Case: INDIA POWER CORPORATION LTD Vs. EASTERN COALFIELDS LIMITED

Petition is to prevent the respondents from obtaining recovery of possession of the generating station without releasing the written down value of the added assets, as per computation of the petitioners. It is also noticed that in spite of orders passed by the Court on 12.10.2012 that …steps ought to be taken by the committee to not only physically verify the plant and machinery but also other assets of the plant by ascertaining the book value thereof…. no steps were taken. This exercise was to be completed by 12.12.2012. Since, the exercise was not completed by that time, the time was extended till 08.01.2013. At the time of final disposal of the Writ Petition the Learned Single Judge observed that the dispute does not seem to be resolvable by the committee set up by the respondent. It is noticed that the issues involved are also highly disputed factual issues. The matter was therefore referred to arbitration under the relevant clause of the lease deed. In appeal the Division Bench upheld the order of the Learned Single Judge on 19.03.2014. As noticed earlier the Supreme Court referred the matter to the Sole Arbitrator by order October 17, 2014, with the observation that the Sole Arbitrator is to arbitrate upon the disputes. From the above, it seems apparent that the reference to arbitration is not limited to disputes that existed prior to the passing of the order by the Supreme Court. Therefore, it cannot be accepted that the reference to arbitration would not cover the CounterClaims. 160. It must also be noticed here that the Claimant has raised a preliminary objection on the ground that the application for amendment suffers from delay and laches. Therefore, seeks its dismissal on this short ground. It is submitted that Claimant has already filed its objection to the MECON report and also filed a report submitted by M/s AKB Power Consultants Pvt. Ltd. For consideration of these two reports, further evidence will have to be recorded on behalf of both the parties. 161. It is matter of record that the application for amendment was filed at the time when the Respondent was to commence its arguments. In my opinion that the application cannot be allowed at this stage. The amendment must be necessary for the purpose of determining the real question in controversy. As noticed above, the issuance of the NIT clearly demonstrates the intention of the respondent was to replace the old machinery and plant to Stoker Fired Boilers by Fluidised bed Combustion Boilers. Therefore, the condition of the old machinery as well as the question of plant being in a running condition had become irrelevant. For the reasons stated above, the application for amendment is dismissed as it will serve no useful purpose in determining the real questions in controversy between the parties. 10. By means of the said amendment, the ECL had claimed that the power plant should be put into running condition before handing over its possession. The learned Arbitrator deals with the issue in detail and after considering the pleadings of the parties as also the order passed by the Calcutta High Court found that the counter claim sought to be raised by the said amendment regarding the plant being in a running condition was irrelevant in view of the dispute raised. 11. The MECON report and the M/s AKB Power Consultants Pvt. Ltd. report, both related to the expenses sought to be incurred in bringing back the plant into running condition. Parties had filed their objections to both the reports as there was substantial difference in the figures indicated in the two reports. But once the Arbitrator found that the amendment in the Counter-claim itself was not relevant for the adjudication, there was no question of proceeding any further in inviting evidence etc. with respect to the reports. The submission therefore, that there is requirement of the appointment of Arbitrator to carry out the exercise as per paragraph 160 of the award is therefore completely untenable. The submission is based upon the misreading and misrepresentation of the said paragraph, in isolation bereft of preceding and succeeding paragraphs. The same is accordingly rejected. 12. A bare perusal of the award, in particular paragraph 162, which is the operative portion, does not in any manner indicate any kind of it being an interim award or that any aspect of the matter was to be further considered. In any case, the learned arbitrator did not record any further observation that for leading of further evidence any date has to be fixed or the parties were given opportunity to produce their evidence. It was a mere submission that consideration of MECON report would require further evidence but was not found to be necessary by implication. 13. The next submission relating to the applicability of Section 33 of the 1996 Act also has to fail for two reasons. Firstly, that the same is neither pleaded nor prayed in the application and secondly, once the Arbitrator, while awarding rent as counter claim had accepted the figures as quoted by the ECL, no issue of any error on the part of the Arbitrator in not correctly calculating the rent could be raised. The figure as claimed by the ECL is quoted in paragraph 73(1)(ii) of the award which has been accepted by the Arbitrator in the award. 14. There is another aspect of the matter which disentitles the applicant from any relief in this application. A perusal of the judgment of the Delhi High Court in Section 34 of the 1996 Act proceedings clearly reveals that the point which is being raised here was raised before the Delhi High Court. The Delhi High Court also did not agree with the submission of the respondent--applicant after considering paragraphs 157 to 161 and proceeded to hold that the observations made in paragraph 160 do not render the impugned order to be interim in nature, and that the award finally decided the dispute which was subject matter of the reference.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]9. Paragraph 160 of the award cannot be read in isolation. It was a part of the award dealing with the Application for amendment of counter claim filed by respondent--ECL. The award carried the above sub-title before paragraph 157. Paragraph 160 contains mere submissions advanced on behalf of the appellant/claimant. MECON report was called with respect to the amendment of the counter claim regarding expenses required for putting the plant into running condition. After deliberating upon the said amendment, at the end of paragraph 161, the conclusion was that the application for amendment stood dismissed. Thus, the paragraphs 157 to 161 will have to be read as a whole to understand as to how the award proceeds to deal with the amendment to the counter claim.11. The MECON report and the M/s AKB Power Consultants Pvt. Ltd. report, both related to the expenses sought to be incurred in bringing back the plant into running condition. Parties had filed their objections to both the reports as there was substantial difference in the figures indicated in the two reports. But once the Arbitrator found that the amendment in the Counter-claim itself was not relevant for the adjudication, there was no question of proceeding any further in inviting evidence etc. with respect to the reports. The submission therefore, that there is requirement of the appointment of Arbitrator to carry out the exercise as per paragraph 160 of the award is therefore completely untenable. The submission is based upon the misreading and misrepresentation of the said paragraph, in isolation bereft of preceding and succeeding paragraphs. The same is accordingly rejected.12. A bare perusal of the award, in particular paragraph 162, which is the operative portion, does not in any manner indicate any kind of it being an interim award or that any aspect of the matter was to be further considered. In any case, the learned arbitrator did not record any further observation that for leading of further evidence any date has to be fixed or the parties were given opportunity to produce their evidence. It was a mere submission that consideration of MECON report would require further evidence but was not found to be necessary by implication.13. The next submission relating to the applicability of Section 33 of the 1996 Act also has to fail for two reasons. Firstly, that the same is neither pleaded nor prayed in the application and secondly, once the Arbitrator, while awarding rent as counter claim had accepted the figures as quoted by the ECL, no issue of any error on the part of the Arbitrator in not correctly calculating the rent could be raised. The figure as claimed by the ECL is quoted in paragraph 73(1)(ii) of the award which has been accepted by the Arbitrator in the award.14. There is another aspect of the matter which disentitles the applicant from any relief in this application. A perusal of the judgment of the Delhi High Court in Section 34 of the 1996 Act proceedings clearly reveals that the point which is being raised here was raised before the Delhi High Court. The Delhi High Court also did not agree with the submission of the respondent--applicant after considering paragraphs 157 to 161 and proceeded to hold that the observations made in paragraph 160 do not render the impugned order to be interim in nature, and that the award finally decided the dispute which was subject matter of the reference.