w w w . L a w y e r S e r v i c e s . i n

M/s. Gammon India Ltd. v/s M/s. IVRCL Infrastructures and Projects Ltd. & Another

Company & Directors' Information:- GAMMON INDIA LIMITED [Active] CIN = L74999MH1922PLC000997

Company & Directors' Information:- IVRCL LIMITED [Active] CIN = L45201AP1987PLC007959

Company & Directors' Information:- P S K INFRASTRUCTURES AND PROJECTS PRIVATE LIMITED [Active] CIN = U45400TG2007PTC054435

Company & Directors' Information:- A. R. INFRASTRUCTURES & PROJECTS PRIVATE LIMITED [Active] CIN = U45201DL2003PTC120242

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

    O.S.A.No.81 of 2005 and CMP.No.7415 of 2005

    Decided On, 29 April 2005

    At, High Court of Judicature at Madras


    For The Appellant: Arvind P. Datar, Sr.counsel for Aiyar & Dolia. For The Respondents: R1, R.Murari, Advocate, R2, V. Raghupathy, Government Pleader.

Judgment Text

P. Sathasivam, J.

By consent of both the parties, the main appeal itself is taken up for disposal.

2. The above Original Side Appeal has been filed against the interim order of the learned Single Judge dated 18.4.2005 made in Application No.1440 of 2005 in O.A.No.309 of 2005 on the file of this Court.

3. The first respondent/plaintiff, namely, IVRCL Infrastructures and Project Ltd. filed Application No.1440 of 2005 under section 9 of the Arbitration and Conciliation Act, 1996 (in short, ‘the Act’) before the Original Side of this Court praying for an order directing the second respondent therein, namely, Chennai Metropolitan Water Supply and Sewerage Board (in short, ‘CMWSSB’) to effect payment directly to the applicant of a sum of Rs.21,77,07,845/- being the final bill amount. The applicant has filed an affidavit in support of the above application highlighting its case. It is unnecessary for this Court to refer to all the details at this stage. Though the applicant has also prayed for interim injunction in O.A.No.309 of 2005 and for a direction to the first respondent/appellant herein to effect payment of a sum of Rs.20.05 crores being the amount unjustifiably withheld by the first respondent/ appellant in Appln.No.1441 of 2005, the impugned order was passed on 18.4.2005 in Application No.1440 of 2005. A reading of the impugned order shows that after considering the claims of both the parties and the submissions made, the learned Judge directed the second respondent therein, namely, CMWSSB to make payment of a sum of Rs.10 crores forthwith from and out of the sum payable by it to the first respondent therein, namely, M/s.Gammon India Ltd. to the applicant, namely, IVRCL Infrastructures and Projects Ltd. Challenging the same, the first respondent therein has filed the present appeal.

4. Mr.Arvind P.Datar, learned senior counsel for the appellant, after taking us through the relevant materials and the impugned order of the learned Single Judge, has raised several contentions, namely, (i) there is no prima facie case for passing the impugned order; (ii) the subsequent letter of CMWSSB shows that it was the appellant/first respondent therein who obtained the contract; (iii) after the first respondent herein obtained interim order on 19.3.2005, no effective steps have been taken for arbitration proceedings; (iv) learned Judge has not considered sales-tax liability while issuing direction for payment of Rs.10 crores; (v) there is no evidence of financial crunch to the first respondent herein inasmuch as the application has been filed under section 9 of the Act and the Court has no power to issue interim direction for payment and even Order 39 Rule 10 CPC applies only to money suit and not to the proceedings of this nature; (vi) the order of learned Judge does not show any reason and the appellant/first respondent was not given time to file counter; and (vii) the learned Judge failed to consider the question relating to hardship.

5. On the other hand, Mr.R.Murari, learned counsel for the first respondent, at the outset, pointed out that since the impugned order is only an interim order and the learned Judge has posted the application on 14.6.2005 for further hearing, it is unnecessary for this Court to go into the contentions raised by the learned senior counsel for the appellant.

6. Though before the learned Single Judge, CMWSSB was not represented and it did not project its case, before us the Chief Engineer of CMWSSB has filed a counter affidavit highlighting its stand.

7. We have gone through the materials placed and contentions raised by both parties. As rightly pointed out by the learned counsel for the first respondent, first of all, the learned Judge has not disposed of Appln.No.1440 of 2005. As observed earlier, after issuing direction for payment of Rs.10 crores in favour of the first respondent herein, the learned Judge posted the said application on 14.6.2005 for further hearing. In such a circumstance, we are of the opinion that both parties, particularly the appellant and the first respondent herein are free to raise all the above referred contentions before the learned Judge. However, it is pertinent to note the information furnished by the second respondent CMWSSB in its counter affidavit. The information therein shows that the first respondent herein, sub-contractor to the appellant herein, has completed the work. It is evident from paragraphs 9, 10, 11, 13 and 14 of the counter affidavit filed by the second respondent CMWSSB. No doubt, Mr.Arvind P.Datar, learned senior counsel vehemently contended that as per the letter of the first respondent dated 30.6.2003 it is for the first respondent to pay the sales-tax due as per Rules. For this, Mr.Murari, learned counsel, drawing our attention to the terms of the contract, would submit that the said question has to be decided by the Arbitrator. We are of the view that it is unnecessary for this Court to go into the issue at this stage. It is true that the learned Judge has not assigned sufficient reasons before issuing the positive direction to CMWSSB for payment of Rs.10 crores in favour of the first respondent herein, however, it cannot be disputed that all the relevant materials were not shown and placed before the learned Judge. As said earlier, though CMWSSB was not represented before the learned Judge, the information furnished in the counter affidavit filed by it before us amply shows that the work was done by the first respondent herein. All these materials /information prima facie show that the first respondent herein is entitled to the amount for the work done from the main contractor, namely, the appellant herein. Further, the first respondent herein has filed an affidavit of undertaking dated 29.04.2005 that it will continue to carry out the maintenance and operation of the project. The above statement is hereby recorded.

8. In the light of our discussion, while observing that the parties are permitted to raise all the contentions including legal aspects before the learned Judge while the application is taken up for hearing on 14.6.2005, considering the details furnished by CM

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WSSB in its counter affidavit dated 27.4.2005, we modify the order of the learned Judge in the following manner. The first respondent, namely, M/s. IVRCL Infrastructures and Projects Ltd. is directed to furnish a bank guarantee for a sum of Rs.5 crores (Rupees five crores only) to the satisfaction of the second respondent CMWSSB and on compliance of the said condition, the second respondent CMWSSB is directed to make payment of a sum of Rs.10 crores (Rupees ten crores only) to the first respondent M/s. IVRCL Infrastructures and Projects Ltd., within a period of one week thereafter. The Original Side Appeal is disposed of on the above terms. No costs. Consequently, connected CMP., is closed.