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2010 DIGILAW 918 (KAR)

Gulbarga Electricity Supply Company Limited v. Rayalaseema Alkalis & Allied Chemical Limited

2010-08-25

B.V.PINTO, V.G.SABHAHIT

body2010
Judgment 1. These appeals are filed by respondent No.1 in the Writ petition Nos.1730-31/2001 to open the Escrow account as per Clause 9.5 of Article 9 of the agreement within a period of 30 days from the date of receipt of a copy of this order. 2. Theessential facts of the case leading up to these appeal are as follows: The first respondent herein entered into an agreement with the appellant herein on 15/12/1997 regarding purchase of electricity from the producers of the electricity. As per Clause 9.5 of the agreement, the appellant herein was required to maintain an escrow account as a security for payment of the electricity purchase from the contracting party – the writ petitioners. Since the escrow account was not maintained, the respondent Nos.1 and 2 herein filed W.P.Nos.1730-31/2001 for a direction to the appellant herein to open an escrow account as per Clause 9.4 and 9.5 of Article 9 the agreement dated 15/12/1997. The petitions were resisted by contending that the appellant herein has promptly made payment and because of the onerous nature of maintaining the account and since the writ petitioners are seeking enforcement of the agreement, they should approach the Civil Court as disputed question of facts are involved. The learned Single Judge after hearing the learned counsel appearing for the parties by order dated 23/02/2004 held that execution of the agreement is not disputed, execution of the clause for opening the escrow account is also not disputed and following an earlier order passed by this court, wherein mandamus was issued for opening the escrow account, allowed the writ petitions and directed the appellant herein to ensure that they put into operation escrow account within a period of 30 days from the date of receipt of a copy of the order. Being aggrieved by the order of the learned Single Judge dated 23/02/2004, this appeal is filed by the first respondent in the Writ petition-Karnataka Power Transmission Corporation Limited. 3. We have heard the learned counsel appearing for the parties. 4. Learned counsel appearing for the appellant submitted that the terms of the agreement cannot be enforced in a Writ petition and the writ petitioners ought to have approached the Civil Court. The terms of the agreement regarding opening of the escrow account would require maintenance of accounts regarding the purchase and supply of electricity in various areas and is onerous. Learned counsel appearing for the appellant submitted that the terms of the agreement cannot be enforced in a Writ petition and the writ petitioners ought to have approached the Civil Court. The terms of the agreement regarding opening of the escrow account would require maintenance of accounts regarding the purchase and supply of electricity in various areas and is onerous. Wherefore, the escrow account could not be opened. Hence, the Writ Petitions ought to have been dismissed. He has also submitted that Karnataka Power Transmission Corporation Limited has now been bifurcated and agreement has been assigned in favour of Bangalore Electricity Supply Company Ltd., and Mangalore Electricity Supply Company. 5. Learned counsel appearing for the respondents argued in support of the order passed by the learned Single judge. 6. Learned counsel appearing for the appellant in reply has relied upon decision of this court in W.A No.3961/2005 dated 24.01.2006, wherein this court while considering the interim order passed by the learned Single Judge in W.P No.45077/2003 dated 23/12/2005, the papers pertaining to the Writ petition was called for and Writ petition was disposed with a direction that the operation of the termination of the Power Purchase Agreement as per the impugned letter dated 05.07.2003 will stand stayed for a period of three weeks or till the Regulatory Commission passes an order in the application for stay whichever is earlier and delegated the parties to Electricity Regulatory Commission. 7. We have given careful consideration to the contention of the counsel appearing for the parties and scrutinized the material on record. 8. The material on record would clearly show the fact that there was a concluded agreement between the appellant and respondent Nos.1 and 2 herein on 15/12/1997 as per the terms of the agreement produced at Annexure ‘P’ to the Writ Petition, is not in dispute. The contents of the said agreement are also not in dispute. It is also not in dispute that as per Clause 9.5 escrow account had to be opened for securing payment of price of electricity to be purchased from the contracting party. It is also not in dispute that the appellant has not opened the escrow account as per the said agreement. It is also not in dispute that as per Clause 9.5 escrow account had to be opened for securing payment of price of electricity to be purchased from the contracting party. It is also not in dispute that the appellant has not opened the escrow account as per the said agreement. The material on record would also show that indisputably no steps have been taken for declaring that clause 9 of the agreement with specific reference to 9.5 which requires the appellant to open escrow account, has been taken by the appellant and wherefore, so long as the agreement dated 15/12/1997 with clause 9.5 requiring opening of the escrow account is a part of the agreement, the appellant is are bound to comply with the same. No decision is required on the disputed question of the fact. In view of the above said facts of the present case and if at all the appellant felt that the said clause requiring opening of the escrow account would be onerous, wherefore could not be maintained and were aggrieved by the terms of the agreement, it is for them to get the said clause verified or modified or deleted after seeking appropriate declaration from the court or the authority and wherefore, the decision relied upon by the learned counsel appearing for the appellant pertaining to termination of the agreement, is not helpful to the appellant in the present case. The appellant cannot be permitted to take advantage of its own ground for not opening the escrow account though there is no modification or variance of the terms of the agreement which is not disputed and wherefore, the order passed by the Learned Single Judge directing the appellant-corporation to open an escrow account, is justified and does not suffer from any error or illegality as to call for interference in this intra Court appeal. Since the appellant has now been assigned the power to Bangalore Electricity Supply Company Ltd., and Mangalore Electricity Supply Company Ltd., and the agreement has been assigned in favour of the said corporation, the direction issued by the Learned Single Judge has to be complied with by the assignee of the appellant-Corporation and it is also made clear that it is open to the appellant to workout its remedy in accordance with law regarding validity of clause 9.5 of the agreement in accordance with law. Accordingly, Writ Appeals are disposed of.