CMA No. 49 of 2017 and CMA (SR) No. 3807 of 2017. Case: IndBharath Power (Madras) Limited Vs ICOMM Tele Ltd. and Ors.. High Court of Andhra Pradesh (India)
| Case Number | CMA No. 49 of 2017 and CMA (SR) No. 3807 of 2017 |
| Counsel | For Appellant: P. Vikram, Adv. and For Respondents: T. Bala Mohan Reddy, Adv. |
| Judges | Suresh Kait and U. Durga Prasad Rao, JJ. |
| Issue | Arbitration and Conciliation Act, 1996 - Sections 2(1)(e), 20, 34, 9; Code of Civil Procedure, 1908 (CPC) - Order XVIII Rule 5; Order XXXIX Rule 3; Indian Partnership Act, 1932 - Section 69(3) |
| Judgement Date | February 07, 2017 |
| Court | High Court of Andhra Pradesh (India) |
Judgment:
U. Durga Prasad Rao, J.
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CMA No. 49 of 2017 is filed by the first respondent in Arbitration O.P. No. 35 of 2017 whereas the CMA (SR) No. 3807 of 2017 is filed by the petitioner in the said O.P.
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Heard respective counsel and with their consent both the CRPs are disposed of at the admission stage.
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Hereinafter, the parties are referred as they were arrayed in the Arbitration O.P. No. 35 of 2017.
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The appellant/petitioner filed Arbitration O.P. No. 35 of 2017 on the file of XI Additional Chief Judge, City Civil Court, Hyderabad under Section 9 of Arbitration and Conciliation Act, 1996 (for short "the Act") against respondents 1 and 2 with the following averments:
a) The petitioner is one of the India's largest product designing, engineering development and turnkey solution providers for Power, Telecom, Defence, Solar and Infrastructure Sectors and it was a company incorporated in the year 1989. The 1st respondent is a limited company and the 2nd respondent is the banker of the petitioner company.
b) The further case of petitioner is that the 1st respondent invited sealed bids from the eligible bidders for Construction of 400KV D/C (Quad) Moose Transmission line from switchyard of IBPML, Manapad, Tuticorin (Tamil Nadu) to PGCIL 765/400 KV pooling station at Kelaeral, Yattayapuram on Turnkey basis and the petitioner stood as the successful bidder and placed separate Purchase Orders for Supplies and Services for a total value of Rs. 104.25 Crores (Supply: Rs. 57.12 Crores, Services: Rs. 47.13 Crores). The duration of the contract was 21 months from Contract effective date. The commencement date was 20.05.2015 and completion date was 20.02.2017.
c) The petitioner submitted the following Bank Guarantees through 2nd respondent bank as per terms of Purchase Orders:
Supply:
• Performance BG No. 0124151GADP0001, dt. 4.6.2015 of Rs. 5,22,31,033/- of Dena Bank
• Advance BG: BG No. 297INGL151540002, dt. 3.6.2015 of Rs. 8,25,60,458/- of Laxmi Vilas Bank.
Services:
• Performance BG: BG No. 297INGL151540001, dt. 3.6.2015 for Rs. 4,71,33,536/- of Laxmi Vilas Bank.
• Advance BG: BG No. 297INGL151540003, dt. 3.6.2015 for Rs. 4,79,50,500/- of Laxmi Vilas Bank
While-so, the petitioner's case is that he has undertaken the project and there was no deficiency in the quality of the work undertaken by it nor there was any delay in execution but the 1st respondent though could not find any fault with the petitioner, started threatening to invoke the bank guarantees under false, illegal, arbitrary and fraudulent measures contrary to the terms of the general conditions of the contract entered into by the parties. The 1st respondent may take action adverse to the interest of the petitioner inspite of the valid and justified prayers of the petitioner. The petitioner intended to invoke arbitration proceedings but in the meanwhile, 1st respondent was eager to invoke the bank guarantees. Hence, the petition under Sec. 9 of the Act with the prayer to grant injunction restraining the 1st respondent from invoking the petition schedule mentioned bank guarantees issued by the 2nd respondent and also a corresponding order restraining the 2nd respondent from honouring the bank guarantees.
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The learned XI Additional Chief Judge, City Civil Court, Hyderabad, in her order dated 04.01.2017 granted ad-interim ex parte injunction restraining the 1st respondent from invoking or encashing the schedule mentioned bank guarantees issued by the 2nd respondent-bank and further restrained the 2nd respondent-bank from honouring/encashing the schedule bank guarantees till 23.01.2017. The Court also ordered notice to the respondents through Court and RPAD by 23.01.2017.
Aggrieved by the aforesaid ex parte order, the 1st respondent filed CMA No. 49 of 2017.
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While-so, the 1st respondent filed a memo dated 01.02.2017 before the Court below for extension of interim injunction earlier granted in his favour. The trial Court while dismissing the memo passed the following order:
Order dt. 01.02.2017:
Heard both parties. The Respondents Counsel submitted that the petitioner not complied Order XXXIX Rule 3. They submitted 2007 SCC 695. The Hon'ble Apex Court clearly directed in 15th para about the compliance of the Rule 3. The Respondent also contended that no jurisdiction. Hence by following the citation, the Interim Order is not extended. Hence this memo is rejected.
Aggrieved by the aforesaid order, the petitioner filed CMA (SR) No. 3807 of 2017.
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