SLIPCO CONSTRUCTIONS PVT LTD v. BHARAT HEAVY ELECTRICALS LIMITED & ANR.

1. This petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) has been filed by the petitioner inter alia seeking the following prayer:

2. It is the case of the petitioner that the Telangana State Power Generation Corporation Limited (TSGENCO) is setting up a power project at Ramanujavaram, Manuguru, District Khammam, TELANGANA and had awarded an EPC contract to the respondent no.1 to set up 4 X 270 MW Thermal Power Station. The respondent no.1 in turn had sub-contracted the work of construction of one chimney for unit 1 and 2 to the petitioner.

3. On the allegations that the petitioner had failed to execute the works under the contract, TSGENCO deleted the work of Chimney from the scope of work of the respondent NO. 1, who in turn terminated the contract of the petitioner vide letter dated 19.03.2018. This letter was received by the petitioner only on 22.03.2018 through an e-mail.

4. The petitioner, therefore, filed the present petition primarily seeking taking of inventory of the petitioner’s plant OMP(I)(COMM.) No.233/2018 Page 3 and equipment at the project site as also the measurements of the work already done by the petitioner on the site. This petition was filed by the petitioner on 03.04.2018.

5. From the reply filed by TSGENCO to the application seeking their impleadment in the present petition, it is revealed that the respondent no.1, after terminating the contract had addressed a letter dated 09.4.2018 to the petitioner calling upon the petitioner to depute its authorized personnel for inter alia preparing material reconciliation statement for the material issued by the respondent and return the excess/unused material to the respondent as also to preserve and take care of the petitioner’s plant and machinery.

6. The petitioner, however, by an e-mail dated 10.04.2018 called upon the respondent to get the work measured in the presence of a person appointed by the Court.

7. Counsel for TSGENCO submits that as TSGENCO could not have waited any further, it got the work measured alongwith respondent no.1 and the said measurement reports will be supplied to the petitioner. He further submits that since that date, the work has been allocated to a new contractor who has carried out substantial work under the said contract. He submits that at this stage, therefore, to have the work measured afresh would cause further confusion inasmuch as it would be difficult to decipher the work which has been carried out by the petitioner and that which has been carried out by the new contractor. He submits that even otherwise, this exercise OMP(I)(COMM.) No.233/2018 Page 4 would cause further delay in the completion of work and the TSGENCO cannot be made to suffer for the inter se dispute between the petitioner and respondent no.1.

8. Counsel for respondent nos.[1] and 2 submits that this Court would lack territorial jurisdiction to entertain the present petition. However, for the order proposed to be passed, this objection of the respondent is left open.

9. I have considered the submissions made by the counsels for the parties.

10. The petitioner had filed this petition without impleading TSGENCO, though it was always aware that the site is under the possession and control of TSGENCO and no measurement of the work can be carried out in its absence and without its permission. It is only after realising at a later stage, that TSGENCO is a proper and necessary party in these proceedings that an application seeking their impleadment has been filed by the petitioner.

11. Immediately, on filing of the petition, the petitioner had been called upon by the respondent no.1 to join in on the joint measurement of the work done as also for making of the inventory of the plant and machinery. Incase, the petitioner had any apprehension in this regard, it could have approached the Court immediately with a request to appoint an independent observer in carrying out of such measurement. However, it chose not to do so and in fact it was TSGENCO who in its reply dated 13.9.2018 disclosed the letter dated OMP(I)(COMM.) No.233/2018 Page 5 09.4.2018 addressed by respondent no.1 to the petitioner.

12. I further find merit in the submission of the counsel for TSGENCO that the work having already been awarded to a new contractor and such new contractor having carried out substantial work after the award of such work, it would be impossible for the Local Commissioner to now decipher the work which has been done by the petitioner and which has been done by the new contractor. The exercise of measurement of work at this stage would, therefore, be a futile exercise.

13. As far as the equipment of the petitioner at the site is concerned, even the letter dated 09.4.2018 suggests that certain equipment belonging to the petitioner was lying at the site.

14. I, therefore, deem it appropriate to appoint a Local Commissioner who shall visit the site in the presence of a representative of the petitioner as also the respondents including TSGENCO. The petitioner shall identify the equipment that it claims to be belonging to the petitioner. If there is no dispute regarding the same, the respondent shall allow the petitioner to remove such equipment from the site. In case there is a dispute regarding the equipment, the said dispute will be duly notified to and recorded by the Local Commissioner and shall await the result of arbitration proceedings.