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Informist, Thursday, Sept. 11, 2025

 

NEW DELHI – The Delhi High Court has rejected ABB India Ltd.'s plea that sought a summary verdict to recover INR 1.93 billion from Power Finance Corp. Ltd. and its arm REC Ltd. in a dispute regarding a contract for certain transmission works in Uttar Pradesh. A summary judgement is a court decision made in favour of one party and against another without recording evidences and a full trial.

 

The high court said the case requires a detailed examination of the minutes of meeting in 2017 and related evidence, which cannot be decided in a summary proceeding. "Thus, issue(s) necessitates a careful examination of the minutes of meeting, the surrounding correspondence, and evidence, and such an inquiry, being inherently fact-intensive, is ill-suited for resolution in a summary proceeding," said the court.

 

Justice Purushaindra Kumar Kaurav remarked that in cases involving equivocal, ambiguous, and conflicting documents, experience dictates that the truth of the matter could only be brought out by resorting to explanatory oral evidence and cross-examination of the parties associated with the transaction. "For these reasons, the present application under Order XIII-A CPC (The Code Of Civil Procedure) is found to be without merit and is accordingly dismissed," said Justice Kaurav. The court placed the matter, along with the pending applications before the concerned joint registrar on Nov. 11 for further steps, in accordance with law. 

 

In 2011, ABB India had entered into various contracts with ICI-C&C Mainpuri JV for design, supply, erection, testing, and commissioning of certain transmission works in Uttar Pradesh. Subsequently, by way of novation in 2014, the contracts were assigned to Isolux Corsan and South East U.P. Power Transmission Co. Ltd., with the total contract value revised to INR 10.68 billion. According to the defendants, they were only the facilitator to the agreements between ABB India, Isolux Corsan and South East U.P. Power Transmission Co. Ltd.

 

In 2016, the petitioner had suspended the work owing to persistent defaults in payments. Thereafter, negotiations were undertaken between the plaintiff, defendants, Isolux, and South East U.P. Power Transmission to resolve the outstanding disputes and ensure completion of the project. In 2017, a settlement was recorded in the form of minutes of meeting executed by the plaintiff and defendants. Under the minutes of meeting, the plaintiff undertook its obligations in the project and agreed to secure the release of advance bank guarantees while the defendants and South East U.P. Power Transmission agreed to a payment mechanism.

 

As per the minutes, an amount of INR 56.1 million per month -- one-third of the monthly transmission charges -- was to be disbursed to the plaintiff from the project revenues routed through a trust and retention account, until the outstanding dues were liquidated. According to the petitioner, it had complied with its obligations and released advance bank guarantees of INR 378.9 million. However, the defendants, thereafter, allegedly failed to deliver the payments through the trust and retention account, resulting in outstanding dues of approximately INR 1.93 billion, said the petitioner. 

 

The defendants said that there was no privity of contract between them and the plaintiff. Their role was solely confined to being a facilitator of the agreement, wherein, as lead lenders and as the financial institutions, they enabled the discussions and oversaw the maintenance of the trust and retention account, the defendants said. By virtue of being a mere facilitator, no binding contractual obligation arises between the defendants and plaintiff, said Power Finance Corp. Ltd. and REC.

 

At 1231 IST, shares of ABB India Ltd. were up 1% at INR 5,215.20 on the National Stock Exchange, while PFC was up 0.5% at INR 400.05, and REC was up 1.1% at INR 375.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Vandana Hingorani

 

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