Bangalore District Court
M/S.Gvpr Engineers Limited vs M/S. Mysore Minerals Ltd on 11 October, 2022
IN THE COURT OF LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU. (CCH-90)
Present: Sri.S.J.Krishna, B.Sc., LL.B.,
LXXXIX Addl.City Civil &
Sessions Judge, Bengaluru.
Dated: 11th OCTOBER 2022
Com.A.S.No.137/2019
PLAINTIFF : M/s.GVPR Engineers Limited,
(Transferor Company)
M/s.GSP Infratech Development Pvt.
Ltd.'
(Formerly known as
M/s. GSP Projects Pvt., Ltd.,
(Transferee Company)
A Company registered under the
Companies Act 1956,
D.No.8-2-293/82/A/739/A,
Plot No. 739-A, Road No.37,
Jubilee Hills,
Hyderabad-500 033.
Represented by its Vice-President
(Marketing)
Mr.R.Narayan.
(By M/s.Holla & Holla Advocates)
V/s.
RESPONDENTS :. M/s. Mysore Minerals Ltd.,
(A company incorporated under the
Companies Act 1956)
No.39, M.G.Road,
Bengaluru-560 001.
Represented by its Managing Director.
(By Sri.A.K.Vasanth, Advocate)
/2/
Com.A.S.No.137/2019
Hon'ble Justice Mr. B.Padmaraj,
(Former Judge), High Court of
Karnataka, The Hon'ble Sole Arbitrator,
Judicial Layout, Yelahanka, Bengaluru.
(By Sri.Srinivas.K, Advocate)
Date of Institution of : 06.09.2019
suit
Nature of suit : Arbitration Suit-Application u/s.34 of
(suit on pronote, suit Arbitration & Conciliation Act, 1996
for declaration and
possession suit for
injunction, etc.,)
Date of : -
commencement of
recording of evidence
Date of judgment : 11.10.2022
Total duration : Year/s Month/s Day/s
03 01 05
(S.J.KRISHNA)
LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU.
(CCH-90)
JUDGMENT
M/S.MYSORE MINERALS LTD., has filed Arbitration suit No:136 of 2019 U/Sec.34 of the Arbitration & Conciliation Act, 1996 praying the Court to set aside the award dated 07.06.2019 passed by the learned Sole Arbitrator in Arbitration Proceedings between M/S.GSP Infratech /3/ Com.A.S.No.137/2019 Development Pvt., Ltd., and M/S. Mysore Minerals Limited arising out of CMP No:153/2014 with respect to Issue No:16 and Issue No:21 and also with respect to rejection of counter claim of the Plaintiff; and costs of the proceedings throughout and other expenditures and such other reliefs.
02. M/S.GVPR ENGINEERS LIMITED {Transferor Company)-M/S.GSP Infratech Development Pvt., Ltd., (formerly known as M/S.GSP Projects Pvt.,Ltd.,-Transferee Company) has filed Arbitration suit No:137 of 2019 U/Sec.34 of the Arbitration & Conciliation Act, 1996 praying the Court to set aside the award dated 07.06.2019 passed by the learned Sole Arbitrator in Arbitration Proceedings between M/S.GVPR ENGINEERS LIMITED{Transferor Company)-M/S.GSP Infratech Development Pvt., Ltd., (formerly known as M/S.GSP Projects Pvt.,Ltd.,-Transferee Company) and M/S.Mysore Minerals Limited arising out of CMP No:153/2014 with respect to Claim No:1 to 7 for a sum of ₹.218.8 Crores of the Plaintiff as set out in the statement of Claim before the Arbitral Tribunal; allow the entire claims of the Claimant set out in the Claim Statement on the file of the Arbitral Tribunal and costs of the proceedings.
03. The A.S.No:136/2019 and A.S.No:137/2019 are arising out of Award dated:07.06.2019 passed by the learned Sole Arbitrator in Arbitration Proceedings between /4/ Com.A.S.No.137/2019 M/S.GVPR ENGINEERS LIMITED {Transferor Company)-M/S.GSP Infratech Development Pvt., Ltd., (formerly known as M/S.GSP Projects Pvt.,Ltd.,-Transferee Company) and M/S.Mysore Minerals Limited arising out of CMP No:153/2014. For the sake of convenience, the parties to the present suit are referred to as 'claimant' and 'respondent' as before the learned Sole Arbitrator.
The case of the claimant before the learned Arbitral Tribunal is as under:
04. The Claimant is a reputed Company which is engaged in mining and related activities in the States of Karnataka and Andhra Pradesh. Previously the name of the Claimant was M/S.GSP Projects Private Limited and was changed as GSP Infratech Development Limited and presently the name is changed as M/S.GSP Infratech Development Private Limited.
05. The Respondent is a public sector undertaking which is wholly owned by the State Government. The Respondent had been allotted certain mining leases by the State Government including the lease of the Ubbalagundi Iron ore Mines (UIOM) under the mining lease Bg.No:ML995.
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06. The respondent had invited a tender Bg.No:MML:GD:MKD:2002-2003 dated:28.06.2002 with respect to sale of Iron ore from UIOM, which tender also included the extraction of the Iron Ore through a third party and the successful tenderer had been given an option of indicating a raising contractor who would separately enter in to an agreement with the respondent. The said tender also provided for extraction of the mineral and investment on the backlog development to bring the mine to prescribed safety levels at a fixed cost, fixed in the tender schedule irrespective of the actual cost of production.
07. The Claimant's sister concern, M/S.Shivashakar Minerals Private Limited, was looking to diversify its business, it had participated in the tender for marketing the iron ore and it emerged as the successful bidder in the said tender, having quoted a price of ₹.231/- per metric ton for the iron ore, inclusive of royalty charges, forest development tax and all other applicable taxes and levies.
08. The Respondent then informed the claimant's sister concern that it was the decision of the Respondent's Board to enter in to two agreements, one for raising of the Iron ore and another for marketing and sale of the extracted Iron ore, and requested the claimant's sister concern to suggest an entity that could fulfill these functions of raising /6/ Com.A.S.No.137/2019 the Iron ore. Thus, the claimant's sister concern suggested to the respondent that the Claimant be assigned the task of raising of the iron ore, due to its expertise in this field. The respondent agreed and appointed the Claimant as the raising contractor. Thereafter, the respondent had insisted on the signing of an agreement that had been prepared by the respondent, and stated that this was standard form of agreement that all contractors would have to enter in to with the respondent. The claimant and its sister concern had already mobilized all the required men and missionary at this juncture, and thus were forced to sign the agreements. Accordingly, an agreement was signed on 22.01.2004 between the respondent and the claimant.
09. In terms of the agreement, the claimant had also deposited a sum of ₹.30.00 lakhs towards the revolving security deposit equivalent to the process cost of one month's quantity fixed and agreed to process a minimum quantity of 2,40,000 metric tons of iron ore lumps per annum. In terms of Clause 22(a) of the agreement, it was agreed that a sum of ₹.150/-PDMT shall be paid by the respondent to the claimant towards processing charge for iron ore lumps. A perusal of the clauses 3,4 , 7,10 and 22(a) reveals that the claimant had been appointed as the raising contractor to carry out the processing of Iron ore lumps in Ubbalagundi Iron Ore Mines, and further the claimant had agreed to process a minimum quantity of 2,40,000 metric /7/ Com.A.S.No.137/2019 tons of iron ore lumps a process charges of ₹.150/- PDMT and the same is subject to getting the approvals and permission from various governmental authorities including MoEF, Forest Clearance, etc., The term of the contract was to be initially for five years and extendable for another three years. In order to bring the mines to a safety level, a gestation period of one year was allowed to the claimant to start the actual mining activities.
10. It was the responsibility of the respondent to obtain all necessary approvals and permissions to start the mining activity apart from obtaining mining lease.
11. After entering in to the said agreement with the respondent, the respondent has completely deviated from the original tender as also, from the terms of very agreement executed between the claimant and respondent. The respondent insisted that the claimant is required to pursue the applications under the Forest Conservation Act for obtaining permission for commencement of the mining work, which was not at all the responsibility of the claimant. Further, the respondent insisted that the claimant should pursue and obtain the environmental clearance, which was also the duty of the respondent, the lessee of the Government of Karnataka.
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12. The claimant thereafter liaised with various authorities and obtained permission under the Forest Conservation Act as also the various environmental clearances. The claimant has spent ₹.2.5 Crores plus applicable taxes and interest towards obtaining of such clearances, which amount is liable to be reimbursed by the respondent to the claimant. Further, till this day, the respondent was not even able to get the execution of the lease deed in respect of UIOM in contravention of the terms of the agreement.
13. As the lessor in respect of the mining lease of UIOM, the respondent was required to pay the net present value (NPV) as also charges towards afforestation fencing forest lease rent etc., to the forest department. Neither the tender conditions nor any provisions of law require the raising contractor to pay the said amounts. However, by inserting a clause in the agreement, the respondent has forced and collected from the claimant an amount of ₹.1,00,56,000/- plus applicable taxes towards 50% of the net present value and a sum of ₹.9.00 lakhs plus applicable taxes towards afforestation, fencing, forest lease rent etc., Having regard to the fact that these amounts were to have been paid by the respondent to the Forest Department as a lessee of mine and the said payments not being required to be made by the claimant under the terms of the tender, the amount paid by the claimant is liable to be reimbursed by /9/ Com.A.S.No.137/2019 the respondent to the claimant along with interest at 24% p.a.
14. The respondent did not have any permission for carrying on mining area situated in the State Forest, and the respondent only had a temporary working permit as on 01.04.2005. In view of the decision of the Apex Court on 16.09.2005 in T.N.Godavarman's case the department of Mines and Geology and Forest departments directed the respondent to stop the mining operations at ML995 in the UIOM since the respondent had not obtained Forest Clearance from the MoEF. Since the agreement provided that the claimant was required to remove 2,40,000/- metric ton of ore per year, the claimant had mobilized all the resources and had shifted the machinery exclusively for carrying on mining operations and had expended huge amount of money for the same, as aforementioned. During such time the Forest Department did not permit Mysore Minerals Limited and the claimant to carry on mining operations, which resulted in all the resources mobilized by the claimant remaining idle, which was purely on account of the breach committed by the Respondent.
15. The machinery and workers remained idle till 15.05.2006 when the temporary working permission was given by the Central Government, while the claimant continued to pay their salaries and hire charges for the /10/ Com.A.S.No.137/2019 machinery. Though the obligation is on the part of the respondent to get the execution of the mining lease and for obtaining all required statutory and governmental clearances from various central and state governments, the respondent failed and neglected to obtain the same, and delayed the commercial operation of the mining activities which caused the claimant to suffer huge financial and other losses.
16. The actual commercial production of mining activities for a quantity of 20,000 metric tons per month was started only in the month of August 2008, when the necessary permission from the Karnataka State Pollution Control Board viz., the consent for establishment (CFE) and consent for operation (CFO) and permission from the Karnataka State Environment Impact Assessment Authority (constituted by Ministry of Environment and Forests, Government of India) was received. Further, the Government of Karnataka renewed the lease for a period of 20 years retrospectively commencing from 29.09.1990 over an area of 33.60 hectares by its notification dated:08.02.2006.
17. The modification of the mining plan was approved only on 03.05.2006 by the Office of Controller of Mines (South Zone), Ministry of Mines and thereafter by order /11/ Com.A.S.No.137/2019 dated 12.07.2006, the Government of Karnataka, Forest, Ecology and Environment Department accorded permission for diversion of the said 33.60 hectares for non-forest mining activities. Copies of notification dated 08.02.2006, 01.04.2005 and 15.05.2006, 12.07.2006, 10.12.2007 are at Annexures-C4, C4(a) to (h) respectively.
18. In fact, even till the month of July 2008, certain important clearances were not at all issued including IBM Mining Plan Approval in order to start with the mining activity in full fledged and the claimant kept on seeking the authorization of the respondent to pursue with the Government authorities to obtain the necessary statutory clearances and permissions, which is evidenced by the letters dated 03.04.2008, 20.06.2008. Further, in the letter dated 03.04.2008 the claimant has even intimated to the respondent that they removed the overburden of over 26,00,000 metric tons in order to reach the actual iron ore. Though the agreement was entered into between the claimant and respondent on 22.01.2004 the mining operations could only commence after getting forest clearance and DGMS clearance in 2007 and the end of 2008, which delay of over three years caused untold hardship, misery and economic losses to the claimant in the form of overheads and idling charges of the machinery, including the salary to the staff appointed for executing the project work besides the huge hiring charges on machinery /12/ Com.A.S.No.137/2019 and equipment required for commencing the mining operation. The claimant estimates this loss on account of overheads as also idling charges at ₹.37.36 Crores plus applicable taxes. Due to the delay in the project and since the machinery and equipment were very huge and were not easily movable, the claimant suffered huge losses as stated above and the respondent is liable to make good of the same. Cost of mobilization and demobilization will be huge and hence the same cannot be easily moved from one place to another for short time in order to mitigate the losses. As the closure order against the operation of the mining activity for production of iron ore in UIOM was issued way back in the year 1984 by the DGMS, the mining operation for iron ore production could not be commenced in the year 2005, 2006 and till May 2007.
19. The respondent virtually played fraud upon the claimant by not bringing to the notice of the claimant that the UIOM has been closed way back in the year 1984 by the DGMS. This was not even disclosed in the tender documents further showing the fraudulent intention. The claimant had to liaise with the concerned authorities and after rectifying the various violations which had rendered the mine closed, due solely to the claimant's efforts, the mine was reopened. In fact, the claimant in its letter dated 15.06.2005 requested the respondent to obtain various permissions to commence mining operation and they were doing the developmental /13/ Com.A.S.No.137/2019 and incidental works in order to commence the actual commercial production. In the said letter, the claimant requested the respondent to seek permission from the conservator of forests, Bellary to install a crusher and a weigh bridge at the forest land and also sought the respondent to obtain power connection from the KPTCL and further requested the respondent to obtain explosives license.
20. The work pertaining to backlog development was commenced from 11.05.2005 and the actual production of iron ore was started only after getting CFO and CFE from the Karnataka State Pollution Control Board in the month of August, 2008.
21. In fact, as a result of the backlog development of the Mine to get it in compliance with the mining safety requirements and seek opening of the Mine, there was incidental production of iron ore recovered from the contact zone of Ore Body and waste overburdens and this can by no stretch of imagination be regarded as commercial production. This caused the claimant to suffer huge losses as the claimant's men and machinery were kept idle for lack of necessary permissions and approvals which were the obligation of the respondent. Furthermore, while the respondent had shown the mining area available for mining /14/ Com.A.S.No.137/2019 and extraction of the mineral/iron ore was 43 as per Annexure-C2(a) out of the 80.94 Ha mining lease area allotted to the respondent by the GOK, they ultimately made available to the claimant only an area of 33.60 Ha for mining and for the haulage road reducing 22% of the promised mining area which affected the total iron ore production and in turn resulted in idling of men and machinery which the claimant had procured to work in the larger, tender notified area of 43 Ha. The notification dated 08.02.2006 issued by the GOK extending the mining lease for a period of 20 years retrospectively commencing from 29.09.1990 clearly evidences that only an extent of 33.60 hectors was renewed. The same is also evidenced by the letter dated 01.07.2008 issued by the respondent itself, which clearly states that the area made available to the claimant was only 33.60 hectors. The claimant estimates that the loss caused due to reduction of the promised area is a sum amounting to ₹.7.21 Crore which is to be reimbursed with interest. After getting the necessary permissions, the claimant commenced the mining operations to clear the backlog development.
22. The claimant noticed that the ratio of ore overburden is 1:11 and thereby the claimant incurred huge expenses causing untold hardship and injury to the claimant. The claimant noticed that it was required to remove the huge backlog development pending since the /15/ Com.A.S.No.137/2019 closure of the Mine by the DGMS for unsafe working conditions way back in 1984 for the purpose of conducting safe mining operations and in order to comply with the provisions of law, the claimant invested more than ₹.43.00 Crores to clear the 17,72,000 cubic meter of backlog development pending since the closure by the DGMS in 1984 and for the purpose of removing the over burden for making the mining lease area suitable for commercial extraction of the iron ore.
23. In fact, vide reports dated 23.07.2008 and 11.08.2009 addressed to the General Manager, Bengaluru and Sandoor, attaching the statement showing the development work carried out for the period between May 2005 to 18th July 2009, thereby admitting the overburden ratio of 1:10.5 (over burden removed is 34,38,000 tons ore extracted is 3,41,960 tons). Copies of reports dated 23.07.2008 and 11.08.2009 issued by the Technical Consultancy Division of MML (TCD) are at Annexure-C 12 and C 13 respectively. The claimant was not obliged to pay the aforesaid amount and it was the responsibility of the respondent. Further, in several Board Meetings the then Managing Director of the respondent promised to repay the said amounts to the claimant and the same as also been recorded in the minutes of such meetings and instructed to get a technical report from its Technical Consultancy Division of MML (TCD) and also a fact finding team was sent /16/ Com.A.S.No.137/2019 from the Head Office of MML, which also submitted its report. Therefore, the respondent is also liable to pay a sum of ₹.43.06 Crores spent by the claimant on backlog development plus taxes to the claimant. A copy of another report of TMC is at Annexure-C 14. A copy of one such extract of Board Meetings of the respondent indirectly admitting their responsibility to reimburse the said payments is at Annexure-C 15. After the commencement of the mining operations, the claimant noticed that the respondent had misrepresented facts to the claimant as to the supply/mining of 2,40,000 metric tons per annum which was not possible in as much as the environmental clearance from the Ministry of Environment and the Karnataka State Pollution Board was available only for 85,000 metric tons per annum as per CFO on account of the same. This is evident from the letter dated 04.02.2008 issued by the Manager of the respondent which states that the consent from Karnataka State Pollution Control Board in UIOM was given only for production of 85,000 metric tons per annum. Further, the same was reiterated in the affidavit filed by the Manager, MML to the KSPCB that they have produced only 85,000 metric tons of iron ore per annum. Copies of the letter dated 04.02.2008 and the affidavit given by the Manager of the claimant are at Annexure-C 16 and C 17 respectively. Unaware of this discrepancy, and uninformed of the same by the respondent the claimant had mobilized machinery and labor for the purposes of extracting 2,40,000 metric tons of iron ore lumps per annum or in other words /17/ Com.A.S.No.137/2019 approximately 20,000 metric ton of lumps per month, as a result of the non-obtaining of the requisite permissions by the respondent, the claimant could extract only about 7000 metric ton of ore a month out of which the lumps were only about 20% to 30% of the total ore. Therefore, it was not possible for the claimant to extract 20,000 metric ton of ore per month though the claimant had placed men and material to extract the same.
24. Once again, this led to the machinery deployed being idle on account of the lapse of the respondent in seeking 2,40,000 metric tons of ore per annum, while only having clearance for 85,000 metric tons. The idle charges incurred due to the lower production due to availability of only 85,000 metric tons comes to ₹.24,75,99,264.00. Copy of the statement showing the details regarding idle charges is at Annexure-C 18. As per the terms and conditions of the Raising Agreement, the raising cost for the first two years was fixed as per schedule-'B'.
25. Keeping in view the terms of the agreement dated 22.01.2004 the claimant mobilized all the required machinery by investing several cores of rupees to achieve the targeted production. Due to myriad reasons aforementioned solely due to the respondent, however, the claimant was unable to achieve the targeted production /18/ Com.A.S.No.137/2019 during the first two years period and is entitled for enhancement of the raising cost keeping in view the expenses incurred in mobilizing men and machinery to achieve the original targeted production.
26. The claimant gave a representation requesting the respondent to increase the cost of production by actually recalculating the total over burden removed from the mining lease and the actual expenses incurred in conducting the mining operations of each metric ton. The respondent appointed a third party expert, Dr.V.R.Shastry, to assess the cost of production at UIOM so as to re-fix the cost of production payable to the claimant. The said Dr.V.R.Shastry visited the UIOM with his team of technical experts and found that the cost of production at UIOM (ML
995) would amount to ₹.1,895/- per metric ton. Accordingly, he submitted a report stating that the cost of production for producing one metric ton of iron ore mineral at UIOM is ₹.1,895/- per metric ton. The respondent was required to re-fix the cost of production keeping in view of the recommendation made by Dr.V.R.Shastry.
27. Despite having regard to re-fixing the cost of production keeping in view of the recommendation of Dr. V.R.Shastry, the respondent instead pressurized him to reconsider the recommendation made by him and /19/ Com.A.S.No.137/2019 accordingly he has recommended for ₹.1,204/- per metric ton, without there being any basis though he has come to the conclusion that the cost of production is ₹.1,895/- per metric ton. The claimant requested the respondent to at least to make the payment in terms of the recommendation made by Dr.V.R.Shastry at ₹.1,895/- per metric ton. However, the respondent had unilaterally fixed the cost of production at ₹.526/- per metric ton, fixed only for the year 2009-10, a sum that is not even a third of the initial finding of Dr.V.R.Shastry.
28. Further, the respondent itself in its assessment order for the year 2008-09 has unequivocally admitted the fact of raising cost of ₹.1,895/- per metric ton, since the ore to over burden ratio during the financial year 2007-08 is not less than 1:11 ratio. Therefore, it is clear that the report of Dr. V.R.Shastry regarding fixation of raising cost at ₹.1,895/- correlates to the statement given by the respondents.
29. Even from the day one, the respondent was irregular in making payments of raising cost. Since the respondent was irregular in making payments, the claimant vide letter dated 29.09.2009 requested the respondent to release the raising cost. A copy of the said letter is at Annexure-C 21. Further, on 21.07.2010 the claimant requested the respondent to fix the raising cost by calling /20/ Com.A.S.No.137/2019 them to the meeting to fix the raising cost for the years 2008-09 and 2009-10. However, no reply was given by the respondent.
