GAMMON INDIA LIMITED

party as the Defendant had alleged that an amount of Rs. 340,000,000 is due to it from the joint venture. The
Company had engaged the services of Defendant as the sub-contractor for certain works in relation to
contract of civil works of Sewa Hydro Electric Project. As a result of default by the Defendant, the Company
had taken over the entire plant site and equipment. This action of the Company was challenged by the
Applicant as being illegal as the plant equipment was hypothecated to Applicant by the Defendant. The
matter is pending. The Applicant has prayed for release of the plant and machinery in custody of the
Company.
7. M/s. National Hydro-Electric Power Corporation (“Plaintiff”) has filed a petition in the High Court of Jammu
and Kashmir against the Company under section 34 of the J&K Arbitration and Conciliation Act, 1997 for
setting aside the arbitral award dated January 4, 2005. The Plaintiff had appointed the Company as the
contractor for construction of tail race tunnel at salal hydro electric project. The Company had filed a claim
before the arbitrator for recovery of certain amounts from the Plaintiff which was allowed in favour of the
Company. The matter is pending. The total amount involved is approximately Rs. 217.5 million.
8. Madhavi Dandekar and others (“Plaintiffs”) have filed a money suit against the Company in court of senior
civil judge, Palghar. The Plaintiffs have alleged that the Company has encroached their land and carried out
excavation activities, including excavation of stone, without their permission. The Plaintiffs have claimed the
price of the stone excavated from the Company. The matter is pending. The total amount involved is
approximately Rs. 195 million.
Arbitration proceedings
9. Champ Enterprises Limited (“Claimant”) has initiated two arbitration proceedings against the Company for
recovery of additional cost incurred by the Claimant in executing the contract for civil work for construction
of tail race channel and other associated works relating to the teesta canal fall hydel project and excavation
work in doyang hyro-electric project. The Claimant has filed a statement of claim before the sole arbitrator.
The matter is pending. The total amount involved is approximately Rs. 94 million.
10. The Company has initiated arbitration proceedings against the Gas Authority of India Limited
(“Respondent”), for recovery of liquidated damages and cost of additional items aggregating to Rs. 5.7
million in relation to work of design, construction, testing and commissioning of cooling tower and cooling
water treatment plant for LPG recovery project at Pata, Uttar Pradesh. The Respondent has raised a counter
claim for recovery of loss of production in thermal power project due to delay in completion of works by the
Company. The matter is pending and is in advanced stages of hearing. The total amount of counter claim
involved is Rs. 45.92 million.
11. The Company has initiated arbitration proceedings against the water resources department, government of
Bihar (“Opposite Party”), for recovery of contract amount, idle charges and loss of overheads and profits
from the Opposite Party in relation to construction of concrete cum masonary dam under burnar reservoir
project, aggregating upto Rs. 564.1 million. The Opposite Party had terminated the contract and has raised a
counter claim of liquidated damages. The arbitrator has been appointed and the matter is pending. The total
amount of counter claim involved is Rs. 74.2 million.
Notice
12. DMRC has issued a show cause notice dated July 29, 2009 to the Company alleging failure to exhibit due
professionalism, quality and adoption of ethical procedures by the Company which led to serious accidents at
work site. Such accidents have lead death of eight persons and injury to 20 persons. DMRC has proposed to
145