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



Savan Godiawala, in his Capacity of Liquidator and on Behalf of Lanco Infratech Limited v/s Steel Authority of India Limited & Another


Company & Directors' Information:- LANCO INFRATECH LIMITED [Active] CIN = L45200TG1993PLC015545

Company & Directors' Information:- STEEL AUTHORITY OF INDIA LIMITED [Active] CIN = L27109DL1973GOI006454

Company & Directors' Information:- S A L STEEL LIMITED [Active] CIN = L29199GJ2003PLC043148

Company & Directors' Information:- M M S STEEL PRIVATE LIMITED [Active] CIN = U27109TZ1996PTC006849

Company & Directors' Information:- K L S R INFRATECH LIMITED [Active] CIN = U45400TG2011PLC072158

Company & Directors' Information:- G. O. STEEL PRIVATE LIMITED [Active] CIN = U27100PB2007PTC031033

Company & Directors' Information:- G R INFRATECH PRIVATE LIMITED [Active] CIN = U45201RJ2010PTC031015

Company & Directors' Information:- G R INFRATECH PRIVATE LIMITED [Amalgamated] CIN = U45201GJ2010PTC098472

Company & Directors' Information:- R T INFRATECH PRIVATE LIMITED [Active] CIN = U45400WB2011PTC160181

Company & Directors' Information:- J M G STEEL PRIVATE LIMITED [Strike Off] CIN = U27105BR1992PTC004985

Company & Directors' Information:- H L STEEL PVT LTD [Active] CIN = U27107AS1992PTC003726

Company & Directors' Information:- K V M STEEL PRIVATE LIMITED [Active] CIN = U29141DL1988PTC031248

Company & Directors' Information:- K STEEL PRIVATE LIMITED [Strike Off] CIN = U27104JH1973PTC000998

Company & Directors' Information:- R. J. STEEL PRIVATE LIMITED [Active] CIN = U28112MH2009PTC193047

Company & Directors' Information:- M M STEEL PRIVATE LIMITED [Active] CIN = U27107MH2001PTC131270

Company & Directors' Information:- D K S INFRATECH INDIA PRIVATE LIMITED [Active] CIN = U45400UP2015PTC070754

Company & Directors' Information:- P. N. A. INFRATECH PRIVATE LIMITED [Active] CIN = U45200UP2006PTC061782

Company & Directors' Information:- S K INFRATECH PRIVATE LIMITED [Active] CIN = U70102DL2009PTC195508

Company & Directors' Information:- B L STEEL PVT LTD [Active] CIN = U51909WB1981PTC034021

Company & Directors' Information:- R K G STEEL PRIVATE LIMITED [Active] CIN = U27109DL2004PTC128852

Company & Directors' Information:- B E INFRATECH PRIVATE LIMITED [Active] CIN = U70102UP2010PTC040469

Company & Directors' Information:- V B STEEL PRIVATE LIMITED [Active] CIN = U28112MH2010PTC211691

Company & Directors' Information:- A K INFRATECH INDIA PRIVATE LIMITED [Strike Off] CIN = U45400DL2007PTC166364

Company & Directors' Information:- I B STEEL COMPANY PRIVATE LIMITED [Strike Off] CIN = U28910MH2010PTC211344

Company & Directors' Information:- J S C STEEL PRIVATE LIMITED [Active] CIN = U27106UP2013PTC061568

Company & Directors' Information:- S. M. STEEL PRIVATE LIMITED [Active] CIN = U51101MH2013PTC239811

Company & Directors' Information:- R K P STEEL LTD [Active] CIN = L27109WB1980PLC033206

Company & Directors' Information:- C P STEEL PRIVATE LIMITED [Active] CIN = U27100WB2008PTC127447

Company & Directors' Information:- D. L. INFRATECH PRIVATE LIMITED [Active] CIN = U70102UP2012PTC051029

Company & Directors' Information:- A. K. J. STEEL PRIVATE LIMITED [Active] CIN = U28112WB2010PTC144880

