{"id":153580,"date":"2009-11-19T00:00:00","date_gmt":"2009-11-18T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/act-vs-maharashtra-state-electricity-on-19-november-2009"},"modified":"2015-04-28T12:49:56","modified_gmt":"2015-04-28T07:19:56","slug":"act-vs-maharashtra-state-electricity-on-19-november-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/act-vs-maharashtra-state-electricity-on-19-november-2009","title":{"rendered":"Act vs Maharashtra State Electricity … on 19 November, 2009"},"content":{"rendered":"
Bombay High Court<\/div>\n
Act vs Maharashtra State Electricity … on 19 November, 2009<\/div>\n
                                          1\n\n\n               IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n\n\n\n\n                                                                            \n                   ORDINARY ORIGINAL CIVIL JURISDICTION\n\n                   ARBITRATION APPLICATION NO. 9 OF 2005\n\n\n\n\n                                                    \n    Datar Switchgear Limited                            )\n    a Company registered under the Companies            )\n\n\n\n\n                                                   \n    Act, 1956 having its Registered Office at           )\n    Datar Apartments, Commercial Complex                )\n    Vakilwadi, Nasik 422 001.                           )..Applicant\n\n\n\n\n                                       \n                Versus   \n    1)  Maharashtra State Electricity Board             )\n          A body Corporate formed under the             )\n                        \n          Electricity Supply Act, 1948 having its       )\n          Head Office at \"Prakashgad\", Bandra (E)       )\n          Bombay.                                       )\n      \n\n    2)  Maharashtra State Distribution Company      )\n          Limited having its Registered Office at   )\n   \n\n\n\n          \"Prakashgad\", Bandra (E), Mumbai 400 051. )\n\n    3)  State of Maharashtra                            )\n         through The Principal Secretary (Energy)       )\n\n\n\n\n\n         Government of Maharashtra, Mantralaya          )\n         Mumbai.                                        )..Respondents\n\n\n\n\n\n    Mr. Mukul Taly with Ms.Swati Deshpande, Mr. Sheikh Yusuf\n    i\/b Shaunak Satpute for the Applicants.\n\n    Mr. Nagendra Rai, Senior Advocate, with Mr.Prashant Chavan,\n    Mr. Chandra Prakash and Mr. Ram Prakash i\/b Khare Legal \n    Chambers for Respondent Nos.1 and 2.\n\n\n\n\n                                                    ::: Downloaded on - 09\/06\/2013 15:19:22 :::\n                                                 2\n\n    Mr. P.G. Lad, Assistant Government Pleader, for the State.\n\n                                 CORAM : SWATANTER KUMAR, C.J.\n\n\n\n\n                                                                                  \n                JUDGMENT   RESERVED ON : 7TH NOVEMBER 2009\n                JUDGMENT DELIVERED ON  : 19TH NOVEMBER 2009\n\n\n\n\n                                                          \n    JUDGMENT \n<\/pre>\n
           The   applicant   which   is   a   Public   Limited   Company   entered   into   a <\/p>\n
    contract   of   lease   with   the   respondents   for   supply,   including   erection, <\/p>\n
    commissioning,   maintenance,   testing   and   transportation   at   specified <\/p>\n
    locations,  of  47,987 Low Tension  Load Management  Systems  (hereinafter <\/p>\n
    referred to as `LTLMS’). The work order was issued by the Chief Engineer <\/p>\n
    (Distribution) of the Respondents.   The applicant installed 17,294 LTLMS.\n<\/p>\n
    However, in the year 1998, some disputes arose between the parties which <\/p>\n
    were   referred   to   the   Arbitral   Tribunal   consisting   of   Mr.   Justice   V.D.\n<\/p>\n
    Tulzapurkar   (Retd.),   Mr.   Justice   S.C.Pratap   (Retd.)   and   Mr.   Justice   M.L.\n<\/p>\n
    Pendse (Retd.).  The Arbitral Tribunal made an Award on 18th June, 2004.\n<\/p>\n
    Some relief was granted to the applicant.  The relief granted by the Arbitral <\/p>\n
    Tribunal reads as under:\n<\/p>\n
                                            “AWARD<\/p>\n
           (A) The Respondents shall pay to the  claimants sum of
\n               Rs.185,97,86,399\/- (Rupees One hundred Eighty Five
\n               Crores   Ninety   Seven   Lakhs   Eighty   Six   Thousand
\n               Three hundred Ninety Nine only) towards damages in <\/p>\n
                                                          ::: Downloaded on – 09\/06\/2013 15:19:22 :::<\/span>
\n                                                  3<\/span><\/p>\n
                  respect of work order dated March 27, 1997.\n<\/p><\/blockquote>\n