30. The claimant again sent a reminder dated 28.09.2010, again requesting the respondent to fix the raising cost and further reminding about outstanding dues payable towards the raising cost to the claimant running to several Crores. Copies of letters dated 27.02.2010 and 28.09.2010 are at Annexure-C 22 and C 23 respectively. Further, vide letter dated 06.05.2013 the claimant again requested the respondent to release the payments, pending finalization of raising cost for the year 2011-12. A copy of the letter dated 06.05.2013 is at Annexure-C 24.
31. As the respondent failed and neglected to fix the raising cost mutually and fixing the raising cost contrary to the terms of the agreement, the claimant vide its letter dated 15.05.2013, sent the details of raising cost analysis incurred by it for the years 2010-11, 2011-12 and 2012-13 prepared on the basis of parameters suggested by the respondent, and further informed the respondent that the details regarding the raising cost analysis for the years 2006-07, 2007-08, 2008-09 and 2009-10 will be sent shortly. No reply whatsoever has been given by the respondent to the above letters. A copy of the letter dated /21/ Com.A.S.No.137/2019 15.05.2013 is at Annexure-C 25. On 30.05.2013, the claimant submitted a letter to the respondent bringing it to its notice the details of expenditure incurred for production of iron ore and removal of over burden for the years 2008- 09, 2009-10, 2010-11 and 2011-12 as per the norms suggested by the respondent. A copy of the said letter dated 30.05.2013 is at Annexure-C 26. There was no reply given by the respondent to this letter. However, they kept on fixing the raising cost at their whims and fancies without consulting the claimant which is again contrary to the terms of the contract.
32. Again on 07.08.2013, the claimant sent another letter enclosing the comparative statement adopting the same parameters as adopted by the respondent in respect of Subbarayanahalli Iron Ore Mine in fixing the raising cost. However, no reply was given by the respondent and kept on fixing the raising cost at its whims and fancies. A copy of the letter dated 07.08.2013 along with comparative statement is at Annexure-C 27. As per the terms and conditions of the agreement, the respondent has to finalize the raising cost in consultation with the claimant in April of each year and pay to the claimant on the quantity of material dispatched from the ML 995. However, the respondent has not finalized the raising cost in consultation with the claimant from the years 2006-07 till date.
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33. This is also evident from the letter dated 30.11.2013. The non-finalization of the raising cost by the respondent has proved to be yet another obstacle to the fair conduction of business. Instead of finalizing the raising cost and paying the claimant every month, the respondent has harassed the claimant and has also stopped supply of materials to the sister company of the claimant, SSML, stating that it is in arrears to the respondent and the respondent illegally kept increasing the sale price of iron ore to SSML without correspondingly increasing the raising cost, thereby showing the malafidies on the part of the respondent. Non-finalization of raising cost in time is a violation of terms and conditions of the agreement. The raising cost fixed by the respondent for the years 2008-09 to 2001-12 vide letters dated 03.05.2011 and 30.11.2013 sent by the respondent are not acceptable to the claimant since the respondent has finalized and fixed the same unilaterally and without considering Dr.V.R.Shastry report and without taking into consideration the views of the claimant and hence, the same is contrary to the terms of the agreement dated 22.01.2004. The claimant estimates that the respondent is liable to pay to the claimant an amount of ₹.102.51 Crores plus applicable taxes and interest towards the raising cost from the year 2006-07 till date as per the stock dispatched from the ML 995 and for the remaining quantity the claimant reserves it right to make its claim as soon as the same is dispatched. Copies of letters dated 03.05.2011 and 30.11.2013 sent by the /23/ Com.A.S.No.137/2019 respondents fixing the raising cost are at Annexure C 28 and C 29 respectively. The claimant opposed the same by its replies. Further, in terms of clause six of the agreement, the claimant has deposited a sum of ₹.30.00 lakhs towards the revolving security deposit equivalent to the processed cost of one month's quantity fixed with the respondent at the time of the entering into this agreement. The said amount has not yet been returned to the claimant. Hence, the respondent is liable to pay the said sum of ₹.30.00 lakh and interest thereon @ 24% per annum. Further, the respondent vide email dated 30.04.2013 sent to the Director of the claimant pursuant to the meeting dated 29.04.2013 which has taken place between the respondent and the officials of the claimant, the claimant vide its letter dated 01.05.2013 agreed to provide weigh bridge for weighment of iron ore selling through e-Auction @ ₹.20.00 per metric ton plus applicable taxes and duties and sought for their approval.
34. The respondent vide its letter dated 03.05.2013 agreed for the said price of ₹.20/- per metric ton plus applicable taxes and duties. Accordingly, the claimant provided the said service of weighment and raised an invoice for a sum of ₹.16,38,013/- towards weighment charges. However, the respondent failed to make the said payment. Copies of letters dated 01.05.2013 and 03.05.2013 are at annexure C 30 and C 31 respectively. As /24/ Com.A.S.No.137/2019 the respondent failed to make the said payment, the claimant sent a reminder dated 19.07.2014 demanding payment of the said amounts. However, the respondent failed to make the said payment of ₹.16.38 lakhs. A copy of the reminder letter dated 19.07.2014 is at Annexure C 32. More than 1.00 lakh metric tons of iron ore, which rose by the claimant, is lying on the UIOM and the claimant is entitled to raising cost of the same. Once the said iron ore is sold, the claimant will quantify the said amounts in this regard in terms of clause 23 of the agreement. They have conducted the mining operations systematically as per the guidance and instructions of the respondent's qualified mines Manager and under the daily supervision of the respondent's qualified mines Manager and under the daily supervision of the respondents' Mines Manager and other technical staff including the mines agent and General Manager (P), with frequent inspections by the DMG, Forest Department, IBM, DGMS and KSPCB etc., who have not made any complaint about the claimants' mining operations. The respondent owes the aforesaid amounts to the claimants and also loss of profit running into hundreds of Crores of rupees which the respondent has failed and neglected to pay without any justifiable reason or cause.
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35. The claimant has prayed the Tribunal to award the following reliefs:
PRAYER Wherefore the claimant respectfully prays that this Hon'ble Tribunal may be pass an award:
i. Directing the respondent to pay the claims set out herein below:
Abstract of the total claims of the claimant on the respondent company Sl Amount in No Description ₹. (Crores) 1 Expenditure incurred by the claimant to 2.50 get state and central government permissions clearances and approvals in respect of ML 995 of the respondent. 2 50% of the NPV payment to forest 1.09 department afforestation fencing, forest lease rent etc., paid by the claimant to the respondent 3 Loss on account of over heads, idling 37.36 charges for the idling period as per calculation made in Annexure-C8 4 Due to handing over of 9.40 Ha of lesser 7.21 mining lease area for operation than the NIT schedule area of 43 HA resulted in idling charges and over heads of salaries, wages etc. to the claimant as per calculation made in Annexure-C11 5 Back log development of the mine to 43.06 vacate the Sec. 22/3 of Mines Act imposed by the DGMS for highly unsafe mine workings at UIOM in the year 1984 6 Loss due to idling of machinery and men 24.76 /26/ Com.A.S.No.137/2019 of the claimant, due to shorter production approval available only for 85,000 Mtons p.a. consent for operation (CFE) from KSPCB against 2,40,000 Mtons of Iron Ore to be produced as per the respondents agreement which is to be reimbursed to the claimant by the respondent as per calculation made in Annexure-C18.
7 Payment of Raising cost Payable to the 102.52 claimant by the respondent till date 8 Revolving security deposit 0.30 9 Amount due from Respondent to 0.16 claimant in respect of balance of weighment charges for the weighment of 88,000/- Mts of e-auction Iron ore, respondent letter No.MML/MKT/Loading/2013-14/348/ dated 30.04.2013.
10 Legal expenses 0.30
Total 219.26
Plus interest at 24% p.a. till date on the claim of ₹.Two Hundred and Nineteen Crores and Twenty Six Lakhs only, Plus applicable cost, etc. ii. Grant such other and further reliefs as this Hon'ble Tribunal deems fit including the costs of this legal proceedings in the interest of justice and equity.
The summary of the Statement of objections filed by the respondent is as under:
36. The respondent Mysore Minerals Limited by its tender notice dated 28.06.2002 had invited bids inter alia for sale of calibrated iron ore from its several mines /27/ Com.A.S.No.137/2019 including UIOM. The copy of the tender notice is at Annexure-R 1. Along with the tender documents, instructions were issued to the tenders. The copy of the instructions to the tenderers is at Annexure-R.2. In response to the said tender notification seven offers/ bids were received by the MML. Before the financial bids were opened, a meeting was held on 06.08.2002 and 07.08.2002 to clarify certain queries raised by the tenders. A representative of M/s. Shivashankar Minerals Limited, which was one of the tenderers and sister concern of the claimant attended the meeting held on 06.08.2002. The copies of the minutes dated 06.08.2002 and 07.08.2002 are at Annexures-R.3 and R.3(a) respectively. The financial bids of the tenderers were opened on 29.07.2002. The bid offered by SSML was ₹.231/- per month. The copy of the bid/offer of the claimant is at Annexure-R.4. The copy of the comparative statement/ evaluation of tenders of all the tenderers prepared by the MML and placed before the Tender Accepting Authority is at Annexure-R.5. The tender scrutiny committee in its meeting held on 26.11.2002 resolved to accept the offer of the said SSML. The copy of the proceedings of the tenderers scrutiny committee dated 26.11.2002 is at Annexure-R.6. Pursuant to the said decision of the Board, the MML in its 240th Meeting held on 20.03.2003 confirmed the recommendations / acceptance made by the tender scrutiny committee. The copy of the said resolution is at Annexure- R.8. In terms of clause-9 of the instructions to tenderers (Annesure-R.2), the SSML by its letter dated 10.10.2003 /28/ Com.A.S.No.137/2019 informed the MML that it has nominated M/s. GSP Projects Limited, the claimant herein as the raising agent. Along with the said letter the consent letter of the claimant herein as the raising agent. Along with the said letter the consent letter of the claimant to act as the raising agent was also enclosed. The copies of the letters dated 10.10.2003 written by SSML are at Annexures-R.9 and R.9a respectively.
37. The MML by its letter dated 22.01.2004 forwarded a copy of the unsigned agreement to the Managing Director of the claimant for their approval and signature. The copy of the said letter is at Annexure-R.10. The claimant, after going through the contents of the agreement, signed the agreement and returned the same to the MML. The MML on its part signed the said agreement and forwarded a copy of the agreement to the claimant along with its letter dated 03.02.2004. The copy of the said letter is at Annexure-11 and a copy of the Raising Agreement dated 22.01.2004 is at Annexure-R.12.
38. The Government of India, Ministry of Environment and Forest in its letter dated 01.04.2005 addressed to the principal secretary to the Government of Karnataka, Forest, Environmental and Ecology Department informed that the Central Government has approved diversion of 33.60 /29/ Com.A.S.No.137/2019 hectares of forest land in Ubbalagundi Village subject to the condition mentioned therein. The central Government also informed that a temporary working permission is granted for a period of one year in respect of stage-1 of UIOM. The copy of the said letter is at Annexure-R.13. Accordingly, the Principal Chief Conservator of Forest, Government of Karnataka in his letter dated 20.04.2005 addressed to the Conservator of Forests informed him that the Government of India had accorded temporary working permission for mining in broken up forest area for a period of one year. The copy of the said letter is at Annexure-R.14. The MML by its letter dated 25.04.2005 advised the Mines Manager, MML, to approach the conservator of forests and to obtain the required permission to start the mining operation. The copy of the said letter is at Annexure-R.15. The MML by its letter dated 27.04.2005 also requested the Department of Mines and Geology to permit MML to start the mining operation. The copy of the said letter is at Annexure-R16. The claimant, in its letter dated 15.06.2005 informed the MML that the mining operations have been commenced w.e.f. 11.05.2005. The copy of the said letter is at Annexure-R.17. Though the mining work was commenced from 11.05.2005 the claimant had not installed the screening and crushing machinery and hence, by letter dated 17.08.2005 MML advised the claimant to make arrangements for installing the crusher. The copy of the said letter is at Annexure-R.18. That on 27.08.2005, the Forest Department seized vehicle bearing chassis No.PDE /30/ Com.A.S.No.137/2019 55887 belonging to the claimant for illegal transportation of ore from mine to stockyard and later, on paying ₹.25,000/- as security deposit, the vehicle was released from the Forest Department.
39. In this connection, an F.I.R. was also registered by the Forest Department and copy of the said letter dated 18.10.2005 from the Deputy Conservator of Forests is at Annexure-R.19. The GOI, MOFE in its letter dated 22/23.09.2005 informed all the Secretaries and principal Chief Conservators of Forests of all states that the Apex Court in its order dated 16.09.2005 passed in W.P.No.202/1995 directed stoppage of all mining operations in Forest Areas which had been carrying on such operations on the strength of the temporary working permissions. The copy of the said communication dated 22/23.09.2005 is at Annexure-R.20. Pursuant to the said communication, the Range Forest Officer, Sandoor Range, in his notice dated 07.10.2005 directed stoppage of mining activities. A copy of the said letter is at Annexure-R.21. The MML in its letter dated 11.10.2005 endorsed that it had stopped mining activities w.e.f.10.10.2005 and copy of the said communication is at Annexure-R.22.
40. In spite of such clear direction the claimant had violated the Apex Court order and continued with the /31/ Com.A.S.No.137/2019 mining operation. In view of this, The MML by its letter dated 23.11.2005 directed the claimant to stop the mining operations forthwith and that if the claimant indulges in violation of the order passed by the Apex Court, it will be personally held responsible for the future consequences. A copy of the said letter is at Annexure-R.23.
41. The GOI, MOEF in its communication dated 15.05.2006 informed the principal Secretary to the Government of Karnataka that the Central Government had accorded approval for diversion of 33.60 hectors of forest land in UIOM. The copy of the proceedings is at Annexure- R.25. Pursuant to the said permissions, the Mines Manager, UIOM informed the MML that the mining activity has been resumed w.e.f. 05.10.2006. A copy of the said letter is at Annexure-R.26. The MML by its letter dated 12.07.2006 requested the claimant to pay 50% of NPV i.e., ₹.1,00,56,000/- which had already been paid by the MML and a copy of the said letter is at Annexure-R.27.
42. The SSML, by its letter dated 20.07.2006 sought permission to continue the mining operations and a copy of the said letter is at Annexure-R.28. The board of MML in its 259th Meeting held on 28.07.2006 accorded in principle approval for enhancing the raising cost, which would be revised from time to time on the basis of increase in the /32/ Com.A.S.No.137/2019 cost of input or the price index and it was also resolved to extend the contract for seven months considering the fact that the mine was not operative for a period of about seven months. It was further resolved that the raising contractor / claimant should pay salaries to the staff posted by the MML at the mine, besides the cost of explosive. The copy of the said resolution is at Annexure-R.29.
43. Pursuant to the said decision of the Board, a supplementary agreement was also entered into between the parties on 04.08.2006 and a copy thereof is at Annexure-R.30. Accordingly, the work order was also issued on 08.09.2006 and a copy of the said work order is at Annexure-R.31. Initially, the agreement between the parties was for extraction / operation of only 85,000 metric tons. Efforts were made to increase the said quantity. Accordingly, the State Level Environment Impact Assessment Authority by its letter dated 10.12.2007 accorded approval for increasing the said quantity to 1.073 million tons. A copy of the said letter is at Annexure-R.32. The MML by its letter dated 4/10.02.2008 intimated about the consent for enhancing the quantity and requested the claimant for increase in the production to 1.073 metric tons. A copy of the said letter is at Annexure-R.33. The MML also obtained consent from the Karnataka State Pollution Control Board for exploiting the said quantity from 01.07.2008 onwards. A copy of the said letter is at Annexure-R.34.
/33/ Com.A.S.No.137/2019 Though all clearances were obtained, the claimant never achieved the minimum assured quantity of 240 metric tons per annum during the subsistence of the contract. The extended period ended on 07.02.2008. In the year 2008- 09, the price of iron ore lumps and fines had to be revised and re-fixed w.e.f. 08.02.2008. The SSML did not extend necessary co-operation for fixation of price of iron ore and continued to take delivery at the rate of ₹.231/- per metric ton, even beyond 07.02.2008. When the price of iron ore was fixed at ₹.231/- per metric ton, correspondingly the raising cost was fixed at ₹.150/- per metric ton. Though the MML requested the SSML to fix the price of iron ore, it went on postponing the same on one pretext or the other. Since the price of iron ore was not revised and re-fixed by SSML, the raising cost also could not be fixed in time. Eventually, the Board in its 282nd Meeting held on 15.02.2010 resolved to fix the price of iron ore at ₹.1,900/- per metric ton for the period subsequent to 08.02.2008. A copy of the said resolution is at Annexure-R.35. Thus, the price of raising cost could not be fixed for the year 2008-09 immediately in view of the non-co-operation of the claimants' sister concern, SSML. For fixing the raising cost in the year 2009- 10, a meeting was convened on 23.10.2009. In the said meeting it was agreed by both the parties that, a joint survey be conducted to arrive at the current overburden ratio. Pursuant to the said decision, survey was conducted and report was submitted by the General Manager, fixing the overburden ratio at 1:5 for the year 2009-10. A copy of /34/ Com.A.S.No.137/2019 the joint survey report submitted by the General Manager is at Annexure-R.36. Based on the report, the MML worked out and fixed the raising cost at ₹.365/- per metric ton. A copy of the calculation sheet is at Annexure-R.37.
44. On going through the said calculations, the claimant disputed the same on the ground that though survey was conducted jointly, but the report containing overburden ratio at 1:5 was prepared unilaterally by the MML and not jointly. In the said meeting, after detailed discussions, it was decided that both the parties would meet again on 16.12.2009 at Sandoor to work out the details as per the mutually agreed technical parameters / norms. A copy of the proceedings of the meeting is at Annexure-R.38. In the meeting held at Sandoor, the claimant failed to submit any technical data and hence, the MML by its letter dated 18.12.2009 requested the claimant to furnish details, so that the raising cost could be finalized. A copy of the said letter is at Annexure-R.39. The MML addressed letters dated 09.03.2010 and 30.03.2010 furnished the information and copies of the said letters are at Annexures-R.40 and 41 respectively. In response to the said letters, the SSML by its letter dated 15.04.2010 requested the MML to finalize the cost, as the same could not be resolved in several meetings held. A copy of the said letter is at Annexure-R.42. Since the raising cost could not be finalized by mutual discussions and negotiations, the Board of MML in its 279th Meeting held on /35/ Com.A.S.No.137/2019 07.05.2010 affirmed the raising cost at ₹.365/- per metric ton for the year 2009-10. A copy of the said resolution is at Annexure-R.43. Accordingly, the MML by its letter dated 05.06.2010 informed the same to the claimant and a copy thereof is at Annexure-R.44. Upon receipt of the said communication, the claimant submitted a comparative statement worked out on the basis of overburden ratio and waste development for fixation of raising cost and arrived at a figure of ₹.864/- per metric ton by taking into consideration the ore production for the period between September 2008 and October 2009.
45. A perusal of the comparative statement shows that the cost of production based on the mining activity was worked out at ₹.691/- per metric ton and to that figure, 25% profit margin of ₹.173/- has been added which works out to the total of ₹.864/- per metric ton. A copy of the said comparative statement is at Annexure-R.45. The said working sheet furnished by the claimant is referred to the cost accountant of MML, who after taking into consideration the data furnished by the claimant in its working sheet, re- worked and arrived at the figure of ₹.478/- per metric ton. Copies of the revised work sheet and the comparative statement are at Annexures-R.46 and R.47 respectively. The said price worked out by the cost Accountant was discussed by the committee constituted for the said purpose by the MML in its meeting held on 19.07.2010 and /36/ Com.A.S.No.137/2019 accepted the figure arrived at by the Cost Accountant and recommended to the Board for at Annexure-R.48.
46. The Board, in its 280th Meeting examined the fixation made by the Cost Accountant and the recommendations of the Committee and decided to refer the matter to an independent third party opinion and the Board decided to entrust their matter to the National Institute of Rock Mechanics, KGF and a copy of the said proceedings is at Annexure-R.49.
47. The NIRM, by its fax communication dated 31.08.2010 informed their inability to undertake the task. A copy of the said Fax communication is at Annexure-R.50. The MML therefore decided to refer the matter to Dr.V.R.Shastry and the said Dr.V.R.Shastry by his letter dated 07.02.2011 fixed the raising cost at ₹.1,204.62 per metric ton. A copy of the said letter is at Annexure-R.51.
48. Upon perusal of the said report and the price arrived at by Dr.V.G.Shastry, the MML noticed that he had committed a glaring error in fixing the raising cost, based on academic orient method by the cost accountant at ₹.526/- per metric ton. A copy of the said calculation sheet is at Annexure-R.52. The Board in its 284 th meeting held on /37/ Com.A.S.No.137/2019 20.04.2010 noticed that the price fixed by Dr. V.R.Shastry was exorbitant, since even according to the claimant, the raising cost worked out to ₹.691/- per metric ton without profit margin of 25% totaling to ₹.865/- per metric ton and therefore rejected the report of Dr. V.R.Shastry. Further, the Board accepted the revised price fixed by the Cost Accountant at ₹.526/- per metric ton and a copy of the said meeting resolution is at Annexure-R.53.
