Calcutta High Court
Quippo Infrastructure Ltd vs Azz Infraservices Ltd. & Anr on 21 January, 2021
1
AP 255 of 2020
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
Commercial Division
QUIPPO INFRASTRUCTURE LTD.
Vs.
AZZ INFRASERVICES LTD. & ANR.
For the Petitioners : Mr. Swatarup Banerjee, Advocate
Mr. Rajib Mullick, Advocate
Mr. Rakesh Sarkar, Advocate
For the Respondents : Mr. Utpal Bose, Sr. Advocate
Ms. H. Chakraborty, Advocate
Ms. Neelina Chatterjee, Advocate
Mr. Suvodeep Chakraborty, Advocate
Hearing concluded on : January 18, 2021
Judgment on : January 21, 2021
DEBANGSU BASAK, J. :-
1. The petitioner has applied under Section 9 of the Arbitration
and Conciliation Act, 1996 for interim protection.
2. Learned Advocate appearing for the petitioner has submitted
that, the respondent No. 1 had participated in a tender floated by
South Delhi Municipal Corporation for solid waste management. The
respondent No. 1 has specialized in asset management business. The
respondent No. 2 has been set up as a special purpose vehicle
incorporated at the instance of the respondent No. 1 for carrying out
the specific work of south Delhi Municipal Corporation. Subsequent to
the respondent No. 1 becoming the successful bidder, a concession
agreement had been entered into between the South Delhi Municipal
Corporation and the respondents herein on December 2, 2016 for a
period of 8 years for the purpose of solid waste management.
3. Learned Advocate appearing for the petitioner has submitted
that, the petitioner was instrumental in setting up a business of
respondent No. 2. It had also arranged for finance for the machineries
and equipment through a financer. The respondent had entered into a
Master Services Contract for a period of 8 years with the petitioner on
April 28, 2017. The respondent No. 2 had entered into a Master Lease
Agreement dated May 5, 2017 with the financer. The parties had also
entered into a escrow agreement dated October 4, 2017.
4. Learned Advocate appearing for the petitioner has submitted
that, the claim of the petitioner is on account of the Master Service
Contract. According to him, under the Master Service Contract, the
respondents had agreed that, all payments received from the South
Delhi Municipal Corporation will be put in the escrow account and
that, payments will be disbursed through the escrow account which
would be made by considering the outstanding dues of the petitioner,
the financer and other party in terms of the relevant contracts on a
private basis.
5. Learned Advocate appearing for the petitioner has submitted
that the respondent No. 1 had acted in breach of its obligation under
the Master Service Contract. The respondent No. 1 unlawfully diverted
money received from South Delhi Municipal Corporation and did not
deposit the same in the escrow account. He has drawn the attention of
the Court to the fact that the petitioner used to raise monthly invoices
on the respondent No. 1 in lieu of consultancy provided for carrying
out the work of South Delhi Municipal Corporation. The respondent
No. 1 had failed to make regular payments. He has drawn the
attention of the Court to the correspondence exchanged between the
parties. He has submitted that, despite acknowledgment of liability,
the respondent No. 1 has failed to pay the petitioner. In such
circumstances, he has submitted that, the respondent No. 1 be
restrained by an order of injunction from receiving any payment from
South Delhi Municipal Corporation except for the purpose of
depositing the same in the escrow account and paying the parties out
of the escrow amount including the petitioner.
6. In response to a query from the Court on the question of
jurisdiction, learned Advocate appearing for the petitioner has relied
upon various authorities and submitted that, this Hon'ble Court has
the jurisdiction to try, entertain and determine the instant petition.
7. Learned Senior Advocate appearing for the petitioner
respondent No. 1 has submitted that, the Master Services Agreement
between the parties stood terminated on May 28, 2020. He has
submitted that, since the Master Services Agreement stand
terminated, the question of making payment to the petitioner does not
arise. According to him, the petitioner is not providing the consultancy
services in terms of the Master Services Agreement for the respondent
No. 1 to pay the petitioner. According to him, no amount is due and
payable by the respondent No. 1 to the petitioner.
8. Learned Advocate appearing for the respondent No. 1 has
submitted that, a sum in excess of Rs. 15 crores is due and payable by
the petitioner to the respondent by way of compensation. The
respondents had suffered loss and damages due to the non
performance of the contractual obligations of the petitioner during the
subsistence of the Master Services Contract dated April 28, 2017. The
respondents had on numerous occasions informed the petitioner of its
failure to perform its obligations under the Master Services Contract
dated April 28, 2017. In fact, South Delhi Municipal Corporation had
issued warning notice for non performance to the respondents.
9. During the hearing of the petition, the parties have filed an
agreement in writing to refer the disputes to arbitration to the
arbitrator named therein.
10. Since the respondents have not raised the issue of
jurisdiction, and since, the Master Services Contract contains a forum
selection clause with the Courts at Kolkata having selected forum and
since the Master Services Contract provides for the seat of arbitration
to be at Kolkata, I do not find any reason to enter into the arena of
lack of jurisdiction.
11. As has been noted herein, the parties had filed a written
agreement for appointment of an arbitrator to arbitrate the disputes.
The parties to such agreement, are at liberty to take appropriate steps
in accordance with law, for resolution of the disputes between them.
12. The petitioner has limited its claim against the respondents
under the Master services contract dated April 28, 2017 only. The
parties have admitted that, there are disputes and differences between
them under the Master Service Contract dated April 28, 2017. The
respondents had terminated the Master Service Contract dated April
28, 2017 on May 28, 2020. The respondent No. 1 in the letter of
termination dated May 28, 2020 has alleged that, the petitioner had
failed to provide requisite asset management consultancy to the
petitioner for the last two years. The petitioner has also alleged that,
due to the deficiency in service rendered by the petitioner, the
equipments have not been operating on the full capacity and
accordingly the quality of service provided is not up to the mark. By
such letter of termination, the respondent No. 1 had demanded a sum
of Rs. 8.5 crores from the petitioner towards penalty and damages.
The respondent No. 1 has alleged that, the petitioner did not provide
diligent and efficient services even after May 28, 2020.
13. The parties have disputes and differences between themselves
with regard to the Master Service Contract. The respondent No. 1 had
by the letter dated May 28, 2020 terminated the Master Service
Contract. As to the issue whether and what amount is due and
payable by which party to whom, should await the decision of the
arbitration. At the interim stage, it is not possible to state with
certainty that, a quantified amount on an identified account is due
and payable by one party to the other. In absence of such a finding, in
my view, it would not be proper to grant any interim relief to any of the
parties pending the arbitration. Moreover, the claims of the respective
parties are money claims and that too, on account of damages.
Discussing the conduct of the parties elaborately at this interim stage
to assess the respective rights and liabilities in view would prejudice
the arbitration. One of the grounds of refusing to grant an interim
order is when the Court finds that money is an adequate
compensation. Here the claims are money allegedly receivable.
14. In view of the discussions above, AP No. 255 of 2020 is
dismissed without any orders to costs.
[DEBANGSU BASAK, J.]