           (B) The   aforesaid   amount   is   payable   after   deducting <\/p>\n
               therefrom   Rs.6,81,99,390\/-   (Rupees   Six   Crores
\n               Eighty   One   Lakhs   Ninety   Nine   Thousand   Three
\n               Hundred Ninety only) paid by the Respondents to the <\/p>\n
               Claimants   in   pursuance   of   interim   order   passed   by
\n               the Tribunal.\n<\/p><\/blockquote>\n
           (C) The Respondents shall pay interest at the rate of 10% <\/p>\n
               p.a. on the  sum of Rs.179,15,87,009\/- (Rupees One
\n               Hundred   Seventy   Nine   Crores   Fifteen   Lakhs   Eighty
\n               Seven   Thousand   Nine   only)   from   the   dae   of   the
\n               award till realisation.\n<\/p><\/blockquote>\n
           (D) The Respondents shall pay to the  claimants sum of <\/p>\n
               Rs. 1,00,00,000\/- (Rupees One Crore only) towards
\n               the cost of the proceedings.\n<\/p><\/blockquote>\n
           (E)    The   counter   claim   filed   by   the   Respondents   stands
\n                  dismissed in its entirety.\n<\/p><\/blockquote>\n
           (F)    The Bank guarantees furnished by the Claimants in <\/p>\n
                  pursuance   of   interim   orders   passed   by   Tribunal   to
\n                  stand   discharged   one   month   after   the   date   of <\/p>\n
                  declaration of Award.”\n<\/p><\/blockquote>\n
    2.     Against   the   Award   dated   18th   June,   2004,   the   respondents   herein <\/p>\n
    filed a petition (Arbitration Petition no.374 of 2004) under section 34 of the <\/p>\n
    Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) <\/p>\n
    challenging the said award.   The applicant, on the  other hand, filed two <\/p>\n
    petitions   viz.   Arbitration   Petition   No.372   of   2004   and   524   of   2004   both <\/p>\n
    under section 9 of the Act, praying that the respondents deposit a sum of Rs.\n<\/p>\n
    61,68,47,975\/- and a sum of Rs.244,22,33,845\/-, respectively, in court. Vide <\/p>\n
                                                            ::: Downloaded on – 09\/06\/2013 15:19:22 :::<\/span>
\n                                                  4<\/span><\/p>\n
    judgment dated 3rd August, 2005 in Arbitration Petition No.374 of 2004, the <\/p>\n
    award dated 18th June, 2004 was set aside.  This judgment was challenged <\/p>\n
    in appeal (Arbitration Appeal No. 672 of 2005) and the Appellate Court vide <\/p>\n
    its judgment dated 22nd October, 2008 set aside the judgment of the Single <\/p>\n
    Judge and remanded the  case back for adjudication afresh in accordance <\/p>\n
    with the parameters set out by Section 34 of the Act.   In a Special Leave <\/p>\n
    Petition preferred against the judgment of the Appellate Court,   before the <\/p>\n
    Supreme Court,  the Supreme Court vide order dated 18th December, 2008 <\/p>\n
    declined to interfere with the order of the Division Bench and requested the <\/p>\n
    learned single Judge, to whom the case had been remitted, to dispose of the <\/p>\n
    same   expeditiously   within   three   months.   The   learned   single   Judge   vide <\/p>\n
    judgment dated 18th March 2009 dismissed the petition. Both the parties to <\/p>\n
    the present application have filed appeals (Appeal Nos. 165 of 2009 and 166 <\/p>\n
    of   2009)   which   are   pending.       In   view   of   the   subsequent   events,   the <\/p>\n
    applicant  did not  press  the  petitions  under  section  9 and  the  same  were <\/p>\n
    withdrawn.\n<\/p>\n
    3.     In other words, since the year 1999, the parties have been pursuing <\/p>\n
    their respective remedies under the Act and various orders have been passed <\/p>\n
    from time to time.   During the interregnum period, vide letter dated 30th <\/p>\n
    August, 2004, the Advocates acting on behalf of the respondents served a <\/p>\n
                                                           ::: Downloaded on – 09\/06\/2013 15:19:22 :::<\/span>
\n                                                     5<\/span><\/p>\n
    letter upon the applicant requiring them not to remove any panel without <\/p>\n
    the   permission   of   the   respondents   and   if   such   an   act   was   done   and   the <\/p>\n
    panels are not returned within one week then they reserved their right to <\/p>\n
    take   action   in   accordance   with   law.     This   letter   was   replied   to   by   the <\/p>\n
    applicant   vide   its   letter   dated   31st   August,   2004.     The   arbitration <\/p>\n
    proceedings between the parties had concluded and they asserted that the <\/p>\n
    material was being unauthorisedly detained by the respondents. This further <\/p>\n
