Superbuild India Private Limited, Hyderabad v. Niraj Cement Structural Limited, Mumbai
2013-11-29
VILAS V.AFZULPURKAR
body2013
DigiLaw.ai
JUDGMENT This is an appeal arising out of an injunction petition filed by the plaintiff in O.S.No.367 of 2011 pending before the III Additional Chief Judge, City Civil Court, Hyderabad. 2. The suit was filed seeking relief of injunction against the defendants 1 and 2 from invoking or making any claim against the schedule mentioned bank guarantees aggregating to an amount of Rs.18,91,09,097/- and consequently, restraining the third defendant from honouring or making payment under the aforesaid bank guarantees to defendants 1 and 2. In the said suit, an application, being I.A.No.1596 of 2011 was also filed seeking similar relief. By the impugned order of the trial Court dated 19.06.2012, the said I.A.No.1596 of 2011 was dismissed, on merits, after hearing both sides. Aggrieved thereby, the present appeal is preferred by the plaintiff. 3. Respondents 1 to 3 in the aforesaid I.A.No.1596 of 2011 are defendants 1 to 3 in the suit and are also similarly arrayed in this appeal. For the sake of convenience, they are referred to herein with reference to their array in the suit. 4. The case of the plaintiff, in brief, is as follows: (a) It is stated that the plaintiff is a company engaged in the business of infrastructure, construction and undertakes major projects throughout India such as laying of roads and bridges, national highways, engineering procurement and contracts including Build, Operate and Transfer (BOT) projects etc. It is alleged that in March 2010 the second defendant proposed work for providing two lanes of concrete pavement and widening of culvert including construction of new slab culvert from KM 107.00 to KM 184.80 i.e. a stretch of 77.80 KM on NH-221 i.e. from Jagdalpur to Konta Road, Chhattisgarh State (hereinafter referred to as work-I). The first defendant emerged as the successful bidder for a contract price of Rs.136,84,48,390/-. The first defendant, therefore, was awarded the said work with a stipulation under the contract to complete the work within 30 months. An agreement, accordingly, was entered into by the first defendant and the second defendant – Government of Chhattisgarh. (b) It is alleged that the first defendant was on the look out for sub-contracting the said work on competitive price on back-to-back basis. The plaintiff and the first defendant, accordingly, finalized the sub-contract and the first defendant placed a letter of intent dated 17.05.2010 on the plaintiff.
(b) It is alleged that the first defendant was on the look out for sub-contracting the said work on competitive price on back-to-back basis. The plaintiff and the first defendant, accordingly, finalized the sub-contract and the first defendant placed a letter of intent dated 17.05.2010 on the plaintiff. As per the terms of the said letter of intent, the plaintiff had to arrange the performance bank guarantees for Rs.6,84,22,420/- being 5% of the value of the work and the said bank guarantees were to be issued in favour of the second defendant. Accordingly, the plaintiff is alleged to have arranged the bank guarantees through the third defendant bank for the said entire amount of Rs.6,84,22,420/-. Plaintiff also alleged that it had also provided bank guarantees for drawing mobilization advance of Rs.9.5 crores on behalf of the first defendant in favour of the second defendant. Consequently, the first defendant is said to have executed the general power of attorney in favour of the nominees of the plaintiff. (c) The plaintiff further alleged that apart from the aforesaid work another work regarding widening of two lanes from Chintalnar to Maigudam from KM 0.00 to KM 65.00 under Left Wing Elimination (LWE) project (hereinafter referred to as Work-II) was also allotted to the first defendant for which also the sub-contract was awarded by the first defendant to the plaintiff. In terms of the said work-II also the plaintiff was required to furnish performance bank guarantees to the second defendant for Rs.3,56,86,677/-. The plaintiff and the first defendant agreed to abide by the sub-contract agreement relating to work-I, referred to above, so far as execution of work-II also. It is also alleged that the first defendant furnished the bank guarantees procured by plaintiff to the second defendant with respect to both the said works. The plaintiff alleged that he commenced work-I on site from 01.10.2010 by investing in men and machinery and while the said work was being proceed with in full force, the first defendant, allegedly, committed breach of terms of sub-contract agreement by appropriating the entire mobilization advance of Rs.9.5 crores given by the second defendant to the first defendant.
The plaintiff alleged that he commenced work-I on site from 01.10.2010 by investing in men and machinery and while the said work was being proceed with in full force, the first defendant, allegedly, committed breach of terms of sub-contract agreement by appropriating the entire mobilization advance of Rs.9.5 crores given by the second defendant to the first defendant. It is stated that as per the sub-contract agreement, the first defendant ought to have paid the said mobilization advance to the plaintiff and after long correspondence between the parties and after delay of more than 78 days, the first defendant paid to the plaintiff 60% of the mobilization advance i.e. Rs.5.78 crores. Plaintiff, therefore, states that on account of delay, the progress in the work was slowed down. So far as the work-II is concerned, plaintiff states that in spite of numerous correspondence, the first defendant did not respond to the plaintiff and did not sign the sub-contract. Hence, ultimately, the plaintiff was not interested in the said work and demanded the first defendant for return of the performance bank guarantees furnished by it earlier for the work-II for Rs.3,56,86,677/-. (d) The plaintiff alleged that due to continuous disturbance and bandhs called by the Extremists and Maoists in the work place, the progress of the work was considerably slowed down, which was within the knowledge of the first and second defendants and the problem at site was further compounded by heavy rains during November – December 2010. It is also alleged that as per the sub-contract agreement, the first defendant and the plaintiff was to open an ESCROW account wherein the receivables from the running bills were to be deposited. However, the first defendant is said to have committed breach of that obligation and also committed default in not providing the plaintiff with requisite drawings, survey data, cross sections and structure designs, which also resulted in halting the work for no fault of the plaintiff. The plaintiff, therefore, alleged fraud, misrepresentation and deceit to the acts and omissions of the first defendant, as, briefly, stated above. It was also stated that the first defendant misrepresented that the works are World Bank funded but they were only State Government work under LWE project.