49. The MML, by its letter dated 03.05.2011, communicated the said fixation made by the Board to the claimant and a copy of the said letter is at Annexure-R.54. For the year 2010-11, the claimant by its letter dated 16.05.2011 requested the MML to increase the raising cost proportionately with the price of iron ore as allegedly provided under the terms and conditions of the supplementary agreement and a copy of the said letter is at Annexure-R.55.
50. The mining operations came to an end w.e.f. 29.07.2011 in view of the orders of the Apex Court. The claimant by its letter dated 06.05.2013 informed the MML that except for the year 2009-10. It also sought to furnish certain information as to how the raising cost has to be fixed and a copy of the said letter is at Annexure-R.56. The technical consultancy division of the MML vide its letter /38/ Com.A.S.No.137/2019 dated 06.05.2013 submitted the report of quantity calculation of the production and development carried out by the claimant for the period from 15.03.2010 to 03.05.2010 and a copy of the said letter is at Annexure- R.57.
51. The MML by its letter dated 09.05.2013 requested the claimant to submit the required data along with supporting document for fixing the raising cost for the year 2008-09, 2010-11 and till closure of mine and a copy of the said letter is at Annexure-R.58. The claimant by its letter dated 15.05.2013 submitted their statement indicating the details worked out by it. For the years 2010-11, the claimant claimed a sum of ₹.2,250/- per metric ton and for the year 2012-13 had arrived at a figure of ₹.2,520/- per metric ton and a copy of the said letter is at Annexure-R.59. Upon receipt of the same the MML by its letter dated 31.05.2013 requested the claimant to substantiate its figures with relevant documents and a copy of which is at Annexure-R.60. In response to the said letter, the claimant by its letter informed that it has in its earlier letter dated 15.07.2013 have worked out the price based on the expenditure incurred for production and removal of overburden ratio and a copy of the said letter is at Annexure-R.61.
/39/ Com.A.S.No.137/2019
52. The claimant, again by its letter dated 06.06.2010 submitted a statement and work sheet indicating as to how the figures were arrived at and copies of the said letter and the work sheet are at Annexure-R.62 and 63 respectively. In the meantime, the Cost Accountant of the MML vide his report submitted on 02.08.2013 fixed the raising cost for the year 2008-09 at ₹.559/- per metric ton and ₹.762/- per metric ton for the year 2010-00. The copy of the said report is at Annexure-R.64.
53. The Cost Accountant, while arriving at the said price had taken into consideration the quantity of overburden based on the trip wise, which is not the correct procedure and therefore by taking into consideration the survey report, he recalculated the figures and fixed at ₹.620/- per metric ton. This fixation is based on cost parameters as per the trip, based on technical consultancy division report. A comparative statement showing the said calculation is at Annexure-R.65. When this issue was brought before the Board, the Board in its 297 th Meeting held on 30.09.2013 approved the raising cost based on the TCD survey report and Mine activities, costing for the year 2008-09 and approved the price at ₹.559/- per metric ton for the year 2008-09 and ₹.620/- per metric ton for the year 2010-11, and for the year 2011-12, 10% increase was allowed from the previous year and fixed at ₹.682/- per metric ton. Copies of the Board note and the resolution of /40/ Com.A.S.No.137/2019 297th Board Meeting are at Annexures-66 and 67 respectively. Accordingly, the MML by its letter dated 30.11.2013 indicated the same to the claimant and a copy thereof is at Annexure-R.68.
54. The Apex Court based on various irregularities and illegalities in mining activities witnessed during inspection of the monitoring committee appointed by the CEC and the UIOM has been classified by the CEC as category-'C' mining. In respect of category-'C' mining, the Apex Court has directed to cancel the mining leases of the lessees and re auctioned. The State Government has formulated a scheme pursuant which the State Government has formulated a scheme pursuant which the State Government has appointed CRISIL Risks and Infrastructures Solutions Limited to assist the State Government in developing and auction methodology for category-C mining and further to assist in conducting action.
55. The CRISIL while working out the floor price has taken the prevailing market conditions of Ballary-Hosapet sector mines as sample illustrating and has worked out the floor price to be fixed for C-Category mines. By taking into account the average cost of extraction based on annual reports filed by the mining companies of IBM, has arrived at a raising cost of ₹.65/- per metric ton. The relevant portion /41/ Com.A.S.No.137/2019 of the CRISIL report is at Annexure-R.69. The Income Tax Department, while assessing the returns filed by the MML for the year 2008-09 has inter alia observed that the supplies made to the extent of 81,923 metric tons to SSML during the year 2007-08 at a price of ₹.231/- per metric ton while prevailing market value at ₹.1,250/- per metric ton, has sold the iron ore at an abnormally low price and called upon the MML to explain the same.
56. The MML has explained the same by informing the Income Tax Department that the ore of overburden ratio during the financial year 2007-08 was not less than 1:11 ratio and that ₹.231/- per metric ton was collected and correspondingly, ₹.150/- per metric ton was paid to the raising contractor and therefore requested the department to drop the proceedings. However, the department did not accept the said explanation and assessed the ₹.8,34,79,537/- as suppressed sales. The copy of the income tax department's order is at Annexure-R.70. The claimant, by its letter dated 8.1.2010 authorized the MML to adjust the amount receivable against raising cost from the amount payable by SSML towards cost of iron ore to MML and a copy of the said letter is at Annexure-R.71. Accordingly, the SSML made an adjustment and paid a part of the amount to MML against supply of Iron ore fines and a copy of which is at Annexure-R.72. The MML during 2009-10 and 2010-11 have adjustment the raising cost against the /42/ Com.A.S.No.137/2019 sale price payable by SSML and the copies of the sample delivery orders and the statement showing adjustment are at Annexures-R.73 and R.74 respectively.
57. The Government of Karnataka in its order dated 12.03.2007 and 09.09.2008 referred the matter to the Lokayuktha to investigate into various illegalities committed by the Mining Leaseholders and the Lokayuktha submitted its report in December, 2008. One of the references made by the Government was to enquire and report various aspects of illegal mining ranging from encroachment, mining beyond quantities etc,. In so far as UIOM is concerned it is reported by the Lokayuktha at serial No.82 of the List appended to the said report that there is an encroachment of 5.737 hectares. Copy of the said report is at Annexure-R.75. Pursuant to the said report, the Forest Department registered F.I.R. dated 05.03.2009.
58. Upon registration of the F.I.R., the Forest Department has seized the Mine area including the machinery and consequently, the mining activity could not be carried out. Further, on 16.05.2009 the respondent company gave an undertaking to the Forest Department to release the ore and machinery, which has been seized. The copies of the F.I.R., seizure mahazar and the release order are at Annexure-R.76. The Range Forest Officer by his letter /43/ Com.A.S.No.137/2019 dated 11.05.2009 informed the Mines and Geology Department, not to issue any permits. Subsequently, the Range Forest Officer by his letter 05.06.2009 and for the reasons stated therein withdrew his earlier letter dated 11.05.2009. The copy of the said letter is at Annexure-R.77. Thereafter, the Government of Karnataka by its order dated 28.07.2010 banned export of iron ore with immediate effect. The copy of the said order is at Annexure-R.78.
59. The Apex Court by its order dated 29.07.2011 suspended all mining activities including transportation in the Ballary District and a copy of the said order is at Annexure-R.79. Subsequently, the Apex Court by its order dated 26.08.2011 extended the said suspension to the districts of Tumkuru and Chitradurga and a copy of the said order is at Annexure-R.80. Further, the Apex Court by order dated 23.09.2011 directed that the entire quantity available iron ore in Ballary, Chitradurga and Tumkuru districts shall be sold only through E-Auction by the monitoring committee appointed by the Apex Court in that regard and a copy of the said order is at Annexure-R.81.
60. The CEC in its report dated 03.02.2012 submitted to the Registry of the Apex Court has dealt with classification of leases in different categories on the basis of the level of illegalities found. A copy of the relevant extract /44/ Com.A.S.No.137/2019 of the report dated 03.02.2012 submitted by the CED along with relevant extracts are at Annexures-R.82. The report of the CEC was accepted by the Apex Court in its order dated 18.04.2013 and the Apex Court in para 50 of its judgment has summarized the conclusions. In sub-para 7 of para 50 the Apex Court accepted the recommendation of the CEC dated 03.02.2012 and further clarified that the leases in respect of C-category mines will stand cancelled and in sub- para 8 of para 50 the Apex Court further held that the proceeds of the sales of the iron ore of C-category mines made through the monitoring committee will stand forfeited to the State.
61. The monitoring committee will remit the amounts held by it on this account to the SBV for utilization in connection with the purpose for which it had been constituted. A copy of the relevant extract of the judgment of the Apex Court is at Annexure-R.83. Pursuant to the said judgment of the Apex Court, the Government by its order dated 12.09.2013 determined the lease of C-Category mines including UIOM and a copy of the said letter is at Annexure-R.84. It is because of the encroachment made by the raising agent i.e., the claimant ultimately UIOM came to be categorized as C-Category mines by the CEC. One of the conditions imposed by the Apex Court while deciding the mines matters referred to above is that all the mines irrespective of their categorization shall undertake /45/ Com.A.S.No.137/2019 reclamation and rehabilitation work as per ICFRE guidelines by constructing retention walls, shifting dams etc,. As this direction of the Apex Court is required to be implemented, the MML by its letter dated 20.06.2014 called upon the claimant to deposit a sum of ₹.10.00 Crores for undertaking the said works and a copy of the said letter is at Annexure- R.85. However, no amount has been deposited by the claimant so far. Apart from stating the above factual back ground in its statement of objections and counter claim, the respondent has also traversed the averments made in the claim statement. On these and other contentions urged or taken in the statement of objections and counter claim and also having traversed the averments of the claim statement, the respondent has prayed the Arbitral Tribunal to dismiss the claim made by the claimant in their claim statement.
62. The respondent made a counter claim against the respondent to direct the claimant to pay the following amounts:
Claim amount Sl.
Claims in
No.
₹.
1. Salary reimbursement 36,94,498.00
2. Penalty for not produced 35,75,78,351.00 minimum assured quantity
3. R & R approximate cost 10,00,00,000.00 /46/ Com.A.S.No.137/2019
4. Compensation in 'C' Category 1,96,41,85,195.00
5. NPV payable 51,91,337.00
6. Minimum wages payable to 1,40,00,000.00 contract labourers
7. Reputation damages 50,00,000.00
8. Legal expenses 30,00,000.00 Total 2,45,06,47,381.00
63. Regarding Claim No:1 the Respondent has stated that it is incumbent upon the claimant to pay the salaries of the four employees in terms of clauses 18 (c) and (d) of the Raising Agreement dated 22.01.2004, The respondent has furnished the details of the payments made to the four employees with an abstract. The amount so paid by the respondent is ₹.36,94,498.00. The respondent is entitled to claim the said amount from the claimant.
64. The claimant was required to produce a minimum quantity of 2,40,000 metric tons per annum as per clause- 22 (c) of the said agreement,. The claimant has not produced the said assured minimum quantity of iron ore. The respondent has furnished the details of short fall during each month to the Claimant. The claimant ought to have produced a total quantity of 13,00,000 metric tons whereas it has produced only 4,91,421 metric tons and the short fall is 8,08,079 metric tons. As per Clause 22(c) of the agreement the respondent is entitled to seek compensation /47/ Com.A.S.No.137/2019 for the short fall in production. The respondent is entitled to have compensation of ₹.35,75,78,351/- which amount is calculated on the basis that the respondent would have paid the claimant had it produced the agreed quantity. The respondent is basing its claim for compensation varying from ₹.150/- to ₹.682/- which price was in fact paid to the raising contractor for extracting the iron ore.
65. The claimant and its sister concern M/s.Shivashankar Minerals Limited committed various illegalities while operating the mines. The Lokayuktha and the CEC have noticed that the claimant has carried out illegal mining activity in the Forest Area and the Mine claimed to be classified as C-Category mines only because of the irregularities committed by the claimant. In view of the order passed by the Apex Court, the respondent-counter claimant is required to pay the R & R Plan prepared in respect of UIOM and based on the plans prepared by ICFRE in respect of A & B Category Mines, the respondent has claimed an approximate amount of ₹.10.00 Crores i.e., likely to be required for implementation of R & R works of UIOM. Since this amount is required to be spent only due to the illegalities committed by the claimant, the respondent in its letter dated 26.02.2014 has demanded the sum of ₹.10.00 Crores from the claimant towards implementation of the R & R plan.
/48/ Com.A.S.No.137/2019
66. Based on the recommendation of the CEC, the Apex Court has directed cancellation of all C-Category mines and accordingly, the State Government in its notification dated 17.10.2013 has determined the lease in respect of UIOM and a copy of the said order is at Annexure- R.89. The approved mining plan of the UIOM indicates the Mine is in the Forest FC approved area of 36.360 hectors and the extract of the approved mining plan is at Annexure- R.90. The total value of the remaining mineral reserves now available in the mines works out to ₹.785,678,40,780/-. The respondent would have received if the mining lease is not determined and the amount so calculated works out to ₹.785,678,40,780/-. The respondent is claiming only 25% of the said value which works out to ₹.196.41 Crores as compensation towards the loss.
67. The claimant was required to pay ₹.100.56 lakhs towards NPV and out of which ₹.10.00 lakhs was payable before commencement of mining operation while the balance of ₹.90.56 lakhs was to be recovered from the processing cost within a period of four months from the date of production in view of clause-22 (c) of the said agreement,. Further, on different dates the respondent- counter claimant is in receipt of ₹.74,98,263/- towards the NPV between the period September 2006 and March, 2008, leaving a balance of ₹.25.58 lakhs. Further, an amount of ₹.11.97 lakhs towards safety zone charges (4.9 lakhs) and /49/ Com.A.S.No.137/2019 compensatory afforestation charges (7.40 lakhs) has also not been paid. With the simple interest at10% it works out to ₹.51,91,339/- which has been informed to claimant through a letter dated 21.07.2009 requesting the claimant to pay the same at an early date. Hence, the claimant is liable to pay a sum of ₹.51,91,337/- to the respondent towards the NPV.
68. The claimant is responsible to pay the minimum wages every month during the employment of the employees employed by the claimant as per Clause-24 of the agreement dated 22.01.2004,. But, about 28 workers employed by the claimant have raised the industrial dispute for not paying the minimum wages and also to continue their employment and a case has been filed in the Court of Regional Labour Commissioner, which is pending at RLC, Bellary. A copy of the said letter and other connected documents are produced collectively at Annexure-R.92. In view of the above, an amount of ₹.1,40,00,000/- which has been claimed in the interest of the respondent company being a Government organization.
69. The respondent-counter claimant has suffered huge loss of reputation on account of the claimant who have carried illegal mining operation, resulting in cancellation of the lease, thereby bringing down the reputation of the state /50/ Com.A.S.No.137/2019 undertaking like the MML. Hence, a nominal damage of ₹.50.00 lakhs has been claimed for loss of reputation.
70. The respondent is also entitled to claim a sum of ₹.30.00 lakhs towards the legal fees of the proceedings.
71. The Respondent has prayed the Tribunal to direct the Claimant to pay the amounts claimed by way of counter claim.
The summary of the rejoinder filed by the claimant to the Counter claim is as under:
72. The Respondent is not entitled for any reliefs. It is stated that the said sum of ₹.231 per metric ton was quoted by Shivashankar Minerals Private Limited (SSML for short) included the royalty and other taxes payable by it, for the delivery of mineral by respondent with necessary transit permission and the same is evidenced by Annexure-R6 as well as Annexure-R8. It is further stated that the claimant did not quote the price on ex-mine basis. Further, the CAVO of the respondent suggested in the tender evaluation committee (Annexure-R6) to inform the present status of the mining lease to the successful tenderer and the same was suppressed by the respondent and has committed fraud on the claimant. Further vide para 6 of the rejoinder it is stated that the claimant was not given any opportunity to /51/ Com.A.S.No.137/2019 look into the terms of the agreement since the same was given across the table to the claimant and the claimant was asked to sign the same immediately and the claimant was never given an opportunity to approve the same as falsely stated by the respondent. Annexure-R.10 which is a letter dated 22.01.2004 issued by MML clearly reveals that the agreement was given on the very same day and the agreement (Annexure-R12) was executed on the very same day, which itself clearly shows that no opportunity was given to the claimant to go through the same and suggest changes, if any by the claimant. The allegation that the claimant, after going through the contents of the agreement, signed the agreement and returned the same to the MML is false. It is also stated that however as the closure order against the operation of mining activities for production of iron ore in UIOM was issued way back in the year 1984 by the DGMS, the mining operation for iron ore production could not be commenced in the year 2005, 2006 and till May, 2007 (Annexure-C9 and C10). There was no production till the DGMS vacated its orders imposed U/s. 23(3) of the Mines Act and there was a delay of more than 16 months from the date of entering the agreement and as on the date of agreement, there were no permissions and clearances from DGMS, Forest Department, MOEF, Karnataka State Pollution Control Board and even mining lease renewal from Director, MGD, etc to operate the mine nor even enter into mine, which fell in forest land. Further, MML even till today does not have the explosive licence and /52/ Com.A.S.No.137/2019 the respondent has directed the claimant to stop the mining operations on various occasions as mentioned in detail in the claim statement as well as in the rejoinder. Further, by the letter dated 27.11.2008 respondent itself asked the claimant to arrange for obtaining blasting permission, which clearly proves that even on 27.11.2008, the respondent did not have the explosive license in respect of UIOM which is an important permission to start with the mining activity. A copy of the letter dated 27.11.2008 is as per Annexure-C37. The claimant started the developmental activity to bring the mine to safe working condition and to vacate Sec.22(3) of the Mines Act, and due to the developmental works carried out by the claimant, the order of closure came to be vacated by the DGMS. In fact, in the said letter, the claimant itself requested the respondent to seek permission from Conservator of Forests, Bellary to install a crusher and a weigh bridge as required under the relevant forest laws at the forest land and also sought the respondent to obtain power connection from KPTCL and further requested the respondent to obtain explosive license. If this is so, the question of commencement of operation, does not at all arise, and hence the allegation that the claimant informed the respondent MML that the mining operation for iron ore production have been commenced w.e.f. 11.05.2005 is false. In fact, the work pertaining to backlog development was commenced from 11.05.2005 to vacate the order of ban imposed U/s. 22(3) of the Mines Act which was imposed way back in the year /53/ Com.A.S.No.137/2019 1984 and the actual production of iron ore was not started as the mine to get it in compliance with the mining safety requirements and seek opening of the mine, for iron ore production, there was incidental production of iron ore recovered from the contact zone of ore body and waste over burdens, left over to strengthen the vertical walls by the respondent in 1984. This can be no stretch of imagination be regarded as commercial production or mining operation which also violates the Mines Act before vacating order of ban U/s. 22(3) of the Mines Act. Because of this reason, the agreement had provided for a gestation period of one year to the claimant before the claimant commences the actual commercial production. The claimant itself requested as per Annexure-R17 the respondent to obtain the forest approval and power sanction from KPTCL and no mining activities were commenced before the Karnataka State Pollution Control Board issue CFE. The claimant itself in its letter dated 15.06.2005 (Annexure-R17) requested the respondent to seek permission from Conservator of Forests, Bellary to install a crusher and a weigh bridge at the forest land and also requested the respondent to obtain power connection from KPTCL and further requested the respondent to obtain explosive license. For mining operation, crushers are required. In that view of the matter, the question of commencement of commercial production does not arise till then. It is true that on 27.08.2005, the forest Department issued a F.I.R. to the respondent and seized vehicle bearing chassis No.PDE /54/ Com.A.S.No.137/2019 55887 for illegal transportation of ore from mine to stockyard. The claimant was transporting the iron ore which came during the developmental works under the supervision, control and instructions of the respondents' authorized mine Manager to the stockyard of the respondent. The entire mining activities and transportation of the iron ore was carried out as per the instructions and control/supervision of the respondents' mine manager and no independent discretion was ever given to the claimant at the mines by the respondent. The respondent alone is submitting all statutory returns to the concerned departments in this regard. It is false to state that in spite of such clear directions the claimant had violated the Supreme Court and continued with the mining operation. The claimant has not received the letter dated 10.10.2005 (Annexure-R22) which claim to have been sent by the respondent, but however in the letter dated 10.10.2005 (Annexure-R23) are not true and the respondent is put to strict proof. It is not correct to state that the mining activity has been resumed w.e.f. 05.10.2006, but only the developmental activities as specifically informed that they resumed the development work to lift the prohibition U/s. 22(3) of the Mines Act by the Mines Manager to the GM (Mkt) of the respondent as at Annexure-R26 which continued and not the actual commercial production. The claimant had paid the NPV in terms of the agreement though the same was not the requirement under the terms of the agreement though the same was not the requirement /55/ Com.A.S.No.137/2019 under the terms of the tender. It is true that the Board of MML in its meeting held on 28.07.2006 has accorded in principle approval for enhancing the raising cost, which would be revised from time to time on the basis of increase in the cost of input or the price index. It is also true that it was resolved to extend the contract for seven more months considering the fact that the mine was not in operation for a period of more than seven months. It is true that it was further resolved that the raining contractor/claimant should pay salaries to the posted by MML as per clause 18(c) of the Raising agreement, but the same was only to four categories of employees and not to all employees at the mine, besides the cost of explosive and pursuant to the said decision of the Board, a supplementary agreement was also entered between the parties on 04.08.2006 and the work order was also issued on 08.09.2006. The agreement does not provide for extraction of only 85,000 metric tons of iron ore. It is true that the state level environment impact assessment authority by its environmental clearance letter dated 10.12.2007 accorded approval for increasing the said quantity to 1.073 million tons is true, but with a condition to obtain CFE and CFO from KSPCB. The CEF and CFO were issued only in 22nd May 2008 and 14th August 2008 respectively and which clearly revealed that the enhancement from 85,000 metric tons to 1.073 metric tons came into force only from middle of August 2008 when the CFO was issued by KSPCB. Since the actual clearances were obtained only in the month of August 2008, the /56/ Com.A.S.No.137/2019 contention of the respondent that the claimant never achieved the minimum assured quantity during the subsistence of the contract, though all clearances were obtained is false. A perusal of letter dated 04.02.2008 at Annexure-R33 clearly states that the respondent itself has instructed the claimant not to produce more than 85,000 metric tons till they obtain CFE from KSPCB. Though the respondent received the permission for enhancement of production from 85,000 metric tons to 1.073 metric tons from 14th August 2008 the respondent had not obtained the explosive license, which is a basic requisite for mining activity till today. The action of the respondent in revising and re-fixing the price of iron ore lumps from the year 2008- 09 w.e.f. 08.02.2008 is illegal apart from being contrary to the terms of the agreement. The allegation that SSML did not extent necessary co-operation for fixation of price of iron ore and continue to take delivery at the rate of ₹.231/- per metric ton even beyond 07.02.2008 is false. It may be true that when the price of iron ore was fixed at ₹. 