TaxTMI 
TaxTMI 
TaxTMI 
2022 (3) TMI 638
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....i.e. 'M/s ONGC Petro Additions Ltd.' issued Letter of Assurance dated 24.03.2015 and 02.09.2016 to the Operational Creditor assuring that all conditions of the contracts will be honoured and the Corporate Debtor will make payments directly to the Operational Creditor after receipt of invoice duly certified by FCIPL and EIL (Engineers India Ltd.). After the aforesaid Letter of Assurance, certain payments were directly made to the Operational Creditor by the Corporate Debtor. Certain bills and invoices were raised by the Operational Creditor and the notice under Section 8 was issued by the Operational Creditor on 25.05.2018 demanding payment from the Corporate Debtor for works performed by the Operational Creditor to the extent of Rs. 1,51,14,649/-. 3. The Section 8 notice was replied by the Corporate Debtor denying the claim of the Operational Creditor. It was stated in the reply that the Corporate Debtor has decided to make direct payment to the Sub-contractor/Vendors of FCIPL including the Operational Creditor for the works to be executed w.e.f. 01.09.2014 only with a view to get the work of the contract done smoothly in the interest of the Corporate Debtor and subject to methodo....
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....ct that neither such retention money has been deducted by the alleged Corporate Debtor nor it is a subject matter of the said letters of assurance. We also find that the main contractor has not raised the bills for the alleged outstanding amounts as well as retention money nor any claim till then had been filed before the RP of FCIPL who was undergoing CIRP. We also find that the reply to notice of demand issued under Section 8 of IBC, 2016, alleged Corporate Debtor has clarified its stand and opposed the demand so raised. 7. Thus, considering the fact and circumstance of the case, we conclude that in the absence of privity of contract and non-compliance of the submission of invoices/bills by the main contractor along with necessary back up documents required as 0per the contractual provisions, the said letters of assurance do not result into a cause of action against the alleged Corporate Debtor. We also find that the Corporate Debtor is Public Sector Undertaking (PSU), hence, instead of pursuing its claim with the main contractor, the Operational Creditor has chosen to file this application. Normally, in these circumstances, we could have imposed costs for abuse the process of ....
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....Assurance for payment to M/s Hardwin Construction Pvt. Ltd. Reference- Work order nos. FCIPL/OPaL/Contracts/311 dated 26 November, 2014 (amended), FCIPL/OPaL/Contracts/325 dated 29 August, 2014 and FCIPL/OPaL/Contracts/328 dated 8th September, November, 2014 placed by M/s FERNAS on M/s Hardwin Construction Pvt. Ltd. Dear Sir, With reference to the Work Orders mentioned above, placed by M/s FCIPL on you with regard to supply of various items as mentioned in WO, fabrication and erection of fire sprinkles, installations & dismantling of scaffoldings, OPaL is hereby confirming that all the conditions of the contracts will be honored and the payment w.e.f. 1st September, 2014 will be paid to you directly by OPaL within 15 days from the date of receipt of invoices duly certified by M/s FCIPL and EIL. Thanking you, Yours faithfully, Sd/- K. Satyanarayana CEO OPaL" 9. To the similar effect is next letter dated 02.09.2016 which stated that the Corporate Debtor is confirming that all the conditions of the contract will be honored and Corporate Debtor shall make the payments directly to the Operational Creditor once services as per aforesaid mentioned letter will be provided ....
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....the Respondent to the Appellant directly. 25. Simply because some payments had been made by the ONGC to the Appellant, it would not be established that there was a privity of contract between the ONGC and the Appellant and only for that reason the ONGC cannot be saddled with a liability to pay the amount payable to the Appellant by the Respondent. 26. It is also pertinent to note that the Arbitration Agreement was only between the Appellant and the Respondent. The ONGC was not a party to the Arbitration Agreement. When a dispute had arisen between the Appellant and the Respondent in relation to payment of money, the Appellant had initiated the arbitration proceedings. As the ONGC was not a party to the Arbitration Agreement, it could not have been represented before the Arbitral Tribunal. If the ONGC was not a party before the Arbitral Tribunal, the Tribunal could not have made any Award making the ONGC liable to make payment to the Appellant. In the aforestated factual and legal position, the Arbitral Tribunal could not have made the ONGC liable in any respect and rightly, the majority view of the Arbitral Tribunal was to the effect that the ONGC, not being a party to any cont....