2012 (4) TMI 776 - HC - Indian Laws

Invalid Assignment of Rights: Alstom & GE Canada's Applications Dismissed

The applications under Order XXII Rule 10 CPC by Alstom and GE Canada were found to be misconceived and dismissed. The court held that the assignment of ... - Issues Involved:1. Maintainability of applications under Order XXII Rule 10 CPC.2. Validity of assignment and devolution of interest.3. Locus standi of the original parties and their successors-in-interest.4. Legal consequences of non-disclosure of changes in party constitution.Summary:Issue 1: Maintainability of Applications under Order XXII Rule 10 CPCOrder XXII Rule 10 CPC deals with the procedure to be adopted by a civil court where one of the parties to the proceedings before it dies. It is premised on the pendency of the suit. In the present case, the two entities who were claimants before the Tribunal can be said to be in the position of plaintiffs in a suit. The applications by Alstom and GE Canada are held to be misconceived and deserve to be dismissed as such.Issue 2: Validity of Assignment and Devolution of InterestThe SPA dated 19th July 1991 did constitute the assignment of rights and interest of MGI in the project in question in favour of GAE. Further, such assignment could not have been made without the consent of NHPCL and was, for the purposes of Order XXII Rule 10 CPC, not a valid assignment. The reference of the disputes to arbitration could have been made properly only by GAE.Issue 3: Locus Standi of the Original Parties and Their Successors-in-InterestOn the date of reference of the disputes to the ICC, MGI had no right or interest in the disputes arising out of the contract dated 3rd August 1984. MGI could not have filed a suit against NHPCL after 19th July 1991. The position was no different from that of the death of a plaintiff in a suit which, in the absence of substitution of LRs during the pendency of the suit, abates.Issue 4: Legal Consequences of Non-Disclosure of Changes in Party ConstitutionThere is no explanation whatsoever either in the application or in the rejoinder for this monumental lapse on the part of GAE to bring the above changes to the notice of the learned Tribunal. These facts did not surface till 2010 when applications were filed both before this court as well as the Division Bench by the two applicants Alstom and GE Canada. The procedure under Order XXII Rule 10 CPC is available only during the pendency of the suit. On this short ground, the applications by Alstom and GE Canada are held to be misconceived and deserve to be dismissed as such.Conclusion:Both applications are dismissed with no order as to costs due to the serious lapse in bringing the fundamental changes in the constitution of the original parties to the contract to the notice of the Tribunal and the court.