Aforesaid v. NTPC Limited, A Government of India Enterprise, Having Its Registered Of
Case Details
1 2025:CGHC:6123 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBR No. 33 of 2024 Godavari Commodities Limited, A Company Incorporated Under The Provisions of The Companies Act, 1956 And Having Its Registered OfÏce At 18 Netaji Subhas Road, 2nd Floor, Kolkata (West Bengal) 700001, Outside The Jurisdiction Aforesaid. ... Applicant versus NTPC Limited, A Government of India Enterprise, Having Its Registered OfÏce At NTPC Bhawan, Core-7, Scope Complex, Institutional Area, Lodhi Road, New Delhi-110003 And Having Its Concerned OfÏce At Scc-Wr Ii (Sipat) Project, Po Ujwal, District- Bilaspur, Chhattisgarh-495555, Within The Jurisdiction Aforesaid. ... Respondent For Applicant : Mr. Raja Sharma, Advocate. For Respondent
Legal Reasoning
: Mr. Anuroop Panda, Advocate. PREETI KUMARI Digitally signed by PREETI KUMARI Date: 2025.02.05 15:38:11 +0530 Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board 03.02.2025 1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. 2. The applicant has prayed for the following relief(s): 2 a) The Hon'ble Chief Justice of this Hon'ble Court or any person or institution designated by him be pleased to appoint an independent and impartial person as the sole arbitrator to adjudicate all disputes and differences between the parties arising under, out of or in relation to the PO dated 30.07.2019 as well General Conditions of Contract and Special Conditions of Contract which is the part of E-Tender no. 9900177351; b) Such further and/or other order or orders be passed and/or direction or directions be given, as to this Hon'ble Court may deem fit and proper.” 3. The facts, in brief, as projected by the applicant are that the applicant is a Public Limited Company being registered under the Companies Act, 1956 and a company within the meaning of Companies Act, 2013 having its Registered OfÏce at 18 Netaji Subhas Road, 2nd Floor, Kolkata 700001. The applicant is a pioneer in coal mining activities and also lifting and transportation of coal to its customers. The applicant is actively engaged in the said business from the last 2 decades and is considered as one of the pioneers actively serving several government entities and private entities. The respondent is a Government of India Enterprise and is India's largest energy conglomerate to accelerate power development in India and has established itself as the dominant power/entity of the power generation business. The respondent Company had issued one Notice Inviting Tender, being NIT No. 9900177351 dated 20.04.2019 for the work of transportation of 5 LMT coal from Bhupdevpur/Kotarlia siding by road to NTPC Lara. Pursuant to such NIT, the applicant herein had submitted its bid online vide BID ID No. 52084. The said bid was opened by the respondent on 15.05.2019 and the work was awarded to the applicant herein. The respondent issued a purchase order being Purchase Order no. 5500033740-064-1019 dated 30.07.2019 wherein the work of transportation of 5 LMT coal from Bhupdevpur/ Kotarlia siding by road to 3 NTPC Lara was awarded to the applicant for a sum of Rs. 18,65,00,000/- . The entire work had to be completed from 01.07.2019 to 29.02.2020. In terms of the aforesaid PO, the applicant had to load coal from the Pakri Barwadih mine stockyards to the rakes and then once the rakes reaches the Bhupdevpur/ Kotarlia yard, the coal had to be unloaded and then transport the unloaded coal to NTPC Lara by road. It appears from the record that in the PO, the date of the NIT has been inadvertently stated as 15.04.2019 instead of 20.04.2019. Thereafter once the work started, the applicant realised that there were substantial problems with the Bhupdevpur yard such as a) various parties operate at that siding for loading and unloading of coal for different customers; b) transportation of coal from railway siding to National Highway is being done on a private road where stoppage of work happens frequently; c) due to non availability of railway siding at siding, manual Local Transit Pass (LTP) is being issued by Mining Department which restricts movement of trucks and (d) unloading of wagon is to be done manually by the local labours and non-mechanical unloading is permitted. The applicant recorded the aforesaid issues in its letter dated 26.08.2019 and suggested to add VWLR siding for handling and transportation of coal. The respondent vide its letter dated 26.08.2019, sought for certain clarifications and documents pertaining to the VWLR siding. The said amendment was allowed by the respondent and a Amendment Service Purchase Order dated 30.07.2019 was issued on 14.10.2019. Th respondent thereafter vide email of 18th October 2019 informed the applicant that coal loaded rakes for NTPC Lara is expected at VWLR Railway siding in addition to the BEF siding from 20.10.2019 and further informed that the applicant’s separation for unloading rakes, loading into trucks and onward transportation to NTPC Lara should be in full swing. 