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

Company & Directors' Information:- C D STEEL PVT LTD [Under Liquidation] CIN = U27109WB1981PTC034340

Company & Directors' Information:- T M S STEEL PRIVATE LIMITED [Strike Off] CIN = U02710TZ1996PTC007498

Company & Directors' Information:- V. S. INFRATECH (INDIA) PRIVATE LIMITED [Active] CIN = U45400UP2008PTC035313

Company & Directors' Information:- K A S INFRATECH PRIVATE LIMITED [Active] CIN = U70100DL2014PTC264637

Company & Directors' Information:- D H INFRATECH PRIVATE LIMITED [Active] CIN = U72200WB2007PTC114579

Company & Directors' Information:- P AND S INFRATECH PRIVATE LIMITED [Active] CIN = U45201OR2008PTC010495

Company & Directors' Information:- P M R STEEL PRIVATE LIMITED [Active] CIN = U51102DL2003PTC122675

Company & Directors' Information:- C T STEEL PVT LTD [Active] CIN = U27109WB2005PTC106634

Company & Directors' Information:- P G STEEL PVT LTD [Strike Off] CIN = U24111AS1998PTC005409

Company & Directors' Information:- D S INFRATECH PRIVATE LIMITED [Active] CIN = U45400HR2010PTC040726

Company & Directors' Information:- A AND S STEEL PRIVATE LIMITED [Active] CIN = U63090DL1987PTC027835

Company & Directors' Information:- A TO Z INFRATECH PRIVATE LIMITED [Amalgamated] CIN = U45400DL2008PTC173245

Company & Directors' Information:- AT INFRATECH PRIVATE LIMITED [Strike Off] CIN = U17291DL1994PTC063808

Company & Directors' Information:- SAVAN INFRATECH PRIVATE LIMITED [Active] CIN = U45200GJ2011PTC067603

Company & Directors' Information:- J S STEEL PRIVATE LIMITED [Active] CIN = U52190CT1978PTC001432

Company & Directors' Information:- U M STEEL PRIVATE LIMITED [Strike Off] CIN = U27209TN1986PTC013670

Company & Directors' Information:- L N STEEL PRIVATE LIMITED [Active] CIN = U27310WB2007PTC118206

Company & Directors' Information:- P R INFRATECH PRIVATE LIMITED [Active] CIN = U45400DL2008PTC184432

Company & Directors' Information:- N N INFRATECH PRIVATE LIMITED [Active] CIN = U45200DL2012PTC233232

Company & Directors' Information:- J. B. INFRATECH INDIA PRIVATE LIMITED [Active] CIN = U45202KA2007PTC041469

Company & Directors' Information:- K. D. W. STEEL PRIVATE LIMITED [Active] CIN = U28910UP2011PTC043976

Company & Directors' Information:- R. N. STEEL PRIVATE LIMITED [Active] CIN = U27100WB2007PTC116588

Company & Directors' Information:- P M STEEL PRIVATE LIMITED [Active] CIN = U27105MP1982PTC001915

Company & Directors' Information:- M R STEEL (INDIA) PRIVATE LIMITED [Active] CIN = U27100TG2013PTC088808

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

Company & Directors' Information:- H L INFRATECH PRIVATE LIMITED [Active] CIN = U72900DL2007PTC163051

Company & Directors' Information:- C K STEEL PVT LTD [Active] CIN = U29150WB1975PTC030259

Company & Directors' Information:- K STEEL & COMPANY PVT LTD [Strike Off] CIN = U51909WB1991PTC053960

Company & Directors' Information:- N S STEEL PVT LTD [Strike Off] CIN = U27106PB1980PTC004266

Company & Directors' Information:- P J K INFRATECH INDIA LIMITED [Strike Off] CIN = U70109PB2013PLC037175

Company & Directors' Information:- B AND H INFRATECH LIMITED [Active] CIN = U45209CH2010PLC032536

