CG POWER AND INDUSTRIAL SOLUTIONS LTD. (FORMERLY CROMPTON GREAVES LTD.)] Vs. U.P. POWER TRANSMISSION CORPORATION LTD.

JUDGEMENT

(1.) This Application has been filed by the Applicant under Sec. 11(6) of the Arbitration and Conciliation Act, 1996 as amended, saying that the Applicant is a public limited company duly incorporated under the Companies Act and the Respondent U.P. Power Transmission Corporation Limited (here in after referred to as UPPTCL) is a State Transmission Utility notified under Sec. 39 of the Electricity Act, 2003.

(2.) It has been argued by the learned counsel for the Applicant that a Tender was floated by the Respondent Corporation in 2010-11 bearing Specification No. ESD-8/48 for construction of a 400/220 kW Substation at Banda on turnkey basis. The contract was awarded to the Applicant on 28/12/2011, in furtherance whereof three separate Agreements were executed between the parties, the first one being for supply of equipment and materials for construction of the Substation, that is, the Supply Agreement. In between January 2013, and March 2013, the Applicant manufactured certain equipment and the same was inspected by the Respondent. The Applicant wanted to supply the equipment two months earlier to the initially agreed date of supply. A letter was written in this regard by the Applicant to the Respondent saying that it wished to supply equipment in June 2013 before the scheduled date of delivery i.e. August 2013. The Respondent refused to accept delivery prior to the due date citing procedural issues. After correspondence and discussion, when the Applicant agreed to bear the interest towards pre-ponement of the delivery and payment towards the equipment for the period of two months on the total cost of the equipment, the Respondent agreed to take the delivery before time. However, the Respondent instead of releasing Rs.11.00 Crore 76 lakhs, released only a sum of Rs.10.00 crores on an ad-hoc basis. It also indicated that interest at the rate of 12% per annum on the payment of Rs.10.00 crores shall have to be be paid by the Applicant until the date of erecting of the equipments.

(3.) The Applicant addressed several letters to the Respondent objecting to the unilateral levy of interest up to the date of erecting of the equipment and calling upon the Respondent to pay balance outstanding dues of Rs.1.76 crores towards delivery of equipment under the Supply Agreement. This correspondence continued all through 2016 and 2017. The Applicant thereafter supplied the second set of Transformers and Reactors in accordance with the terms of the Supply Agreement. On 6/2/2018 the Respondent unilaterally deducted a sum of Rs.3.00 Crores and 24 lacs as interest on the amount paid in advance towards supply of equipment in July 2013. In effect, the Respondent had withheld Rs.5.00 crores and the Applicant objected to unwarranted deductions being made by the Respondent in its various correspondence in 2018. On 4/5/2019 the entire project was successfully completed by the Applicant and it requested for inspection, finally the Respondent took over the Banda Substation on 29/11/2018.