    aggravated the differences between the parties and vide notice dated 14th <\/p>\n
    October, 2004, the applicant raised demand and also claimed interest and <\/p>\n
    claimed a sum of Rs.245,22,33,845\/- with 18% interest on the said claims.\n<\/p>\n
    These claims were primarily raised on the basis of the wrongful detention of <\/p>\n
    LTLMS   and   LTSC’s.     In   furtherance   to   this   notice   of   demand,   vide   letter <\/p>\n
    dated 27th November, 2004, the applicant invoked clause 15 of the work <\/p>\n
    order dated 27th March, 1997.  The respondents did not respond and accept <\/p>\n
    the   request   for   arbitration   resulting   in   filing   of   the   present   arbitration <\/p>\n
    application,   No.9 of 2005, under section 11 of the Act.   Clause 15 of the <\/p>\n
    Arbitration agreement reads as under:\n<\/p>\n
           15.0 Arbitration\/Disputes:\n<\/p><\/blockquote>\n
                  If   any   dispute   arise   by   virtue   of   this   lease   contract
\n           both  the parties shall strive to settle the disputes amicably.
\n           However,   if   such   dispute   cannot   be   settled   mutually,   the
\n           matter shall be referred for Arbitration jointly in accordance
\n           with the provisions of the Indian Arbitration Act for the time <\/p>\n
                                                               ::: Downloaded on – 09\/06\/2013 15:19:22 :::<\/span>
\n                                                   6<\/span><\/p>\n
           being in force, with one Arbitrator appointed by each party
\n           and   an   Umpire   appointed   by   prior   mutual   consent.
\n           However, if the dispute is not resolved the Cl.No.16 shall be <\/p>\n
           operated.”\n<\/p><\/blockquote>\n
    4.             The   agreement   between   the   parties   is   not   disputed   and <\/p>\n
    resultantly there is no dispute to the arbitration agreement as well.  Clause <\/p>\n
    15   of   the   agreement   between   the   parties   had   been   admittedly   invoked <\/p>\n
    earlier   by   the   parties,   correspondence   was   being   exchanged   between   the <\/p>\n
    parties as back as in the year 2004, notice for further disputes had been <\/p>\n
    given by the present applicant.  The contention raised before this Court by <\/p>\n
    the respondents is that the Award dated 18th June 2004 had determined all <\/p>\n
    the controversies between the parties and, therefore, the arbitration clause <\/p>\n
    stood   exhausted.     It   is   further   argued   that   the   applicant   ought   to   have <\/p>\n
    claimed or ought to have raised all claims at the first instance and cannot <\/p>\n
    claim any amounts which the applicant ought to have claimed at the very <\/p>\n
    initial stage.   Non-claiming of such amount tantamounts to waiver of the <\/p>\n
    claim   and,   therefore,   the   present   petition   is   not   maintainable.     These <\/p>\n
    questions being legal, should be determined by this Court and cannot be left <\/p>\n
    to   the   Arbitrator   for   being   decided.     On   the   other   hand,   the   applicant <\/p>\n
    contends that the claim raised now are even for the period subsequent to the <\/p>\n
    invocation of the arbitration agreement and primarily relate to the wrongful <\/p>\n
                                                             ::: Downloaded on – 09\/06\/2013 15:19:22 :::<\/span>
\n                                                    7<\/span><\/p>\n
    retention, use of LTLMS and the interest on that amount has been claimed.\n<\/p>\n
    Thus, it is not covered even indirectly under the provisions of Order 2 Rule 2 <\/p>\n
    of the Code of Civil Procedure and the applicant has not waived any of its <\/p>\n
    claims.   The   contention   raised   and   even   the   objections   taken   by   the <\/p>\n
    respondents can fairly be decided by the Arbitrator within the ambit and <\/p>\n
    scope   of   Section   16  of  the  Act.  Reliance  has   been  placed   on   the  case   of <\/p>\n
    National   Insurance   Company   Limited   v   Boghara   Polyfab   Private   Limited, <\/p>\n
    (2009) 1 SCC 267. Reliance has also been placed upon the judgment of the <\/p>\n
    Supreme Court in the case of K.V. George v Secretary to Government, Water &  <\/p>\n
    Power Department, Trivandrum and another, (1989) 4 SCC 495.\n<\/p>\n
    5.     It is really not necessary for this Court to examine the merit of the <\/p>\n
    contentions   raised   in   a   petition   under   Section   11   of   the   Act.     These   are <\/p>\n
    disputes   which   would   require   documentary   and   oral   evidence   to   be <\/p>\n
