Patna High Court - Orders
M/S Ramky Infrastructure Ltd. vs The State Of Bihar & Ors on 10 November, 2014
Author: Mihir Kumar Jha
Bench: Mihir Kumar Jha
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.7148 of 2014
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M/s Ramky Infrastructure Ltd., a Company incorporated under the
Companies Act, 1956 having its registered office at Ramky House, Raj
Bhawan Road, Samajiguda, Hyderabad- 500082 through its authorizex
representative Vijendra Kumar Singh
.... .... Petitioner/s
Versus
1. The State of Bihar through the Principle Secretary- Cum- Commissioner,
Bihar Road Construction Department, Vishweshwaraiya Bhawan, Bailey
Road, Jawaharlal Nehru Marg, Patna, Bihar- 800001.
2. The Bihar State Road Development Corporation Limited having its
registered office at Road Construction Department Central Mechanical
Work Shop Campus, Near Patna Airport, Sheikhpura, Patna Through its
Managing Director.
3. The Managing Director, The Bihar State Road Development Corporation
Limited having its registered office at Road Construction Department
Central Mechanical Work Shop Campus, Near Patna Airport, Sheikhpura,
Patna.
4. URS Scott Wilson India Private Limited, 19th Floor, Tower C, Building
5, Cyber Terraces DLF Cyber City, Phase- III, Gurgaon- 122002.
.... .... Respondent/s
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Appearance :
For the Petitioner/s : Mr. Y.V. Giri, Sr. Adv, Mr. Sarojanand Jha,
Mr. Saket Tiwary and Mr. Sanjeev Kumar
Dubey, Advocates.
For B.S.R.D.C : Mr. Lalit Kishore, PAAG with Mr. Vikas
Kumar, Advocate.
For the State : Mr. GP30- Raju Giri
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CORAM: HONOURABLE MR. JUSTICE MIHIR KUMAR JHA
ORAL JUDGMENT
13 10-11-2014Heard learned counsel for the parties as with regard to the following reliefs sought in this writ application:-
"a. To issue an appropriate writ (s), order(s), direction(s) in the nature of writ of Certiorari quashing the decision taken by the Respondent No. 2 under the Chairmanship of Respondent No. 3 and as recorded in the minutes of meeting dated 22.03.2014, so far as it concerns the petitioner, whereby the Respondent No. 4 Patna High Court CWJC No.7148 of 2014 (13) dt.10-11-2014 2 has been advised to issue a notice to the Petitioner under Clause 15.1 of the General Conditions of Contract ("GCC") and thereafter to take further coercive action against the Petitioner as being arbitrary, unreasonable and being violative of Article 14 of the Constitution of India.
b. To issue an appropriate writ (s), order(s) direction(s) in the nature of writ of Certiorari quashing the letter dated 28.03.2014 issued by the Respondent No. 4 to the Petitioner under Clause 15.1 of the GCC thereby threatening to take actions against the Petitioner as being arbitrary, unreasonable and being violative of Article 14 of the Constitution of India.
c. To issue an appropriate writ (s), order(s) direction(s) in the nature of writ of Mandamus restraining the Respondents or any other person acting on their behalf from invoking the Performance Security furnished by the Petitioner to the Respondent no. 1 by way of the Bank Guarantee being BG No. 0008BG00031010 dated 24.03.2010 for an amount of Rs. 39,17, 63,383/- issued by ICICI Bank Limited, ICICI Bank Towers Level-1/West Wing, 1-11-256, Begumpet, Hyderabad 500016;
d. To issue an appropriate writ (s), order(s) direction(s) in the nature of writ of Mandamus restraining the Respondents or any other person acting on their behalf from invoking the following Bank Guarantees furnished by the Petitioner to the Respondent No. 1 against the Mobilization Advance;
a. BG No. 006GM07100980001 for an amount of Rs. 10,00,00,000/- issued by Yes Bank Limited, Ground Floor, Mayank Towers, 6- 3-1090/B/1 & 2, Rajbhawan Road, Somajiguda, Hyderabad;
b. BG No. 700LG0120/10 for an amount of Rs. 10,00,00,000/- issued by ING Vyasa Bank Limited, TFU, -SP Road, -, TSR Complex, Sardar Patel Road, Secunderabad.
c.BG No. 700LG0121/10 for an amount of Rs. 10,00,00,000/- issued by ING Vyasa Bank Limited, TFU, SP Road, 1-7-1, TSR complex, Sardar Patel Road, Secunderabad;
d. BG No. 0008BG00037110 for an amount of Rs. 9,17,63,383/- issued by ICICI Bank Limited, ICICI Bank Towers Level-1/West Wing, 1- 11-256, Begumpet, Hyderabad 500016; e. To issue an appropriate writ (s), order(s) direction(s) in the nature of writ of Mandamus restraining Patna High Court CWJC No.7148 of 2014 (13) dt.10-11-2014 3 the Respondents in any manner acting upon the Minutes of Meeting dated 22.03.2014 or upon the letter dated 28.03.2014 issued by the Respondent No. 4 including taking any coercive steps against the Petitioner and to issue any other relief or reliefs for which the members of the Petitioner is found to be entitled in the facts and circumstances of the case.
2. During the pendency of this writ application, the petitioner has prayed for additional relief by filing Interlocutory Application No. 3784 of 2014, wherein, the amendment to the prayer made in the writ application has been sought in the following terms:-
"That the present interlocutory application is being filed to amend the prayer of C.W.J.C No. 7148/2014 so as to challenge the letter dated 25.04.2014 (Annexure-18 to I.A. 3441 of 2014) be which the respondent No. 2 has terminated the contract under the clause 15.2 of the Agreement."