Company & Directors' Information:- T V A INFRATECH LIMITED [Strike Off] CIN = U70109DL2006PLC154309

Company & Directors' Information:- M P INFRATECH LIMITED [Strike Off] CIN = U45200MP2010PLC024751

Company & Directors' Information:- C L INFRATECH PRIVATE LIMITED [Strike Off] CIN = U70102HR2012PTC045548

Company & Directors' Information:- S. R. INFRATECH PRIVATE LIMITED [Active] CIN = U45200MH2009PTC190243

Company & Directors' Information:- C H S INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45200TG2013PTC085657

Company & Directors' Information:- A G H INFRATECH PRIVATE LIMITED [Active] CIN = U45202UP2013PTC060726

Company & Directors' Information:- U. P. INFRATECH PRIVATE LIMITED [Active] CIN = U45200DL2008PTC174142

Company & Directors' Information:- R C STEEL PVT LTD [Strike Off] CIN = U28112AS1980PTC001811

Company & Directors' Information:- INFRATECH INDIA PVT LTD [Strike Off] CIN = U99999DL1997PTC084925

Company & Directors' Information:- P D STEEL PRIVATE LIMITED [Strike Off] CIN = U74899DL1989PTC038426

Company & Directors' Information:- A K STEEL PVT LTD [Strike Off] CIN = U99999DL1961PTC003566

Company & Directors' Information:- M S INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45400DL2007PTC164458

Company & Directors' Information:- H S P STEEL PRIVATE LIMITED [Strike Off] CIN = U27100MH2013PTC242983

Company & Directors' Information:- D H STEEL PRIVATE LIMITED [Strike Off] CIN = U27109RJ2012PTC039742

Company & Directors' Information:- R A STEEL PRIVATE LIMITED [Active] CIN = U51909MH2014PTC253625

Company & Directors' Information:- S F S INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45400UP2011PTC043142

Company & Directors' Information:- G. L. INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45400UP2011PTC045841

Company & Directors' Information:- S A C INFRATECH PRIVATE LIMITED [Strike Off] CIN = U74120UP2011PTC047111

Company & Directors' Information:- L R INFRATECH PRIVATE LIMITED [Strike Off] CIN = U74120UP2013PTC055304

Company & Directors' Information:- K A C INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45209TG2011PTC075843

Company & Directors' Information:- S G A INFRATECH PRIVATE LIMITED [Under Process of Striking Off] CIN = U70102UP2014PTC066190

Company & Directors' Information:- V & P INFRATECH PRIVATE LIMITED [Active] CIN = U70102UP2015PTC071618

Company & Directors' Information:- N. V. STEEL PRIVATE LIMITED [Strike Off] CIN = U27310DL2009PTC186541

Company & Directors' Information:- K. D. STEEL PRIVATE LIMITED [Strike Off] CIN = U28939DL2012PTC244467

Company & Directors' Information:- S M INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45400DL2007PTC171217

Company & Directors' Information:- H R INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45400DL2012PTC238429

Company & Directors' Information:- L N D INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45400DL2012PTC242018

Company & Directors' Information:- G D INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45400DL2013PTC256246

Company & Directors' Information:- INDIA INFRATECH PRIVATE LIMITED [Active] CIN = U45400DL2013PTC257567

Company & Directors' Information:- S N INFRATECH PRIVATE LIMITED [Active] CIN = U45201DL2005PTC135712

Company & Directors' Information:- S N S INFRATECH PRIVATE LIMITED [Active] CIN = U70109DL2013PTC255712

Company & Directors' Information:- A G INFRATECH PRIVATE LIMITED [Active] CIN = U70200DL2012PTC242598

Company & Directors' Information:- M R INFRATECH PRIVATE LIMITED [Strike Off] CIN = U70109DL2006PTC156032

Company & Directors' Information:- STEEL INDIA PRIVATE LIMITED [Strike Off] CIN = U00349KA1958PTC001309

Company & Directors' Information:- R & F INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45400TG2008PTC059851