    examined in their correct and legal perspective.   Suffice it to note that in <\/p>\n
    terms of the judgment of the Supreme Court in the case of Union of India v <\/p>\n
    M\/s   Onkar   Nath   Bhalla   &   Sons,  JT   2009   SC   (5)   682,   the   arbitration <\/p>\n
    agreement is  in  existence.   According to the  applicant, the disputes have <\/p>\n
    arisen between the parties.  This arbitration clause has been invoked by the <\/p>\n
    applicant on an earlier occasion and even Section 9 petition had been filed <\/p>\n
    in which there was hardly any dispute with regard to existence and validity <\/p>\n
                                                               ::: Downloaded on – 09\/06\/2013 15:19:22 :::<\/span>
\n                                                  8<\/span><\/p>\n
    of the arbitration agreement.  The question whether the disputes now raised <\/p>\n
    are covered by the arbitration agreement or not and whether there is any <\/p>\n
    abandonment   of   claim   by   the   applicant   at   any   earlier   stage   is   a   mixed <\/p>\n
    question of fact and law and can more appropriately be gone into by the <\/p>\n
    learned Arbitral Tribunal  in view of the language of Section 16 of the Act.\n<\/p>\n
    These questions are the questions which will fall in the second category of <\/p>\n
    the issues or points of determination as classified by the Supreme Court as <\/p>\n
    observed in the case of National Insurance Company Ltd. (supra).  These are <\/p>\n
    not   the   issues   which   would   fall   in   paragraph   22(1)   of   that     judgment <\/p>\n
    inasmuch as it is not even pleaded that the applicant has not approached the <\/p>\n
    appropriate Court and that both parties are not parties to the agreement.\n<\/p>\n
    Whether the claim is barred in law or the claim falls within the arbitration <\/p>\n
    clause or not are the matters which can quite safely be determined by the <\/p>\n
    Arbitral   Tribunal.     This   would   further   require   some   evidence,   oral   and <\/p>\n
    documentary,   before   any   of   the   parties   to   the   present   application   can <\/p>\n
    succeed on the merit of the issues raised.  It is neither appropriate nor would <\/p>\n
    it be in the interest of parties that this Court should examine the merit or <\/p>\n
    otherwise of the claims and the scope of the arbitration agreement in the <\/p>\n
    peculiar facts and circumstances of the case.   Vide Award dated 18 th  June <\/p>\n
    2004 no claims of the applicant were accepted which were ultimately upheld <\/p>\n
    by   the   Court.     Whether   the   subsequent   claims   are   covered   under   the <\/p>\n
                                                            ::: Downloaded on – 09\/06\/2013 15:19:22 :::<\/span>
\n                                                 9<\/span><\/p>\n
    arbitration clause or not and whether such claims could be raised in face of <\/p>\n
    the previous litigation between the parties, are the matters which can legally <\/p>\n
    and fairly examined by the Arbitral Tribunal.  Whether the invocation of the <\/p>\n
    arbitration agreement and consequently pronouncement of the award would <\/p>\n
    exhaust the arbitration clause or not again is a mixed question of fact and <\/p>\n
    law.\n<\/p>\n
    6.      In the circumstances afore-noticed, the petition under Section 11 is <\/p>\n
    allowed.     The   respective   parties   are   hereby   directed   to   nominate   their <\/p>\n
    respective   Arbitrators,   within   one   week   from   the   pronouncement   of   this <\/p>\n
    judgment, who in turn, will appoint an Umpire by mutual consent in terms <\/p>\n
    of clause 15 of the arbitration clause.  No order as to costs.\n<\/p>\n
                                                                 CHIEF JUSTICE<\/p>\n
                                                             ::: Downloaded on – 09\/06\/2013 15:19:22 :::<\/span>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court Act vs Maharashtra State Electricity … on 19 November, 2009 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION APPLICATION NO. 9 OF 2005 Datar Switchgear Limited ) a Company registered under the Companies ) Act, 1956 having its Registered Office at ) Datar Apartments, Commercial Complex […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-153580","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nAct vs Maharashtra State Electricity ... on 19 November, 2009 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/act-vs-maharashtra-state-electricity-on-19-november-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Act vs Maharashtra State Electricity ... on 19 November, 2009 - 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