HON’BLE SRI JUSTICE K. LAKSHMAN ARBITRATION APPLICATION No.177 OF 2024

ORDER

Heard Mr. M. Rama Krishna, learned counsel for the applicant and Mr. P. Sri Harsha Reddy, learned counsel for the respondent. 2. This application is filed under Section - 11 (5) & (6) of the Arbitration and Conciliation Act, 1996 (for short ‘Act, 1996’), to appoint a sole Arbitrator to adjudicate the disputes/claims between the applicant and the respondent.

3. CONTENTIONS OF THE APPLICANT i) The respondent - M/s. Singareni Collieries Company Limited (SCCL) floated Tender Enquiry No.E141800480, dated 19.02.2019 for transportation of Coal from KTK-6 Incline & KLP Mine to KTK-5 CHP, Bhupalapally Area on weight basis for a period of two (02)

years.

ii) The applicant - M/s. Sri Laxmi Ganapathi Constructions, Warangal, participated in the said Tender and stood as successful bidder. Therefore, the respondent has awarded the said work vide Work Order No.7600007834, dated 24.06.2019. They have also entered into an Agreement dated 30.07.2019 on the specific terms and conditions mentioned therein. The work was commenced from

24.06.2019 and it is going to expire by 23.06.2021.

iii) The said contract is based on the quantity of the coal provided to the applicant on the rates prescribed under the said contract. But, from the beginning of the contract, the respondent did not provide the minimum quantity of coal for transportation causing immense loss to the applicant.

iv) The respondent has abruptly stopped providing coal for transportation to the applicant. The respondent neither sent any communication nor assigned any reason for stopping the allocation of coal abruptly. Therefore, the applicant had submitted a letter dated 04.09.2020 to restore the contract and comply with the terms of the work order and agreement. The applicant also addressed several letters to the respondent demanding to settle the said dispute by paying dues and restore the original contract. There was no response from the respondent.

v) Since there was no response from the respondent to settle the dispute by way of negotiations, in the month of October, 2022, the respondent orally informed the applicant that they would not restore the contract and pay the forfeited amount on the ground that there is no explicit provision in the purchase order for refunding of forfeited and recovered amount. Therefore, the applicant has issued legal notice to the respondent demanding an amount of Rs.7,47,97,089/- towards damages for breach of contract along with forfeited amount of Rs.48,09,060/- within fifteen (15) days from the date of receipt of the said notice or in the alternative initiate arbitration proceedings for adjudication of disputes raised by the applicant within thirty (30) days. Despite receiving and acknowledging the said legal notice, there was no response from the respondent. Therefore, the applicant filed the present application seeking appointment of arbitrator to adjudicate the disputes.

4. CONTENTIONS OF THE RESPONDENT i) The respondent had filed counter admitting about the contract entered between the parties on 30.07.2019 and that the same is for a period of two (02) years. According to the respondent, the applicant has commenced the work on 03.07.2019. From the date of commencement of the contract, the applicant did not work smoothly, created lot of inconvenience to the Mines Authorities of respondent company by not deploying required number of trucks for transportation of coal as per Clause No.5.9 of the work order.

ii) The applicant has to transport 533 Tons per day from KTK-

6 and 800 Tons per day from KLP Mine. The applicant did not provide sufficient number of Lorries at KTK-6 and KLP Mine due to which coal was dumped at those places every day instead of transporting to the KTK-5 CHP that hampered the production badly. The SCCL failed to supply Coal to its customers and the contract was ended on 31.03.2020 due to non-transport of targeted production from KTK-6 and KLP Mine.

iii) The contra