231/- per metric ton, correspondingly the raising cost was fixed at ₹.150/- per metric ton. But the same has to be done in accordance with the agreement entered into between the parties. Since the commercial production itself was started from 14.08.2008, and there was no supply of contracted quantity, the question of revising and re-fixing the sale price does not arise. The action of the respondent in resolving to fix the price at ₹.1,900/- per metric ton in its Board Meeting dated 15.02.2010 and communicated to SSML on /57/ Com.A.S.No.137/2019 31.03.2011 for the period subsequent to 08.02.2008 is illegal and further the same was fixed unilaterally by the respondent, which was opposed by SSML as the same was contrary to the terms of the agreement and marketing ethics, fixing the revised sale price for the material sold, dispatched, and invoiced, by the respondent to the claimant about three years ago. The allegation that price of raising cost could not be fixed for the year 2008-09 immediately in view of non-co-operation of the claimants' sister concern, SSML, is false. The claimant and sister concern SSML kept on reminding the respondent to revise and re-fix the raising cost repeatedly, where the respondent turned its deaf ear. It is true that a meeting was convened on 23.10.2009 for fixing the raising cost in the year 2009-10 and in the said meeting it was agreed by both the parties that, a joint survey be conducted to arrive at the ore to overburden ratio and pursuant to the said decision, the survey was conducted and report was submitted unilaterally, by the General Manager of the respondent as per Annexure-R36, fixing the over burden ratio at 1:5 though the short term techno-economic report of the General Manager (Production) itself arrived at 1:5:55 of ore to over burden ratio for the year 2009-10 without the knowledge of the claimant and based on the report, the MML unilaterally worked out and fixed the raising cost at ₹.365/- per metric ton for the ore to over burden ratio of 1:5 as against the actual over burden ratio of 1:11. It is submitted that in response to the letter of the respondent to submit the /58/ Com.A.S.No.137/2019 technical data/parameter, the claimant submitted the required technical data and parameters as per Annexure- C27 and requested the respondent to fix the raising cost keeping into consideration the same. However, the respondent without going through the same and in complete contravention of the agreement fixed the raising cost at ₹.365/- per metric ton, unilaterally for the year 2009-
10. The claimants' sister concern on behalf of the claimant opposed the said actions of the respondent vide its letters dated 18.06.2010 and 16.05.2011 as per Annexures-C38 and C39 respectively. The claimant at no point of time has sent a figure of ₹.864/- and the claimant disputes the authenticity or otherwise of the said comparative statement at Annexure-R.45 and the respondent is put to strict proof of the same. The claimant reiterates that respondent every time has fixed the raising cost unilaterally in contravention of the agreement and contrary to the technical and scientifically qualified reports from the qualified mining engineer. It is highly illegal on the part of the respondent to go against the report of Doctor V.R.Shastry and further stating that his report is not binding on them. The raising cost for the year 2009-10 was fixed only in May 2011 as per Annexure-R54, which resulted in the claimant suffering huge financial crunch. The raising cost worked out after inspection and survey by the technically qualified third party appointed by the Board of the respondent at the mines in the presence of the respondents' General Manager (Production) AGM (Production) Geologist etc, and other /59/ Com.A.S.No.137/2019 technical staff was rejected by the respondent since the same did not suit the respondent, which is highly illegal. The respondent company itself submitted to the Income Tax Department in its returns as per annexures-R.70 and C.20 and in the clarifications for the assessment year 2008-2009, stating that the prevailing raising cost of this mines considering the ore to over burden ratio of 1;11, the production cost was ₹.1,850/- per metric ton and the stripping ratio in UIOM is 1:11. Thus, the respondent has taken a different and real version and explained the true fact to the Income Tax Department. In total contradiction to its own statement submitted to the Income Tax Department for the assessment year 2008-09, the respondent has now taken the stand that the over burden ratio is 1:5 against the admitted ratio of 1:11 and hence the raising cost fixed by the respondent is untenable. The respondent had fixed the raising cost for the period between 2008-09 and 2010-11, unilaterally without taking into consideration of the technical parameters and tripwire and overburden ratio which were submitted by the claimant in response to the request of the respondent. The respondent had fixed the raising cost at ₹.559/- for the year 2008-09 and ₹.620/- per metric ton for the year 2010-11 as against the recommendation of ₹.762/- per metric ton by the so-called Cost Accountant of the respondent and ₹.682/- per metric ton for the year 2011-12 and the same was opposed by the claimant vide its letters at Annexure-C25, C26 and C27 and the claimant further reiterated that the raising cost analysis /60/ Com.A.S.No.137/2019 submitted by the claimant is correct and based on the technical parameters and stripping ratio at the UIOM. The respondent instead of fixing raising cost on technical parameters, they compared with the respondents' other mines owned by the respondent. The cost fixation by the respondent was totally contrary to the cost recommended by Dr.V.R.Shastry. In fact, the claimant requested the respondent to fix the raising cost at least at the cost recommended by Dr.V.R.Shastry. On the contrary the respondent fixed the price abnormally low, which caused the claimant to suffer huge losses. The fixation of raising cost unilaterally by the respondent was also opposed by the claimant in various correspondences including in the legal notice dated 12.02.2014 as per Annexure-C33. The claimant disputes the contents of Annexure-R.65. From the table given in the rejoinder, it can be seen that the respondent itself has no consistency in fixing the raising cost and had been changing the raising cost frequently on one pretext or the other without any basis. Further, till date, the respondent has not fixed the raising cost for the years 2006-07, 2007-08 in respect of iron ore fines. Due to non- fixation and non-payment of raising cost from year to year as per the conditions of the agreement the claimant had suffered irreparable financial losses. Had it finalized the cost and paid the same to the claimant in time, the claimant could have invested the said money in other projects and gained profits. The respondent has admitted that the raising cost as per the norms of the PWD, GOK would be /61/ Com.A.S.No.137/2019 ₹.1,850/- per metric ton for the year 2007-08. The respondents' contention that MML has adjusted part of the amounts payable towards the entire raising cost against the sale price payable by SSML is highly illegal and unsustainable. It was not due to the claimant that the mining activities were banned, but it was due to the illegalities committed by the respondent that they suffered the ban order, which caused the claimant to suffer huge loss. The respondent itself has by its letter to the Deputy CF Bellary Division on 16.05.2009 as per Annexure-R76 and further in the letter dated 28.11.2011 addressed to CEF it has not stated that there is encroachment in this mine. Annexure-R78 does not speak anything about the iron ore export ban. The respondent has filed an application for clarification before the Apex Court stating that there is no encroachment. Copies of the letter dated 28.11.2011 and the application filed in the Apex Court are as per Annexures- C.40 and C.41 respectively. At no point of time the respondent has alleged that the claimant has encroached and carried out illegal mining. For the first time, the respondent has come up with this plea in order to prejudice the mind of this Tribunal and to avoid its liabilities and obligations towards the claimant. Further, Director, Mines and Geology vide his letters dated 05.07.2001 in the proceedings of the joint survey report clearly endorsed that there is encroachment by some companies, whereas the respondents' ML 995 at Sl.No.19 which was not included in that cocroachers' list. A copy of the said letter dated /62/ Com.A.S.No.137/2019 05.07.2011 is at Annexure-C 42. The CEC/SCI along with their joint survey team as per Annexure-R82 had considered only the ML extent as 33.60 hectors as in the notification dated 08.02.2006 instead of the GOK notification dated 29.10.2010 in which the GOK renewed the entire ML area of 80.94 hectors in place of earlier extent of 33.60 hectors. If the respondent had properly shown this second notification where the extent of ML 995 is 80.94 hectors, then, the percentage of encroachment would have only 6.27% wherein the UIOM would have categorized as A-Category mine since the violation would be less than 10%. The respondent itself has stated to the said CEC that there are no encroachments. The claimant is not responsible for any violation or encroachment and it was carrying out the mining activities under the strict control and supervision of the respondent. It is the failure of the respondent in proper presentation of records to the joint survey team/CEC as already explained above and the question of paying any amounts much less ₹.10.00 Crores stated in this paragraph for reclamation and rehabilitation works by the claimant as falsely alleged by the respondent. The officer of price bid of the sister concern of the claimant which quoted a price of ₹.231/- per metric ton for the iron ore which is inclusive of the royalty charges, forest development tax etc, even accepted by the tender evaluation committee as per Annexure-R.5 of the respondent as admitted by the respondent itself in its statement of objections. The respondent placed the draft agreement across the table and /63/ Com.A.S.No.137/2019 asked the MD of the claimant to sign the agreement. The claimant was not given any opportunity to look into the terms of the agreement and the respondent asked it to sign the same immediately. No drafts were exchanged between the parties before signing the agreement to suggest changes or modifications by the claimant. The respondent did not issue the required power to the claimant despite repeated request and reminders to the respondent wherein the claimant sought for power to act on behalf of the respondent as per Annexures-R.17, to appoint the claimant as the agent for the mines to act on behalf of the respondent. The respondent did not co-operate in getting the required permissions and clearances and delayed the mining activities though the claimant was ready with men and machinery, thereby causing financial loss to the claimant. Though the claimant requested the respondent by Annexure-R17 to appoint itself as the agent of the mine to co-ordinate with various departments to get clearances, the same was not approved and authorized by the respondent. However, it was the claimant itself which followed up diligently with the respondent to get various clearances and there were delays in getting clearances due to non-co-operation by the respondent. It is the respondent who was required to obtain the permissions and the claimant or the raising agent was just to co-ordinate with the respondent to assist to obtain the same. Despite request and reminders the respondent has turned its deaf ear. It is false to state the claimants' sister concern is /64/ Com.A.S.No.137/2019 required to pay the NPV. The respondent has virtually committed fraud upon the claimant by suppressing the fact of closure order by DGMS way back in the year 1984 U/s. 22(3) of the act. The claimant reiterates that as per the tender schedule an area measuring 43 hectors was to be made available by the respondent and based on the availability of 43 hectors, the claimant in its tender quoted for a production of 20,000 metric tons of iron ore per month. The respondent has acted in all malafidies by decreasing the mining area, which resulted in the decrease in production and under utilization of the men and machinery. Annexure-C.16 is the letter written by the respondents' mine Manager instructing the claimant not to exceed the production more than 85,000 metric tons as per CFO issued by KSPCB and advised the claimant to obtain CFE and CFO on the basis of environmental clearances issued on 10.12.2007. The report of Dr.V.R.Shastry is binding on both the parties. The respondent itself had written to Income Tax Department that the ore to overburden ratio at UIOM mine is 1:11 and the raising cost is ₹.1,850/- per metric ton. The raising costs have to be fixed before the commencement of the financial year but however the respondent has not adhered to the same and has instead fixed the raising cost for the year 2009-10 in the year 2011 and for the years 2008-09, 2010-11 and 2011-12 in the year 2013 which clearly establishes the malafidies on the part of the respondent. The rate fixed by CRISIL does not hold good to these mines apart from being not binding on the /65/ Com.A.S.No.137/2019 claimant since there was a binding agreement between the claimant and the respondent. As per clause 23 of the agreement dated 22.01.2004, the payment for raising iron ore will be paid by the respondent only for the sold and dispatched quantity only and not for the produced and stocked in the mines. The respondent is liable to pay for the stocked quantity as the claimant had incurred huge expenditure in developing the mine and producing iron ore which was in stock at the mine and also the mine was determined only due to irresponsible presentation of the respondent in submitting improper and incorrect mining lease records to the joint survey team. Since 1,60,000 metric tons of iron ore from this mine was e-auctioned, sold and dispatched from the mine, the claimant will have the right to claim the raising cost and it is the bounden duty of the respondent to pay the same to the raising agent as per the agreement whether it gets the sale proceeds or dispose free of cost to its choice only the claimant is to get his payment for the buyers' acknowledged quantity. All other allegations and averments made in the defence statement which are not specifically traversed in the rejoinder have been denied.
73. The respondent, for the first time, has come up with various new and specious claims as counter blast to the claims of the claimant, which are not maintainable, in view of the breach of the contract committed by the /66/ Com.A.S.No.137/2019 respondent and that further, the counter claims of the respondent are barred by limitation and are liable to be dismissed.
74. As regards the counter claim No.1 of the respondent, the claimant submits that as per the clause No.18 (c), the claimant was liable to pay salaries to (1) Mine Foreman (2) Mine Mate (3) Blaster (4) Watchman, but the respondent has allegedly claimed salaries for different categories of persons i.e., (1) Assistant General Manager, (2) Operator Grade-I etc., who are not eligible for salary from the claimant as per the agreement. Hence, the counter claim in respect of this count is incorrect apart from being not maintainable. The respondent has claimed its staff salaries due vide its letters dated 28.06.2012 and 09.02.2012 as ₹.23,53,063/- up to the period ending December, 2011 for several other categories of personnel. But in the counter claim the respondent is claiming a different amount i.e., ₹.36,94,492/-. However, without prejudice to the statement of the claimant that they are paying the salaries as per the agreement, if the respondent contends that their salaries are not paid, the claimant does not have any objection to deduct the salaries alleged to be payable in respect of above four categories of employees from the claims made by the claimant and direct to pay the remaining claims as per the claim statement.
/67/ Com.A.S.No.137/2019
75. The counter claim No.2 of the respondent is not maintainable and respondent is not entitled to claim the same due to its own breach of contract and defaults in getting the permissions and clearances in time and further its act of fraud in not disclosing the fact of closure order against UIOM way back in the year 1984, which finally revoked only in May 2007 and further has not obtained the explosive licenses till today. The claimant disputes the statement produced at Annexure-R.87 since the same is not correct and not admitted and hence the allegation in this para based on the same is false apart from being baseless.
76. The counter claim No.3 of the respondent is not maintainable and the respondent is not entitled to claim the said amounts mentioned in this paragraph. In fact it is due to illegal operation of mining by the respondent, the UIOM mine was closed way back in the year 1984 and this itself proves that the respondent is responsible for unscientific mining as in 1984 is the same. The claimant has not violated any mining laws nor carried out any illegal mining and further submits that it has carried out the mining activities all the time under the exclusive supervision and the control of the respondent. The claimants' sister concern was not even concerned with the raising of the ore but only the marketing of the ore. The allegation that Lokayuktha and the CEC have noticed that the claimant has carried out illegal mining activity in the forest area and the mine came /68/ Com.A.S.No.137/2019 to be classified as C-Category mines only because of the irregularities committed by the claimant is false. As stated earlier, it is due to the illegal operation of the mines during 1970 to 1984 by the respondent and also not properly submitting the right documents in particular the mining lease, notification dated 29.10.2010 where the GOK approved the ML area as 80/94 hectors, if the respondent had placed these documents the mine was in A-Category, but not in C-Category, which only due to the failure of the respondent and not by the claimant. The UIOM has been categorized as C-Category mines. Further, the respondent has failed to represent their case properly before the joint survey team/CEC, showing it that the ML extent is 80.94 hectors and not 33.60 hectors, which was taken for the purpose of calculations. Ultimately, as a result of the negligence of the respondent, mine was classified as the C- Category mine due to the respondent showing the leased area as 33.60 hectors instead of actual area of 80.94 hectors. Further, the respondent itself has claimed that there is no encroachment and the claimant cannot be made liable for the same and on the contrary, the respondent is liable for the same. Further, allegation that in terms of the orders passed by the Apex Court, respondent who is the lessee may be required to pay the R & R Plan prepared in respect of UIOM is true. However, the respondent alone is responsible for the same. The allegation that since this amount is required to be spent only due to the illegalities committed by the claimant, the respondent in its letter /69/ Com.A.S.No.137/2019 dated 26.02.2014 has demanded the sum of ₹.10.00 Crores from the claimant towards implementation of the R & R Plan, is false. At no point of time during the course of the mining operations the claimant has received any kind of communication from the respondent or from any departments alleging irregular working operations carried out outside the ML area. The DMG one of the monitoring committee member and convener, after conducting joint survey informed to MML that there are no encroachments, by MML and instructed MML to continue mining operations in the mine. MML in their report submitted to CEC had not pointed out, anything about any alleged irregularities committed by the claimant at any point of time. In fact, the respondent itself has by its letter dated 28.11.2011 addressed to CEC stated that there is no encroachment in this mines. Further, the respondent has filed an application for clarification before the Apex Court stating that there is no encroachment. The entire mining activities were conducted by the claimant under the supervision and control of the respondent. For the first time, the respondent has come up with this plea in order to prejudice the mind of the tribunal.
77. With respect to the counter claim No.4, the claimant reiterates its statement made in defence in order to avoid repetition.
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78. In regard to counter claim No.5, the Claimant has stated that it is true that clause-7 of the supplementary agreement provides for payment of the NPV payable to the forest department shall be paid by first and second parties equally on 50:50 basis which is not reimbursable by either parties. In fact, as per the tender schedule conditions, the claimant was not liable to pay the NPV. However, the claimant has paid the same in terms of the agreement. Hence, the claim of respondent in this Court is illegal apart from being not maintainable.
79. In respect of Counter Claim No:6, the claimant has stated that it has paid all the wages to all its employees as per the Minimum Wages Act, and there are no dues pending and hence the counter claim in this regard is false. The claimant does not have any knowledge of the case pending before the Regional Labour Commissioner at Bellary and even if the same is pending, the claimant is not liable to pay the same as falsely alleged by the respondent.
80. In respect of counter claim No.7, the Claimant has stated that the respondent being a government company has not disclosed the factual position that the mine was under closed U/s.22(3) of Mines Act imposed by the statutory authority viz., DGMS in the year way back in 1984, which shows its real reputation and in any event, a /71/ Com.A.S.No.137/2019 corporation can have no reputation. Further, without having the renewal of mining lease from DMG, Forest clearance, environmental clearance from MOEF approved mining plan from IBM, contest for expansion and consent for operation approvals from KSPCB explosive license from Government of India etc., the respondent had issued marketing and production tender, virtually fooling the tenders which show the conduct of the respondent. Therefore, the question of any loss of reputation of the respondent does not arise and hence the counter claim in this regard is not maintainable.
81. The Claimant has prayed the Arbitral Tribunal to allow the claim statement filed by the claimant as prayed for and reject the counter claims of the respondent.