Company & Directors' Information:- A A INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45200DL2007PTC158616

Company & Directors' Information:- R A INFRATECH PRIVATE LIMITED [Strike Off] CIN = U45200DL2007PTC159385

    OMP. (I)(COMM). No. 407 of 2018

    Decided On, 20 November 2018

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE VALMIKI J. MEHTA

    For the Petitioner: Sandeep Sethi, Senior Advocate, Vaijayant Paliwal, Jasveen Kaur, Srishti Khare, Advocates. For the Respondents: Parag P. Tripathi, Senior Advocate, Arun Kathpalia, Senior Advocate, Mandeep Singh Vinaik, Anjali Sharma, Deepak Bashta, Lalltaksh Joshi, Karan Khanna, Mohit Taneja, Advocates.



Judgment Text

Oral:

I.A. No.14596/2018(exemption)

1. Exemption allowed subject to just exceptions.

I.A. stands disposed of.

O.M.P.(I)(COMM) No. 407/2018 and I.A. Nos. 15751/2018 (under Section 151 CPC) & 17753/2018 (for condonation of delay)

2. This is a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 whereby the petitioner seeks an injunction order against the respondent no. 1 from in any manner acting upon the impugned Termination Notice dated 24.09.2018. An injunction order is also prayed by the petitioner to restrain the respondent no. 1 from invoking the Performance Bank Guarantee dated 20.01.2014 (valid for 5 years) for a sum of Rs. 50 crores. Ad-interim ex parte orders are also prayed qua the aforesaid two prayers.

3. On 26.10.2018, this Court passed the following order :

1. Counsel for the petitioner says that petitioner will file a detailed affidavit setting out exactly and how the proposed assignee of the contract to whom the contract is sought to be assigned fulfils all the necessary technical bid requirements of the contract which was originally awarded to Lanco Infratech Limited.

2. The affidavit will be supported by the relevant documents and cross reference will be made in the affidavit to the relevant portions of the documents. The said affidavit be filed within four days from today.

3. Respondent no. 1 will file reply affidavit to the affidavit which is now to be filed by the petitioner within four days thereafter. Petitioner will file rejoinder affidavit if so required within a period of four days of filing of the affidavit by respondent no. 1.

4. Besides the fact that this order is without prejudice to the respective rights and contentions, however, it is noted that this Court prima facie feels that respondent no. 1 can take a holistic view of the matter that in case the proposed assignee satisfies the technical bid parameters, then there is no reason why the respondent no. 1 should not be interested in going through the contract as regards its performance and which performance, already started with the contracting company Lanco Infratech Limited, and which is presently in liquidation.

5. Re-notify on 20th November, 2018.'

4. The petitioner has filed its affidavit as per Order dated 26.10.2018. The respondent no. 1 has filed its affidavit in response thereto. The petitioner has in the meanwhile moved an application being I.A. No. 15751/2018 for amendment of the petition whereby the petitioner seeks to amend the petition to bring on record the facts that the proposed assignee of the contract being, M/s Tasra Mining and Energy Company Private Limited, was eligible to submit the original bid as it was technically and financially competent to do so. This amendment was prayed along with a prayer for taking on record an additional affidavit dated 31.10.2018. Basically, the petitioner wants to bring on record the fact that the proposed assignee M/s Tasra Mining and Energy Company Private Limited was financially and technically competent as the original contracting party M/s Lanco Infratech Limited which was awarded the original contract being the Coal Mining Services Agreement (hereinafter 'CMSA') dated 23.09.2013 by the respondent no. 1.

5. The respondent no. 1 has filed a reply to the amended petition itself, and therefore really I.A. No. 15751/2018 is not effectively opposed, of course, without prejudice to the rights of the respondent no. 1 to contest the petition on merits by denying the averments and prayers as made by the petitioner.

