L. Nageswara Rao, J. - (1.) Leave granted. 1. M.P. Power Generation Co. Ltd. formerly known as Madhya Pradesh Electricity Board (hereinafter referred to as 'the Board') invited proposals for refurbishment of Units 3 and 4 of the Thermal Power Plants at Amarkantak having the capacity of 120 MW by a notice inviting tender dated 24th October, 1996. A provisional Letter of Intent for refurbishment of Thermal Power Plant of 2 x 120 MW Phase II was issued by the Board to Respondent No.1, ANSALDO Energia SPA (for short 'the Claimant') on 11th May, 1999. Thereafter, on 24th August, 1999 four Agreements were signed between the Claimants and the Board viz Overall Coordination Agreement, Offshore Supply Contract, Onshore Supply Contract and Onshore Services Contract.
(2.) A Bank Guarantee dated 22nd February, 2000 was furnished by the Claimants as per Clause 9.2 (a) of the Onshore Supply Contract for Rs. 9,29,20,000/- (10 per cent of the Onshore Supply Contract price). Another Bank Guarantee was furnished by the Claimants on 23rd February, 2000 as per the stipulation in Clause 9.2(a) of the Offshore Supply Agreement for US $ 1,708,100/-. The above Bank Guarantees were given towards advance payment that was to be made by the Board. On 24th February, 2000, a Performance Bond was executed by the ANZ Grindlays Bank Limited on behalf of the Claimants for Rs.18,48,00,000/- (10 per cent of the total Contract price) pursuant to Clause 4.1 of the Overall Coordination Agreement. The Board subsequently made advance payments of the amounts equivalent to the two Bank Guarantees dated 22nd February, 2000 and 23rd February, 2000 given by the Claimant.
(3.) The Zero Date (i.e. effective date of Contract) as per Clause 7 of the Overall Coordination Agreement is as follows: "7. Notice to Proceed 7.1 Zero Date (Effective Date of Contract) The zero date of the Contract shall mean the date on which the all the following conditions are fulfilled: (i) Signature of the Contract (ii) Receipt by ANSALDO of the Notice to Proceed (iii) Receipt by MPEB the Bank Guarantee from ANSALDO for the Advance Payment (10% of the Contract Price) (iv) Receipt by ANSALDO of the Advance Payment (v) Receipt by ANSALDO of the Letter of Credit for the Offshore Supply and Letter of Comfort/ Support for Onshore Supply and Onshore Services (vi) Financial tie-up of PFC loans 7.2 If the Start Date has not occurred on or before six (6) months after the date hereof, then the Contract will automatically expire, without any liability on either side and the price will cease to be valid and will be subject to renegotiation. 7.3 MPEB may not issue a Notice to Proceed under any of the Refurbishment Contracts without issuing a Notice to Proceed under all of the Contracts.";