82. Subsequently on 13.02.2016, the respondent has filed its rejoinder dated 10.02.2016 stating that the counter claim is made within the time and no claim is barred by limitation. The demand made by the respondent under Annexures-C43 and C44 have not been paid by the claimant. Under clause-18(c), the claimant is liable to pay salaries payable towards Mine Foreman, Mine Mate, Blaster and Watchman, but however, due to non-availability of Mine Foreman, Blaster, Watchman, the respondent posted the Assistant General Manager, Mine Foreman and Operator Grade-I, which the claimant never protested nor requested /72/ Com.A.S.No.137/2019 the respondent to post the officials, only the persons whose categories of posts are mentioned in the agreement, and the claimant has utilized the services of officials posted by the respondent during the period when the mine was in operation. The respondent has paid salaries in respect of these officials, which the claimant has not reimbursed nor is the said amount deducted from out of the amounts payable to the claimant towards raising cost. The statement showing the details of salaries paid and which is recoverable from the claimant is as per Annexure-R93. As provided under the agreement, the claimant is required to obtain all necessary statutory approvals/ clearances and that the respondent will not be responsible, if there is any delay in obtaining such approvals. The Union of India issued temporary working permission in the year 2005 and pursuant thereto, notices have been issued to all the concerned authorities, such as Regional Labour Commissioner, Director General of Mines-Safety, Controller of Indian Bureau of Mine etc, informing that the mining operations have been commenced and copies thereof are as per Annexures-R.94, 95, 96 and 97 respectively. After showing the progress in operating the mine, steps were taken to move the Director General of Mines Safety, and the respondent obtained clearances from the said authority vide permission dated 04.05.2007 and a copy thereof is as per Annexure-R 98. This clearly shows that the ban order of 1984, if any, was lifted. In the said notices, the respondent has also informed that steps will be taken to get the ban /73/ Com.A.S.No.137/2019 order imposed U/s. 22(3) of the Mining Act, since such order could be vacated only upon establishing that the mines was in operation and that, all safety measures have been taken. The work order dated 07.09.2006 issued by the Deputy Conservator of Forest, Bellary Division as per Ex.R.99 copy would show that the mining operations to be carried out only in an extent of 33.60 hectors of forest land. Initially the respondent had permission to extract 85,000 metric tons of iron ore in the year 2006-07 and for the subsequent years i.e., from 2007-08 the respondent obtained permissions in enhancement of production up to 10,73,000 metric tons of iron ore vide the Karnataka State Pollution Control Board letter as per Ex.R.32. The respondent has furnished the details of permissible quantity in a tabular column as under:
Year Consent Cal. Fines in Total in
quantity for Ore in MTS MTS
operation MTS
2006-07 85000 16817 24286 41103
2007-08 1073000 75107 97656 172763
2008-09 1073000 81582 43343 124925
2009-10 1073000 29225 27599 56824
2010-11 1073000 34005 51800 85805
2011-12 1073000 3000 7000 10000
83. The claimant had entered into an agreement on 14.01.2008 with one M/s. Mahesh Traders, Sangam Complex, Sindagi, Bijapur District for supply of explosives to /74/ Com.A.S.No.137/2019 carry out the blasting works and a copy thereof is as per Annexure-R.100. The respondent obtained permission from the Deputy Chief Controller of Explosive vide his letter dated 02.03.2009 to utilize the explosive magazine and a copy thereof is as per Annexure-R.101. These facts clearly establish that the claimant who has defaulted in breaching the contract in not supplying and not extracting the required quantity provided under the agreement. A perusal of various clauses in the agreement, specially clauses-4, 9, 10, 11 and 12 of the agreement clearly shows that, is the responsibility of the raising contractor to carry out the mining works in accordance with law and the raising contractor has not adopted scientific and systematic methods of mining in UIOM. As provided under the agreement, the claimant should have worked within 33.60 hectors only. However, the claimant has dumped the waste generated beyond 33.60 hectors of the sanctioned area. It is because of this dumping beyond 33.60 hectors of the sanctioned area. It is because of this dumping beyond 33.60 hectors, UIOM came to be classified as category-'C' mine by the Central Empowered Committee (CEC) constituted by the Hon'ble Supreme Court of India. Since the mine has been categorized as C-Category mine Reclamation and Rehabilitation works (R & R works) are required to be carried out and this has again attributable only to the illegality committed by the claimant in the matter of dumping the waste beyond 33.60 hectors of sanctioned mining area. All the other denials made in the /75/ Com.A.S.No.137/2019 statement of objections of the counter claimant which are not specifically traversed in the rejoinder are denied and the claimant is put to strict proof of the same. All the averments made and the claims made by the counter claimant / respondent are reiterated. The Respondent has prayed the Arbitral Tribunal to discard / reject the statement of objections filed by the claimant to the counter claim of the respondent / counter claimant, and allow the counter claim in the interest of justice.
84. The Learned Arbitral Tribunal has framed the following Issues for its determination:
ISSUES
1. Whether the claimant proves that the respondent forced to sign the agreement dated:22.01.2014?
2. Whether the claimant proves that the respondent is required to obtain all statutory permissions to resume the mining operations?
3. Whether the Claimant proves that the respondent forced the claimant to pay 50% of the NPV and the claimant is entitled for reimbursement of the said amount with 24% interest P.A.?
4. Whether the claimant proves that the respondent did not had any permission for carrying on mining operations and from the year 2005 they were carrying only the development activity and the commercial production started only in the year 2008, August because of the same the claimant suffered huge amount of financial loss?
5. Whether the claimant proves that the respondent played fraud on the claimant by not disclosing the closure order of 1984 as alleged by the claimant?
/76/ Com.A.S.No.137/2019
6. Whether the claimant proves that the respondent offered 43 Ha for mining operations but they made available 33.60 Ha for operation because of the same the claimant suffered huge loss?
7. Whether the claimant proves that the overburden was 1:11 and remove the same the claimant incurred huge expenditure?
8. Whether the claimant proves that the respondent was having permission from KSPCB for extracting only 85,000 Mts per annum because of the same the claimant suffered huge loss?
9. Whether the claimant proves that the raising cost was not fixed adopting the scientific method, and the raising cost was not fixed mutually and the same was fixed to the whims and fancies of the respondent because of the same the claimant incurred huge loss?
10. Whether the claimant is entitled for a sum of ₹.2.50 Crores towards the expenditure incurred by the claimant to obtain State and Central Government permissions, clearances and approvals in respect of ML 995 of the respondent?
11. Whether the claimant is entitled for a sum of ₹.37.36 Crores towards loss on account of over heads, idling charges for the idling period?
12. Whether the claimant is entitled for a sum of ₹.7.21 Crores towards idling charges, over heads of salaries, wages etc, as a consequence of the respondent handing over lesser mining lease area of 33.60 HA, as against the NIT schedule area of 43 HA?
13. Whether the claimant is entitled for a sum of ₹.43.06 Crores towards back log development of the mine to vacate the prohibition order imposed under section 22(3) of Mines Act by the Directorate General of Mines Safety?
14. Whether the claimant is entitled for a sum of ₹.24.76 Crores towards loss due to idling of machinery and men of the claimant, due to production approval for 85,000 MTs, per annum obtained by the respondent as against the /77/ Com.A.S.No.137/2019 contractual quantity of 2,40,000 MTs., of iron ore lumps per annum?
15. Whether the claimant is entitled for a sum of ₹.102.52 Crores towards increased raising cost payable by the respondent?
16. Whether the claimant is entitled to recover a sum of ₹.30 lakhs towards Revolving Security Deposit with interest?
17. Whether the claimant proves that the respondent is liable to pay weighment charges?
18. Whether the claimant is entitled for a sum of ₹.16 lakhs towards the balance of weighment charges for the weighment of 88,000/-MTs of e- auction of iron ore as per the letter of respondent dated 30.04.2013?
19. Whether the claimant proves the respondent was irregular in making payment to the claimant?
20. Whether the claimant proves that they are entitled for interest at 24% per annum?
21. Whether the claimant is entitled for a sum of ₹.30/-lakhs towards the legal expenses?
22. Whether the claimant proves that the counter claims are barred by limitation?
23. Whether the claimant proves that since the respondent is in breach of contract the respondent is not entitled to any of the counter claims?
24. Whether the respondent proves that claimant failed to produce minimum assured quantity of iron ore?
25. Whether the respondent proves that they are entitled for counter claims?
26. Whether the respondent proves that report of Dr.V.R.Shastry, Professor of Mining Engineering, NIMT, Suratkal regarding price fixation is not binding on them?
27. Whether the respondent proves that they are entitled for salary reimbursement from the claimant?
28. Whether the respondent proves that they are entitled for compensation for the shortfall in production by the claimant?
/78/ Com.A.S.No.137/2019
29. Whether the respondent proves that the R & R work cost to be borne by the Claimant?
30. Whether the respondent proves that because of the illegalities committed by the claimant the UIOM came to be classified as 'C' category?
31. Whether the respondent proves that the minimum wages payable to the labourers be borne by the claimant?
32. Whether the respondent is entitled for the following sums in terms of the prayers made in the counter claim?
a. A sum of ₹.36,94,498/- towards salary reimbursement.
b. A sum of ₹.35,75,78,351/- towards shortfall in production.
c. A sum of ₹.10,00,00,000/- towards R & R work cost d. A sum of ₹.1,96,41,85,195/- towards compensation for UIOM classified as 'C' category. e. A sum of ₹.51,91,337/- towards NPV.
f. A sum of ₹.1,40,00,000/- towards minimum wages.
g. A sum of ₹.50,00,000/-towards loss of reputation. h. A sum of ₹.30,00,000/- towards legal expenses.
33. Whether the respondent proves that they are entitled for the interest as prayed?
34. What award or order?
85. The Claimant has adduced the evidence of Sri.R.Narayana Vice President (Marketing) and the Authorized Signatory of the Claimant as CW1. He has exhibited Ex.C1 to Ex.C55.
/79/ Com.A.S.No.137/2019
86. The Respondent has examined Sri.H.D.Raju, General Manager (Marketing incharge) of the Respndent as RW1. He has exhibited Ex.R1 to R130.
87. After hearing the arguments the Learned Tribunal has passed the Award on 07.06.2019 Award i. The claimant is awarded a sum of ₹.46,38,013/- against the respondent, and the respondent is liable to pay the same to the claimant within a period of one month from the date of the award. The aforesaid sum shall be payable to the claimant by the respondent along with interest @ 18% p.a. from the date of reference till the date of award and also future interest on the said sum at the same rate till the date of the actual payment of the amount awarded.
ii. The claimant is entitled to recover from the respondent and the respondent is required to pay the above said sum of ₹.46,38,013/- together with interest thereon at 18% p.a. from the date of reference till the date of payment, within one month, failing which the award shall be executable in the same manner as if it were a decree of the Court under the Code of Civil Procedure in terms of Sec. 36 of the Arbitration and Conciliation Act, 1996. iii. All the other claims of the claimant, other than the above two claims, are hereby dismissed;
/80/ Com.A.S.No.137/2019 iv. All the counter claims of the respondent raised before this Arbitral Tribunal are hereby dismissed;
v. Considering the overall facts and circumstances of the case and the expenditure incurred in the arbitration proceedings, I consider it proper to award ₹.50.00 lakhs towards the costs and legal expenses of the claimant. The respondent is directed to pay the same to the claimant. The claim of the payment of the cost of the respondent is rejected.
vi. The respondent is hereby directed to pay a sum of ₹.46,38,013/- to the claimant in relation to his above said two claims. Over and above the sum of ₹.46,38,013/-, the respondent is liable to interest incurred at a commercial rate at 18% p.a. as well as ₹.50,00,000/- towards the arbitral costs and legal expenses of the claimant within one month from the date of this award, failing which the above sum shall be payable with future interest at 18% p.a. from the date of award till the date of actual payment.
vii. The award shall be enforced under the Code of Civil Procedure in the same manner as if it were a decree of the Court in terms of Section 36 of the Arbitration and Conciliation Act, 1996.
The stamp duty payable on this award may be paid by the claimant or the respondent. However, if the claimant pays the stamp duty, it shall recover it from the respondent as part of this award.
I terminate the proceedings. That is to say, the proceedings before the Arbitral Tribunal stands terminated herewith.
/81/ Com.A.S.No.137/2019
88. The claimant has filed this arbitral suit being highly aggrieved by the arbitral award dated 07.06.2019 passed by the learned Arbitral Tribunal in so far it relates in rejecting entire claims of ₹.218.80 Crores except allowing claim No.8, 9 and 10 awarding ₹.46,38,013/- towards revolving sales advance and the balance of vehement charges and awarding ₹.50,00,000/- towards the cost and the legal expenses of the claimant.
89. The claimant has reiterated the averments made in claim statement and rejoinder statement filed before the learned arbitral tribunal. The claimant has challenged the arbitral award on various grounds by incorporating the averments made in the claim statement and rejoinder.
90. The claimant stated that the learned Arbitral Tribunal passed the award by rejecting the claim of claimant for ₹.219.26 Crores along with interest which is wholly erroneous and perverse and contrary to law and evidence on record.
91. The learned Arbitral Tribunal has totally misinterpreted the entire terms of the agreement and has acted beyond the terms of the agreement and the award is /82/ Com.A.S.No.137/2019 contrary to the established principles of law of India and policy and contrary to public policy.
92. The learned Arbitral Tribunal has failed to take notice of the ratio of decision of The Hon'ble Supreme Court of India reported in AIR 1976 SC 2257. The learned Arbitral Tribunal has not considered the evidence on record and has come to the findings on issues without going into the evidence lead by the claimant.
93. The learned Arbitral Tribunal has relied on the judgment of another Arbitrator without considering all the judgments of the Hon'ble Supreme Court of India related relied on by the claimant.
94. The learned Arbitral Tribunal has virtually created a new contract by wrongly interpreting Clause 5 of the agreement by holding in para 72 of the award that the respondent has no where assured of a supply of 2,4,00000/- Metric Tons of Iron Ore lumps p.a. 4,80,000 MTs for 2 years to the claimant.
95. The learned Arbitral Tribunal has erred in going beyond the terms of the agreement has failed to give effect /83/ Com.A.S.No.137/2019 the ordinary words in the agreement and instead proceeded to give its own interpretation to the very contract which is contrary to the terms of the contract.
96. The learned Arbitral Tribunal has completely deviated from the original tender and also from the terms of the very agreement executed between the parties. The respondent has insisted that the claimant to pursue and obtain all the required statutory and governmental clearances.
97. The learned Arbitrator in one breath has come to the finding that the agreement will suppressed the tender but has proceeded to the negative most of the issues by placing reliance on the statements made in the tender document.
98. The learned Arbitral Tribunal has erred in assuming that the claimant was part of the tender and is aware of the tender conditions.
99. The learned Arbitral Tribunal failed to take notice that unless all permissions and clearances under various acts namely environmental Protection Act, Mines Act, Forest /84/ Com.A.S.No.137/2019 Conversations Act, Water Act, Air Act etc., no mining activities can be carried and in the instant case admittedly permissions from various authorities were not obtained till August 2008 which clearly establishes that there was no commercial production till then and hence the findings to the contrary is erroneous and perverse.
100. The learned Arbitral Tribunal has failed to consider that the claimant has spent ₹.2.5 Crores + applicable taxes in obtaining the aforesaid clearance even though there are several documents produced to that effect.
101. The learned Arbitral Tribunal has failed to notice that the claimant was required to pay the net present value as also charges towards afforestation, fencing, forest and etc., to the Forest Department which in reality is contrary to the tender and the law.
102. The learned Arbitral Tribunal failed to notice and consider that the claimant was required to remove 2,40,000 MT of Iron ore per year. Although there was no permit to mine and also that the claimant has mobilised all the resources and has shifted the machines exclusively for the /85/ Com.A.S.No.137/2019 purpose of the tender and agreement and accordingly had expended huge amounts of money.
103. The learned Arbitral Tribunal has failed to consider various judgments of the Hon'ble Supreme Court of India reported in 2006(11) SCC 181 and 2007(13) SCC 43. Wherein it clearly lays down that promise to perform at a particular time should be fulfill at that time as the time is essence of a contract and when there is non-performance of the contract as in this case the respondent is not perform the promise. The respondent is not entitled to any loss and shall be liable to make good to the claimant.
104. The learned Arbitral Tribunal has failed to notice that the respondent has acted unfairly towards the claimant and is trying to deny the legitimate dues of the claimant.
105. The learned Arbitral Tribunal has failed to notice that delayed commercial mining operations, delay of nearly 3 years solely attributable to the respondent has caused the claimant to suffer huge financial loss.
106. The learned Arbitral Tribunal has failed to consider that the machinery and equipment were very huge /86/ Com.A.S.No.137/2019 and the same was not easily moveable therefore, the same were kept idle from 2004 and hence the respondent is liable to make good the loss of the same. The claimant had incurred huge loss due to the men and machinery being idle further the respondent has admitted in their cross- examination at question No.16 that men and machinery were mobilised immediately after the raising contract was entered into.
107. The learned Arbitral Tribunal has also failed to draw a difference between the tender conditions entered into between the sister company of the claimant and the conditions of the agreement in question. Thereby, denying the claimant's rightful claim.
108. The learned Arbitral Tribunal has failed to consider that the respondent played fraud on the claimant by suppressing material facts from the claimant that the mining activity could not be conducted when the agreement was entered into by the claimant and the claimant had to suffer losses to bring the mining area to workable conditions and idling charges.
109. The learned Arbitral Tribunal has failed to appreciate the judgments of The Hon'ble Supreme Court /87/ Com.A.S.No.137/2019 of India reported in 1980(1) SCC 599 1970(1) SCC 582 and 1999(7) SCC 89. Wherein, the Hon'ble Supreme Court of India time and again has held that public bodies are much bound by representation and promises as a private citizen. Public bodies are not exempted from carrying out their obligations arising out of the representation made by it.
110. The learned Arbitrator has not considered any of the judicial pronouncement relied upon by the applicant claimant. The learned Arbitral Tribunal wholly erred in not granting damages towards loss of reputation suffered by the claimant due to the gross breaches committed by the respondent.
111. The learned Arbitral Tribunal has failed to notice that the respondent has played fraud on the claimant by initially promising to provide for 43 Hectare of land for undertaking mining activity and thereafter providing only 33.6 hectares for mining activity and this has resulted in huge commercial losses to the claimant.
112. The learned Arbitral Tribunal has wholly erred in holding in para 149 of the award that the entire amount of NPV is paid by MML though 50% of the NPV has been paid /88/ Com.A.S.No.137/2019 by the claimant. The learned Arbitral Tribunal despite holding that the there is a delay in commencement of commercial production has wholly erred in not granting the claims sought by the claimant.
113. The learned Arbitral Tribunal has failed to consider that the claimant has return several letters calling upon the respondent to revise and re-fix the raising cost in terms of the agreement by providing all the necessary details namely causes increasing factors like fuel charges, cost of machinery, salaries and the like. The price of ore was also increased by the respondent keeping in view the market in goods available domestically and internationally. The claimant also arrived at the cost in put by taking into consideration the report of doctor V.R.Shastry. The Income Tax Report submitted by the respondent and the prevailing skipping ratio of the ore are over burden being 1:11 and consequent amounts spent for backlog development of mine to bring to working condition of mine and also to vacate the closure order under Section 22(3) of Mines Act imposed by DGMS. Despite providing such detailed costs imports, the respondent unilaterally and without any application of mind rejected the plaint suggested by the claimant and proceeded to ignore all scientific proposals to unilaterally fix raising cost without any basis or calculation. Despite from the same the learned Arbitral Tribunal has come to erroneous findings that the claimant has not /89/ Com.A.S.No.137/2019 discharges its initial burden of proving that they have provided a scientific raising cost in terms of the agreement between the parties.
114. The arguments made by the claimant in details has not been either referred or dealt with in the impugned award. The learned Arbitral Tribunal failed to consider that due to the difference in the cost prepared by both parties the respondent company approached a third party to arrive at a raising cost. It was not intention of the respondent to merely compare the cost. A duty was cast upon the respondent to prove that the merely appointed the third party person V.R.Sharsty just to compare the cost. This burden has not been discharged by the respondent. Despite the same the learned Arbitrator has proceeded to hold that the rate mentioned by the respondent was fixed in accordance with the terms of the agreement. The terms of the agreement categorically stated that the price was fixed mutual and hence the arbitral award is liable to be set aside as being contrary to the terms of the agreement.
115. The learned Arbitral Tribunal has also erred in not awarding in raising cost to be payable to the claimant. Despite holding that the price fixed by the respondent was correct and in accordance with the terms of the agreement /90/ Com.A.S.No.137/2019 the learned Arbitral Tribunal erred in not awarding any amount towards the raising cost.
116. The learned Arbitral Tribunal has erroneously came to the finding that the claimant has not produced any evidence to show raising cost apart from relying on the report of the expert appointed by the respondent. The claimant has produced the income tax returns of the respondent wherein the respondent has themselves declare that the raising cost payable to the claimant shall be ₹.1,895 per MT. Despite producing the said evidence the learned Arbitral Tribunal has proceeded to ignore the very crucial evidence and rejected the claim in its entirety that too not considering that the claimant who has raised the iron ore in UIOM.
117. The claimant primarily relied on the price fixed by it based on the cost as prescribed by the terms of the agreement. In order to support its continent the claimant also relied on the report prepared by Dr.Shastry who was appointed by the respondent itself and hence the award ignoring the crucial evidence is wholly illegal and perverse and hence same is liable to be set aside.
/91/ Com.A.S.No.137/2019
118. The learned Arbitral Tribunal has failed to consider that the respondent themselves have appointed Prof.V.R.Shastry for determination of raising cost for the year 2009 to 2010 and hence the same yardstick shall apply to the fixing of raising previous and subsequent years.
119. The learned Arbitral Tribunal has not considered the report given by the expert appointed by the respondent themselves wherein the raising cost has been fixed to ₹.1895/-. Despite noticing the fact that the respondent themselves appointed the third party expert. The learned Arbitral Tribunal has come to an erroneous finding that the report of the third party expert is not binding on the parties.
120. The learned Arbitral Tribunal has failed to consider the assessment order for the year 2008, 2009 which is subsequent to the report of the expert. The respondent had appointed. According to the respondent the raising cost was arrived and fixed at the rate of ₹.1895 for MT and the same was submitted for concern income department by the respondent and corroborates with raising cost fixed by the expert Dr.V.R.Shastry. However, the learned Arbitral Tribunal has not considered the same although the respondent has categorically admitted and submitted their assessment to the concerned authority. The learned Arbitral Tribunal has not considered the fact. The /92/ Com.A.S.No.137/2019 respondent has not filed any document to show that the claimant has undertaken illegal mining.
121. The learned Arbitral Tribunal has not considered that the contrasting contentions the claimant has taken in the review petition filed by the respondent before the Hon'ble Supreme Court of India the respondent has specifically stated that no illegal mining activities has taken place and a contrasting contention has been taken by the respondent before the arbitration proceedings. The learned Arbitral Tribunal has failed to consider that claimant has produced iron by mobilising its men and machinery by spending huge amounts and therefore is legally entitled for raising fee in terms of the contract and as per the price fixed by the third party expert. However, the respondent has not been directed to pay any amount towards production of the iron ore and the award is illegal and perverse and is liable to be set aside.
122. The learned Arbitral Tribunal has failed to consider that in terms of the agreement the respondent was required to pay a sum of ₹.150 per MT for the two years and thereafter at a mutually agreed price.
/93/ Com.A.S.No.137/2019
123. The learned Arbitral Tribunal has not considered that there has been a delay of more than three years in fixing the raising cost by the respondent. The learned Arbitral Tribunal failed to notice that the respondent had admitted that there was an over burden in the ratio of 1:11 and thereby the claimant has incurred huge financial losses and hence the claimant is entitled for the same.