6. The facts of the case are that the respondent no. 1 has entered into a CMSA on 23.09.2013 with M/s Lanco Infratech Limited. The petitioner is acting through Mr. Savan Godiawala, who is the Liquidator acting on behalf of M/s Lanco Infratech Limited. Mr. Savan Godiawala is an insolvency professional, and so appointed by the National Company Law Tribunal, Hyderabad Bench vide Order dated 27.08.2017 for M/s Lanco Infratech Limited. Mr. Savan Godiawala effectively is none other than, and acting for and on behalf of M/s Lanco Infratech Limited. After the CMSA dated 23.09.2013 was entered into between petitioner and respondent no. 1, a part of the contract was sub-contracted by M/s Lanco Infratech Limited to its sub-contractor M/s Thriveni Ramka Mining Private Limited. This sub-contracting was done with the approval of respondent no. 1 as per the respondent no. 1’s Letter dated 05.05.2017. As per clause 25 of the CMSA dated 23.09.2013, if M/s Lanco Infratech Limited goes into liquidation, then, the respondent no. 1 was entitled to terminate the agreement after giving a 30-day notice. This 30-day notice has been given by the respondent no. 1 in terms of respondent no.1’s Termination Notice dated 24.09.2018 and which was treated as the 30- day notice required as per the order dated 27.09.2018 passed by the learned single Judge of this Court in OMP(I) (COMM) No. 377/2018.

7. Therefore, it is seen that the undisputed position emerging on record is that the parties are bound by the CMSA, and this contract entitles the respondent no. 1 to terminate the same on the petitioner going into the liquidation. Admittedly the petitioner is in liquidation and the petition has been filed through Mr. Savan Godiawala, in his capacity as a liquidator of M/s Lanco Infratech Limited. Therefore, clearly respondent no. 1 was completely justified in seeking termination of the contract on the basis of Clause 25 of the CMSA which provided for termination of the contract in case M/s Lanco Infratech Limited went into liquidation, and which it has. 8. On behalf of the petitioner, to seek the reliefs prayed, reliance was placed upon a Letter dated 15.03.2018 issued by respondent no. 1 as per which respondent no. 1 is said to have permitted assignment of CMSA originally awarded to M/s Lanco Infratech Limited in favour of M/s Tasra Mining and Energy Company Private Limited, and this company is a wholly owned subsidiary company of M/s Lanco Infratech Limited. It is argued on behalf of the petitioner that respondent no. 1 after issuing its Letter dated 15.03.2018, the respondent no. 1 could not now back-out of the same, unilaterally, without giving reasons, much less valid reasons for withdrawing the permission for the assignment.

9. In order to appreciate this argument urged on behalf of the petitioner, reliance has been placed upon the Letter dated 15.03.2018 issued by the respondent no. 1. This letter is reproduced as under :

'Ref. No.: ED(CD)/Tasra/17-18/406 Date : 15.03.2018

To

Mr. Savan Godiawala

The Resolution Professional (RP) of M/s Lanco Infratech Limited,

Appointed by National Company Law Tribunal (NCLT)

Sub: Suggested Assignment of Coal Mining Service Agreement between SAIL and M/s Lanco Infratech Limited.

Dear Sir,

In pursuance to the request from the Resolution Professional of M/s Lanco Infratech Limited vide letter InLanco/560, dated 6th Jan' 2018 and subsequent deliberation on 16.01.2018 by you as Resolution Professional of M/s Lanco Infratech Limited appointed by National Company Law Tribunal (NCLT) on advantages of assigning Coal Mining Service Agreement executed between SAIL and M/s Lanco Infratech Limited dated 23rd September, 2013 to M/s Tasra Mining & Energy Company Private Limited (TMECPL) a 100% subsidiary of M/s Lanco Infratech Limited and subsequent clarification vide your letter no. InLanco/564, dated 13th March, 2018.

The matter has been examined by SAIL in consultation with SAIL-Corporate Law. We under the provision of Coal Mining Service Agreement, Clause „31’ hereby permit M/s Lanco Infratech Limited to assign the Coal Mining Service Agreement to M/s Tasra Mining & Energy Company Private Limited, a 100% subsidiary of M/s Lanco Infratech Limited.

