RASHTRIYA ISPAT NIGAM LTD. Vs. GET POWER LIMITED

JUDGEMENT

(1.) One M/s.Voltech Projects (P) Ltd., had participated in a tender, called by the applicant, on 22/8/2007, for the work of supply and instillation of galvanized cable support, racks and trays for interplant cable tunnels/trestles/trenchers and was declared as the lowest bidder. Subsequently, the bid of M/s.Voltech Projects (P) Ltd was accepted by the applicant, for a sum of Rs.11,96,42,162.50 by way of a letter of acceptance dtd. 12/2/2008. Thereafter, M/s.Voltech Projects (P) Ltd., sought deviations in the letter of acceptance. After receiving this request, another letter of acceptance, dtd. 25/2/2008, was issued, setting out the terms of the contract and requiring the said M/s.Voltech Projects (P) Ltd., to execute a formal agreement. Further, the applicant also contends that in any event, the notice inviting tenders issued on 22/8/2007 incorporated a clause that the general conditions of contract, technical specifications and General specifications of contract would constitute a part of the notice inviting tenders.

(2.) M/s.Voltech Projects (P) Ltd., instead of entering into the formal agreement and commencing work, had sought to enter into correspondence. The applicant had then held a meeting with the M/s.Voltech Projects (P) Ltd., on 5/4/2008 to resolve these issues. As this meeting did not result in any positive result, a notice dtd. 19/4/2008 was issued by the applicant, to M/s.Voltech Projects (P) Ltd., proposing to terminate the contract at the risk and cost of M/s.Voltech Projects (P) Ltd. M/s.Voltech Projects (P) Ltd., replied to this notice and took the stand, in its reply dtd. 24/4/2008, that as there was no concluded contract, the question of terminating the contract and the liability of cost and risk would not arise. Thereafter, the applicant terminated the contract by a letter dtd. 6/5/2008. After the said termination, fresh bids were invited for the same work and M/s.Rohini Industrial Electrical Pvt. Ltd., and M/s Cosmic Power Systems Pvt. Ltd. were entrusted the said work, on the basis of the bids made by them. As these bids entailed further expenditure, over and above, the amount fixed in the earlier bid, the applicant issued a notice dtd. 7/2/2011 to M/s.Voltech Projects (P) Ltd., to make good the loss of Rs.2,09,66,304.63 with interest at the rate of 18% from 30/7/2008. The applicant apart from raising this demand had also invoked the arbitration clause 28.1 contained in the General conditions of contract. These letters are said to have been avoided by M/s.Voltech Projects (P) Ltd., and the notice was returned with an endorsement 'left without instructions'.

(3.) The applicant also by a letter dtd. 21/6/2011, appointed a former Judge of the Hon'ble High Court of Andhra Pradesh as its nominee arbitrator. The applicant with a view to ascertain the correct address of M/s.Voltech Projects (P) Ltd., had approached the Registrar of Companies, and had sent a notice dtd. 23/12/2011 to the changed address obtained from the Registrar of companies. The previous communications of 7/2/2011 and 21/6/2011 were enclosed with this notice. The applicant thereafter received a letter dtd. 27/3/2012 stating that M/s.Voltech Projects (P) Ltd., had amalgamated into M/s. GET Power Pvt. Ltd., w.e.f 1/4/2010. M/s.GET Power Pvt. Ltd., by another letter dtd. 18/4/2012, requested for all the earlier correspondence which was made available through a letter dtd. 2/5/2012. After receipt of the earlier correspondence, M/s. GET Power Pvt. Ltd. by a letter dtd. 10/10/2012 suggested resolution of dispute. As there was no further movement, the applicant by letter dtd. 31/12/2012 and 8/4/2013 again requested the M/s. GET Power Pvt. Ltd., to appoint its nominee arbitrator. However, M/s. GET Power Pvt. Ltd., filed an Arbitration Application bearing S.R.No.3288 of 2013 seeking a declaration that the arbitration clause contained in General conditions of contract is not binding on it. This application was withdrawn on 21/6/2013.