TaxTMI 
TaxTMI 
2018 (8) TMI 1826
X X X X Extracts X X X X
X X X X Extracts X X X X
....as required, Erection, Testing, Commissioning of Steam Generator Comprising Boiler including Drum, Structures, Pressure Parts, Non-Pressure Parts, Boiler including Drum, Structures, Pressure Parts, Non-Pressure Parts, Boiler Auxiliaries, Power Cycle Piping, Electrostatic Precipitator (ESP), Rotating Equipments & Auxiliary Boiler including Final Painting, Assistance for Trial operation, Performance Guarantee Test and Handover of the Coal fired Unit- I of 2x600 MW Kalisindh Thermal Power Project, Rajasthan vide work order No.3300002925, dated 19.08.2009. 3. It is stated by the Operational Creditor that as per clause 2.6 of the Work Order, dated 19.08.2009, the work has to be completed within 24 months from the date of commencement of the work i.e. from October 2009, but the work started on 23.10.2009 and therefore, the work had to be completed on or before 22.10.2011. 4. It is stated that as per the clause 2.D(b) of the Work Order, dated 19.08.2009, for Boiler, any activities specified in the order got delayed and carried out beyond the time schedule of the Contract, payment will be made after pro rata adjustments towards LD, if the delays are attributable to the Operational Cr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Auxiliary Steam Piping and fuel oil piping of the same project to the Operational Creditor vide its work order No.3300008844 (including Service Tax). The contract completion period was 30.07.2013. 10. It is stated by the Operational Creditor that Corporate Debtor could not provide the requisite facilities for completing the project within the time. The Operational Creditor brought to the notice of the Corporate Debtor about their obligations which they could not fulfil. 11. According to the Operational Creditor, the Corporate Debtor has to provide the following facilities to the Operational Creditor:- a. Supply of materials/ parts etc. b. Delays due to other reasons:- (i) The delay in readiness of Balance of Plant and other areas (especially coal handling system, etc.) and non-availability of coal were the main reasons for delay of trial run; (ii) Platen super heater coil burst due to operation fault. It took many days to rectify the same, causing delays; (iii) Cold Re-Heat piping got damaged during operation for no fault of the Operational Creditor. It took many months to rectify the same, which caused delays; (iv) Tec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....RC amounts and thereby violated the conditions of the contract. 20. The Operational Creditor itself quantified and claimed an amount of Rs. 5,82,61,035/- vide its letter, dated 15.12.2011, however the same has been revised vide letter, dated 08.10.2014, and reduced the ORC amount claim to Rs. 5,49,22,446/-. 21. It is stated by the Operational Creditor that the Corporate Debtor in its letter, dated 11.12.2014, informed the Operational Creditor that Overstay Compensation beyond the Contract period is under consideration. 22. Notwithstanding the delay in payments, the Operational Creditor completed the work on 28.03.2015 and the Corporate Debtor issued the Work Completion Certificate. 23. The Operational Creditor claimed the following amounts in this Petition:- Sl. No. Particulars Amount in Rs. 1. Final Bill- Boiler and ESP (S.O. No. 3300002925) (copy of the bills acknowledged by the Corporate Debtor and approved the release of payment) 2,35,20,413 2. Retention - Boiler and ESP (S.O. No.3300002925) (copy of the bills acknowledged by the Corporate Debtor and approved the release of payment) 2,68,22,327 3. Retention - Fuel oil piping & ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nal Creditor filed copies of invoices, copy of Computation of Interest, copies of work orders dated 19.08.2009 and 10.01.2013, copy of Bank account statement of the Operational Creditor. The Operational Creditor also filed the email dated 17.07.2017 acknowledging the dues. 34. The Corporate Debtor filed counter and stated that intentionally the Operational Creditor did not include Form-3 notice and the reply issued by the Corporate Debtor. It is stated by the Corporate Debtor that the Corporate Debtor has specifically and categorically raised the dispute as to the alleged defaulted amount and referred to various correspondence between the parties relating the dispute. 35. The Operational Creditor also intentionally not filed Affidavit of no dispute which is mandatory Under sec. 9(3)(b) of IB Code. 36. According to the Corporate Debtor, the claim made by the Petitioner is disputable one. The Corporate Debtor stated that the claim made by the Operational Creditor over an amount of Rs. 8,56,84,939/- is absolutely false. 37. The Corporate Debtor also stated that the Operational Creditor cannot claim interest of Rs. 5,30,94,661/-. 