9911796707
TMI Blog2023 (5) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... worth INR 39,82,66,061/-vide Letter of Intent ('LOI') No. PSER:SCT:ABJ-B1183:10:LOI:2371 dated September 21, 2010, and work order contract dated October 28, 2010 for erection, testing, commissioning, trial run, and handing over of Boiler etc., ESP, rotating aux piping, insulation, painting etc. (Part I) along with structural steel works, transfer points, conveyer galleries, connecting platforms, etc. (Part II) for Package A of 4 x 270 MW Unit-1, Phase-I, Chandwa Thermal Power Plant, Jharkhand. The completion period for Part I was within a period of 26 months from the date of start of work, and within a period of 15 months from the date of start of work for Part II. 4. Similarly, the respondent had awarded the petitioner a contract worth INR 44,40,00,000/-vide Letter of Intent ('LOI') No. PSER:SCT:ABJ-B1183:11:PKG-B:LOI:2419 dated May 26, 2011 and work order contract dated August 03, 2011 for erection, testing, commissioning, trial run, and handing over of Boiler etc., ESP, rotating aux piping, insulation, painting etc. (Part I) along with structural steel works, transfer points, conveyer galleries, connecting platforms, etc. (Part II) for Package B of 4 x 270 MW Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the course of next two years, the petitioner wrote several emails and letters to the respondent reiterating the above-stated requests along with the prayer for return of the performance bank guarantee, and finally, served a legal notice dated March 22, 2017. 12. On receipt of the said legal notice, the respondent on March 27, 2017 returned the performance bank guarantee without addressing the issue of compensation for delays by the 'Hold' imposed on the petitioner. It is to be noted here that the petitioner had kept on renewing the said performance bank guarantee despite the project being on 'Hold'. 13. Thereafter, on April 18, 2017 and April 19, 2017, the respondent called a meeting at its Kolkata office with the petitioner to discuss and sort out the issues between the parties. 14. On January 16, 2019, the petitioner invoked arbitration in terms of Section 21 of the Act and clause 2.21 of the General Conditions of Contract whereby it requested the respondent to nominate a sole arbitrator within 15 days of receipt of the notice. It is to be noted here that the said clause provides for the disputes to be referred to a sole arbitrator appointed by BHEL/In Charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the parties and perused the materials on record. 21. Before delving into other issues plaguing the present application, I will proceed first with the appointment procedure of the sole arbitrator as laid down by clause 2.21 of the contract between the parties. 22. In the light of the apex court's pronouncements in Perkins Eastman Architects DPC & Another-v-HSCC (India) Ltd. reported in [2019] 17 S.C.R. 275 and TRF Ltd.-v-Energo Engineering Projects Ltd. reported in [2017] 7 S.C.R. 409, it is crystal clear that unilateral appointment of an arbitrator by a party who has some sort of interest in the final outcome or decision is not permissible. The cardinal importance of the independence and neutrality of the arbitral tribunal has been reiterated by the Supreme Court on multiple occasions. For arbitration to be seen as a viable dispute resolution mechanism and as an alternate recourse to litigation, the independence of arbitration process outside the purview of undue influence and favor needs to be ensured in both letter and spirit. And in case of non-adherence to such principles, the courts must step in. If one takes a careful look, the very basic essence of the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... face of it that the issues purported to be referred to arbitration are hopelessly time-barred, the courts can intervene beyond the bare existence of an arbitration clause to cut the deadwood and decline reference to arbitration in such cases. Hence, the argument put forth by Mr. Kumar, counsel appearing on behalf of the petitioner is rejected. 27. Now, the question before me is whether the claims here are ex-facie time barred, and therefore, fall under the restrictive category of deadwood. It is a settle principle of law that the limitation period in a Section 11 application is governed by Article 137 of the Limitation Act, 1963 which provides for three years from the date when the right to apply first accrues. 28. Mr. Bhattacharya, counsel appearing on behalf of the respondent cited the decision of the Supreme Court in Geo Miller & Company Private Ltd.-v-Rajasthan Vidyut Utpadan Nigam Ltd., reported in MANU/SC/1198/2019 to argue that the limitation period in the present case had already expired and that the petitioner cannot justify the unreasonable delay in invocation of arbitration by taking refuge in the purported settlement discussions. The relevant portion of the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said meetings indicated their intent to have the pending work completed with set timelines. 30. Now, on failure of the parties to act in adherence to their previously held discussions and to resolve the extant issues, a Section 21 legal notice dated January 16, 2019 invoking arbitration was issued by the petitioner. In fact, with the issuance of the aforesaid notice, it would be appropriate to state that the petitioner sensed the 'breaking point', that is, the futility of settlement talks with the respondent, and like a reasonable party abandoned its efforts in arriving at the same. 31. Nonetheless, on receipt of the aforesaid notice, the respondent again called for meeting between the parties to discuss the matter and the said meeting was held on March 06, 2019. The written claims were submitted by the petitioner later that month, and the same was duly acknowledged by the respondent with a request to withdraw the said legal notice. Once again the discussion between the parties did not lead to any success. In my opinion, the final breakdown of any chances of amicable settlement happened vide respondent's email dated October 24, 2019 wherein the petitioner was ask ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w giver. The period of limitation is provided under the Limitation Act. The law giver has contemplated that when a moratorium has been put in place, the said period must be excluded. We cannot overlook also the employment of words "any suit or application". This is apart, no doubt, from the words "by a corporate debtor". Interpreting the statute in the manner which the appellant seeks would result in our denying the benefit of extending the period of limitation to the corporate debtor, a result, which we think, would not be warranted by the clear words used in the statute. 35. Therefore, we are of the view that Section 60(6) IBC does contemplate exclusion of the entire period during which the moratorium was in force in respect of corporate debtor in regard to a proceeding as contemplated therein at the hands of the corporate debtor." Therefore, the limitation period will not be operative against the petitioner from February 05, 2019 onwards, and hence, the present petition is well within time and not barred by limitation. Another point which is required to be addressed is the distinguishable nature of the present case with the judgement delivered by me in B. K. Consortium (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trading Corporation reported in (2019) 20 SCC 406, which was further moulded by the Supreme Court in Bharat Broadband Network Ltd.-v-United Telecoms Ltd. reported in (2019) 5 SCC 755 as extremely limited, and only in those cases, where no iota of doubt regarding a claim being ex-facie time-barred is present. If and when the Court is in doubt, it has to refer the matter to the arbitral tribunal for adjudication. I have extracted the relevant paragraphs below- "46. The upshot of the judgment in Vidya Drolia [Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 is affirmation of the position of law expounded in Duro Felguera [Duro Felguera, S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729 ] and Mayavati Trading [Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC 714] , which continue to hold the field. It must be understood clearly that Vidya Drolia has not resurrected the pre-amendment position on the scope of power as held in SBP & Co. v. Patel Engg. Ltd. [SBP & Co. v. Patel Engg. Ltd.,: (2005) 8 SCC 618] 47. It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time-barred, or that the dispute is non-a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