124. The learned Arbitral Tribunal has ignored well established principles laid down by the Hon'ble Supreme Court of India and other High Courts including one reported in AIR 1999 Madras 317, in 2003(2) ARB.LR 110(Delhi) with respect to idling charges and denied the claimant legitimate cost incurred with regard to the same.
125. The learned Arbitral Tribunal totally ignored catena of judgments rendered by the Hon'ble Supreme Court of India and various High Courts including the judgments reported in 1989 Suppl.(1) SCC 368, 2017(8) SCC 146, 2006 (11) SCC 181, 2006 (13)SCC 779, 2002(4) SCC 45 wherein they have categorically held that the escalation is normal incident arising out of gap of time inflationary age and hence the party in default has to compensate the party who suffers.
/94/ Com.A.S.No.137/2019
126. The learned Arbitral Tribunal totally ignored the ratio of the decision of The Hon'ble Supreme Court of India and various High Courts including the judgment reported in 1984(4) SCC 59, 1999 (3) SCC 500, 2011 (10) SCC 573 and AIR 1964 MP 101 wherein they have categorically held that the damages claimed by the contractor where Government committed breach by improperly rescinding the contract. Held contractor is entitled for damages for loss of expected profit for estimating the amount of damages Court should make a brought evaluation instead of going through minute details.
127. The learned Arbitral Tribunal failed to consider that the categorically admission by the Managing Director of the respondent who himself in the Board of Meeting has accepted that the respondent is obliged to pay the expenses incurred by the claimant towards removal of over burden and the claimant is entitled for a sum of ₹.43.06 Crores which the respondent is liable to pay the same.
128. The learned Arbitral Tribunal has failed to notice that despite there were no statutory clearances and approvals the respondent was seeking the claimant to perform and supply/mine 2,40,000 MT p.a. that was impossible to perform as the statutory permit the Karnataka State Pollution Control Board permitted the respondent to /95/ Com.A.S.No.137/2019 mine only 85,000 MT p.a. that too which was issued in May 2007 only. Hence, the respondent expected the claimant to perform an impossible task and conduct illegal activity. The learned Arbitral Tribunal failed to notice that the RW1 has categorically admitted that the claimant could not mine beyond the statutory limitation permitted by Karnataka State Pollution Control Board and hence the non-production of agreed quantity during the relevant point of time was totally attributable to the respondent and hence the claimant is entitled for the claim sought in this regard.
129. The learned Arbitral Tribunal failed to take notice that the respondent has not fixed the raising cost for the entire term of the contract and further did not oblige to accept their own assessment of the cost for raising as per their own appointed expert which was ₹.1985 per metric ton and hence the entire action of the respondent is contrary to the terms of the agreement and hence the respondent is liable to make good of the same to the claimant.
130. The learned Arbitral Tribunal failed to notice the time and again the respondent has played fraud on the claimant and has breached the terms of the agreement by unilaterally fixing the cost of production at ₹.526 per MT which was fixed only for the year 2009 and 2010. The learned Arbitral Tribunal failed to consider the admitted fact /96/ Com.A.S.No.137/2019 by the respondent that from the very beginning of the contract the respondent has been in violation of the terms of the agreement and has also always been irregular in making payments in terms of the agreement.
131. The learned Arbitral Tribunal has even failed to notice that the claimant has produced the iron ore by removing huge over burden running to an extent of 1.12 ratios. The learned Arbitral Tribunal even failed to notice that the claimant is entitled to raising cost at least the amount fixed by Dr.V.R.Shastry.
132. The learned Arbitral Tribunal failed to notice that claimant is entitled for raising cost for the production which it has made and the same is not even disputed by the respondent. The learned Arbitral Tribunal failed to notice that over 1 lakh MT of iron ore is laying the stock yard of the respondent for which the claimant is entitled for the raising cost.
133. The learned Arbitral Tribunal wholly erred in holding that claimant is not entitled for any raising cost when undisputedly the claimant has produced the iron ore by investing huge amounts and mobilising huge men and machinery.
/97/ Com.A.S.No.137/2019
134. For all the reasons stated above, the impugned award has been rendered opposed to public policy under Section 34 of the Arbitration and Conciliation Act, 1996. The learned Arbitral Tribunal failed to notice the claimant is entitled for raising cost at least fixed by the respondent at the rate of ₹.632 per MT and hence non-granting of any amounts towards the raising costs is against the terms of the contract and hence the arbitral award is illegal apart from being in contravention of the fundamental policy of Indian law and hence the award is liable to be set aside.
135. The entire approach adopted by the learned Arbitral Tribunal is in contravention with the fundamental policy of Indian law and is in conflict with notions of the justice and are vitiated by patent illegality appearing on the face of it.
136. The erroneous manner in which the learned Arbitral Tribunal rejected the claims of the claimant was clearly an exercise opposed to public policy. The arbitral award in this regard has resulted in gross miscarriage of justice and opposed to fundamental policies of Indian Law.
137. The failure of the learned Arbitral Tribunal in understanding that nothing is payable to the claimant /98/ Com.A.S.No.137/2019 towards the raising cost and idling charges which the claimant has suffered in the matter was irreparable having adverse consequences well being of the claimant and all associates with it and in understanding that even on grounds of equity the claims of the claimant could not have been ignored as served a heavy blow to the notions of justice and public policy.
138. The impugned award is shrouded with perversity inconsistent findings and unsustainable in law and thus liable to be set aside as per the well established principles of law and claims of claimant should be allowed in its entirety.
139. The learned Arbitral Tribunal has failed to completely appreciate the documents produced, the evidence lead and gather the import of the documents produced.
140. The learned Arbitral Tribunal has failed to fully understand the purport and the true intent of the different terms of the agreement. Hence, the impugned award passed by the learned Arbitral Tribunal be set aside in so far as it relates to rejecting the claims No.1 to 7 for a sum of ₹.218.80 Crores of the claimant as set out in the statement /99/ Com.A.S.No.137/2019 of claims on the file of the Hon'ble Sole Arbitrator; and allow the entire claims of the claimant as set out in the claim statement grant such other reliefs.
After the service of notice, the respondent appeared before the Court and has filed statement of Objections:
141. The respondent has reiterated the averments made in the statement of objections filed before the learned Arbitral Tribunal. The respondent has stated that a copy of unsigned agreement was sent to the Managing Director of the claimant for their approval and signature. The claimant after going through the raising agreement sent the agreement the returned to the respondent. The respondent on its part signed on the said agreement and forwarded a copy of raising agreement to the claimant along with a letter dated 03.02.2004.
142. The respondent has not forced the claimant to sign the raising agreement. As per the tender and agreement condition the claimant has to take approval or clearance from the statutory authority. The respondent had advised the mines manager of the claimant to approach the conservator of Forest to obtain required permission to resume the mining operations. The claimant in its letter dated 15.06.2005 informed the respondent that the mining operations have been commenced w.e.f 11.05.2005.
/100/ Com.A.S.No.137/2019 Though the mining work was commenced from 11.05.2005 the claimant had not installed the screening and crushing machinery. Hence, the respondent reminded the claimant to install the crusher vide letter dated 17.08.2005.
143. The claimant assured to produce 2,40,000 MTs of lumps p.a. at ₹.150 PDMT. As per the agreement, the terms of the contract was to be initially for 5 years and extendable for another 3 years. It was the responsibility of the claimant to obtain permission from all the statutory authorities.
144. The tenderer shall take the responsibility of obtaining permission from Ministry of Environment and Forest. The legitimate expenditure spent for the process may be deducted out of the sale proceeds on the mutually agreed proportion. In the tender norms and conditions for raising of mine, mineral under 9(B) it is provided that in case of forest land it is the complete responsibility of raising agent to coordinate with the different statutory authorities and get clearances from the MOEF, New Delhi. Any expenditure spent on this the raising contractor should obtain the prior permission from the Respondent and the expenditures so will be adjusted towards purchase of minerals.
/101/ Com.A.S.No.137/2019
145. The claim of the claimant for reimbursement of ₹.2,50,00,000/- is false. The claimant ought to have submitted accounts for the legitimate expenditure which he has spent for getting forest clearance permission. But the claimant has not furnished any such clearance certificate.
146. As per Clause 7(7) of the Agreement, the respondent is not responsible for any delay in obtaining statutory clearances. It is denied that the raising contractor is not liable to pay Net Present Value as also charges towards afforestation, fencing, and forest lease rents etc., to the Forest Department. As per the supplementary agreement dated 04.08.2006 Clause 1 the second party shall pay 50% of NPV i.e, ₹.1,56,00,000/- the claimant was aware of NPV condition and signed the supplementary agreement. The respondent is not inclined to reimburse nor is the claimant in a position to make such claims in respect of NPV. The claimant has pay to entire amount of NPV as per the agreement. The claimant has already been paid entire amount of NPV to Forest Department.
147. The averments made by the claimant that it has removed over burden 26 lakhs MT in order to reach the actual iron ore is denied as false.
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148. As per the directions of the Hon'ble Supreme Court of India and the circulars issued by the Principal Chief Conservator of Forest all mining operations in forest area has been stopped. The Range Forest Officer Sandoor Range vide notice dated 17.02.2005 directed to stop all mining activities. Accordingly the respondent in its letter dated 11.10.2005 endorse that it has stopped mining activities w.e.f., 10.10.2005. In spite of clear direction the claimant violated the Hon'ble Supreme Court of India and continued the mining operation. In view of this, the respondent by its letter dated 23.11.2005 directed the claimant to stop the mining operation forthwith and if the claimant indulges the violation of the order on 27.08.2005 the Forest Department Seized Vehicle Bg. Chassis No. 887 belong to the claimant for illegal transportation of ore from mine to Stock yard. Later on paying security deposit of ₹.25,000/- the vehicle was released from the forest department. In this connection the FIR was also registered by the forest department. As per Tender and agreement condition the backlog development should carryout and bringing the mines on safety levels was the responsibility of the claimant.
149. The allegations of fraud made against the respondent by the claimant are all false. The claimant has licensed with the other Government Departments to get the statutory requirement while doing so the respondent has brief about the status of mine and given the relevant /103/ Com.A.S.No.137/2019 documents to process to get the clearances. Hence, it is not correct to say that the respondent has played fraud upon the claimant. As per the tender condition the claimant should have inspected the mine before applying for the tender. The claimant was aware that the mines were stopped since 1984. The respondent has not concealed any fact and it was the duty of the claimant to be aware of these facts.
150. It is false to aver that the commercial production has commenced during September 2006.
151. The respondent had advised the claimant to install the crushing machinery and weigh bridge. The respondent has applied for explosives licence/magazines. In the meantime the respondent has supplied explosives from another magazine. The claimant had entered in to contract with third party for supply explosives and blasting. Further the commercial production was commenced in September 2006 only and not August 2008.
152. In the tender conditions the respondent in Annexure R1 has shown the extent of 43 Hectare which has been possessed for the forest clearance. The forest clearances obtained for 33.60 Hectares. The claimant /104/ Com.A.S.No.137/2019 worked with the respondent in obtaining the clearances. Hence, the claimant cannot blame the respondent for reduction in the area. After much pursuant from the claimant the company has authorised SSML to process for the remaining area of the lease extent which was not a part of tender area for which the claimant was successful bidder.
153. The averments made due to the effect that reduction in promised area a sum amounting to 7.21 Crores which is to be reimbursed with interest is false and incorrect. As the agreement entered into with the claimant is for an area of 33.60 hectares only.
154. The mining lease of Ubbalagundi Iron ore Mine was sanctioned by the Government of Karnataka to an extent of 33.60 hectares. The claimant estimated losses of ₹.7,24,00,000/- is denied as false.
155. The respondent has estimated the raising cost and fixed the same at ₹.150 per MT irrespective of whether the over burden ratio is 1:11 or 1:0. In view of this backlog development done is the responsibility of the claimant. As per C12 the development carried out during May 2005 to 08.07.2008 is shown as 17,000 to 72,000 Metric Cube and produced 2,16,256 MT of ore transported. On the other /105/ Com.A.S.No.137/2019 hand as per C3 over burden removed is 19,10,000 and removed 3,41,960 tons between the period May 2005 to 18.07.2009 which means that during the year 2008-09 the claimant has removed only 1,38,000 Metric Cube. Over burden with a production of 1,25,704 MT Showing an ore to an over burden ratio as 1:1.9. Hence, the figures and statements made by the claimant do not tally with each other and it is denied as false.
156. The respondent is not liable to pay a sum of ₹.43.06 Crores alleged to have been incurred by the claimant. The document annexure C15 refer to by the claimant is not the proceedings of the Board but is a proceeding with the MD and the officials of the respondent. As per the tender and agreement condition to carry out the backlog development was the responsibility of the claimant. The expenditure incurred by the claimant was as per the condition. The respondent made it clear that it was not having any statutory clearances for UIOM as it is a forest land. It was the burden on the successful bidder to help or to obtain the required statutory clearances from the different departments to operate the mine. The Manger of the KSMCL issued a letter dated 04.02.2008 to the claimant informing that the respondent has obtained the consent for expansion from 0.58 MTPA to 0.173 to MTPA. As per letter dated 17.12.2007 and the claimant was requested to make necessary arrangement to increase the production as per /106/ Com.A.S.No.137/2019 the tender condition and the agreement by producing 2,40,000 lumps p.a. In view of the above a statement provided by the claimant is false and the claimant is not entitled for idle charges of ₹.24,75,99,264/-. On the other hand the claimant is liable to pay the penalty for not producing minimum assured quantity as per the agreement. As per the agreement, the claimant should have produced 2,40,000 MT p.a. The claimant has failed to produce the consented minimum quantity per annum. The respondent has suffered huge losses.
157. During the year 2006-07 and 2007-2008 from 01.09.2006 to 31.03.2008 the claimant failed to achieve the consented quantities. Hence, respondent has suffered huge losses.
158. The respondent is not liable to pay a sum of ₹.43.06 Crores alleged to have been by the claimant. The document annexure C15 refer to by the claimant is not the proceedings of the Board but is a proceeding with the MD and the officials of the respondent. As per the tender and agreement condition to carry out the backlog development was the responsibility of the claimant. The expenditure incurred by the claimant was as per the agreement condition. At the tender level itself the respondent made it clear that it was not having any statutory clearances for /107/ Com.A.S.No.137/2019 UIOM as it is a forest land. It was the burden on the successful bidder to help or to obtain the required statutory clearances from the different departments to operate the mine. The Manger of the KSMCL issued a letter date 04.02.2008 to the claimant informing that the respondent has obtained the consent for expansion from 0.85 MTPA to 1.073 to MTPA as per letter dated 17.12.2007 and the claimant was requested to make necessary arrangement to increase the production as per the tender condition and the agreement by producing 2,40,000 lumps p.a. In view of the above a statement provided by the claimant is false and the claimant is not entitled for idle charges of ₹.24,75,99,264/-. On the other hand the claimant is liable to pay the penalty for not producing minimum assured quantity as per the agreement. As per the agreement, the claimant should have produced 2,40,000 MT p.a. The claimant has failed to produce the consented minimum quantity per annum. The respondent has suffered huge losses.
159. During the year 2006-07 and 2007-2008 from 01.09.2006 to 31.03.2008 the claimant failed to achieve the consent quantities. Hence, respondent has suffered huge losses. In the year 2007-08 the respondent had the consented quantity of 1.073 MT p.a. as per the letter dated 17.12.2017 and the claimant was requested to make the necessary arrangements to increase the production as per the tender condition and the agreement by producing /108/ Com.A.S.No.137/2019 2,40,000 MT of calibrated iron ore per annum. In view of this the claimant is not entitled for ₹.24,75,99,264/- on the otherwise the claimant is liable to pay the penalty for not producing the minimum assured quantity as per the agreement dated 22.01.2004.
160. The appointment of Dr.V.R.Shastry, Prof.of Mining, Engineer, NIMT, Suratkal is an internal matter of the respondent. As it felt that the third party opinion may obtain. The claimant was never informed about the appointment of Dr.V.R.Shastry nor his opinion binding on the respondent.
161. On several occasions the respondent requested the claimant to co-operate in fixing the raising cost for the relevant years. But the claimant never co-operated in finalizing in raising cost in time. The respondent informed the Income Tax Department about the ore to over burden ratio at 1:12. The Income Tax Department has rejected the respondent's reply.
162. As per the request of the claimant the respondent adjusted the raising cost which is payable to the claimant to M/s.Shivashankar Minerals for selling of iron ore produced from Ubbalagundi Iron Mining Ore.
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163. The respondent revised the raising cost and fixed for calibrated ore and iron ore fines. The raising cost for the years 2006-07 and 2007-08 does not arise due to the fact the price was fixed under the agreement and tender and under tender clause.
164. The raising cost for the years 2008-09, 2009-10, 2010-11 and 2011-12 were fixed and informed to the claimant through the letter dated 02.05.2011, 30.11.2013. The respondent was always ready for fixing the raising cost based on the mining industry practises prevailing in the sector. The claimant with a hidden agenda and to take undue benefit was always disputing and non-cooperating with the respondent to fix the raising cost in time.
165. The CRISIL appointed by the government has clearly stated that the average raising cost of the sector is at ₹.650/MT during 2013-14. In view of the above, the cost finalised by the respondent is fair and just as it is done by an expert cost accountant based on mine activities costing. Hence, the claimant's claim for an amount of ₹.1,02,51,00,000/- is baseless and far from truth.
166. As per the request of the claimant the security deposit adjusted to M/s.Shivashankar Mines Ltd., for selling /110/ Com.A.S.No.137/2019 of iron ore product from Ubbalagondi Iron Ore Mines. Hence, the payment of security deposit and weigh bridge loading charges does not arise.
167. As per the Order dated:18.04.2013 passed by the Hon'ble Supreme Court of India in W.P.562/2009 based on the report of Central Empowered Committee has classified the mines into three categories based on the various irregularities and illegalities in mining activities witnessed during the inspection of the CEC. The UIOM has been classified by the CEC as category C. Therefore the Government of Karnataka cancelled the mining lease in its Gazette Notification No.CI79 MMM 2013, Bengaluru dated 12.09.2013. Further the stock of iron ore which was laying at Ubbalagundi Iron Ore Mines were auctioned and sale proceeds was forfeited by the monitoring committee as per the directions of the Hon'ble Supreme Court of India. Hence, the payment of raising cost does not arise.
168. The learned Arbitral Tribunal has rightly rejected the baseless claim of ₹.2,19,26,000/- but the learned Sole Arbitrator has wrongly awarded ₹.50,00,000/- as litigating cost when the entire claim came to be dismissed. The respondent has challenged the findings of the learned Arbitral Tribunal awarding ₹.50,00,000/- as litigation cost in /111/ Com.A.S.No.137/2019 AS No.136/2019. The respondent has also prayed for the grant of Counter Claims in AS No.136/2019.
169. The Government of Karnataka in its proceedings dated 12.07.2006 permitted diversion of 33.60 hectares of forest land in UIOM. Pursuant to the said permission the mines Manager UIOM informed the respondent that the mining have been resumed from 05.10.2006. The respondent by its letter dated 12.07.2006 requested the claimant to pay 50% of NPV i.e, ₹.1,56,00,000/- which had already been paid by the respondent.
170. M/s.Shivashankar Minerals Pvt., Ltd., by its letter dated 20th July 2006 sought permission to continue mining operation. The Board of the respondent in its 259th meeting held on 28.07.2006 accorded in principal approval for enhancing the raising cost which would be revised from time to time as per the increase in the cost of input or the price index.
171. It was also resolved to extend the contract for 7 months considering the fact that mine was not operative for a period of 7 months. It was further resolved that the raising contractor i.e, the claimant should pay salaries to the staff /112/ Com.A.S.No.137/2019 posted by respondent at the mine besides the cost of explosives.
172. The supplementary agreement was also entered into between the parties on 4.08.2006. Accordingly the work order was also issued on 08.09.2006. The agreement between the parties for extraction or operation of only 85,000 MT. Efforts for made to increase for the said quantity. Accordingly state level environment impact assessment Authority by its letter 10.12.2007 accorded approval for increasing the said quantity to1.073 Million Tons. The respondent by its letter dated Feb 2008 intimated about the consent for enhancing the quantity and requested the claimant for increasing in the production to 1.073 Million Tons. The respondent also obtained consent from Karnataka State Pollution Board for exploiting the said quantify from 14.08.2008 onwards.
173. Though all the clearances were obtained as detailed above, the claimant never achieved the minimum assured quantity of 2,40,000 MT of calibrated or lumps iron ore during the subsistence of the contract.
174. M/s.Shivashankar Minerals Pvt., Ltd., did not extend necessary cooperation for fixation of price of iron /113/ Com.A.S.No.137/2019 ore and continued to take delivery at ₹.231 per MT. Even beyond 07.02.2008 when the price of iron ore was fixed at ₹.231 per MT correspondingly the raising cost was fixed at ₹.150 per MT. Though the respondent requested SSML to fix the price of iron ore it went on postponing the same on one pretext or the other. Since the price of iron ore was not revised and re-fixed by SSML the raising cost also could not be fixed in time. Eventually the Board of respondent in its 282nd meeting held on 15.02.2010 resolve to fix the price of iron ore at ₹.1900 per MT for the period subsequent to 8.02.2008. Thus, the price of raising cost could not be fixed for the year 2008-09 immediately in view of non cooperation by the claimant's sister concern SSML.
