ALUMINIUM INDUSTRIES LIMITED v. NTPC LIMITED

1. The petitioner (hereafter 'AIL') has filed the present petition under iSection 1,[1] of the Arbitra4<)fl and Conciliation Act, 1996 (hereafter 'the II Act') praying that an arbitrator be appointed to adjudicate the disputes that I, have arisen between the petitioner and the respondent (hereafter 'NTPC'). I

12. The controversy involved in the present case relates to the price I ' ipayable by NTPC for the:work of Dadri Coal Handling Project (CHP), IIStage-l amounting,<7,36,20,lp33/- to AIL. p. Briefly stated, the releVant facts necessary to address the controversy are as under:­ I B.l On 11.11.1987, NTPC' floated international bid for "supply, erection, ' ~., civil and structural work ofpadri Coal Handling Project (CHP) Stage-l" I ' (hereafter 'the Work'). I, 3,.[2] On 30.01.1988, AIL submitted its bids pursuant to the said tender. I I lIhereafter, NTPC accepted AIL's bids and' issued three Letter of Awards CtOAs) dated 02.12.1988 for the Work for the contract value of I ' <~ 8,98,65,448/-. Pursuant to lithe LOAs, AIL furnished irrevocable and I ' u*conditional Bank Guaranteeiamounting to <4,10,00,000/-. !:;1 ' 2018:DHC:8923 I I 3.[3] AIL completed major part of the Work by 1993; however, certain I minor deficiencies could not be rectified due to financial hardship of AIL. 'I: NTPC issued a notice d~ted 08.10.1997 for encashment of the Bank I Guarantee. I 3.[4] NTPC constituted a High Power Committee in 2000 for final closure: of the contract. On OJ.03.2pOO, the said Committee prepared a report of its I recommendations on variops financial issues but AIL was not informed I about the contract closure r~port. 1 3.[5] On encashment of the Bank Guarantee by NTPC, AIL filed a Writ I I, IPetition bearing no. 1478/1999 before the Allahabad High Court. The IHon'ble High Court directed to approach the High Power Committee for Idisputes with respect to enc~shment of the Bank Guarantee. AIL claims that II it did not pursue the 1itigati~n in Allahaba[4] High Court due to its financial Ihardship. 13.[6] On 13.04.2009, AIL Sought information with respect to the report of Irecommendations of High P6wer Committee under the Right to Information i Ii IAct, 2005. _ t[3].[7] On 29.06.20Q[9], the CPIO denied the information sought by AIL as the rase was more than ten years:old. p.[8] Failure on the part ofl NTPC in providing information to AIL, AIL issued a notice dated 01.11.2009 under Clause 56 of the General Conditions ff Contract for appointment dfan arbitrator. 3.[9] On 13.02.2010, NTPC, issued a letter to AIL for J'oint discussion on I " ~he claims ofAIL.

3.10 On 11.03.2010, representatives of AIL appeared before the Joint I;1 <f0mmittee constituted by NTfC for settlement of the disputes and AIL was I I asked to submit a detailrd Written Statement along with documentary evidence in support ofits claims.

3.11 Thereafter, on 12.d[6].2010, AIL submitted the Written Statement before the Committee; hoJever, the Committee failed to adjudicate upon the claims ofAIL.

3.12 AIL issued letters dated 28.02.2011 and 01.06.2012 to NTPC for settlement of its claims bJt it is alleged that they were not considered by NTPC.

3.13 NTPC r~sponded to/ ~IL by.letter dated ~5.06.2012 and reque.sted AIL to depute Its representatIve to dISCUSS the claIms before the CommIttee on 09.07.2012. During the 1iscussion, NTPC presented voluminous Contract Closure Report (CCR) as pir the directions ofthe High Power Committee.

3.14 AIL claims that it m~de numerous.presentations to NTPC to provide I for copy ofthe CCR and failure on the part ofNTPC to do so compelled it to file a Writ Petition bearing boo 4660/2014 before this Hon'ble Court seeking I Contract Closure Report. The said petition was disposed of by an order I dated 07.10.2015 with libe~ to AIL to depute its representative to carry out I ~spect~on of CCR. The~e'fter, ~IL is~ued.a notice dated 14.02.2016 for inspectIon of CCR. During the inSpectIOn, It was agreed that NTPC shall I send copy ofthe note sheet rnd financial data.. I 3.15 AIL claims that on 09.06.2016, NTPC handed over only 30 pages of I CCR but did not send note Jheet.. 3.16 On 21.07.2016, AIL again issued a notice invoking the arbitration I clause. Thereafter, AIL issued letters dated 29.08.2016 and 29.09.2016 I requestingNTPC to appoinJ an arbitrator in terms of Clause 56 of GCC. But INTPC failed to appoint an Jbitrator. I 4. The present petition' has been filed more than several years after the I I I dispute has arisen. As stated above, AIL had also issued a notice invoking I " the arbitration on 01.01.2009 and has approached this Court more than eight I years thereafter. i 5. In Prasar Bharti v. Maa Communication and etc.: AIR 2011 Delhi I 26, a Division Bench of this Court has held that the period of limitation to

I. II file an application under S.ection 11 of the Act would commence on the II failure ofthe other party to respond to the notice invoking arbitration with a I I I period of thirty days. The Televant extract of the said decision reads as I ! lunder:­ "The position under the 1996 Act in Section 11 is akin to that under Section 8 and not to that under Section 20 of the 1940 Act. In fact, the procedure as prescribed under Section 20 of~he 1940 Act has been totally done away within the 1996 Act. Under the 1996 Act, a party to an arbitration. agreement cannot straightaway approach the court for appointment ofthe arbitrator, as a party to an arbitration agreement was entitled to under Section 20 ofthe old Act. Under Section 11 of the new Act, even if there is no named arbitrator, the party is not entitled to approach the court straightaway and· is required to first issue notice to the other party proposing the names of the arbitrators and is to approach the court only.upon the failure of consensus within 30 days of such notice. The procedure prescribed in Section 11 is mandatory. Thus, the question. of a party preferring an application under Section 11(4) or under Section 11(6) to the Chief Justice or his desigijate does not arise unless the procedure of giving a' notice is followed and without such procedure being followed and failure thereof, there would be no cause of action for the petition under Section 11(4) or 11(6), of the Act. Thus, the limitation I, '" for filing an appli9ation under Section 11(4) or 11(6) of the Act cannot but acCrue only upon the failure of the procedure prescriBed and can possibly have nothing to do with the limitktion for preferring the claim. The Supreme Court inl J.C. Budhraja v. Chairman, Orissa Mining Corporati6n Ltd. (2008).[2] sec 444: (AIR, 2008 se 1363), rdied by the counsel for the petitioner, has clearly held thJt the period of limitation for filing a petition under Seclion 8(2) of the 1940 Act seeking appointment of anIarbitrator cannot be confused with the period of limitation for making the claim.

7. We therefore fihd that the limitation for filing an application under \Section 11(4) would commence running only from the expiry of 30 days from the receipt of request rrlentioned in Section 11(4) (a) or (b) and the limitation \for an ~pplication under S~ction 11(6) would commence runmng from the happenmg of the contingencies trientioned in sub-clause (a) or (b) or

(c) thereof." I

6. In view of the above, it is apparent that the present petition is ~opeleSSIY barred by limitaton. The contention that the parties were in ~egotiation for several yearsl and, therefore, the period of limitation stood ~xtended is unmerited. \

7. In view of the above, the present petition is dismissed. The pending ~pplication is also disposed of.

VIBHU BAKHRU, J lpRIL 10,2018 pkv I