Delhi High Court - Orders
Suzlon Energy Limited vs Indian Oil Corporation Limited on 16 May, 2023
Author: Chandra Dhari Singh
Bench: Chandra Dhari Singh
$~43
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 149/2023
SUZLON ENERGY LIMITED ..... Petitioner
Through: Mr.Shashank Garg, Mr.Aman Gupta
and Ms.Nishtha Jain, Advocates
versus
INDIAN OIL CORPORATION LIMITED ..... Respondent
Through: Ms.Astha Sharma and Mr.Karan
Jaiswal, Advocates
CORAM:
HON'BLE MR. JUSTICE CHANDRA DHARI SINGH
ORDER
% 16.05.2023 I.A. No. 9468/2023 (for exemption) Subject to the petitioner filing the clear, original and legible/typed copies of any dim documents on which the petitioner may seek to place reliance, within four weeks from today, exemption is granted for the present.
The application is disposed of.
O.M.P.(I) (COMM) 149/2023
1. The present petition under Section 9 of the Arbitration & Conciliation Act, 1996 (herein after referred to as „the Act‟) has been filed by the petitioner seeking the following reliefs:
"a. Grant ad interim orders and/or directions in favour of the Petitioner and against the Respondent calling upon This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:50 the Respondent to release the PBGs in the favors of the Petitioner or in the alternative direct the Respondent to deposit the original document of the Performance Bank Guarantees bearing Nos. 0999516BG0000596 and 0999516BG0000597 for the amount of Rs.12,24,00,000/-
and Rs 3,24,88,239/- and the BGs No. 0999516BG0000593 and 0999516BG0000595 for the amount of Rs. 12,21,00,000/- and Rs 3,58,59,367/-before this Hon'ble Court.
b. Grant ad interim orders and/or directions in favour of the Petitioner and against the Respondent, restraining the Respondent from issuing any communication to the Petitioner or the Petitioner's Bank from seeking any further extension of the PBGs beyond the validity period of 30.06.2023.
c. Grant ad interim orders and/or directions preventing the Respondent from enchasing the PBGs on any ground whatsoever;
d. Pass such other Order(s) as this Hon'ble Court may deem fit and proper in the interest of justice and in the facts and circumstances of the present case."
2. The learned counsel appearing for the petitioner submitted that the present petition has been filed seeking release of the four original Performance Bank Guarantees bearing No. Nos. 0999516BG0000596 and 0999516BG0000597 for the amount of Rs. 12,24,00,000/- and Rs 3,24,88,239/- and the BGs No. 0999516BG0000593 and 0999516BG0000595 for the amount of Rs. 12,21,00,000/- and Rs 3,58,59,367/-(hereinafter together referred to as "PBGs") which are valid till 30th June, 2023 to the petitioner in terms of the award dated 25th February, 2023 or in the alternative submit the same before this Court until the execution of the award dated 25th February, 2023.
3. The learned counsel appearing for the petitioner submitted that on 29th June, 2015 the respondent issued Tender No. PLCC/WF/ AESD/ 1524 and in response to the same the respondent on 4th March, 2016 issued four letters of This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:50 acceptance issuing contracts for Design, Manufacture and Supply for 25.2 MW wind farm at Bhopalgarh, in the state of Rajasthan for Tender no. PLCC1524S and PLCC1524I, work order no. 24686705 and 24686706, respectively, to the Petitioner (referred to as the "the Project" hereinafter) and the value of the work order was to the tune of Rs. 1,224,000,000.00.
4. It is further submitted that as per Clause 2.0 of the LOAs the petitioner was required to deposit Performance Bank Guarantee from a nationalized bank for sum of Rs.12,24,00,000/-and Rs 3,24,88,239/-for Bhopalgarh wind farm and Rs.12,21,00,000/- and Rs 3,58,59,367/- for Kaladungar wind farm as a security deposit with the Noida office of the respondent No.1 have been furnished by the petitioner as per the terms and conditions of the contract.
