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2021 (3) TMI 1424
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.... of the Arbitration and Conciliation Act, 1996 (hereafter the "A&C Act'). In addition, Voith also prays that directions be issued to NTPC to forthwith pay it Rs. 2,88,31,380/-, which is the cost incurred by Voith to extend the Bank Guarantees furnished to NTPC. 2. The Award was passed in the context of disputes that had arisen between the parties in connection with an agreement for execution of a Hydro Electric Project to be constructed on the river Bhagirathi known as Loharinag Pala Hydro Electric Power Project (4 x 150 MW). 3. In terms of the Award, Voith was awarded a total sum of USD 10,688,455.95; EUR 3,341,171.32; and Rs. 153,495,177.90. The compensation awarded to Voith under various heads, as summarized by the Arbitral Tribunal, is set out below:- USD EUR INR A. Engineering 325,871.38 926,789.53 95,356,757.96 B. Material 12,547,850.37 2,992,800.66 186,932,479.79 C. Model Test - 639,203.14 - D. On-site Expenses - - 19,249,500.00 E. Off-site Expenses 871,962.20 915,069.97 259,235,689.53 F. Bank Guarantees - 229,472,02 377,004.62 Less Advance Received (3,057,228.....
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.... guaranteed a sum of Rs. 9,86,74,263.87/-; EUR 24,70,794.28/-; USD 85,67,414.33; and GBP 76,798.13 (The said Bank Guarantee is referred to as the "Niti Aayog BG'). 8. As stated above, NTPC's petition to set aside the Award was dismissed. Pursuant to the dismissal of the petition under Section 34 of the A&C Act (in O.M.P. (COMM.) 16/3017), a Coordinate Bench of this Court, by orders dated 10.12.2019 and 17.10.2019 passed in EX. APPL. (OS) 960/2019, directed NTPC to (i) deposit the set of the Bank Guarantees which were issued during the performance of the contract as well as the Niti Aayog BG; and (ii) deposit the balance 25% of the awarded amount alongwith upto date interest with the Registrar General of this Court. The Judgment Debtor challenged the aforesaid order in EFA (OS) (COMM.) 21/2019. But, the Division Bench of this Court dismissed the said appeal by an order dated 17.12.2019. 9. Thereafter, in part compliance with the orders of this Court, NTPC deposited (i) both set of Bank Guarantees on 06.01.2020 and 05.02.2020; and (ii) a Demand Draft for a sum of Rs. 54,42,72,662 on 07.02.2020. 10. NTPC preferred an appeal-being FAO (OS)(COMM.) No. 329/2019-against....
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....on 13 March 2018, in support of his contention that a deduction on account of TDS could not be made on payments in discharge of judgment debt. 16. He also submitted that interest had accrued on the shortfall amount of Rs. 12,09,16,391.37 and thus, the applicable interest on this amount which was due on 15.09.2017 till 17.10.2019, amounts to Rs. 2,24,57,027.11. 17. He submitted that against the balance amount, which was due to be paid by NTPC in accordance with the order of this Court dated 17.10.2019, it had deposited only Rs. 56,42,71,662 on 06.01.2020. 18. He submitted that the amount due to Voith on 17.10.2019 was Rs. 74,86,34,859.42. A detailed calculation of the balance amount is set out as below: Remaining 25% amount as on 15 September 2017 INR 16,38,25,209.56; EUR 15,71,300.52; USD 37,37,271.86; GBP Interest on this remaining 25% amount INR 3,04,26,207.19; EUR 83,052.31; USD 1,97,536.42; GBP 1,287.86 Shortfall in the payment under the Niti Aayog Office Memorandum Rs. 12,09,16,391.27 Interest on the Shortfall under the Niti Aayog Office Memorandum Rs. 2,24,57,027.11 TOTAL AMOUNT IN INR AFTER TAKING INTO CONSIDERATION THE EXCHANGE RATE A....
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....the TDS is concerned, the same was deducted as Voith had agreed to receive the payments in Indian currency. She stated that directions to pay the TDS amount would unfairly prejudice NTPC, as it would amount to requiring NTPC to pay the said amount twice. She submitted that it is not disputed that the amounts were to be paid to foreign companies, but Voith had consciously opened the Escrow Account and accepted that the money be paid in Indian currency. 23. Lastly, she submitted that NTPC cannot be called upon to pay the cost of the Bank Guarantees. She submitted that the Advance Bank Guarantees were given by Voith to NTPC in terms of the contractual provisions and against advances made by NTPC. The said Bank Guarantees had been kept alive in view of NTPC's challenge to the Award. The Award did not contemplate payment of any charges for the bank guarantees till the same were returned. She submitted that the charges for the Niti Aayog BG would necessarily have to be borne by Voith as it had volunteered to furnish the said guarantees to avail the benefit of the Niti Aayog Circular. She submitted that in terms of the Niti Aayog Circular, Voith was required to furnish the Bank Gua....