3. Mr. Lalit Kishore, P.A.A.G., appearing on behalf of the respondent nos. 2 & 3 has initially raised the question of maintainability of the writ application on account of there being alternative remedy for the petitioner by way of arbitration. He has also submitted that as the petitioner had caused breach of the terms and conditions of the agreement and also voluntarily sought to rescind the agreement, he now cannot be permitted to Patna High Court CWJC No.7148 of 2014 (13) dt.10-11-2014 4 assail the decisions taken by the authorities nor he can claim any amount for the work done and, inasmuch as, it is the Government which has been put to substantial loss on account of inaction/negligence on the part of the petitioner.
4. Mr. Giri, in reply, would submit that as a matter of fact when the basic requirement for providing the site to take up and complete the assigned work as per the terms and conditions of the agreement was not fulfilled by the respondents nos. 1 to 3, they cannot blame the petitioner much less take any penal action against it. He has also submitted that mere rescinding of the agreement by the petitioner in terms of agreement itself will not preclude the petitioner from claiming the amount of loss sustained either in terms of the bills raised by the petitioner for the work already done or for the liquidated damages.
5. This Court for the time being would find force in the submission of Mr. Lalit Kishore, inasmuch as, Patna High Court CWJC No.7148 of 2014 (13) dt.10-11-2014 5 such disputed question of fact cannot be decided by this Court in exercise of power under Article 226 of the Constitution of India, specially when the inter parte agreement also contains the clause of arbitration for resolution of the dispute. Reference in this connection may be usefully made to the judgment of the Apex Court in the case of M/s Titagarh Paper Mills Ltd. Vs Orissa State Electricity Board and Another reported in 1975 (2) SCC 436, E. Venkant Krishna vs Indian Oil Corporation & Anr reported in 2000(7) SCC 764 and H.P.C.L & Ors vs Super Highway Services & Anr reported in 2010(3) SCC 321.
6. Mr. Giri in fact, in the background of the aforementioned settled position in law has himself agreed for taking recourse to arbitration proceeding but then he would submit that since the petitioner has suffered a lot both on account of the action taken by the respondent nos. 1 to 3 in denying legitimate payment as also forfeiting the amount of bank guarantee to the tune of Rs. 93 crores Patna High Court CWJC No.7148 of 2014 (13) dt.10-11-2014 6 approximately as against which it has only certain interim protection in terms of the interim order of this Court, not only this Court itself should appoint an arbitrator but also fix a time limit for concluding the arbitration proceeding.
7. Mr. Lalit Kishore, also does not have any objection to the aforesaid submission of Mr. Giri but then he has submitted that since the respondent nos. 2 & 3 have certain counter claims that would also be required to be adjudicated in the arbitration proceeding. He has also submitted that even the respondent nos. 1 to 3 want the dispute to be decided at the earliest because the work in question which was being done by the petitioner has been sought to be re-tendered and thus the progress of such work may get affected on account of pendency of arbitration proceeding for a long period.
8. Having regard to the stakes of both the parties involved in the arbitration proceeding, this Court would find necessity of its expeditious disposal. In this regard, this Court has taken into consideration that the bank Patna High Court CWJC No.7148 of 2014 (13) dt.10-11-2014 7 guarantee furnished by the petitioner to the tune of Rs. 93 Crores approximately has been sought to be invoked by the respondent nos. 2 & 3 on the ground of violation of the terms and conditions of the agreement. This Court in fact has given a limited protection to the petitioner by its interim order only to the extent that though the bank guarantee furnished by the petitioner was not be encashed by the respondent nos. 2 & 3 on a condition that the petitioner would be also bound to keep on renewing the validity of the bank guarantee. The petitioner has also ensured the same by extending the validity of the period of bank guarantee up to 15th of April, 2015.
9. In view of the aforementioned submissions and findings, this Court with the consent of both parties would dispose of the present writ application with the following observations and directions:-
(i) Hon'ble Mr. Justice Uday Sinha, a retired judge of this Court, will act as an Arbitrator in the resolution of the dispute between the petitioner and respondent nos. 1, 2 & 3.Patna High Court CWJC No.7148 of 2014 (13) dt.10-11-2014 8
(ii) The parties shall appear before him through their respective counsels at 11:00 am on 15th of November, 2014, at his residence and the learned counsel for the petitioner shall hand over not only a copy of this order but also relevant documents including a copy of this writ application with its enclosures.
(iii) The Hon'ble Arbitrator after preliminary hearing and fixing his remuneration to be shared in equal proportion by both the parties shall grant a period of two weeks for filing of a compact statement of claim by the petitioner and another two weeks to the learned counsel for respondent nos. 1, 2 & 3 for filing of written statement and counter claim, if any.
(iv) The pleadings having been completed within a maximum period of four weeks to be computed from 15th of November, 2014, the petitioner shall lead its evidence within a maximum period of four weeks. Similarly, the respondent nos. 1, 2 & 3 shall also complete their evidence within a maximum period of three weeks from the date of closure of the evidence by the petitioner.
(v) The oral arguments as also written submissions Patna High Court CWJC No.7148 of 2014 (13) dt.10-11-2014 9 by both the sides must be completed within a period of two weeks of the closure of evidence by the respondent nos. 1, 2 & 3.
(vi) The award thereafter shall be pronounced by Hon'ble Arbitrator within a period of four weeks from the date of completion of the arguments by both the sides.
(vii) If, for any reason, whatsoever, the award cannot be pronounced by the Hon'ble Arbitrator in the aforementioned time schedule, the petitioner shall be under an obligation to extend the further period of validity of its bank guarantee for a period as may be fixed by Hon'ble Arbitrator and also handover its original to the respondent nos. 2 and 3.
(Mihir Kumar Jha, J) Ranjan/-
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