Page 241 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] IN RE : SIEMENS LTD. 487
apparent that the Third Contract cannot be executed independent of the Fifth
Contract. It is clear from the contract that not only the third contract and fifth
contract is interdependent but all six contracts are interrelated with each other.
All the contracts are interdependent. Further the contracts are covered by the
cross fall breach clause which means breach of one will be deemed as breach of
other. The work of Taking Over/Time for Completion of the project and handing
over to the Employer upon successful completion is to be completed within 38
months.
40. The Contractee is aware of such interdependence of the two con-
tracts. Although there is break-up of contract price for supply of goods & supply
of services and also awarded under two separate contract agreements, clauses
under both of these contracts make it abundantly clear that notwithstanding the
break-up of the Contract Price, the contract shall, at all times, be construed as a
single source responsibility and the Applicant shall remain responsible to ensure
execution of both the contracts to achieve successful completion. Thus these two
contracts for supply of goods & supply of services are naturally bundled under
the whole contract. It is expressly understood and agreed by the appellant along
with JV partners that while entering into Fifth contract of supply of services that
any default or breach by the JV partners under the ‘First Contract’ and/or ‘Se-
cond Contract and/or the ‘Fourth Contract’ and/or the ‘Sixth Contract and/or
breach by the Associate of JV-SIEMENS-1 under the ‘Third Contract shall auto-
matically be deemed as a default or breach of this ‘Fifth Contract also and vice
versa, and any such default or breach or occurrence giving us a right to terminate
the First Contract’ and/or ‘Second Contract and/or ‘Third Contract and/or
‘Fourth Contract and/or the ‘Sixth Contract’, either in full or in part, and/or re-
cover damages under those contract(s), shall give us an absolute right to termi-
nate this Contract at your risk, cost and responsibility, either in full or in part
and/or recover damages under this Fifth Contract as well. Thus from the terms of
the contract it is crystal clear that the transportation services provided by appellant
which are the part of Fifth service contract is not only integrally connected with Third
contract of supply of goods but it is also connected with the other contracts (First, Se-
cond, Fourth and Sixth contracts) which are performed by the JV partners other than the
appellant.
41. The ‘cross fall breach clause’, settles unambiguously that supply of
goods, their transportation to the contractee’s site delivery and related services of
insurance, unloading and handling at site, installation including civil work, test-
ing etc. are not separate contracts, but only form parts of an indivisible composite
supply of goods and services with single source responsibility.
42. The two contracts for supply of the goods and allied services are
not separately enforceable. The recipient has not contracted for ex-factory supply
of materials, but for the composite supply. It is important that these two con-
tracts if were separate and independent then inclusion of clause 2.1 as repro-
duced above was in fact not necessary. But by including the clause 2.1 the PGCIL
has created interdependency between the two contracts so as to ensure the quali-
ty of the material and effective performance in execution of services related to
contract.
It is seen from the agreement that though the parties have entered into
distinct and separate contracts, one for the transfer of material and other for sup-
ply of services, this is in effect a single instrument embodying the intention of the
parties. In turnkey projects more particularly of the kind involved in this im-
GST LAW TIMES  21st May 2020  241