Further, you are hereby requested to depute authorized person(s) for execution of agreement with SAIL on behalf of M/s Tasra Mining & Energy Company Private Limited.

Thanking you,

sd/-

(S.K. Basak)

ED, Collieries Division'

(Underlining Added)

10. In my opinion, this Letter dated 15.03.2018 cannot be said to be finally binding upon respondent no. 1 that there has infact taken place an actual assignment of the contract in favour of M/s Tasra Mining and Energy Company Private Limited, inasmuch as, the last line of this aforesaid letter makes it clear that assignment is only complete on the execution of the agreement of the respondent no. 1 with M/s Tasra Mining and Energy Company Private Limited. Also, this Court cannot permit the petitioner to take benefit of the Letter dated 15.03.2018 because this Letter dated 15.03.2018 signed by one Mr. S.K. Basak has not been validly issued as Mr. S.K. Basak is not the competent/final/decision making authority in the respondent no. 1 to take the decision for assigning the CMSA of M/s Lanco Infratech Limited to M/s Tasra Mining and Energy Company Private Limited. In fact, the respondent no. 1 in its counter-affidavit to the main petition has stated departmental proceedings were initiated against Mr. S.K. Basak for illegally issuing the Letter dated 15.03.2018, and that he has been visited with appropriate penalty for illegally issuing the Letter dated 15.03.2018. Therefore, in my opinion, the petitioner cannot place reliance upon the Letter dated 15.03.2018 that the same had the final effect of causing an actual assignment of the CMSA awarded to M/s Lanco Infratech Limited in favour of M/s Tasra Mining and Energy Company Private Limited.

11. Though this argument is not raised on behalf of the respondent no. 1, but in my opinion, the petition is liable to be dismissed and is accordingly also dismissed in view of the provisions of Section 14 and 41(e) of the Specific Relief Act, 1963. Section 14(1)(b) and (d) specifically prohibit grant of specific relief of a contract because of which a court is required to go into many details of a very detailed contract, and the court has to supervise the implementation of a contract which contains too many details requiring constant supervision. A huge, complicated and humongous Coal Mining Services Agreement containing dozens of terms, and requiring performance in hundreds of different ways, surely is a contract which will fall under Section 14(1)(b) and/or (d) of the Specific Relief Act. Once specific performance cannot be granted, then, Section 41(e) of the Specific Relief Act provides that an injunction cannot be granted because by grant of injunction staying the cancellation of a contract, effectively the court will be ordering specific performance of the contract, and which it cannot as per Section 14 of the Specific Relief Act. Hence, for this additional reason this Court cannot grant the relief prayed in this petition of staying of the impugned Termination Notice dated 24.09.2018, and to this extent the relief claimed, the petition is liable to be dismissed on account of the provisions of Sections 14(1) and 41(e) of the Specific Relief Act. Section 14(1) and Section 41(e) of the Specific Relief Act read as under:

'Section 14. Contracts not specifically enforceable.-(1) The following contracts cannot be specifically enforced, namely:-

….. …… …… ……

(b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the par

Please Login To View The Full Judgment!

ties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms; ….. …… …… …… (d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise.' Section 41. Injunction when refused.- An injunction cannot be granted- ….. …… …… …… (e) to prevent the breach of a contract the performance of which would not be specifically enforced' 12. Once the Termination Notice dated 24.09.2018 becomes final, and the petitioner is not entitled to assign the contract to M/s. Tasra Mining and Energy Company Private Limited, obviously, then there does not arise the grant of injunction against invocation and encashment of the bank guarantee, inasmuch as this relief is predicated on the continuation of the CMSA with the assignee M/s Tasra Mining and Energy Company Private Limited, and this assignment has neither taken place, nor can the respondent no.1 be otherwise forced to do so, as is already discussed above. 13. In view of the aforesaid discussion, I do not find any merit in the petition and the same is therefore dismissed.
O R