Delhi High Court - Orders
M/S Interarch Building Products Pvt Ltd vs Vry Logisitics Park Llp & Ors on 13 April, 2021
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
$~24
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 135/2021
M/S INTERARCH BUILDING PRODUCTS
PVT LTD ..... Petitioner
Through Ms Meenakshi Arora, Senior
Advocate with Ms Charu Sangwan
and Ms Kajal Kumari, Advocates.
versus
VRY LOGISITICS PARK LLP & ORS. ..... Respondents
Through Mr Chetan Sharma, Senior Advocate
with Mr Vinay Yadav, Mr Akshay
Gadeock, Mr Amit Gupta and Mr
Sahaj Garg, Advocates.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 13.04.2021 I.A. 5259/2021
1. Exemption is allowed, subject to all just exceptions.
2. The application stands disposed of.
O.M.P.(I) (COMM.) 135/2021 & I.A. 5258/2021
3. The petitioner has filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereafter „the A&C Act‟), inter alia, praying as under:
"(a) Grant an ad-interim injunction in favour of the Petitioner and restraining the Respondents from carrying out the Work at the project site FWS Logistics Park, NH 9, Sikandrabad, Uttar Pradesh, through any other vendor including above said E-Pack;Signature Not Verified digitally signed by:DUSHYANT O.M.P.(I) (COMM.) 135/2021 Page 1 of 8 RAWAL
(b) Grant an ad-interim injunction in favour of the Petitioner and restraining the Respondents from allowing entry to any vendor, sub-contractor to the aforesaid project site;
(c) Grant an ad-interim injunction in favour of the Petitioner and restraining the Respondents from accepting the supply of any material for pre-engineered building at the aforesaid project site;"
4. The petitioner claims that the disputes have arisen between the petitioner and the respondents in connection with a Purchase Order dated 25.02.2019 (hereafter the Purchase Order) and a Work Order dated 25.02.2019 (hereafter the Work Order). The petitioner claims that the respondents had approached the petitioner in the year 2019 for availing its services for design, manufacturing, supply and erection of pre-engineered building at respondent no.1‟s project site at FWS Logistics Park, NH 9, Sikandrabad, Uttar Pradesh.
5. Thereafter, on 16.12.2019, respondent no.1 had issued a Purchase Order for supply of pre-engineered building material, in accordance with the technical data sheet, for its warehouse buildings located at FWS Logistics Park, NH 91, Sikandrabad, Uttar Pradesh at a value not exceeding ₹13,39,69,846/-. Clauses 4 and 5 of the Purchase Order setting out the Scope of Works and the Payment Terms are relevant and are set out below:
"4. Scope of Work: The Contract value includes fees and price for design, manufacturing, supply, transportation to site, offloading at site, & other components like transit insurance, etc. The detailed supply scope is as per the technical data sheet and drawings enclosed herewith. All supplies will be verified as per the specifications; weight of the steel components and the building design Signature Not Verified digitally signed by:DUSHYANT O.M.P.(I) (COMM.) 135/2021 Page 2 of 8 RAWAL specification will be as per the approved GA drawings by us.
5. Payment Terms:
a) 10% Advance along with PO order on submission of corporate guarantee and signed cheque of equivalent amount without date from Nationalized Bank for discharge of liability.
b) 15% on approval of GA drawings on submission of Corporate guarantee and signed cheque of equivalent amount without date from Nationalized Bank.
c) 70% on prorate basis against pro-forma invoice prior to dispatch of material.
d) 5% on submission of PBG valid for 15 months from date of last dispatch of contract value shall be submitted along with last dispatch.
e) Along with furnishing Bank guarantees, M/s Interarch Building Products Pvt. Ltd. undertakes to indemnify M/S VRY Logistic Part against any delay or defect or failure to meet the timelines as per the purchase order. Further in a situation of M/s Interarch Building Products Pvt. Ltd. delays, causes a defect or has a failure in meeting the timelines, it fully authorizes M/S VRY Logistics part to recover the entire money paid to other vendor for completion of work from M/s Interarch Building Products Pvt. Ltd. in totality and can get the work executed by any other vendor of M/S VRY Logistic park LLP choice at the cost of M/s Interarch Building Products Pvt. Ltd."
