Bombay High Court
Mbpl-Kec(Jv) And 2 Ors vs Maharashtra Rail Infrastructure ... on 22 July, 2022
Author: G. S. Kulkarni
Bench: G.S.Kulkarni
Prajakta Vartak 1 907-carbpl [email protected] IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION IN ITS COMMERCIAL DIVISION COMM. ARBITRATION PETITION (L.) NO. 20186 OF 2022 AND COMM. ARBITRATION PETITION (L.) NO. 20456 OF 2022 M/s. MBPL - KEC (JV) & Ors. ...Petitioners Versus Maharashtra Rail Infrastructure Development Corporation Ltd. ...Respondent ----- Mr. Sunip Sen with Mr. Chirag Dave and Mr. Anuj Athalye i/b. Legasis Partners for Petitioners. Mr. Manoj Badgujar for Respondent. ----- CORAM : G.S.KULKARNI, J.
DATE : JULY 22, 2022.
P.C. :-
Commercial Arbitration Petition (L.) No. 20186 of 2022
1. By this petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 (for short, "the Act"), the petitioner is seeking reliefs on disputes and differences which have arisen between the parties under the contract awarded to the petitioners by the respondent on the Nagpur-Amla project. On 29 June, 2022 when the proceedings were moved before this Court on the first occasion, this Court had passed the following order:-
"1. The present proceedings are similar to the proceeding of Commercial Arbitration Petition (L.) No.11818 of 2022 which was heard by this Court on 12 April, 2022 and 06 May, 2022 and which ::: Uploaded on - 23/07/2022 ::: Downloaded on - 23/07/2022 21:22:33 ::: Prajakta Vartak 2 907-carbpl [email protected] was also a case wherein it was contended that substantial work under the contract in question in the said proceedings was completed. The respondent taking a well considered view of the matter, had accepted an undertaking from the petitioner therein that the contractual work would be completed within a stipulated time.
2. In my opinion, even in the present case, the respondent keeping open all its rights and contentions, may re-consider its position so as to put the petitioners to specific terms and conditions and explore the possibility of the disputes being resolved.
3. It is, therefore, appropriate that the parties have a joint meeting and try to resolve the disputes. In order to enable the parties to do so, stand over to 04 July, 2022 (H.O.B.).
4. In the meantime, it would be appropriate and in the interest of justice that the impugned termination is not acted upon, which is strictly to enable the parties to make an attempt to resolve the disputes.
5. Needless to observe that the meeting would be without prejudice to the rights and contentions of the parties.
6. All contentions of the parties are expressly kept open."
2. As there was a possibility of an amicable resolution of disputes, the respondent in public interest had taken a fair stand. In these circumstances, on 13 July, 2022, the Court passed the following order:-
"1. In so far as Nagpur-Amla work is concerned, learned Counsel for the respondent has drawn the Court's attention to the letter dated 12 July 2022 addressed by the respondent to the petitioners. Mr.Sen, learned Counsel appearing for the petitioners would agree on the receipt of such letter by his clients. Mr.Badgujar, learned Counsel for respondent has also made a statement that there are no hindrances whatsoever in regard to Nagpur-Amla work to be undertaken. Mr.Sen makes a statement that his clients are willing to proceed to execute the work. Let the same be commenced within a period of one week from today.
2. In so far as Pune-Miraj work is concerned, Mr.Sen would submit that there are some issue which would be sorted out in few days. Accordingly, for further orders to be passed in that regard, stand over to 20 July 2022. High On Board.
3. Needless to observe that in respect of Nagpur-Amla work, the ::: Uploaded on - 23/07/2022 ::: Downloaded on - 23/07/2022 21:22:33 ::: Prajakta Vartak 3 907-carbpl [email protected] petitioners would furnish a bank guarantee of Rs.2.5 crores, which shall also be furnished within a period of two weeks from today. There shall not be any further extension.
4. Mr.Sen has also made a statement that in the event Pune- Miraj issues are resolved, his clients would also furnish a bank guarantee of Rs.2.5 crores in respect of such work."
3. It is on such backdrop, the proceedings are listed before the Court today.
4. Learned counsel for the respondent has tendered a compilation of documents. The Court's attention is drawn to the position taken by the respondent as arrived in the resolution of disputes in a similar case namely in Michigan Engineers Pvt. Ltd. Vs. Maharashtra Rail Infrastructure Development Corporation Limited, which was subject matter of the proceedings before this Court in Commercial Arbitration Petition (L.) No.11818 of 2022. A reference is made to such proceedings and the order dated 29 June, 2022 (supra) passed on such proceedings.
