BHARAT HYDRO POWER CORPORATION LTD Vs. ASSAM STATE ELECTRICITY BOARD GUWAHATI

JUDGEMENT

(1.) This a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996, with a prayer that a sole arbitrator may be appointed to decide the disputes pending between the petitioners, namely, M/s. Bharat Hydro Power Corporation Ltd. (for short, BHPCL) and M/s. Subhash Projects and Marketing Ltd. (for short SPML), of the one part, and the Assam State Electricity Board (for short, ASEB), of the other part. The disputes between the parties, as indicated by the petitioners are those as referred to in the letter of demand dated 17-8-96, by which it was informed to the respondents that the petitioners had appointed their arbitrator and the respondents were called upon to appoint their arbitrator within 30 days of receipt of the said letter. Since the respondents failed to appoint their arbitrator, therefore, the present petition has been preferred by the petitioners.

(2.) A Memorandum of Understanding (hereinafter to be called 'MOU') was entered into and signed on 25th March, 1993 by SPML and the ASEB under which 100 MW capacity Karbi Langpi (Lower Borpani) Hydro Electric Power Generation Project was to be transferred by the ASEB to a Registered Public Company to be formed by the parties to the said MOU. This is how M/s. Bharat Hydro Power Corporation Ltd. (BHPCL) came into being, having been registered on 2nd April, 1993. A Deed of Assignment was executed between the ASEB and BHPCL on 8th April, 1993 and the MOU formed part of the Deed of Assignment. According to the claim of the petitioners, all the assets which were liable to be handed over by the ASEB to BHPCL in pursuance of the MOU were not transferred. The worth of such assets as not transferred is said to be about Rs. 39.94 crores. This shortage in handing over the assets is said to be checked and verified by the Chartered Accountants, whose reports have also been placed on the record. A perusal of the letter dated 17-8-96 indicating the disputes between the parties shows that it was claimed that the petitioners suffered losses and damages due to various types of lapses on the part of the ASEB. According to the case of the petitioners as given out in the letter dated 17-8-96, losses suffered by them was to the tune of Rs. 100.27 crores, apart from damages on account of loss of good will.

(3.) In regard to the claim on account of short delivery of the assets by the ASEB to the BHPCL, our attention is drawn to Clause 34 of the MOU, which reads as follows :-"34. Notwithstanding anything to the contrary herein contained, in case at the time of taking physical possession of the said Project, if it is found that any item in the inventory of the said properties are not available in the site of the said Project, then and in that event the cost of such assets and properties, plants and/or machineries, fittings and/or fixtures as shown in the accounts of the said Electric Power Generation Project shall be deducted out of the total consideration payable to ASEB under these presents."