175. A meeting was convened on 23.10.2009 to fix the raising cost for the year 2009-10. In the said meeting it was agreed by both the parties that the Joint survey be conducted to arrive at the current over burden ratio. A joint survey was conducted and report was submitted by the General Manger fixing the over burden ratio at 1:5 for the year 2009-10. Based on said report the respondent worked out and fixed the raising cost at ₹.365/MT for both calibrated and iron ore mines. A meeting was conducted on 05.12.2009 wherein the respondent furnished the details as to how it has arrived at the figure ₹.365/MT. On going through the said calculation the claimant disputed the same on the ground that though survey was conducted jointly /114/ Com.A.S.No.137/2019 that the report containing over burden ratio at 1:5 was prepared unilaterally by the respondent and not jointly. After a detailed discussion it was decided to have another meeting on 16.12.2009 at Sandoor to work out the details as per the mutually agreed technical parameters or norms.
176. In the meeting dated 16.12.2009 at Sandoor the claimant failed to submit any technical data. Hence, the respondent requested the claimant vide letter dated 18.12.2009 to furnish details, so that the raising cost could be finalised. The respondent addressed letters dated 09.03.2010 and 13.03.2010 to the claimant and furnished the information. In response to the said letter M/s.SSML by its letter dated 15.04.2010 requested the respondent to finalise the cost as the same could not be resolved in several meetings held. Since the raising cost could not be finalised by mutual discussion and negotiations the Board of respondent's in its 279th meeting held on 07.05.2010 fixed raising cost at ₹.365/MT for the year 2009-10. Accordingly, the respondent by its letter dated 05.06.2010 inform the same to the claimant. Upon receipt of the said communication the claimant submitted a comparative statement worked out on the basis of over burden ratio and waste development for fixation raising cost and arrived at a figure ₹.864 /MT by taking into consideration the over production for the period between September 2008 to October 2009.
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177. Cost of production based on mining activities was worked out ₹.691/MT and to that figure 25% profit margin of ₹.173 was added which works out to ₹.864.MT. The said sheet furnished by the claimant is referred to the cost accountant of respondent who after taking into consideration the data furnished by the claimant in its working sheet reworked and arrived at the figure ₹.478/MT. The said price are worked out by the cost accountant was discussed by the committee for the said purpose by the respondent in its meeting held on 19.07.2010 and accepted the figure arrived at by the cost accountant and recommended to the board for fixing the cost at ₹.478/MT. The Board of respondent in its 280th meeting examine the fixation made by the cost accountant recommendation of the committee and decided to refer the matter to an independent third party opinion and the board decided to entrust the matter to the National Institute of Rock Mechanics, KGF. However, NIRM by its communication dated 31.08.2010 informed their inability to undertake the task. Therefore the matter was referred to Dr.V.R.Shastry, Professor of Mining Engineer, NIT, Suratkal. Dr.V.,R.Shastry by his letter dated 07.02.2011 fixed raising cost of ₹.1204.62/MT.
178. The respondent noticed that Dr.V.R.Shastry has fixed the cost of raising in an Academic orient method. Hence, it was not accepted. The Board of the respondent /116/ Com.A.S.No.137/2019 revised the price fixed by the cost accountant at ₹.526/MT and communicated to the claimant. For the year 2010-11 the claimant by its letter dated 16.05.2011 requested the respondent to increase the raising cost proportionately with the price of iron ore as allegedly provided under the terms and conditions of the supplementary agreement.
179. The mining operation came to end w.e.f., 29.07.2011 in view of the order of the Hon'ble Supreme Court of India.
180. The respondent requested the claimant to submit the required data along with documents for fixing raising cost for the year 2008-09, 2010-11 and till closure of the mines vide letter dated 09.05.2013. The claimant by its letter dated 15.05.2013 submitted their statement indicating the details worked out by it for the year 2010-11 the claimant claimed a sum of ₹.2250/-MT and for the year 2011-12 claimed ₹.2520/MT.
181. The claimant was requested to substantiate its claim vide letter dated 31.05.2013. The claimant has submitted its statement and worksheet indicates how the figures were arrived at. In the meantime the cost accountant of the respondent vide its report submitted on /117/ Com.A.S.No.137/2019 02.08.2013 fixed the raising cost for the year 2008-09 at 569/MT and ₹.762/MT for the year 2010-11.
182. The State Government has formulated a scheme in pursuance of which the State Government has appointed CRISAL Risks and Infrastructure Solution Ltd., to assist the state government in developing an auction methodology for category C mines and further to assist in conducting auction. The CRISAL while working out the float price has taken the prevailing market condition of Bellary Hospet Sector Mines as illustration and has worked out float price to be fixed for C category mines. By taking into account the average cost of extraction based on annual reports filed by the mining companies of IBM has arrived at raising cost of ₹.65/MT.
183. The Income Tax Department while assessing the returns filed by the respondent for the year 2009-10 has inter alia observed that the supplies made to the extent of 81,923 MT to SSML during the year 2007-08 at a price of ₹.231/MT while prevailing market value at ₹.1250/- MT has sold the iron ore at an abnormally low price and called upon the respondent to explain the same. The respondent has explained the same by inform the same Income Tax Department that the ore of the over burden ratio during the financial year was not less than 1:11 ratio and that ₹.231 /118/ Com.A.S.No.137/2019 was collected and correspondingly ₹.150/- MT was paid to the raising contractor and therefore the department to drop the proceedings. However, the Income Tax Department did not accept the said explanation and assess at 8,34,79,537 as suppressed sales.
184. The claimant by its letter dated 08.01.2010 authorized the respondent to adjust the amount receivable against raising cost from the amount payable by SSML towards cost of iron ore to respondent. Accordingly the SSML made an adjustment and paid a part of the amount to the respondent against the supply of iron ore fines.
185. The respondent during the financial years 2010- 11, 2011-12 has adjusted the raising cost against the sale price payable by SSML. The Government of Karnataka in its order dated 12.03.2007 and 09.09.2008 referred the matter to the Hon'ble Lokayukta for investigation in the various illegalities committed by mining lease holders. In the report of Hon'ble Lokayukta at Sl.No.82 it is observed that an encroachment of 5.737 hectares is reported in respect of UIOM. An FIR was also registered by the Forest Department on 05.03.2009. Upon registration of FIR the Forest Department has seized the mine area including the machinery. Consequently the mining activities could not be carried out. Further on 16.05.2009 the respondent gave an /119/ Com.A.S.No.137/2019 undertaking to the Forest Department to release the ore and machinery which has been seized. The RFO by its letter dated 11.05.2009 informed the Mines and Geology Department not to issue any permits. Subsequently the RFO by its letter dated 05.06.2009 and for reasons stated therein through the earlier letter dated 11.05.2009. Thereafter the Government of Karnataka by its order dated 28.07.2010 banned export of iron ore with immediate effect.
186. The Hon'ble Supreme Court of India by its Order dated 29.07.2011 in WP No.562/2009 suspended all the mining activities including transportation of the iron ore in Bellary District of Karnataka State. Subsequently the Hon'ble Supreme Court of India by its order dated 26.08.2011 extended the said suspension of the mining activities to the Districts of Chitradurga and Tumkur. The Hon'ble Supreme Court of India by its order dated 23.09.2011 directed that the entire quantity iron ore in Bellary, Chitradurga and Tumkar Distcits shall be sold only through e-Auction by the monitoring committee appointed by The Hon'ble Supreme Court of India in that regard.
187. The CEC in its Report dated 03.02.2012 submitted to the Registry of the Hon'ble Supreme Court of India in Part 1 Chapter IV has dealt with classification leases /120/ Com.A.S.No.137/2019 in different categories on the basis of level of illegalities found.
188. The CEC has made recommendations regarding the mines classified as category C in said report. The Hon'ble Supreme Court of India accepted the recommendations of CEC report dated 03.02.2012 and further clarified that the reasons in respect of C category mines will stand cancelled. The Hon'ble Supreme Court of India has further held that the proceeds of the sale of iron ore of C category mines made through the Monitoring Committee will stand forfeited to the State. The Monitoring Committee will remit the accounts held by it on this account to the SPV for utilisation in connection with the purpose for which it had been constituted. Pursuant to the said judgment of the Hon'ble Supreme Court of India the Government by its order dated 12.09.2013 determined the lease of C category mines including UIOM. It is pertinent to mention that because of encroachment made by the raising agent i.,e the claimant ultimately UIOM came to be categorized as C category mines by CEC.
189. One of the conditions imposed by the Hon'ble Supreme Court of India while deciding the mines matter referred to the above is that all the mines irrespective of their categorisation shall undertake Reclamation and /121/ Com.A.S.No.137/2019 Rehabilitation work as per ICFRE guidelines by constructing retention work silting dams etc.,
190. As the direction of the Hon'ble Supreme Court of India is required to be implemented by the respondent it called upon the claimant vide letter dated 22.06.2014 to deposit a sum of ₹.10 Crores for undertaking R & R work. Viewed from any angle the application filed by the applicant is not maintainable lacks merits and bonafides and deserves to be dismissed. The respondent has prayed the Court to dismiss the suit with exemplary cost.
191. The Learned Counsel for the respondent and the claimant have addressed their respective arguments and have also submitted respective written arguments.
192. I have gone through the materials available on record.
193. The following points arise for my determination:
(1)Whether the Plaintiff (claimant in arbitration proceeding) has made out any grounds as set out under Section 34 of Arbitration & Conciliation Act, 1996 so as to set aside the findings of the Learned Arbitral Tribunal on with respect to Claim No:1 to 7 for /122/ Com.A.S.No.137/2019 a sum of ₹.218.8 Crores of the Plaintiff as set out in the statement of Claim before the Arbitral Tribunal made in the Award dated:07.06.2019? (2)What Order?
194. My findings on the above points are as follows:-
Point No. 1 : - In the Negative Point No. 2 : - As per final orders for the following REASONS
195. Point No.1 : M/S.MYSORE MINERALS LTD., has filed Arbitration suit No:136 of 2019 U/Sec.34 of the Arbitration & Conciliation Act, 1996 praying the Court to set aside the award dated 07.06.2019 passed by the learned Sole Arbitrator in Arbitration Proceedings between M/S.GSP Infratech Development Pvt., Ltd., and M/S. Mysore Minerals Limited arising out of CMP No:153/2014 with respect to Issue No:16 and Issue No:21 and also with respect to rejection of counter claim of the Plaintiff; and costs of the proceedings throughout and other expenditures and such other reliefs.
196. M/S.GVPR ENGINEERS LIMITED{Transferor Company)-M/S.GSP Infratech Development Pvt., Ltd., (formerly known as M/S.GSP Projects Pvt.,Ltd.,-Transferee Company) has filed Arbitration suit No:137 of 2019 U/Sec.34 of the Arbitration & Conciliation Act, 1996 praying /123/ Com.A.S.No.137/2019 the Court to set aside the award dated 07.06.2019 passed by the learned Sole Arbitrator in Arbitration Proceedings between M/S.GVPR ENGINEERS LIMITED{Transferor Company)-M/S.GSP Infratech Development Pvt., Ltd., (formerly known as M/S.GSP Projects Pvt.,Ltd.,-Transferee Company) and M/S.Mysore Minerals Limited arising out of CMP No:153/2014 with respect to Claim No:1 to 7 for a sum of ₹.218.8 Crores of the Plaintiff as set out in the statement of Claim before the Arbitral Tribunal; allow the entire claims of the Claimant set out in the Claim Statement on the file of the Arbitral Tribunal and costs of the proceedings.
197. In order to determine the suit it is useful to refer to Section 34 of Arbitration and Conciliation Act, 1996 which reads as under:
ARBITRATION AND CONCILIATION ACT, 1996 [Section : 34] Application for setting aside arbitral award (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub- section (3).
(2) An arbitral award may be set aside by the Court only if- (a) the party making the application establishes on the basis of record of the Arbitral tribunal that-
(i) a party was under some
incapacity; or
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(ii) the arbitration agreement is
not valid under the law to which the
parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral Tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part;
or /125/ Com.A.S.No.137/2019
(b) the Court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
[Explanation 1.-For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.-For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an /126/ Com.A.S.No.137/2019 erroneous application of the law or by reappreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33 , from the date on which that request had been disposed of by the arbitral Tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral Tribunal will eliminate the grounds for setting aside the arbitral award.
[(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.
(6) An application under this section shall be disposed of expeditiously, and in /127/ Com.A.S.No.137/2019 any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.
198. As per the mandate of Section 34 of the Act and the ratio of various judicial precedents, the Court while exercising jurisdiction under Section 34 of Arbitration & Conciliation Act, 1996 shall not act as an Appellate Court. The Court shall not interfere with the Award passed by the Arbitral Tribunal lightly without there being grounds as contemplated under Section 34 of the Act. The Court shall not modify/alter/remand the impugned award by assuming power of an Appellate Authority. This Court is not entitled to re-appreciate the evidence and substitute its view to the view taken by the Arbitral Tribunal. It is settled law that the Court while dealing with an application under Section 34 of Arbitration & Conciliation Act, 1996 is required to exercise its jurisdiction within the frame work of Section 34 and Section 34 (2A) of the Act. The Plaintiff has to establish that the impugned order is against to the fundamental law of India and must be patently illegal. The Court has to act within the frame work of Section 34 of the Act.
199. The Learned Arbitral Tribunal after exhaustive analysis of materials available before it has answered Issue No.1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 19, 25, 26, 28, 29, 30, 31, 32 and 33 in the Negative; Issue No.16, 17, /128/ Com.A.S.No.137/2019 18, 21, 26 in the Affirmative; Issue No.20 and 22 partly affirmative. The Learned Tribunal has also held Counter claim No:1, 2, 5, barred by limitation and Counter claim No:3, 4, 6, 7, 8 are within limitation. Finally, the Learned Tribunal has awarded a sum of ₹.46,38,013/- in favor of the claimant and against the respondent, along with interest @ 18% p.a. from the date of reference till the date of award and also future interest on the said sum at the same rate till the date of the actual payment of the amount awarded; and ₹.50,00,000/- towards costs and legal expenses. The learned Tribunal has rejected the counter claim made by the Respondent.
200. The Claimant is contending that the learned Arbitral Tribunal has failed to appreciate the materials available on record, failed to apply the law as applicable to the facts of the case, the Arbitral Tribunal has not properly appreciated the terms and conditions of the agreement and gave too much importance to the tender conditions. The Arbitral Tribunal has committed while rejecting the claim of the claimant amounting to ₹.218 Crores. Hence, the findings of the Arbitral Tribunal except on Issue No:16 and 21 deserves to be set aside.
201. The Respondent is contending that the findings of the Arbitral Tribunal except on Issue No:16 and 21 deserves /129/ Com.A.S.No.137/2019 to be maintained and award of ₹.46,38,013/-with interest at 18% p.a. from the date of reference till the date of payment and award of costs and legal expenses of ₹.50,00,000/- are liable to be set aside.
202. The Claimant as also the Respondent are contending that the impugned Award passed by the learned Arbitral Tribunal is opposed to public policy and most basic notion of Indian law and not at all maintainable in law. Hence, liable to be set aside as prayed by them in their respective Arbitral Suits.
203. The status of Claimant and the Respondent is not in dispute. The Respondent has invited a tender for the purchase of dimensional black and other various mineral produced by it from its queries including UIOM under tender Notification No.MML/GD/MKT/02-03 dated:28.06.2002. The sister concern of the Claimant M/S. SSMP Limited was the successful bidder having quoted a price of ₹.231 per M.T. for the iron ore inclusive of royalty etc., In pursuance of the tender conditions M/S. Shivashankar Minerals Private Limited sister concern of the Claimant suggested the name of the claimant to the respondent to be appointed as the raising agent. Accordingly, the Claimant and the Respondent entered in to raising contract as per agreement dated: 22.01.2004 /130/ Com.A.S.No.137/2019 subject to terms and conditions. The claimant is contending that the said agreement was obtained by force and had no opportunity to look in to the terms and conditions incorporated therein. The Respondent has denied the same and contended that the Claimant has entered in to agreement with full understanding and there was no force or coercion in the execution of the agreement. From the materials it is evident that the claimant has not avoided the contract on the ground of coercion or force but acted upon the same. The claimant has raised the plea that the contract is vitiated by illegality only after the dispute arose with the respondent. The clauses incorporated in the agreement dated:22.01.2004 and the tender conditions and the averments made in the pleading and the conduct of the Claimant show that the Claimant has voluntarily with full understanding of the terms conditions of the agreement has executed the agreement dated:22.01.2004. Therefore the finding of learned Arbitral Tribunal that the agreement dated:22.01.2004 is not tainted with any illegality calls for no interference.
204. The foot note appended to Annexure-1 of the terms and conditions of raising mineral/ore along with Annexure-R, Sl.No:7 of Annexure-1, Clause 2 (b), (3), 7 and 10 of the Agreement show that the Claimant was obliged to take all statutory permits to resume the mining operations and it was not the sole responsibility of the Respondent but /131/ Com.A.S.No.137/2019 joint responsibility of the Claimant and the Respondent to obtain necessary permission/clearance from competent authority/authorities and the claimant is entitled for reimbursement of legal expenses by the respondent. Hence, the contention of the Claimant that it was the sole responsibility of the Respondent to obtain all statutory permissions is rightly rejected by the learned Arbitral Tribunal.
205. The Claimant has made a claim for reimbursement of 50% of NPV against the Respondent much against the clear and unambiguous condition incorporated in clause of the agreement that the NPV payable to forest authority will be shared by both the parties and the same is not reimbursable to the claimant. Hence, the finding of learned Arbitral Tribunal on Issue No.3 calls for no interference.
206. The materials available on record show that the Claimant inspected the site and accepted the area on as is where is basis and accordingly continued to act upon the agreement. The agreement dated:22.01.04 clearly furnished the extent of area of operation as 33.60 hectares only and 44.00 hectares and also mentions about the approvals/clearance to be obtained by competent authorities before starting the operation. It is also clearly depicted that the raising cost shall be paid to the /132/ Com.A.S.No.137/2019 ore/mineral for the materials sold and for material unsold, no payment shall be made to the agent and he will be at liberty to sell the same. The raising cost of ₹.150/-PMT is indicated in respect of UIOM. The Respondent was not under any obligation to pay any other cost other than raising cost of ₹.150/-PMT. It is also clear from the agreement that the UIOM is located in the forest land and permission has to be obtained from the competent authorities, which shall be the responsibility of the Claimant and the claimant is entitled for reimbursement of legal expenditure incurred in obtaining necessary clearance/approvals from the competent authority. All the relevant facts relating to the contract were well within the knowledge of the claimant. The claimant except making vague allegations of fraud has not placed any cogent materials in support of the allegations. The Learned Arbitral Tribunal has extensively dealt with all the relevant facts, various clauses of the agreement and relevant rival pleadings and has come to a just conclusion to answer Issue No:4 to 8 in the Negative, which calls for no interference by this Court.
207. The Claimant has contended that the raising cost was not fixed scientifically and by mutual consent but fixed according to whims and fancies of the Respondent. The materials available on record show that the raising cost was fixed at ₹.150/PMT in tune with the agreement and appended annexure. The raising cost was depending on the /133/ Com.A.S.No.137/2019 price of iron ore. The raising cost was depending on the price of iron ore proportionate the purchase price of iron ore fixed by the sister concern of the claimant and the Respondent. The Claimant is relying on the report of Prof.V.R.Shastry. The learned Tribunal after considering the materials before it has come to the conclusion that the report of Prof.V.R.Shastry is not binding on the parties as Prof.V.R.Shastry was not appointed by mutual consent of the parties. The Tribunal has held that the price fixation ahs to be done or the price ahs to be fixed as per the methodology provided under the contract between the parties. The appointment of Prof.V.R.Shastry by the respondent was only to corroborate or for corroborating the price fixation done by its Chartered Accountant and it was for a limited purpose to reassure or to have an assurance for such fixation of price. The Tribunal has refused to consider the Report of Prof.V.R.Shastry as the evidence without proof. The Tribunal has further held that the procedure for fixation of price has been clearly laid down under the agreements entered into by the parties and the claimant cannot demand fixation of price without following the methodology provided or laid down under the contract and there is nothing to indicate on record as to how the calculation of price on a method provided under the agreement is bad in law. The Tribunal has pointed out that no flaw has been shown in the fixation of price except insisting for accepting the report of Prof.V.R.Shastry. Thus, the learned Arbitral Tribunal has arrived at a right /134/ Com.A.S.No.137/2019 conclusion to answer Issue No.9 in the NEGATIVE, which calls for no interference by this Court.
208. The Claimant has made a claim that it is entitled for a sum of ₹.2.50 Crores towards expenditure incurred by the claimant to obtain State and Central Government permissions, clearances and approvals in respect of ML 995 of the respondent; and a sum of ₹.37.36 Crores towards loss on account of over heads, idling charges for the idling period; a sum of ₹.7.21 Crores towards idling charges, over heads of salaries, wages etc., as a consequence of the respondent handing over lesser mining lease area of 33.60 HA as against the NIT schedule area of 43 HA; a sum of ₹.43.06 Crores towards back log development of the mine to vacate the prohibition order imposed under section 22(3) of mines Act by the Directorate General of Mines Safety; a sum of 24.76 Crores towards loss due to idling of machinery and men due to production approval for 85,000 MTS, per annum obtained by the respondent as against the contractual quantity of 2,40,000 MTS of Iron Ore lumps per annum; a sum of ₹.102.52 Crores towards increased raising cost payable by the despondent; weighment charges; ₹.16 Lakhs towards the balance of weighment charges for the weighment of 88,000/-MTS of e-auction of Iron ore as per letter of respondent dated:30.04.2013.
