Ntpc Vidyut Vyapar Nigam Ltd v. Precision Technik Pvt. Ltd

NAVIN CHAWLA, J DECEMBER 18, 2018 RN

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + O.M.P. (COMM) 481/2016 Reserved on: 27.11.2018 Date of decision : 18.12.2018 NTPC VIDYUT VYAPAR NIGAM LTD. ..... Petitioner Through: Mr.Vikas Singh, Sr. Adv. with Mr.Bharat Sangal, Ms.Isha Gupta, Ms.Babita Kushwah, Ms.Srishti Banerjee, Advs. versus PRECISION TECHNIK PVT. LTD. ..... Respondent Through: Mr.Sandeep Sethi, Sr. Adv. with Ms.Kavita Jha, Ms.Devika Jain, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act") has been filed by the petitioner challenging the Arbitral Award dated 08.05.2015 passed by the Arbitral Tribunal adjudicating the disputes that have arisen between the parties in relation to the Power Purchase Agreement (PPA) dated 10.01.2011 executed between the parties. 2. The dispute between the parties is on the encashment of the Performance Bank Guarantee by the petitioner, which the petitioner has encashed in part, relying upon Article 4.6.1 of the PPA and seeks the encashment of further amount on the ground of purported delay of the respondent in achieving the commencement of supply of contracted Page 2 capacity of the power within the Scheduled Commissioning Date, that is, 09.01.2012. 3. The parties, as noted above, had entered into a PPA on 10.01.2011. In terms of Article 3.1 of the PPA, the respondent was to complete the activities mentioned therein within 180 days from the Effective date of the PPA, which in terms of Article 2.1.1 of the PPA was the date of execution of the PPA, that is, 10.01.2011. 4. In terms of Article 4.1 of the PPA, the respondent was to commence supply of power upto the Contracted Capacity to the petitioner no later than the Scheduled Commissioning Date, which was prescribed in the PPA as 09.01.2012. 5. While the respondent claimed the actual Commissioning Date as 08.02.2012, when the Commissioning Certificate was issued by the Jodhpur Discom in its favour, the Arbitral Tribunal has held the same to be 21.02.2012, when the respondent injected 58 units of electricity from its Power Plant to the Grid. 6. Learned senior counsel for the petitioner submits that the Arbitral Tribunal has erred in considering 21.02.2012 to be the Commissioning Date inasmuch as the respondent was to inject power on a rated capacity; mere 58 units of electricity cannot be considered as a due compliance with the contractual condition and therefore, 21.02.2012 cannot be taken as the commissioning date. In his submission, the Commissioning Date has to be taken as 22.03.2012, when the Review Committee recorded a Page 3 finding that the respondent had installed the complete equipments for its project. 7. I am unable to agree with the said submission of the learned senior counsel for the petitioner. The Arbitral Tribunal has held that on a combined reading of various terms of the PPA, it is apparent that the date of first injection of power is the relevant date for ascertaining commissioning of the Power Project. It has further held that the installation of equipment comes prior to injection or flow of power into the grid. As far as the issue of rated capacity to be supplied for considering the Commissioning Date, the Arbitral Tribunal has held that installation of all equipment and discharge/flowing of energy is sine qua non for commissioning of the project. Once full equipment has been installed and the energy has flowed to the Grid, the project will be deemed to have been commissioned. This in my view is the correct conclusion to be drawn from the reading of various terms of the PPA and cannot be faulted. 8. On facts, the Arbitral Tribunal found that the report dated 08.02.2012 relied upon by the respondent was only showing that the equipment installed by the respondent was synchronized/connected to the grid. Relying upon the affidavit filed by the respondent before the Review Committee, which the Arbitral Tribunal found to be truthful, the Arbitral T