TITLE: NACOF Vs. NLC India Limited.
Decided On: September 11, 2023.
Arb.O.P.(Com.Div) No.302 of 2023 and O.A. No.267 of 2023.
CORAM: Hon’ble Mr. Justice Abdul Quddhose.
Facts:
The applicant / petitioner participated in a tender called for by the first respondent for setting up of 500 MW ISTS connected Solar Power. Project on PAN India basis with Operation and Maintenance for 3 years. One of the tender requirements was that the bidder will have to furnish a bank guarantee for a value of Rs.10,94,06,000/- for every 100 MW along with the bid. The applicant / petitioner has also invoked arbitration by issuing a notice to the first respondent dated 08.06.2023 through its counsel, nominating its arbitrator to adjudicate the dispute between the applicant / petitioner and the first respondent. Since the first respondent has not agreed for arbitration, the applicant / petitioner has filed Arb.O.P.(Com.Div) No.302 of 2023 under Section 11 of the Arbitration and Conciliation Act, 1996, seeking for appointment of an arbitrator by this Court.
Legal Analysis and Decision:
Being a huge amount, if the first respondent is allowed to invoke the bank guarantee, even before the quantification of the claim, the applicant / petitioner will certainly be put to irreparable hardship. Irretrievable injustice will also be caused to the applicant if the bank guarantee for the huge sum is allowed to be invoked by the first respondent as the applicant / petitioner has categorically pleaded that they have not submitted any fabricated document. In support of their stand, they have also produced a letter dated 15.06.2023 sent by AVVNL. The dispute, whether the applicant has submitted fabricated document or not, can be adjudicated only by the arbitral tribunal and this Court at this stage, based on the letter produced by the first respondent, cannot give a categorical finding that the applicant / petitioner had submitted a fabricated document while submitting its tender. When both parties to the dispute have produced letters in support of their respective stand and there is no conclusive evidence available on record to prove that the applicant / petitioner has submitted a fabricated document, while submitting its tender, this Court must certainly protect the interest of the applicant / petitioner by granting an order of interim injunction pending arbitration to restrain the first respondent from invoking the bank guarantee for a sum of Rs.21,88,12,000/-. Prima facie case has been made out by the applicant / petitioner for the grant of interim injunction as prayed for in this application. Irretrievable injustice will be caused to the applicant /petitioner, if the bank guarantee is invoked by the first respondent. The balance of convenience is also in favour of the applicant / petitioner for the grant of injunction as prayed for in this application. since the applicant / petitioner has satisfied that irretrievable injustice will be caused to them and has also satisfied the special equities exception of proportionality for the grant of an order of injunction from invocation of bank guarantee, this Court is inclined to allow this application by granting an order of injunction against the first respondent from invocation of the bank guarantee as prayed for in this application.
The Finally Says that Hon’ble Dr.Justice S.Muralidhar, Former Chief Justice of Orissa High Court, is appointed as the sole Arbitrator to adjudicate the dispute between the applicant / petitioner and the first respondent arising out of the invitation to tender for setting up of 500 MW / ISTS connected Solar Power Project on PAN India basis with operation and maintenance. The Arbitrator shall be paid his remuneration / fees either as per the mutual agreement between the parties or as per the 4th schedule of the Arbitration and Conciliation Act, 1996. Both the parties shall equally share the arbitrator’s fees. The Arbitrator shall conduct the arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and shall complete the arbitration within the specified time as prescribed under the said Act.
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JUDGEMENT REVIEWED BY JANGAM SHASHIDHAR.
