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2021 (3) TMI 1424 - DELHI HIGH COURTEnforcement of Arbitral Award - exchange rate for discharge of the amounts awarded in foreign currency - TDS on the awarded amounts - entitlement of charges for extending the Bank Guarantees. Whether there is any binding agreement between the parties whereby they have agreed that the amounts awarded in foreign currency would be computed at the exchange rate as prevalent on 15.09.2017? If not, the exchange rate to be applied for discharge of the amounts awarded in foreign currency? - HELD THAT:- In the present case, the exchange rate as applicable on the date when the NTPC's Special Leave Petition was dismissed by the Supreme Court-that is, 22.09.2020-will be the relevant date for ascertaining the exchange rate applicable for determining the INR equivalent to the amounts awarded in foreign currency. However, according to Voith, as part payment had been received on 06.11.2018, the exchange rate applicable on that date may be considered for determining the awarded amounts paid by NTPC. Since the value of foreign currencies as on 22.09.2020 was higher than on 06.11.2018, this Court considers it apposite to bind Voith to its concession in this regard. The exchange rate as applicable on 06.09.2018 would be considered relevant for the amounts released on 06.11.2018 being the part payment released by NTPC in terms of the Niti Aayog Circular and the exchange rate as applicable on 22.09.2020 would be considered for discharging the remaining amount awarded in foreign currency. Whether it was open for NTPC to deduct TDS on the awarded amounts and whether the deduction of the said amount and deposit of the same with the Income Tax Authorities constitutes a discharge of the amounts awarded to the aforesaid extent? - HELD THAT:- It is relevant to note that NTPC had deducted TDS in two tranches. It had deducted ₹ 2,58,55,348/- (₹ 1,32,10,961/- on the principal and ₹ 1,26,44,387/- on the interest) and had deposited the same on 07.12.2018. This amount was deducted at the time of remission of money in terms of the Niti Aayog Circular. The second tranche of ₹ 1,34,488/- was deducted by NTPC while depositing the balance amount. Out of the aforesaid amount ₹ 1,10,84,032/- was deducted on account of the principal amount and ₹ 23,50,456/- on account of interest. The said TDS was deposited on 07.01.2020 - this Court considers it apposite to direct that NTPC be credited to the extent of TDS amounting to ₹ 1,61,72,269/- (₹ 1,06,42,438/- plus ₹ 55,29,831/-) against TDS deducted and deposited by NTPC. The said amount would be considered as discharged by NTPC on the dates when these amounts were deposited to the credit of Decree Holder No. 1. Insofar as the remaining amount of TDS is concerned, NTPC is entitled to apply to the Income Tax Authorities for refund of the same. It is further directed that the Income Tax Authorities shall process NTPC's request for refunding of the TDS incorrectly deposited on the strength of this order. Whether Voith is entitled to charges for extending the Bank Guarantees, as claimed? - HELD THAT:- This Court does not consider it apposite to entertain Voith's prayer for such charges. It is also relevant to mention that Voith had voluntarily furnished Bank Guarantees for release of the part of the awarded amount in terms of the Niti Aayog Circular. The Niti Aayog 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. 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. This Court considers it necessary to clarify that the calculations for discharge of the amount would be in accordance with the tabular statement in the Arbitral Award setting out the amounts awarded in different currencies. It is seen that the Arbitral Tribunal had deducted the advances and had computed the total amount payable after such deduction. Thus, the total amount as awarded after deduction of the advances would necessarily have to be considered as the awarded amount and the amounts paid by NTPC would be adjusted against the awarded amounts and the interest thereon. The amounts paid by NTPC are required to be first appropriated towards interest and the remaining against principal - NTPC shall recompute the shortfall payable by NTPC and shall pay the shortfall as computed. List on 26.03.2021 for reconciliation of the amount and for consideration of any further issues that arises in connection with the aforesaid calculations.
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