5. It is submitted on behalf of the petitioner by the learned counsel appearing for the petitioner that after successful completion of the work the respondent also issued completion certificates to the petitioner categorically mentioning the Date of Commission, Stabilization, Commencement of O&M, Completion and Power Curve Test being 31st December, 2016, 16th March,2017, 17th March, 2017, 14th October, 2017, and 10th August, 2017 for Bhopalgarh wind farm and 30th December, 2016, 18th March, 2017, 19th March, 2017and 8th November, 2017 for Kaladungar wind farm respectively.
6. The learned counsel appearing for the petitioner submitted that the on 28th March, 2019, the respondent requested RRECL for PPA extension and that RRECL forwarded their recommendation to RUVNL on 29 th March, 2019. It is submitted that RUVNL did not extend the PPA and meanwhile the respondent approached the High Court of Rajasthan for issuance of direction to RRECL for PPA extension. It is submitted that the vide order dated 2 nd April, 2019 the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:50 High Court directed RUVPNL to continue the PPA till the final outcome of the writ petition.
7. It is further submitted that the respondent issued a Defect Liability Notice dated 4th February, 2019 asserting non-extension of PPA by State Discom as "Defect" and despite the change in State Policy, and in turn asserted that extension of PPA was an obligation of the petitioner and consequently, wrongly withheld the release of the Performance Bank Guarantees, which ought to have been released on completion of works as per Contracts.
8. It is submitted on behalf of the petitioner that the Petitioner, vide letter dated 1st August, 2019, inter alia, stated that obligation arising due to non-extension of PPA was beyond its control and that it would not be responsible for the same and the Petitioner in its letter further stated that, as on the date of bid submission, they had performed all their obligations and got the PPA signed under the REC mechanism and any subsequent change in the policy is beyond the control of the Petitioner. The petitioner approached this Court under Section 9 of the Act vide OMP(I)(COMM) 86/2020 seeking stay of bank guarantee wherein the learned counsel appearing for the respondent made a statement on 20th March, 2020 that the respondent would not encash the performance bank guarantees only in the event the same are not extended and not otherwise.
9. In the interregnum, the petitioner on 23rd May, 2020, issued notice under Section 21 of the Act invoking the arbitration clause and the appointment of the learned arbitrator and the appointment of the Presiding Arbitrator, the Arbitral Tribunal came into existence.
10. The learned Tribunal pronounced the award on 25th February, 2023 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:51 expressing a dissenting view on one of the Counter Claims. However, both majority and minority awards unanimously allowed the Claim of release of the PBGs holding the Defect Liability Notice and the withholding of the Performance Bank Guarantees by the respondent to be illegal and in violation of the Contract. It is further submitted that the petitioner vide Letter dated 10th March, 2023 called upon the respondent to comply with the award dated 25th February, 2023 and release the Bank Guarantees within 10 days of receipt of the letter. The respondent has, however, sent no response to the said letter dated 10th March, 2023. It is thus submitted that petitioner is apprehensive that the respondent may invoke the said four (4) Performance Bank Guarantees in violation of the award dated 25 th February, 2023, thereby rendering the execution of the said award in respect of release of the PBGs redundant and would cause severe and irreparable financial loss to the petitioner.
11. Heard the learned counsel appearing for the petitioner and perused the record.
12. Issue notice of the petition to the respondent.
13. The learned counsel appearing for the respondent accepts notice and vehemently opposed the petition. The learned counsel appearing for the respondent prayed for some time to file reply to the petition. Let the reply to the petition be filed within a period of 10 days.
14. List on 9th June, 2023 before the Vacation Judge.
15. The learned counsel appearing for the petitioner prayed for some time to file additional documents. Let the additional documents be filed within a week.
16. Till the next date of hearing, both the parties are directed to maintain This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:51 status quo in relation to the four Performance Bank Guarantees bearing Nos. 0999516BG0000596 and 0999516BG0000597 for the amount of Rs.12,24,00,000/- and Rs 3,24,88,239/- and the BGs No. 0999516BG0000593 and 0999516BG0000595 for the amount of Rs. 12,21,00,000/- and Rs 3,58,59,367/-.
CHANDRA DHARI SINGH, J MAY 16, 2023 SV/DB Click here to check corrigendum, if any This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 10:36:51