CHERIAN VARKEY CONSTRUCTION CO Vs. MANGALORE SPECIAL ECONOMIC ZONE LIMITED

JUDGEMENT

(1.) THIS appeal is filed by the appellants challenging the order passed by the I Addl. District Judge, D.K., Mangalore, dismissing the application filed by the appellants under Section 9(ii)(d) and (e) of the Arbitration and Conciliation Act, 1996.

(2.) THE 1st appellant is a Private Limited Company. The 2nd appellant is a Partnership Firm. Respondent No.1 had called for a tender for installation of MSEZL Pipeline Corridor, Reach IV, Ch 0.00 to 6460.00. The 1st appellant was the successful bidder. Respondent No.1 issued a letter of intent to the appellant No.1 which was duly acknowledged by appellant No.1. A contract was entered into on 26.8.2011. Further, two work orders came to be issued as follows;

(3.) THE grievance of the appellants is, though the work was entrusted, the appellants could not commence the work in respect of Part -A contract because neither the site nor the drawing of the work to be executed was handed over to the appellants. Insofar as part -B work is concerned, the site was handed over belatedly in piecemeal manner and drawings were handed over belatedly. Further, the scope of work was changed frequently and additional work orders were issued. According to the appellants they have successfully executed the work in respect of Part -B as per the specification. Insofar as part -A work is concerned, it could not be executed because the site was not handed over and the drawings were not furnished. In para.10 of the appeal memo, the appellants have set out the breaches committed by the 1st respondent. It is the cause for non execution of part -A work. According to them, an amount of Rs.17,92,69,553/ - is due from the respondents in respect of part -B work which is clearly set out in para.13 of the appeal memo. According to the appellants, a sum of Rs.21 crores is due from the first respondent. Therefore, the appellant wrote letters dated 7.8.13 and 30.9.13 calling up the respondent No.1 to arrange, certify and to effect payment of the unpaid value of works carried out and other amounts due and payable to the appellants within 14 days of receipt of the same. Thereafter, the respondent No.1 got issued a notice dated 23.10.13 to the 1st appellant calling upon the appellant to show cause within 14 days as to the alleged breach of contract failing which they threatened to terminate the contract. Therefore, the appellants approached the court in Application No.44/2013 u/s 9 of the Arbitration and Conciliation Act, 1996 for an injunction restraining the respondent No.1 from encashing the Bank Guarantees furnished pending disposal of the application. An exparte order of temporary injunction was granted on 7.11.2013 directing both the parties to maintain status -quo. The respondent thereafter entered appearance and filed its objections. After hearing both the parties, the impugned order has been passed dismissing the application.