Calcutta High Court (Appellete Side)
Dpsc Limited & Anr vs Eastern Coalfields Limited & Ors on 19 March, 2013
Author: Aniruddha Bose
Bench: Aniruddha Bose
1
17 19.03.13. W.P. 20948 (W) of 2012..
ab
DPSC Limited & Anr.
Vs.
Eastern Coalfields Limited & Ors.
Mr. Ranjan Bachawat
Mr. Debnath Ghosh
Mr. A. Poddar
Mr. Shounak Mitra
...For the Petitioners.
Mr. Sakti Nath Mukherjee
Mr. Kalimuddin Mondal
Mr. Partha Basu
Mr. Nikhil Roy
...For the Respondents.
The dispute in this writ petition relates to operation of a power generating station. The writ petitioner was given on lease a power- generating unit under a deed of lease executed on 31st March, 1993. A copy of this deed of lease has been annexed as "P2" to the writ petition. The subject of lease is a Thermal Power Station with land, building, plant and machinery etc which was let out to the writ petitioner with effect from 1st April, 1991, as it appears from the deed of lease. The term of the lease was for 20 years commencing from 1st April, 1991. Thus, as per the deed as it originally stood, the lease would have expired on 31st March, 2011. There was extension of the term of the lease by one year as per agreement between the parties. Thus, the deed of lease stood lapsed on 31st March, 2012. Under deed of lease, the lessee, being the writ petitioner no. 1 was authorised to make addition or modification to the equipment, buildings and power station at its own discretion and cost on written prior information to the lessor for essential operation of the station. The petitioners claim to have made substantial investment in terms of this clause and in particular, it is pleaded in the writ petition, the petitioner had 2 constructed and commenced an additional 10 MW plant at their own cost.
The course to be adopted on expiry of the lease is specified in the deed of lease itself, which appears from page 71A of the writ petition. There is a clause to the following effect in the deed:-
"AND it is hereby mutually agreed and between the parties as follows:-
(a) At the expiration or sooner determination of the demise, the lessee shall yield up and deliver upon the Lessor peaceful possession of the station in good running condition without claiming any compensation value thereof but the Lessor shall pay to the Lessee written down value of the additions and alterations of the building, station or additional machinery that may be brought by the Lessee at the station. On such determination the scheduled station shall rest in and be the absolute property of the Lessor."
It appears that there is a subsisting dispute as regards computation of written down value in respect of the additions and alterations made by the writ petitioners in relation to the said generating station. It is for this reason the dispute still remains unresolved. The petitioners continue to remain in possession of the generating station and the respondent coal company has also not taken any legal step to recover possession of the station.
There is an arbitration clause in the deed of lease to the following effect, as it appears from page 74A of the writ petition.
"In the event of any dispute arising out of or in relation to this agreement the same shall be referred to arbitration as per 3 BPE/Ministry's guidelines applicable to Public Sector undertakings".
So far as the subsisting dispute is concerned, in my opinion, the same stands covered by the arbitration clause. The main prayer in the writ petition is to prevent the respondents from obtaining recovery of possession of the generating station without releasing the written down value of the added assets, as per computation of the petitioners.
On behalf of the petitioners however it is argued that a committee had been constituted by the respondent no. 1 for the purpose of quantifying the written down value of the assets created by the petitioners through additions and alterations, but the said committee could not function as one of the members of the committee had retired. In this case, on 12th October, 2012, this Court had taken cognizance of this fact and it was observed that steps ought to be taken to replace the member of the committee who had retired and steps ought to be taken by the committee to not only physically verify the plant and machinery but also other assets of the plant by ascertaining the book value thereof. It was observed in the said order that the said exercise ought to be completed preferably by 12th December, 2012, on which date, the report of the committee was to be placed before this Court. On that date, the matter appeared and it was submitted before this Court that the exercise mandated by the order of the Court on 12th December, 2012 could not be completed. This Court had extended the time for completion of final report till 8th January, 2013. The said report is yet to be filed.
There is also dispute as to why the report could not be 4 completed and contention of the respondents is that the petitioners did not make available all materials before the committee. This allegation however has been disputed by the petitioners.
On the question of applicability of the arbitration clause, it is urged on behalf of the petitioners that existence of the arbitration clause does not altogether exclude the jurisdiction of Writ Court in adjudicting the dispute and since the writ petition has already been entertained, the dispute may be adjudicated upon in this proceeding itself.
In normal circumstances, this would have been the course which I would have adopted as the writ petition has already been entertained by this Court and time to time interim orders have been passed. But in the instant case, the dispute does not seem to be resolvable by the committee. For about 5 months, no progress has been made. The issues involved in the controversy are also highly disputed factual issues which requires examination in detail and accounting and valuation exercise would be necessary for this purpose.
In these circumstances, I am of the view that the matter should be resolved by way of arbitration as postulated in the aforesaid clause in the deed of lease. Let the parties take steps for resolving the dispute through the said mechanism. I do not think it would be possible for the Writ Court to adjudicate on these issues having regard to the nature of the dispute involved in this case.
The writ petition stands disposed of accordingly. Urgent photostat certified copy of this order, if applied for, shall be supplied to the learned Counsel for the parties as 5 expeditiously as possible, in compliance of usual formalities.
(Aniruddha Bose, J.)