4. As per the terms of the PO dated 30.07.2019, the Claimant was required to 4 handle 5 lakh MT of coal in a span of 8 months, which implies 1 rake every alternate day. However, due to additional requirement/demand from the respondent and at the request of the respondent, 2 to 3 rakes every day was arriving at the VWLR railway sidings. Further just one platform, being the platform no. 4 of VWLR railway siding was dedicated to the unloading of all the rakes that were coming for NTPC Lara based on the instruction of NTPC ofÏcials. The same would be evident from the emails dated 06.01.2020 and 28.01.2020 of the Claimant applicant. The aforesaid had created a lot of problems. Since the job of the applicant involved unloading of rakes at the railway sidings and then load them on trucks to transit to NTPC Lara, there were problems of 2-3 rakes being unloaded everyday which led to mixing of the coals which came from different rakes. These different coals from different rakes had various GCV (Gross Caloric Value). Due to these constraints, substantial quantity of unloaded coal was shifted to empty spaces in the corner of the platform to accommodate the unloading of further incoming railway rakes. Since the applicant was not given enough time or opportunity to remove the coal from the platform no. 4 before the next rake came in, different coals of different GCV from different rakes were also getting mixed up since there was no arrangement of proper separate space for coal of different rakes., because a dedicated platform cannot cater to multiple rakes in a single day. Such situation was beyond the control of the applicant and was happening due to excess demand of the respondent. In fact these issues were brought to the notice of the respondent by the applicant vide several of its letters, one of the first being as early as 20.11.2019 and 25.11.2019. 5. Mr. Raja Sharma, learned counsel for the applicant submits that the respondent vide its letter dated 28.11.2019 admitted that the diverting of the rakes is done at the discretion of the Indian Railways also and the 5 respondent stated that it will make efforts to prevent diverted rakes being placed at VWLR siding for NTPC Lara. Due to the aforesaid problems of mixing of coal of various GVC coming through various rakes, the applicant vide its letter dated 27.12.2019 requested the respondent to additionally permit them to use Platform No. 1 also to unload few railway rakes to avoid mixing up of coal. However, the respondent vide its letter dated 28.12.2019 informed the applicant that it was not possible to permit the usage of platform No. 1 and the entire job was to be restricted only to Platform No. 4. The applicant vide its letter dated 30.12.2019 also informed the respondent that due to this mixing of coal of various GVC, it was impossible to maintain the quality of rake wise coal from loading end. The applicant further stated that in order to dispatch coal from the sidings by trucks, E Transit Pass needed to be generated from the website of Mining Department, Government of Chhattisgarh, corresponding to each Railway Receipt (RR). The RR no. at the time of dispatches mentioned in each challan is only for tracking of coal and compliance with the rule of the Mining Department, Govt of Chhattisgarh. However in actuality and reality, mixed coal of different GCV corresponding to different RRs is getting dispatched under one RR. No sample of coal is being collected from the trucks dispatched from the sidings. Upon arrival of the trucks at NTPC Lara, sampling of the coals are being done by CIMFR engaged by NTPC Lara for sampling and testing of coal received at the Lara Plant. Samples collected are tagged with the RR no. mentioned in the challans. However in reality, due to the aforesaid operational difÏculties, samples from mixed coals from different rakes with different RR numbers are collected and tagged with a particular RR. Inspite of receipt of the said letter dated 31.08.2023, there was no response from the respondent. The applicant accordingly, waited for 30 days and issued a letter on 27.12.2023 under clause 8.3 of the GCC and 6 invoked the arbitration mechanism. The applicant clarified that since as per the law of the land, the Chairman cum Managing Director is himself disqualified from being appointed as an arbitrator, he cannot even appoint any person as the sole arbitrator for adjudication of disputes between the parties. Accordingly, the notice under section 21 of the Arbitration and Conciliation Act, 1996 was issued vide the letter dated 27.12.2023 and Mr. Tathagata Roy, Bachelor of Engineering and Bachelor of Law was appointed as the sole arbitrator for adjudicating the disputes between the parties arising from the Purchase Order no. 5500033740-064-1019 dated 30.07.2019. The respondent upon receipt of the letter dated 27.12.2023, responded vide its letter dated 25.01.2024 wherein they rejected Mr. Tathagata Roy as the arbitrator and stated clause 8.3.3 wherein it is stated that the MD shall appoint the sole arbitrator. Surprisingly, the respondent vide the said letter, requested the applicant to restart the dispute resolution process as per clause 8.1 of the GCC by mutual consultation. The applicant responded to the aforesaid letter of 25.01.2024 vide its letter dated 16.05.2024 wherein the applicant reiterated that there was no response to the letters issued by the applicant invoking