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TMI Blog2019 (2) TMI 1939X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 9 of the Arbitration and Conciliation Act, 1996. 3. A brief fact of this case leading to this appeal is that the erstwhile Bihar State Electricity Board floated a notice inviting tender/Request for Proposal being No. 136/PR/BSEB/2010, dated 22nd October, 2012 for appointment of 'Distribution Franchisee' for supply of electricity in the town of Bhagalpur and the adjoining area. In the meantime, Bihar State Power (Holding) Company Limited and four subsidiaries including the appellant came into existence replacing the Bihar State Electricity Board in accordance with the provisions of the Electricity Act, 2003. M/s. SPML Infra Limited emerged as a 'Successful Bidder' and received letter of intent from the appellant dated 21st March, 2013 which was accepted unconditionally by M/s. SPML Infra Limited through letter dated 5th April, 2013 vide Annexure-1. According to the terms of the letter of intent, the successful bidder was allowed to promote a 100% Special Purpose Vehicle. Accordingly, M/s. SPML Infra Limited incorporated and promoted a Special Purpose Vehicle known as Bhagalpur Electricity Distribution Company Private Limited (respondent herein). The agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt herein appeared suo motu on receipt of order of status quo communicated by the respondent and on prayer for time for filing reply, the case was fixed on 01.12.2017 for filing reply. However, the impugned order dated 01.12.2017 reveals that after hearing the parties, the court directed the parties to maintain status quo in the matter of revocation/encashment of bank guarantee. 6. The appellant has challenged the validity/sustainability of the impugned order on the ground that learned 5th Additional District Judge, Patna had no jurisdiction to hear the matter after the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 came into force on receiving assent of the President of India on 31.12.2015 and after notification of the State Government dated 3rd March, 2017 in exercise of power under Section 3 of the said Act whereby the District Judge posted in the Civil Court of the Divisional Headquarter was appointed as Judge of Commercial Court for discharge of the duties of this Court in addition to his normal duty. The local jurisdiction was also decided by the same notification. 7. Section 3 of the Commercial Courts, Commercial Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division. 2. All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in any Civil Court in any district or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court: Provided that no suit or application where the final judgment has been reserved by the Court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub-section (1) or subsection (2). 3. Where any suit or application, including an application under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of Specified Value shall stand transferred to the Commercial Division or Commercial Court under sub-section (1) or subsection (2), the provisions of this Act shall apply to those procedures that were not complete at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Headquarter alone and no other District Judge or Additional District Judge. Hence, the court below had no jurisdiction to pass the impugned order. Therefore, impugned order is fit to be set aside on this ground alone. 12. Learned counsel for the appellant next contended that the learned court below has misconducted the proceeding before it and acted with material irregularity. The court below has never discussed the case of the parties nor has examined whether the petitioner before the court below had any locus to bring the matter before the court and in a casual manner without complying the order of the District Judge to send notice to the opposite party issued an order of ad interim injunction on 10.10.2017 which was confirmed by the impugned order without assigning reason that in the event of waiting for notice to the appellant herein the whole purpose of the injunction would be defeated. 13. The impugned order would not reveal that what was the submission of the appellant before the court below. The appellant had raised the issue of locus of the respondent herein to bring the case. Appellant had raised the issue of jurisdiction of the court below to pass the order but nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Agreement to be entered into by the BSEB and the successful bidder for Distribution Franchisee for undertaking distribution of electricity through the Franchisee in a specified area. Distribution Licensee - Shall mean the Bihar State Electricity Board (BSEF) or its Successor Companies. Parties - Shall mean a reference to selected Bidder and BSEB collectively and "Party" shall mean an individual reference to either one of them." 19. Annexure A/5 which is letter of intent dated 21.03.2013 issued by the appellant-company to M/s. SPML Infra Limited would show that M/s. SPML Infra Limited was communicated of its appointment as distribution franchisee for Bhagalpur area. In term, M/s. SPML Infra Limited accepted the invitation unconditionally. Clause 5 of that letter provides that within 30 days, the selected Bidder (SPML here) shall submit the Payment Security and Performance Guarantee and Cost and expenses to the Distribution Licensee and execute the Distribution Franchisee Agreement. However, the successful bidder may also incorporate a Special Purpose Vehicle. In case of Special Purpose Vehicle, a tripartite Distribution Franchisee Agreement shall be executed between the M/s. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Bidder for the entire term of the Distribution Franchisee Agreement." 22. In view of the aforesaid conditions, submission of the appellant is that M/s. SPML Infra Limited was the real party and the respondent herein was a proforma party as per the agreement for the reason that only a successful bidder could have been appointed as distribution franchisee and successful bidder was M/s. SPML Infra Limited and M/s. SPML Infra Limited had undertaken its liability under the agreement. Therefore, in absence of M/s. SPML Infra Limited, no order could have been passed or should have been passed by the court below. 23. Learned counsel for the respondent submitted that from the agreement, it would be evident that the respondent herein was second party to the tripartite agreement. Before joining the agreement the appellant in its letter of intent had allowed the successful bidder of engagement of Special Purpose Vehicle for performance of the contract. Hence, it cannot be argued that respondent had no locus to bring the matter before the Arbitrator or the Court for redressal of his grievance. 24. Learned counsel relied on the judgment of the Hon'ble Supreme Court in Gangotri Enterpris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight or authority under Clause 18 to appropriate the amounts of other pending bills of the respondent in or towards satisfaction of its claim for damages against the respondent and the learned Judge was justified in issuing an interim injunction restraining the appellant from doing so." 25. Learned counsel for the appellant has drawn attention of the Court to Section 230 of the Indian Contract Act, 1872 which says that "in the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. Presumption to the contract to contrary.- Such a contract shall be presumed to exist in the following cases:- (1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad; (2) where the agent does not disclose the name of his principal; (3) where the principal, though disclosed, cannot be sued". 26. According to learned counsel none of the aforesaid condition is fulfilled in this case in favour of the respondent, to permit, to prosecute the matter alone. 27. Learned counsel for the appellant has relied on the observations of the Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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