5. It is on the similar lines and considering the public interest, learned counsel for the respondent has contended that a without prejudice proposal was issued by the respondent to the petitioners on 02 July, 2022 calling upon the respondent to accept the terms and conditions as set out in the said letter, a copy of which is tendered on behalf of the respondent. Mr. Sen, learned counsel for the petitioners, on instructions of his clients who are present in the Court, states that the terms and conditions as ::: Uploaded on - 23/07/2022 ::: Downloaded on - 23/07/2022 21:22:33 ::: Prajakta Vartak 4 907-carbpl [email protected] contained in the said letter of the respondent are acceptable to the petitioners, except for three issues, being noted hereinafter. He also states that the willingness of the petitioner to continue with the contract has already been recorded in paragraph 1 of the order dated 13 July, 2022 passed by this Court in the present proceedings. Mr. Sen says that firstly the concern for his clients is to the condition providing for a period of 45 days as set out in paragraph 8(b) of the respondent's letter dated 02 July, 2022. Mr. Sen's contention is that such period of 45 days needs to be reckoned by excluding the period taken for launching of the railway girder. This contention of the petitioners is acceptable to the respondent as stated by the learned counsel for the respondent, on instructions of the officer of the respondent who is present in the Court. The second contention as urged by Mr. Sen is in regard to the condition in paragraph 8b of the said letter of the respondent, which is in regard to the blacklisting. Learned counsel for the respondent, on instructions, makes a statement that the petitioners would not be blacklisted on the present contract in view of the observations as made by this Court in Michigan's case (supra). Mr Sen's third contention is in regard to the respondent insisting for a bank guarantee of Rs.10 Crores. There ought not be any issue on the bank guarantee as the respondent has already agreed to accept a bank guarantee of Rs. 2.5 Crores, which the petitioners have ::: Uploaded on - 23/07/2022 ::: Downloaded on - 23/07/2022 21:22:33 ::: Prajakta Vartak 5 907-carbpl [email protected] agreed to furnish. It is stated that within a period of three to four days, the petitioners are in the process of submitting such bank guarantee to the respondent, as also noted by the Court in its earlier order dated 13 July, 2022.
6. In this view of the matter, the disputes as presented before the Court would stand resolved for the petitioners to commence the contractual work. As a consequence of such consensus, by consent of the parties and in due regard, as to what has been agreed between the parties as noted above, the pre-termination notice stands set aside. The parties are agreeable that in regard to all other matters, the parties shall stand governed by all the terms and conditions of the original contract, including on escalation and liquidated damages.
7. It needs to be observed that the respondent has taken a fair stand considering a larger public interest and more so, the interest of the public exchequer.
8. Disposed of in the above terms. No costs.
Commercial Arbitration Petition (L.) No. 20456 of 2022
9. In so far as this companion petition is concerned, disputes between the parties have arisen under the Pune-Miraj project. Mr. Sen, learned counsel for the petitioners, on instructions of his clients, states that his ::: Uploaded on - 23/07/2022 ::: Downloaded on - 23/07/2022 21:22:33 ::: Prajakta Vartak 6 907-carbpl [email protected] clients are agreeable for all the terms and conditions including of furnishing of the bank guarantee namely that the petitioners shall furnish the bank guarantee of Rs.2.5 Crores. Mr. Badgujar, learned counsel for the respondent, on instructions states that the condition of blacklisting would also not be applicable similar to the position taken by the respondent in Michigan's case (supra).
10. In so far as the project work is concerned, it is agreed between the parties that without any further delay, the same would be completed within a period of eight months, which would commence from one week from today i.e. with effect from 23 September, 2022. There are some issues in regard to the time which would be taken for launching of the girder and preparation of the site for such work. In this regard, Mr. Sen, on instructions has stated that a sufficient notice, which shall be a minimum notice of 10 days, shall be issued to the respondent, when the site is ready for installation of the girder and after receipt of such notice, the respondent would take appropriate steps to involve the third party for installation of the girder. It is also agreed between the parties that the time period for the actual work of the launching of the girder shall be appropriately recorded between the parties in clear and unambiguous correspondence and such time period taken in the actual launching of the girder, shall be excluded and/or not considered in the time period of 8 ::: Uploaded on - 23/07/2022 ::: Downloaded on - 23/07/2022 21:22:33 ::: Prajakta Vartak 7 907-carbpl [email protected] months within which the petitioners are to complete the contractual work. It is agreed that such period shall commence from the date of the petitioners' notice to the respondent intimating that the site is ready for launching of the girder, till the actual launching of the girder is completed, which would be excluded from the said period of 8 months. The parties agree that all these events shall be recorded between the parties in appropriate clear correspondence so that there is no dispute on the period to be excluded.
11. It is agreed by the petitioner that the balance work, namely the work at other places apart from the site where the girders would be launched, shall not in any manner be affected and shall be continued to be undertaken by the petitioners even during the period the work of launching of girder is undertaken and completed.
12. The parties have also agreed that the other terms and conditions of the original contract, except what has been observed above, shall continue to operate including in regard to the liquidated damages and escalation.
13. The petition is accordingly disposed of in view of such consensus between the parties and in the above terms. No costs.
(G. S. KULKARNI, J.) ::: Uploaded on - 23/07/2022 ::: Downloaded on - 23/07/2022 21:22:33 :::