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2017 Supreme(Del) 802

IN THE HIGH COURT OF DELHI AT NEW DELHI
BADAR DURREZ AHMED & SANJEEV SACHDEVA, JJ.
PUNJ LLOYD LTD. – Appellant
Versus
GVK POWER (GOINDWAL SAHIB) LIMITED – Respondent
FAO(OS) 221, 222, 223, 224, 231, 232 of 2015 & CM 7526-27, 7578, 7581, 7584, 7715-16, 7717-18 of 2015
Decided On : 08-03-2017

Advocates Appeared:
For the Appellant :Mr. Rajiv Nayar and Mr. A. S. Chandhiok, Senior Advocates with Mr. Rishi Agrawala, Mr. Akshay R., Mr. Karan Luthra, Mr. Mayank Bamniyal and Mr. Ritesh Kumar
For the Respondent:Mr. Kapil Sibal and Mr. Parag P. Tripathi, Senior Advocates with Ms. Kanika Singh, Ms. Heena Khan, Mr. Arunabh Ganguli and Mr. Salim A. Imamdar

Headnote:

Arbitration & Conciliation Act, 1996 - Section 9, 42 - Arbitration - Jurisdiction - Intention of parties, is significant - Agreements between GVK and PLL clearly specify the place of arbitration to be Hyderabad - There is an indication of the conscious choice of parties with regard to the courts which were to have jurisdiction even in respect of the bank guarantees - Intendment of the parties to be gathered from the agreements - Proforma of the bank guarantees and the bank guarantees shows that the courts at Hyderabad alone would have jurisdiction - Bank guarantees were issued at Delhi would normally have had jurisdiction but the intendment of the parties is clear that the courts at Hyderabad should exclusively deal with the disputes between them.

JUDGMENT :

BADAR DURREZ AHMED, J.

1. These six appeals arise out of a common judgment dated 21.04.2015 and a common order of the same date passed by a learned Single Judge of this Court in OMP Nos. 24/2015, 25/2015 and 27/2015 which had been filed by Punj Lloyd Limited (PLL) seeking interim reliefs under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the said Act’).

2. The said three petitions were in respect of three separate agreements between PLL and GVK Power (Goindwal Sahib) Limited (GVK). All the three agreements had been entered into on 14.09.2009. GVK had appointed PLL as a sub-contractor in respect of a contract that GVK had been awarded by the State of Punjab for building, owning and operating a coal fired electricity power plant consisting of 2x270 MW Units at Goindwal Sahib, Tarn Taran District, Punjab. One agreement was for balance of plant supplies ex-works for steel and cement for the sum of Rs 257 crores. This agreement formed the subject matter of OMP 27/2015 and ultimately FAO(OS) 223/2015. The second agreement which was also of 14.09.2009 related to the balance of plant supplies ex-works for a sum of Rs 448 crores. This agreement formed the subject matter of OMP 24/2015 and FAO(OS) 224/2015. The third agreement which was again of 14.09.2009 was for construction and services for the sum of Rs 250 crores. This formed the subject matter of OMP 25/2015 and FAO(OS) 222/2015.

3. As part of each of these agreements, GVK was to give an advance by way of mobilization of 10% of the contract value to PLL and the same was adjustable against future running bills. Against the mobilization advances so given, PLL was to give bank guarantees to the extent of the mobilization advances in favour of GVK. In addition, PLL was also required to give performance bank guarantees in favour of GVK representing 2% of the contract values. Consequently, the following bank guarantees were furnished by PLL issued by different banks in favour of GVK:-

(A) In respect of the agreement for balance of plant supplies ex-works for steel and cement for Rs 257 crores.

(i) Advance bank guarantee dated 31.08.2012 for Rs 25.70 crores; and

(ii) Performance bank guarantee dated 29.01.2013 for Rs 5.14 crores

(B) In respect of the agreement for balance of plant supplies ex-works for Rs 448 crores.

(i) Advance bank guarantee dated 31.08.2012 for Rs 44.80 crores; and

(ii) Performance bank guarantee dated 29.01.2013 for Rs 8.96 crores.

(C) In respect of the agreement for construction and services for Rs 250 crores.

(i) Advance bank guarantee dated 31.08.2012 for Rs 25 crores;

(ii) Advance bank guarantee dated 29.05.2012 for Rs 30 crores; and

(iii) Performance bank guarantee dated 29.01.2013 for Rs 5 crores.

4. By virtue of the common judgment dated 21.04.2015, the learned Single Judge took the view that the said petitions (OMP Nos. 24/2015, 25/2015 and 27/2015) could not be entertained by this Court as it lacked territorial jurisdiction. It was, however, left to PLL to approach the appropriate Court for reliefs in accordance with law. The petitions were accordingly dismissed on the ground of lack of territorial jurisdiction with costs of Rs. 50,000/- in each of the petitions. FAO(OS) Nos. 222/2015, 223/2015 and 224/2015 have been filed by PLL, being aggrieved by the common judgment dated 21.04.2015.

5. GVK is aggrieved by the common order dated 21.04.2015 which was pronounced after the said common judgment. A request had been made by the learned counsel for PLL, after the said judgment was pronounced, that the same be kept in abeyance for a short period to enable PLL to seek further reliefs. Consequently, by virtue of the common order dated 21.04.2015, the learned Single Judge suspended the said judgment till 28.04.2015. The effect of which was that the interim order passed by the Court earlier on 05.01.2015 would continue till 28.04.2015, subject to the bank guarantees in question being kept alive. GVK is aggrieved by this order inasmu



























































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