/135/ Com.A.S.No.137/2019
209. The Learned Tribunal has formulated the appropriate issues to consider the above claims made by the Claimant. The learned Tribunal has observed that as per the terms of the agreement the tender shall take the responsibility of procuring permission from MoEF and the legitimate expenditure spent for the process may be deducted out of the sale proceeds on the mutually agreed proportion. In case of the Forest land it is the complete responsibility of the raising agent to co-ordinate with the different statutory authority and get clearances from the MoEF, New Delhi. Any expenditure spent on these the raising contractor should obtain the prior permission from the company and expenditure so incurred will be adjusted towards purchase of mineral. The learned Tribunal also observed that the claim made by the Claimant in this regard is not supported by any material and also barred by time. Thus, the learned Tribunal has rightly refused the claim made by the Claimant.
210. The Learned Tribunal has observed that the claimant knew of all the nuances of the business and knew that the mining area was located in the forest land and the permission from the competent authority had to be obtained as per law which was the responsibility of the claimant. The claimant knew that the respondent is in the process of obtaining the mining lease over an area of 33.60 hectares of land and its application is under the process /136/ Com.A.S.No.137/2019 before the State and Central Government and the agreement was entered in to in anticipation of obtaining the working permission from the Central Government over an area of 33.70 hectares. It was also stipulated that the agreement shall be in force immediately, after the company obtain the working permission from the MoEF, GOI, and the grant of first party mining lease and execution of the lease deed in favor of first party. It shall continue to be in force a period of 5 years with further extension of 3 years on mutual negotiations. This agreement shall be only for the processing of Iron Ore lumps of +64%. Further, one year gestation period shall be given to bring the mine workings with the statutory limits and keep accordingly. The learned Tribunal has further observed that it cannot be believed that the claimant would have allowed the men and machinery to lie idle etc., Let alone lying idle, the claimant could not have done any preparation till the legal formalities are complied with/completed. The Respondent cannot be held liable for any delay or denial in respect of grant of permission/clearance by the concerned authority. The Learned Tribunal has further observed that no sensible businessmen would deploy men and machinery at the spot when he had full knowledge of the fact that to make the mine operational, permissions from various authorities are yet to be obtained or procured and no such procuration is possible without following them up at various levels. When the Claimant knew that the actual extent of proposed mining area was 33.60 hectares it could not be believed /137/ Com.A.S.No.137/2019 that it has deployed men and material for a larger extent that too before getting necessary permissions. The loss or damage can be claimed where the respondent is proved to be at fault. The Tribunal has held that the claimant has failed to place cogent materials on record to establish the alleged loss suffered by it. The claimant and the respondent proceeded with the mining work and also entered in to a supplementary agreement till the mine came to a standstill for the fault of none. In such circumstances none can claim any loss or damages.
211. The Learned Tribunal referring to Clauses 18(a0 and (b) of the agreement has observed that the work of removal of overburden (backlog development) is to be doen by the respondent and the cost of which is to be reimbursed by the claimant and that the same is being done by the claimant, the respondent need not be reimbursed and more over it is also barred by time and accordingly negative the claim of the Claimant regarding backlog development.
212. The learned Tribunal has observed that the Respondent right from the beginning made it clear that it was not having any statutory clearances for the UIOM, and it will not be liable for any delay or denial in obtaining statutory clearance. The respondent vide letter dated:04.2.2008 informed the claimant that it had obtained /138/ Com.A.S.No.137/2019 consent for expansion for .85 MTPA to 1.073 MTPA as per the letter dated:17.12.2007 and requested the claimant to increase the production as per the tender conditions and the agreement by producing 2,40,000 PA. The Tribunal has accepted the contention of the respondent that there could be no idling charges subsequent to 2008 as the commercial production started in 2008 and the claim prior to 2008 is barred by time as on the date of issuance of notice dated:12.02.2014 and rejected the claim of the Claimant.
213. The claimant has claimed increased raising cost at ₹.102.52 Crores. The Respondent has contended that as the parties have failed to arrive at a mutually agreed price the Respondent has fixed the raising cost relying on the finding of cRISIL, appointed by the Government which has stated the average raising cost of the sector is at ₹.650/- during 2013-14 and it is done by an expert Cost Accountant. The learned Tribunal by referring to Section 28(1)(a) of Arbitration & Conciliation Act, 1996 has held that the Tribunal is bound to decide the dispute in accordance with the substantive law; Contract Act, T.P.Act and other such laws in force and by referring to Section 28(3) of the Act has stated that the Tribunal has to decide the dispute in accordance with the terms of the contract and also taking into account the usage of the trade applicable to the transaction. The Tribunal has preferred to decide the claim of the Claimant with reference to the terms and conditions /139/ Com.A.S.No.137/2019 agreed upon by the parties and held that the claimant is not justified in seeking fixation of price by any other mode including the report of Prof.V.R.Shastry. The Tribunal has held that in the absence of any mutual negotiations arrived at between the parties, fixing the price on cost input and paying it at such rate is perfectly in accordance with the contract and the same cannot be faulted with as also the same has not been shown to be bad in law. When the Learned Tribunal has considered all the relevant facts, provisions of law and terms and conditions of the agreement, the finding arrived at by the Tribunal to reject the claim of the claimant for increased raising cost at ₹.102.52 does not call for interference by this Court.
214. The claimant had provided weigh bridge service for weighment of Iron ore selling through e-auction at the rate of ₹.20/-PMT and applicable taxes and duties and raised invoice for ₹.16,38,103/-. The respondent has failed to make payment in spite of issuance of letter dated:01.05.2013 and 03.05.2013 and statement of claim submitted by the Claimant. The claimant had also sent a reminder dated:19.07.2014. The respondent has not placed any materials so as to refuse the claim of the claimant. Hence, the Learned Tribunal has allowed the claim of the claimant and awarded ₹.16,38,103/- towards weighment charges in favor of the Claimant, which calls for no interference by this Court.
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215. The Claimant has contended that the Respondent was irregular in payments of raising costs. The Claimant vide letter dated:29.09.2009 requested the Respondent to release the raising cost and requested the respondent vide letter dated:21.07.2010 to fix the raising cost for the eyars 2008-09 and 2009-10. The Claimant has also issued a reminder dated:28.09.2010 and again requested the respondent vide letter dated:06.05.2013 to release the payments pending finalization of raising cost for the year 2011-12. The respondent has denied the claim of the claimant and stated that the claimant did not cooperate with the respondent in fixing the raising cost for the relevant years. The learned Tribunal by referring to Clause 9 of the instructions to tenders has observed that the matter relating to payment of raising cost depends upon the ore sold to the tenderer i.e. M/S.Shivashankar Minerals Private Limited, sister concern of the Claimant and the raising cost indicated in Annexure-1 shall be paid to the ore/ material sold and for material unsold, no payment shall be made to the agent and he will be at liberty to sell the same. The Learned Tribunal has held that the this matter falls outside the purview of the Arbitral Tribunal and accordingly answered the claim of the claimant in the Negative, which calls for no interference by this Court.
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216. After scrutinizing the materials before it in a right perspective the learned Tribunal has rightly answered the aforesaid Issues.
217. The Claimant has made a claim for recovery of ₹.30 Lakhs towards Revolving Security Deposit with interest and claimed interest at 24% p.a. and legal expenses at ₹.30 lakhs. The Learned Tribunal has framed appropriate Issues in order to resolve the said claims.
218. The Claimant has paid ₹.30 lakhs as Revolving Security Deposit as per Clause 6 of the Agreement dated:22.01.2004. The State Government has cancelled the Mining License issued in favor of the Respondent, in pursuance of the order of the Hon'ble Supreme Court of India. As a result the purpose of contract stands frustrated. The contract has become unenforceable. In such circumstances the Respondent is liable to refund the Revolving Security Deposit to the claimant. The respondent has failed to refund the same. Hence, the claimant is entitled to recover ₹.30 Lakhs along with interest at 18% p.a. from the date of frustration till the date of payment. The finding of the learned Tribunal on this claim is justified in the facts and circumstances and the law applicable in this regard.
/142/ Com.A.S.No.137/2019
219. The Learned Tribunal after following the ratio of the decisions of the Hon'ble Supreme Court of India reported in AIR 2010 SC 1511 and 2006 AIR SCW 3276, AIR 2018 SC 3109 and 4773 and Section 31(7) of the Act and 2014 AIR SCW 6764 has fixed the rate of interest at 18% p.a. on the sum due to the claimant and refused to grant interest at 24% p.a. as claimed by the claimant. The Learned Tribunal has not committed any illegality while fixing the rate of interest at 18% p.a. on the amounts due to the Claimant. Hence, the said conclusion of the Tribunal calls for no interference by this Court.
220. The Learned Arbitral Tribunal has awarded ₹.50 Lakhs towards costs and legal expenses to the Claimant. It is true that the learned Tribunal has not elaborated the reasons and methodology adopted by it while awarding ₹.50 lakhs towards cost and legal expenses in favor of the claimant. The Respondent though assailed the said finding has not placed any materials so as to set aside the said finding. The Court while determining an application filed under section 34 of A & C Act, 1996 is precluded from substituting the view of the Arbitral Tribunal with its own view especially in the absence of proper materials. Hence, the said findings of the learned Tribunal call for no interference.
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221. The learned Tribunal has taken up Issue No:23 to 25 and 27 to 32 together for discussion.
222. The respondent made a counter claim against the respondent to direct the claimant to pay the following amounts:
Sl. Claims Claim amount in No. ₹. 1. Salary reimbursement 36,94,498.00
2. Penalty for not produced 35,75,78,351.00 minimum assured quantity
3. R & R approximate cost 10,00,00,000.00
4. Compensation in 'C' Category 1,96,41,85,195.00
5. NPV payable 51,91,337.00
6. Minimum wages payable to contract labourers 1,40,00,000.00
7. Reputation damages 50,00,000.00
8. Legal expenses 30,00,000.00 Total 2,45,06,47,381.00
223. The Respondent has made a counter claim for reimbursement of salary paid its four employees in terms of clauses 18(c) and (d).The Respondent in its letters dated:28.06.2012 and 09.02.2012 has claimed ₹.23,53,063/- up to the period ending December 2011 towards reimbursement of salary for several other /144/ Com.A.S.No.137/2019 categories of personnel but in the counter claim No:1 claimed ₹.36,94,492/- .
224. The claimant has disputed the authenticity of the claim made by the Respondent and stated that the Claimant is not liable to make payment of salary of employees other than the designated employees as per the agreement. The Claimant without prejudice to its rights has stated that it has no objections to deduct the salaries alleged to be payable in respect of designated employees out of the claim made against the respondent and pay the remaining balance.
225. As per Clause-18(e) the respondent has to make claim for reimbursement of salary within 5th day of each calendar month and other reimbursement shall be made within fifteen days from the date of sending the bills for payment and if the claimant fails to reimburse the respondent the respondent may at its discretion forthwith stop all the operations and the claimant shall not raise any objection and is not entitled to claim for such stoppage as it would be due to default of the claimant. The Learned Tribunal has observed that the respondent has failed to place materials on record to show that it has raised any such bills and sent it for payment. The learned Tribunal has /145/ Com.A.S.No.137/2019 also held that the counter claim No.1 is barred by limitation and rightly rejected the counter claim No.1.
226. The respondent is claiming penalty for not producing minimum assured quantity at ₹.35,75,78,351/- against the claimant.
227. The respondent did not have permissions even to enter into the mine and produce iron ore till all the permissions and clearances are obtained by the respondent and the respondent vide its letter dated 04.08.2008 instructed the claimant not to produce beyond 85000 MT and that further by the letter dated 27.11.2008 the respondent itself asked the claimant to arrange to obtain blasting permissions and it did not have explosive license etc., are contended by the claimant. The claimant vide its letter dated 05.09.2008 submitted the reasons for shortfall in the production. The respondent has not controverted the said reasons assigned by the claimant.
228. The assurance given by the claimant is subject to forced majeure clause. Clause 33 of the agreement provides that neither party shall be liable to the other party for any failure to perform or for delay in performance of any delay in performance of any of its duties or obligations or /146/ Com.A.S.No.137/2019 the terms or provisions of the agreement if end to the extent such inability or delay is caused or by its attributable to at God, public enemy, fire explosion, drought, war, riot, revolution insurrection, Civil commotion hostilities, accident, embargo, strike, lockout, plant shutdown etc., or circumstances like or different nature beyond the reasonable control of the failing party be complies with any order including government legislation actions director or order of any Court whether now existing or hereafter arising. It is obligatory on the part of the party to notify the other party, the cessation of such events or force majeure. It was further agreed between the claimant and respondent that during the force majeure no payment shall be by the respondent to the claimant. In such circumstances the claim of the respondent that it is entitled to recover penalty from the claimant does not hold any water. The claimant could not have commenced the work till the necessary clearances and permissions were obtained by the competent authority. As such the learned Arbitral Tribunal has rightly rejected the Counter Claim No.2 made by the respondent.
229. The respondent is claiming R & R cost approximately at ₹.10 Crores against the claimant. The claimant is contending that it has not violated any mining laws and has carried out the mining activity all the time /147/ Com.A.S.No.137/2019 under the exclusive supervision and control of the respondent.
230. The claimant is contending that due to the negligence of the respondent the mine was categorized as C category Mine.
231. The learned Arbitral Tribunal has observed that no materials are placed on record to show the negligence of a party or who has violated the lease condition and who was responsible for closure of mine.
232. It is not in dispute that the state Government has prohibited mining operations in pursuance of the order passed by the Hon'ble Supreme Court of India. Therefore, the learned Arbitral Tribunal has come to the conclusion that the claimant cannot be held liable to contribute to R & R, accordingly, rejected Counter Claim No.3.
233. The respondent is claiming compensation in C category against claimant of ₹.1,96,41,85,195/-. The learned Arbitral Tribunal has observed that when the claimant was not responsible for closure of mine and it has been closed in pursuance of the order passed by the State /148/ Com.A.S.No.137/2019 Government said claim made by the respondent is not maintainable.
234. The learned Arbitral Tribunal has further observed that the rights of the State and its agencies and instrumentality in the realm of contracts are circumscribed by the considerations of the public interest. Apart from above general principles the rights and obligations of the parties to the agreement are also subject to certain statutory prescriptions. Vague and indefinite allegations of negligence etc., do not satisfy the requirement of violation of law leading to cancellation of the mining lease. There is no clear and convincing material which is worthy of acceptance to show that the claimant was responsible for the cancellation of the mining lease. Accordingly, the learned Arbitral Tribunal has rejected Counter Claim No.4.
235. Regarding Counter Claim No.5 the learned Arbitral Tribunal has observed that the claimant has stated that as per Clause 7 of the Supplementary agreement, the claimant and the respondent are liable to share Net Present Value at the ratio of 50:50 basis which is not reimbursable by either parties and in fact as per the tender schedule conditions the claimant was not liable to pay NPV. However, the claimant has paid in terms of the agreement and hence /149/ Com.A.S.No.137/2019 the claim of the respondent made under Counter Claim No.5 is not maintainable.
236. The learned Arbitral Tribunal has analyzed Clause 7 of the agreement and has come to the just conclusion that the said Counter Claim is quite contrary and opposed to the terms of agreement and accordingly rejected Counter Claim No.5.
237. The respondent is claiming a sum of ₹.1,40,00,000/- towards minimum wages payable to contract laborers. The learned Arbitral Tribunal after going through the materials available before it has accepted the contention of the claimant that it is not having any knowledge of the keys spending before the labor commission, Bellary and even if the same is pending it is not liable to pay the same.
238. The learned Arbitral Tribunal has observed that even according to the respondent the dispute raised before the regional labour commissioner is pending and the respondent appears to have taken time to file its defense. Hence, the claim made under Counter Claim No.6 is outside the purview of learned Arbitral Tribunal and also it is still in /150/ Com.A.S.No.137/2019 fluid state. As such the learned Arbitral Tribunal has rejected Counter Claim No.6.
239. The respondent has claimed ₹.50 Lakhs towards damages or loss of reputation. The learned Arbitral Tribunal has extensively considered the scope of claim for damages an account of alleged loss of reputation. The learned Arbitral Tribunal has observed that the damages for loss of reputation as such are not normally awarded for breach of contract. Since the protection of reputation is the role of the tort of defamation. There is nothing on record to show that the breach of contract caused a loss of reputation which in turn caused foreseeable financial loss to the respondent. There are no materials to show that there was breach of contract resulting in loss of reputation involving loss of trade. Accordingly the learned Arbitral Tribunal has rejected Counter Claim No.7.
240. The learned Arbitral Tribunal has rejected the Counter Claim No.8 made by the respondent regarding legal expenses of ₹.30 lakhs. It has observed that the contract has been frustrated in view of the cancellation of mining lease by the State Government pursuant to an order of The Hon'ble Supreme Court of India. Moreover this is not a case where the principle of cost following the event should be applied and accordingly rejected Counter Claim No.8.
/151/ Com.A.S.No.137/2019
241. The learned Arbitral Tribunal has explained the reasons for rejection of Counter Claim No.8. It has also referred to the arbitral award passed in another arbitral proceeding AC No.45/2014 between Sri.Shivashankar Mines Pvt., Ltd., Sister Concern of the claimant and the respondent herein and has come to the conclusion that the respondent is not entitled for the legal expenses.
242. The learned Arbitral Tribunal has considered the fact that the Respondent has claimed salary of its staff vide its letters dated:28.06.2012 and 09.02.2012 as ₹.23,53,063/- up to the period ending December 2011 for several other persons other than designated four employees. The cause of action to claim the said amount accrued to the Respondent from May 2005 to 31.03.2007. The claim in respect of these dues was made on 14.08.2015 when the respondent filed its statement of objections and counter claim hence has rightly held that the said claim is clearly barred by limitation.
243. Regarding counter claim No:2 the Learned Tribunal has observed that the respondent is contending that the claimant was required to produce minimum quantity of 2,40,000 MTS per annum i.e. 13,00,000- MTS whereas it has produced only 4,91,421 MTS and there is a short fall of 8,08,579 MTS. In view of clause 22(c) of the /152/ Com.A.S.No.137/2019 agreement the respondent is entitled to seek compensation for the short fall in production and accordingly the respondent is making a claim of ₹.35,75,78,351-00.
244. The Learned Tribunal has observed that the penalty amounts claimed by the respondent relate to the period starting from 2006-07 to 2011-12 and they are claimed before the Tribunal on 14.08.2015. Except for one moth i.e. August 2012 all other amounts claimed are barred by time. The Tribunal has rejected the counter claim No:2 on merits also. The materials available on record show that the counter claim No.2 is barred by Limitation and there are no grounds to interfere with the same.
245. The Learned Tribunal has rightly held counter claim No:3 and 4 are within the period of limitation as the same arose out of the directions issued by the Hon'ble Supreme Court of India in judgment dated:18.04.2013 and the counter claim No:4 arose on the basis of Government Notification dated:17.10.2013 respectively. However, on merits counter claim No:3 and 4 are rightly rejected by the Tribunal.
246. The Learned Tribunal has taken in to consideration the fact that the claim made by the /153/ Com.A.S.No.137/2019 Respondent under counter claim No:5 for ₹.51,92,337/- was made by the respondent in letter dated:21.07.2009 and rightly held that said claim is barred by limitation.
247. The learned Tribunal opined that the Counter claim No;6 is made within the period of limitation as the same was made on the basis of letter dated:09.03.2015 but refused the prayer on merits.
248. The counter No:7 relates to claim regarding loss of reputation on account of cancellation of lease and legal expenses and they are held to be made within the period of limitation. However, the Tribunal has rejected Counter claim No:7 and 8 on merits.
249. The Learned Tribunal has properly appreciated the materials placed before it in right perspective and has arrived at conclusions as stated above and the respondent has failed to make out a case so as to reverse the findings of the Learned Tribunal.
250. On going through the entire materials available on record it is evident that the learned Arbitral Tribunal has bestowed its attention to each and every claim/counter /154/ Com.A.S.No.137/2019 claim put forth by the Claimant and the Respondent, the evidence placed before it and also the rival arguments and the ratio of precedents relied on by the parties.
251. The materials available on record justify the reasoning adopted and findings given on issues by the learned Arbitral Tribunal while coming to the conclusion to reject the claim of the claimant except on two claims and also the Counter Claim of the respondent. The claimant and the respondent have failed to make out a case that the impugned Award is against to the fundamental law of India and patently illegal, perverse and against the facts of the case. They have not made out any grounds to interfere with the impugned award. In such circumstances, I answer Point No:1 in the NEGATIVE.
252. . POINT No.2 : In view of the discussion made above and findings on Point No:1 I pass the following ORDER The Arbitration suit No:137 of 2019 filed U/Sec.34 of the Arbitration & Conciliation Act, 1996 by the plaintiff praying the Court to set aside the award dated 07.06.2019 passed by the learned Sole Arbitrator in Arbitration Proceedings between M/S.GSP Infratech Development Pvt., /155/ Com.A.S.No.137/2019 Ltd., and M/S. Mysore Minerals Limited arising out of CMP No:153/2014 with respect to Claim No:1 to 7 for a sum of ₹.218.8 Crores is hereby dismissed with costs.
The Award dated: 07.06.2019 passed by the learned Sole Arbitrator in Arbitration Proceedings between M/S.GSP Infratech Development Pvt., Ltd., and M/S. Mysore Minerals Limited arising out of CMP No:153/2014 is hereby confirmed.
(Dictated to the Stenographer, transcribed and typed by her, the corrected and pronounced by me in the Open Court on this 11th day of OCTOBER 2022) (S.J.KRISHNA) LXXXIX ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU.
(CCH-90)
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Digitally signed
by S J KRISHNA
SJ Date:
KRISHNA 2022.10.17
02:43:33 -0400