38. It is stated by the Corporate Debtor ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the resolving of issues relating to liquidated damages. 46. It is stated by the Corporate Debtor that ORC can be claimed only if the default is on the part of the Corporate Debtor. 47. The word 'under consideration' in the letter, dated 11.12.2014, cannot be interpreted as acceptance of the Petitioner's claim. 48. It is stated by the Corporate Debtor that the Operational Creditor has been committing defaults in mobilising required manpower and resources to take up the works within the stipulated time. The Corporate Debtor requested the Petitioner periodically to commence the erection works/activities by writing letters and emails repeatedly, vide emails dated 24.05.2012, 03.06.2012, 04.08.2012, 27.08.2012, 08.09.2012. 49. The Corporate Debtor by email, dated 01.10.2012, listed out the works, which were stopped abruptly by the Petitioner, since wages to the workmen were not paid. It amounts to violation of Sub-Clause (c) of Clause No.D of the Service Order, which states as hereunder:- "Notwithstanding the dues and payments to be received from BGRESL or otherwise, the Contractor shall be liable to make payment of wages and statutory remittances etc. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... instant case, as per clause 2.5(D)b of the Work Order, dated 19.08.2009, if there is any delay attributable to the Operational Creditor, the Corporate Debtor can from time-to-time adjust the liquidated damages from the amounts payable to the Operational Creditor. 58. In view of the said clause, if the delay in completion of work is on account of the Operational Creditor, then the Corporate Debtor is entitled for liquidated damages. That means, in case of breach of the terms of the Work Order/ Contract is there on the part of the Operational Creditor, the Corporate Debtor is entitled for liquidated damages. 59. One of the claim amounts is Overrun Compensation. It is stated by the Operational Creditor that the inability of the Corporate Debtor to finalise the ORC, as per the contract, is breach of contract and it effected the cash flow of the Operational Creditor. 60. According to the Operational Creditor, he is entitled to receive ORC from January 2012. According to the Corporate Debtor, the Operational Creditor is not entitled for ORC. 61. The Operational Creditor is relying upon a letter, dated 11.12.2014, issued by the Corporate Debtor to the Operational Creditor, wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d not deduct the amounts towards liquidated damages while paying the bills, it cannot be said that the Corporate Debtor waived his right to claim liquidated damages. More so, when the amount of damage has not be assessed. 71. First of all, it has to be decided by the Competent Court whether it is the Operational Creditor or the Corporate Debtor that had committed breach of contract. 72. In the instant case, the Competent Court has to decide whether the party that committed breach of contract is liable to pay damages and if so, to what amount. 73. In the instant case, as can been scene from the following correspondence, the Corporate Debtor has been raising the issue of delay in completion of works even prior to the issuance of Demand Notice. The following are the letters, addressed by the Corporate Debtor to the Operational Creditor, raising the issue of delay in completion of work. 74. Letter, dated 31.08.2014, written by the Corporate Debtor to the Operational Creditor regarding completion of Unit # 1 pending work. The following are the pending works of Unit # 1: (i) Cutting & grinding of temporary structure welded on the boiler structure. (ii) Pendi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Materials issued on returnable basis to be handed over to BGRESL store. (xiv) Painting work to be completed in coal pipe, Condensate pipe, cold air duct, compressed air pipe & oil pipe. 76. Letter dated 11.12.2014 written by Corporate Debtor to the Operational Creditor wherein it is stated that Overstay Compensation beyond the contract period is under consideration and it is linked up with the delay in completion of works. 77. Letter dated 24.05.2012 written by the Corporate Debtor to the Operational Creditor requesting to mobilize the manpower, machinery's & supervisory staff to take up the erection activity of the mills immediately. 78. Letter dated 03.06.2012 addressed by the Corporate Debtor to the Operational Creditor stating about the stoppage of work for ten days due to non-availability of welding electrode, gas & filler wire and stoppage of erection work for four days. 79. Letter dated 04.08.2012 addressed by the Corporate Debtor to the Operational Creditor regarding employing less manpower at katpp and requesting to increase the manpower. 80. Letter dated 03.10.2012 regarding stoppage of work for 6 days due to wages not received by the workmen. ....