6. In terms of Clause 12 of the purchase order, the entire material was required to be delivered at the respondent‟s site at Sikandrabad. The delivery Signature Not Verified digitally signed by:DUSHYANT O.M.P.(I) (COMM.) 135/2021 Page 3 of 8 RAWAL was to commence on 29.12.2019 and completed by 11.07.2020 in all respects.
7. Respondent no.1 also issued a Work Order dated 16.12.2019 (Work Order). The said Work Order was for erection of the pre-engineered building for warehouse buildings no.2 and 3 at the site. Clause 3 of the Work Order sets out the scope of work. The same is reproduced below:
"3. Scope of Work: The Contract value includes price for Erection/ Installation and paint touch up at site for complete Pre-Engineered building as per approved GA drawing, off loading of the material at site & paint touch up of building structure with approved paint color."
8. The said Work Order also included an arbitration clause whereby, the parties agreed that any dispute arising out of or in connection with the Work Order shall be referred to arbitration in accordance with the A&C Act.
9. The petitioner states that on 20.02.2020, the petitioner informed the respondent that its supply was ready for inspection and called upon the representatives of the respondent to inspect the said material at the petitioner‟s factory located at Kichha-Rudrapur Road, Udham Singh Nagar, Uttarakhand. The petitioner claims that the respondent carried out the inspection on 25.02.2020 and found that the material was in accordance with the Purchase Order.
10. The petitioner claims that it issued the Pro-forma invoices in terms of the Purchase Order as well as the Work Order. This was duly acknowledged by the respondents. It is the petitioner‟s case that the respondents failed to make the payments as agreed and, therefore, the petitioner was constrained Signature Not Verified digitally signed by:DUSHYANT O.M.P.(I) (COMM.) 135/2021 Page 4 of 8 RAWAL to store the prepared material. It is stated that since the said material was obstructing the petitioner‟s operations, it therefore arranged for its proper storage. Thereafter, the petitioner raised an invoice for a sum of ₹30,00,000/- on the respondents for storing the material manufactured by it. It also sent a letter dated 01.09.2020 to respondent no.1 informing it that the petitioner had earmarked a storage facility and requested it to take delivery of the same and release the payments due to the petitioner.
11. Respondent no.1 responded to the said letter dated 01.09.2020 by its letter dated 07.09.2020. Respondent no.1 stated that the construction of its warehouse had stopped but would be resumed shortly. It also mentioned that it could store the material at its warehouse at its risk.
12. The petitioner states that it continued to pursue the respondents for release of its payments. It contends that as a counterblast, respondent no.1 sent a notice dated 04.02.2021 terminating the Purchase Order and the Work Order.
13. In its notice dated 04.02.2021, respondent no.1 also alleged that the petitioner was demanding exorbitant amounts for storing the material, which was never agreed. It invoked Clause 24 of the Purchase Order and Clause 23 of the Work Order and, terminated both the Purchase Order and the Work Order.
14. Thereafter, the petitioner caused a legal notice to be served through its Advocate. Paragraph 18 of the said legal notice is relevant and is reproduced below:
Signature Not Verified digitally signed by:DUSHYANT O.M.P.(I) (COMM.) 135/2021 Page 5 of 8 RAWAL"18. That due to non-performance of your contractual obligations and non payment of your legal and legitimate dues towards my client, my client suffered irreparable loss and damage.
