Bangladesh Power Development Board (BPDB) vs. Respondent: Quantum Power System Limited

IN THE SUPREME COURT OF BANGLADESH (HIGH COURT DIVISION)

Civil Revision No. 320 of 2014

Decided On: 08.09.2016

Appellants: Bangladesh Power Development Board (BPDB) Vs. Respondent: Quantum Power System Limited

Hon’ble Judges: Naima Haider and Khizir Ahmed Choudhury, JJ.

Counsels: For Appellant/Petitioner/Plaintiff: Md. Forrukh Rahman, Advocate

For Respondents/Defendant: B.M. Elias, Advocate

Subject: Commercial

Catch Words

Mentioned IN

Acts/Rules/Orders: Code of Civil Procedure, 1908 (CPC) - Section 115(1)

JUDGMENT

Naima Haider, J.

1. The Rule was issued by this Court under section 115(1) of the Code of Civil Procedure calling upon the opposite party No. 1 to show cause as to why the judgement and order dated 26-9-2013 passed by the learned District Judge, Dhaka in arbitration Misc. Case No. 220 of 2013 confirming and continuing status-quo Order No. 1 dated 17-4-2013 in respect of encashing Bank Guarantee being No. PB/BG/075/2010 dated 18-2-2010 and Bank Guarantee being No. PB/BG/183/2012 dated 16-4-2012 and deducting any amount from running monthly bill of the petitioner-opposite party should not be set aside.
2. Facts necessary for disposal of the Rule, are that the opposite party No. 1 petitioner floated a tender for installation of 105 MW Power Plants in Noapara, Jessore. The petitioner opposite-party, Quantum Power System Limited (“Quantum”) participated in the tender process and thereafter, the quantum entered into a contract with the BPDB on 4-2-2010 for installation of 105 MW Power Plant, its operation and maintenance services and supply of electricity on rental basis for 3 years at Noapara, Jessore bearing Contract No. 09729. As per Article 8 of the said contract, Quantum furnished Bank Guarantee No. PB/BG/075/2010 dated 18-2-2010 issued by AB Bank Limited favouring BPDB.
3. Article 1(98) of the contract provided that Quantum has to commence the operation of the power plant within 270 days of the execution of the contract. At the same time Article 22.2 of the contract provides that the Government of Bangladesh through BPDB shall ensure clearance of machineries from customs authority for establishing the power plant, otherwise the date of commercial operation of the power plant shall be extended for delay caused for non clearance of machineries from customs authority. Article 8 of the said contract provides for liquidated damage in the event of delay in commencing commercial operation and also provides requirement for depositing bank guarantee to adjust liquidated damage for delay, if any.
4. BPDB encashed a considerable amount of money from the said Bank Guarantee No. PB/BG/075/2010 dated 18-2-2010 on account of liquidated damage for delay in commencing commercial operation of the power plant and another dispute arose between Quantum and BPDB in respect of deduction of amount on account of over consumption of fuel from the running monthly bill submitted by Quantum. The Quantum filed an application under section 7(ka) of arbitration Act, 2001 on 15-4-2013 to stop encashment of bank guarantee or adjust bill and BPDB filed a written objection on 18-7-2013.
5. The learned Court after hearing Quantum, on 17-4-2013 passed the Order No. 1 restraining BPDB from encashing the Bank Guarantee being No. PB/BG/075/2010 dated 18-2-2010 and Bank Guarantee No. PB/BG/183/2012 dated 16-4-2012 and deducting any amount from running monthly bill of the petitioner-opposite party No. 1. On 26-9-2013 the learned Court passed the impugned judgment and order confirming & continuing the status-quo order dated 17-4-2013.
6. Being aggrieved by and dissatisfied with impugned judgement dated 26-9-2013 passed by the learned Court of District Judge, Dhaka, in arbitration Misc. Case No. ‘220 of 2013, the Opposite party No. 1 petitioner has moved this Court and obtained the instant Rule.
7. Mr. Md. Forrukh Rahman, learned Advocate appearing for the opposite party No. 1 petitioner submits that the learned Court below has failed to consider the facts of the case and also the contract, produced before it where it has been clearly stated that under article 13.1 (b)(iii), BPDB prays monthly rental for only setting up the power plant and also to maintain required capacity to generate electricity as and when demanded on hourly basis. But Quantum under rental agreement is not selling electricity per unit basis rather maintaining demanded capacity as rental contractor and generating such quantity of electricity as and when required, the price of which is separately adjusted. He submits that the court below failed to appreciate the terms and conditions of the contract and granted order of injunction.
8. Mr. Rahman further submits that the Court below failed to take into judicial notice that whole power system will simply collapse if the demand and supply of electricity is not coordinated by any competent authority. Accordingly, it is the burden of Quantum to prove that BPDB and such other competent authority engaged in this regard actually did not demand electricity on hourly basis which is contrary to the general presumption and, as such, the order is liable to be set aside. He further submits that a direction may be given to the parties to resolve their dispute through commission under section 40(1) of the Bangladesh Energy Regulatory Commission Act, 2003.
9. Mr. BM Elias, learned Advocate appearing on behalf of the petitioner-opposite party submits BPDB under the terms and conditions of the contract is not at all entitled to encash the bank guarantee furnished by the opposite party before fixing the liability of the petitioner-opposite party and, as such, the court below has committed no error of law in passing the impugned judgment and order restraining the opposite party petitioner from encashing the bank guarantee and, as such, the Rule liable to be discharged.
10. We have heard the learned Advocates for the respective parties and perused the revisional application, annexures and the impugned judgment and order.
11. On perusal of the record it appears that the opposite party No. 1 petitioner floated a tender for installation of 105 MW Power Plants in Noapara, Jessore. The quantum participated in the tender process and the quantum entered into a contract with the BPDB on 4-2-2010 for installation of 105 MW Power Plant, and its operation and maintenance services and supply of electricity on rental basis for 3 years at Noapara, Jessore bearing Contract No. 09729. As per Article 8 of the said, contract, Quantum deposited Bank Guarantee No. PB/BG/075/2010 dated 18-2-2010 issued, by AB Bank Limited at the instance of the Quantum in favour of BPDB. Section 40(1) of the Bangladesh Energy Regulatory Commission Act, 2003 (“BRC Act”) provides provision for resolving dispute through commission, if there be any.
12. Apparently, from the facts and circumstances of the case, we find that a dispute between the parties arose regarding terms and conditions of the contract and the dispute is required to be resolved by the Commission as provided in section 40(1) of the BERC Act, 2003.
13. In view of the above, we think that it would be just and expedient if we direct the parties to resolve the dispute through commission as early as possible.
14. Taking into consideration the above, we are inclined to dispose of the Rule.
15. Accordingly, the Rule is disposed of.
16. The judgement and order dated 26-9-2013 passed by the learned District Judge, Dhaka in arbitration Misc. Case No. 220 of 2013 is hereby set aside.
17. The parties are directed to resolve their dispute through the commission under section 40(1) of the Bangladesh Energy Regulator Commission Act, 2003 immediate after receipt of this judgment and order.
18. No order as to costs.

Communicate the judgment to the court below at once.