Contractual clauses distinguishing between outstanding amounts and claims; only adjudicated debts are actionable.

JUDGMENT

Poonam A. Bamba, J. These appeals are preferred by the appellant Bharat Heavy Electricals Limited under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (Arbitration Act `in short') and Section 13 of Commercial Courts Act, 2015 against the common judgment dated 18.09.2021 (impugned judgment `in short') passed by the Learned District Judge (Commercial-2), South District, Saket Courts, New Delhi, (`Ld' District Judge, Commercial-2' in short) whereby two petitions under Section 34 Arbitration Act bearing numbers [OMP (COMM) No. 54/2021 and OMP (COMM) No. 56/2021)] filed by the appellant herein seeking setting aside of the consolidated award dated 02.06.2021 with respect of arbitration cases no. 02.03.2019 and 03.03.2019, were dismissed;

2. Briefly stating, facts relevant for disposal of these appeals are that the appellant BHEL placed two purchase orders on the respondent bearing no. PSNR/SCP/BOP-BHAWANA/AC/SUP/1926 dated 26.08.2019 for supply of air-conditioning system for 2x750 MW Units at Pragati/III,CCPP,BHAWANA (supply portion) and PSNR/SCP/BOP-BHAWANA/COMP-E&C/1927 dated 26.08.2009 for Erection and commissioning of equipment of air-conditioning system for 2x750 MW Units at Pragati/III,CCPP,BHAWANA (E&C portion). The supply portion of the purchase order was subject matter of Arb. Case No. 02/03/2019. The E&C portion of the purchase order being subject matter of Arb. Case No. 03/03/2019 envisaged erection and commissioning of the equipment. A performance Bank Guarantee No. 0002BG00060609 dated 25.08.2009 for the amount of Rs.41,80,242/- for the supply portion of the purchase order and Bank Guarantee No. 0002BG00063509 dated 01.09.2009 for the amount of Rs.4,64,315/- for the E&C portion of the purchase order, respectively were submitted by the respondent in terms of clause 7 of the General Commercial Terms and Conditions of the agreement between the parties.

2.1. Disputes arose between the parties which came to be adjudicated upon by the Arbitrator. The respondent herein (claimant before the arbitrator) claimed that the delivery of materials for the supply portion of the purchase order was completed within the contractual final delivery period i.e. 25.05.2015 and AC system commissioning for the E&C portion was completed on 09.05.2016. Accordingly guarantee period came to an end on 08.05.2017.

2.2. It was the respondent's (M/s ABB India Ltd.) case that on expiry of warranty period in November 2016, when vide letter dated 30.01.2017, it sought discharge of the bank guarantee, the appellant vide its letter dated 20.02.2017 conveyed that the package AC's system was commissioned on 09.05.2016 and therefore, the guarantee period shall expire after one year as per clause 15.2 of Volume I, Part B of GCC of the Contract. Accordingly, the respondent extended validity of the bank guarantee till 20.08.2017 and 21.08.2017 for the supply portion and E&C portion, respectively. The same was further renewed under coercion for a further period expiring on 20.02.2018 and 21.02.2018. However, despite the same, bank guarantee was not released by the petitioner; and later on, in meeting between the officials of the appellant and the respondent held on 04.01.2018, the respondent was apprised that non release of the bank guarantee was due to ongoing arbitration between the parties in the separate contract at Anapara, Uttar Pradesh, which was distinct from Bawana contract. Withholding of Rs.39,58,908/- in relation to the purchase order (supply portion) and Rs.7,15,861/- in relation to the E&C portion of the purchase order dated 26.08.2019 by the appellant herein, was absolutely illegal and arbitrary besides being contrary to the terms of the contract B