You are therefore called upon through this legal notice to pay legally arising debt of a sum of 4,55,16,230/- (Rupees four crores fifty-five thousand sixteen thousand two hundred and thirty only) with interest @18% p a. due and payable from you the Addressees to my client in respect of your outstanding debt towards my client, within 15 days of receipt of this legal notice, failing which my client would be constrained to file an appropriate complaint/proceedings in the court of law and in such an event, you the Addressees will be responsible, for the costs, risks and expenses incurred by my client in such litigations.
That you are further liable to pay Rs. 25,000/- (Twenty-Five thousand only) as legal notice charges."
15. Respondent no.1 responded to the said notice, inter alia, alleging that the petitioner had failed to supply the pre-engineered material even though it was retaining advances made by respondent no.1 for the same. Respondent no.1 claimed that the petitioner had supplied pre-engineered material of a value of ₹2,80,26,559/- against an advance payment of ₹3,34,92,462/-. It further alleged that the petitioner had been demanding a hike in price, interest and storage charges, which were beyond the scope of the Purchase Order. It claimed that the petitioner had repudiated the contract. Respondent No.1 further asserted that the termination of the Purchase Order and the Work Order was legal and valid. It also denied any liability to pay the amount as claimed.
16. The petitioner has averred in the present petition that the respondents Signature Not Verified digitally signed by:DUSHYANT O.M.P.(I) (COMM.) 135/2021 Page 6 of 8 RAWAL did not pay the outstanding amount of ₹4,55,16,230/- despite numerous reminders but has on the other hand, engaged another vendor for the project and as such disputes have arisen between the petitioner and the respondents.
17. Ms Arora, learned senior counsel appearing for the petitioner earnestly contended that the pre-engineered material prepared by the petitioner was customized as per the requirement of the respondents in terms of the Purchase Order and, therefore, the said material is not saleable in open market. In the given circumstances, irreparable loss would be caused to the petitioner if the interim directions as sought for, are not granted. She submitted that the material was also coloured „yellow‟ as per the requirement of respondents and it is not possible for the petitioner to supply the said material for any other building.
18. It is at once clear from the averments made in the present petition as well as the legal notice served by the petitioner, that its claims are monetary claims.
19. Admittedly, respondent no. 1 has terminated the Purchase Order and the Work Order. Thus, essentially, the petitioner is seeking an order restraining the respondents from engaging any other vendor in order to compel the respondents to specifically perform the Purchase Order as well as the Work Order. Given that the petitioner‟s claim is a monetary claim, the interim relief sought by the petitioner is not in aid of its claims.
20. The contention that irreparable loss would be caused to the petitioner because the pre-fabricated material prepared by it is unsaleable, is unmerited. The petitioner has quantified its claim, as therefore, it is difficult Signature Not Verified digitally signed by:DUSHYANT O.M.P.(I) (COMM.) 135/2021 Page 7 of 8 RAWAL to accept its plea that the loss caused to it would be irreparable. Merely because the goods to be supplied by the petitioner are custom made and have no ready market, cannot lead to the inference that the loss caused to the petitioner cannot be compensated in monetary terms. In the given circumstances, this Court does not consider it apposite to accede to the prayers made in the present petition.
21. It is noted that the Purchase Order does not include an Arbitration Clause. Ms Arora has submitted that even though the Purchase Order does not include an Arbitration Clause, it is inextricably linked with the Work Order and, therefore, the Arbitration Clause as contained in the Work Order would also cover the disputes arising on account of non-payment of consideration in terms of the Purchase Order. It is not necessary for this Court to examine this issue in these proceedings as it is clear that the claims made by the petitioner are essentially monetary claims and, the prayers interdicting the respondents from engaging the services of any other vendor, cannot be granted as an interim measure of protection.
22. The petition is, accordingly, dismissed. The pending application is also disposed of.
VIBHU BAKHRU, J APRIL 13, 2021 RK Signature Not Verified digitally signed by:DUSHYANT O.M.P.(I) (COMM.) 135/2021 Page 8 of 8 RAWAL