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....Furest Day Lawson Limited v. Jindal Exports Limited: (2012) 194 DLT 439 and Progetto Grano S.P.A. v. Shri Lal Mahal Limited: Ex.P. No. 52/2012, decided on 29.05.2014, this Court had considered the date on which the Special Leave Petition against the order rejecting objections to recognition and enforcement of a foreign award was dismissed as the relevant date for determining the exchange rate to be applied for enforcing the awards made in foreign currency. 27. Ms. Anand did not dispute the above. She, however, rested NTPC's case on the ground that the parties had arrived at a settlement and Voith was bound by the same. According to NTPC, the parties had agreed that 15.09.2017 would be the cut-off date for determining the exchange rate. Ms. Anand relied on the Minutes of the Meeting dated 11.09.2017 and Voith's letter dated 16.11.2018, in support of her contention that the parties had agreed to the exchange rate as prevailing on 15.09.2017. The said contention is unmerited. A plain reading of the Minutes of the Meeting dated 11.09.2017 indicates that it does not record any agreement regarding the applicable exchange rate. The said minutes relate to the amounts that were r....
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....ourt had held that once a claim-in that case, a claim for compensation to an employee for wrongful termination of an employment-is decreed, "the claim assumes the character of a judgment-debt by a Civil Court and must be executed subject to deductions and adjustments permissible under the Code of Civil Procedure". The Court further observed as under: "The rule that the decree must be executed according to its tenor may be modified by a statutory provision. But there is nothing in the Income Tax Act which supports the plea that in respect of the amount payable under a judgment-debt of the nature sought to be enforced, the debtor is entitled to deduct income tax which may become due and payable by the judgment-creditor on the plea that the cause of action on which the decree was passed was the contract of employment and a part of the claim decreed represented amount due to the employee as salary or damages in lieu of salary." 33. In Islamic Investment Company v. Union of India and Anr.: (supra), the Bombay High Court following the decision in All India Reporter Ltd. v. Ramchandra D. Datar (supra) rejected the contention that the Judgment Debtor (in that case, the Food Cor....
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....return in India. He also contended that Decree Holder nos. 2 and 3 are not liable to pay any tax in India. This Court is not required to examine whether Decree Holder nos. 2 and 3 are liable to pay tax in India. However, it is clear that tax was not required to be deducted at source since the payments made by NTPC were in discharge of the Award or as ad hoc payments under a mechanism evolved under the Niti Aayog Circular. 39. The contention that Voith had agreed to such deduction is also unmerited. Decree Holder no. 1 had accepted the said payments not only on its behalf but also on behalf of other Decree Holders and therefore, this Court finds it difficult to accept that the Decree Holder no. 1 had accepted and agreed to NTPC deducting tax at source. However, there is merit in the contention that Voith knew, as way back in 2018, that NTPC had deducted TDS and it does not appear that Voith had raised any objection to the same at the material time. 40. This Court is of the view that failure of Voith to object at the material time would not amount to accepting deduction and deposit of TDS as payment towards the awarded amount. 41. It is relevant to note that NTPC had deducte....
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....Circular does not provide for payment of any charges for furnishing Bank Guarantees. Voith had elected to receive payments in terms of the Niti Aayog Circular and therefore, this Court does not consider it apposite to accede to its prayer for Bank Guarantee Charges which were incurred by Voith for furnishing the Bank Guarantees against payments in terms of the Niti Aayog Circular. It was also pointed out that NTPC had released the payment under the Niti Aayog Circular while accepting the Advance BGs to cover part of the amount so released. It was submitted that in this view, the Advance BGs should also be considered as Bank Guarantees furnished in terms of the Niti Aayog Circular. This contention is merited. 46. In any view of the matter, as stated above, given the facts and circumstances of the case, this Court does not consider it apposite to accede to the prayers for reimbursement of bank charges. The prayer made by Voith in this regard, is rejected. 47. In addition to the questions as discussed above, NTPC had also raised an objection regarding the calculation of the shortfall as claimed by Voith. It was submitted that Voith has also calculated interest on the interest co....