dispute resolution mechanism under 8.1 and 8.2 of the GCC from February 2023. The applicant also stated that the CMD of the respondent is disqualified from appointing any sole arbitrator as held by the Hon'ble Supreme Court of India. The applicant clarified that the appointment of the sole arbitrator by the CMD, NTPC from the list of empanelled arbitrators cannot be followed as the procedure laid down in clause 8.3 of GCC is bad in law. The applicant once again sought for confirmation of Mr. Tathagata Roy as the arbitrator within 7 days failing which, the applicant clarified that it would take appropriate steps under the law. 6. Mr. Sharma further submits that the respondent responded thereafter vide 7 its email dated 24.05.2024 wherein the respondent once again offered to restart the dispute resolution process from clause 8.1 by way of mutual consultation. The PO was issued from the ofÏce of respondent situated in the State of Chhattisgarh. As per clause 8.3.3 (h) of the GCC, the place of arbitration will be as stated in the SCC. As per clause 22 of the SCC, the place of arbitration shall be Bilaspur, Chhattisgarh. The applicant states that the respondent on one hand is not confirming Mr. Tathagata Roy as the sole arbitrator and in the other hand is insisting on selecting the arbitrator in a process which is bad in law. The respondent has not denied the arbitration clause contained the said PO and the GCC and the SCC. Thus, the applicant is, therefore, making the present application under Section 11 of the 1996 Act for appointment of the sole arbitrator since the respondent is not agreeing to the nominee arbitrator suggested by the applicant and the respondent's suggested methodology is bad in law as per the judgments of the Hon'ble Supreme Court. The applicant states that some of the issues involved in the Arbitration can be briefly summarized but are not limited to the following:- (a) Whether the applicant is entitled to a sum of Rs. 9.52 Crores against the Respondent on account of the various claims detailed hereinabove. b) Whether the Petitioner is entitled to interest @ 18% per annum on the said sum of Rs. 9.52 Crores. 7. The applicant is ready and willing and wants to enforce the Arbitration Agreement between the parties. The applicant has duly invoked the said arbitration clause and referred the dispute to arbitration under Clause 8.3 of the GCC. The applicant has substantial and genuine claims against the respondent and intends to proceed with such claim before the Sole Arbitrator to be constituted as expeditiously as possible. There has been no 8 delay or latches on the part of the applicant in making the request before this Hon'ble Court. The claim of the applicant arises in connection with the terms and conditions and matters connected with or in connection with or arising out of the said Agreement. The cause of action has arose on 25.01.2021 when the claims of the applicant were rejected by the respondent vide its letter January 2021. But the respondent project ofÏce is situated at Lara, garh and the PO dated 30.07.2019 was issued from Lara, Chhattisgarh. Further the GCC and SCC provide that Bilaspur shall be the seat of arbitration. Accordingly, this Hon'ble Court has got jurisdiction to try and entertain the present petition in terms of section 11 (6) of the Arbitration and Conciliation Act. The instant petition is not barred by limitation and does not suffer from any delay and/or laches. In the aforesaid facts and circumstances, the applicant states and submits that the Hon'ble Chief Justice of this Hon'ble Court or any person or institution designated by him be pleased to appoint an independent and impartial person as the sole arbitrator to adjudicate all disputes and differences between the parties arising under, out of or in relation to the PO dated 30.07.2019. 8. Mr. Anuroop Panda, learned counsel appearing for the respondent relying on the return filed on behalf of respondent/NTPC, opposes this arbitration request application, however, he submits that the respondent will have no objection if any Arbitrator is appointed by this Hon’ble Court for resolving the dispute that has arisen between the parties. 9. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto. 10. A query was put to learned counsel appearing for the parties as to whether they are agreeable for a common name who can be appointed as Arbitrator, learned counsel for the parties submitted that they would have no objection if any retired Judge of this High Court is appointed as the Sole Arbitrator. 9 They further submit that Hon’ble Mr. Justice Dhirendra Mishra, who is a retired Judge of this High Court may be appointed as the Sole Arbitrator. 11. In view of the above consensus between the learned counsel for the parties, Hon’ble Mr. Justice Dhirendra Mishra a retired Judge of this High Court is appointed to act as the Sole Arbitrator to resolve the dispute involved in this arbitration request between the parties. 12. The Registry is directed to communicate this order to Hon’ble Mr. Justice Dhirendra Mishra in the proper address. 13. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties. 14. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) CHIEF JUSTICE Preeti