The plaintiff, therefore, alleged fraud, misrepresentation and deceit to the acts and omissions of the first defendant, as, briefly, stated above. It was also stated that the first defendant misrepresented that the works are World Bank funded but they were only State Government work under LWE project. The plaintiff also alleged that it subsequently came to know that the first defendant allotted a work to the fourth defendant as a sub-contractor and thereby, serious fraud on plaintiff is pleaded. The plaintiff, therefore, alleged that including huge bank guarantees furnished by it, it has incurred huge expenditure of more than Rs.50 crores and has mobilized men and machinery at huge cost. The plaintiff also alleged that the first defendant acted in collusion and connivance with the second defendant and at this stage, the plaintiff came to know that the second defendant has invoked bank guarantees worth Rs.1 crore in respect of work-I under letter of invocation of bank guarantee dated 01.06.2011 without notice to the plaintiff. Hence, the plaintiff filed the present suit for reliefs, as stated above. (e) An injunction application, being I.A.No.1596 of 2011 was filed by the plaintiff on the self-same pleadings to which the first defendant had filed a counter stating that it had become the successful contractor for bid price and work was allotted to it by the second defendant vide letter dated 24.06.2010. The first defendant, however, totally denied the pleadings of the plaintiff and the relief sought for as concocted and speculative based on fabricated facts and figures. It was pointed out that Chattisgarh Government is not made a party and the suit is bad for non-joinder. (f) The second defendant filed a detailed counter to the injunction application accepting that it invited tenders and the first defendant was awarded the contract for work-I and that bank guarantees were furnished by the first defendant in terms of the contract and in addition, the first defendant was also paid mobilization advance of Rs.9.5 crores against the bank guarantees covering mobilization advance. The second defendant, however, states that neither the first defendant has sought nor the second defendant has granted any permission to sub-let or sub-contract work-I in favour of any person including the plaintiff. It was, therefore, stated by the second defendant that it had no knowledge of the plaintiff, being the sub-contractor, nor the plaintiff was authorized by the second defendant.
It was, therefore, stated by the second defendant that it had no knowledge of the plaintiff, being the sub-contractor, nor the plaintiff was authorized by the second defendant. It is also stated that after invocation of bank guarantee of Rs.1 crore, under the letter of the third defendant bank dated 20.06.2011, for the first time, the second defendant was informed that bank guarantees, furnished by the first defendant, were, in fact, third party’s bank guarantees. The second defendant, therefore, states that it had never given any approval to the first defendant for acceptance of third party bank guarantees nor authorized the first defendant to subcontract or sub-let the work. The second defendant also denied having issued any letter to the sub-contractor and any such document produced by the plaintiff is forged and fabricated. It is, further, stated that the plaintiff filed a writ petition on 02.06.2011 before the High Court at Bilaspur where notices were issued on the interim and main relief but suppressing the same, the plaintiff filed the present suit on 14.06.2011 and obtained ex parte order of status quo. The second defendant sought vacation of the said order of status quo by placing reliance upon a decision of the Supreme Court in HIMADRI CHEMICALS INDUSTRIES LTD. v. COAL TAR REFINING CO. [ (2007) 8 SCC 110 ]. (g) The third defendant bank also filed a counter giving the list of bank guarantees furnished by it and it accepted that the plaintiff is its customer, who has availed the credit limits for arrangement of bank guarantees in the name of the first defendant in favour of the second defendant. 5. On the basis of the aforesaid affidavit and counter affidavits, the trial Court considered the injunction application and after examining the terms of the sub-contract agreement, Ex.P6, marked in the said IA, the trial Court found that the plaintiff has furnished the bank guarantees on behalf of the main contractor. On examining the correspondence marked in the IA, as Exs.P9 to P86 and the correspondence produced by the second defendant, marked as Exs.R1 to R38, came to the conclusion that the dispute primarily arises between the plaintiff and the first defendant and the second defendant is not any way concerned with the said dispute. The trial Court, thereafter, followed the ratio of the decision of the Supreme Court in HIMADRI CHEMICALS INDUSTRIES LTD. v. COAL TAR REFINING CO.
The trial Court, thereafter, followed the ratio of the decision of the Supreme Court in HIMADRI CHEMICALS INDUSTRIES LTD. v. COAL TAR REFINING CO. [ AIR 2007 SC 2798 = (2007) 8 SCC 110 ] and came to the conclusion that the plaintiff has failed to establish any fraud vis-à-is the second defendant. The trial Court found that there is no privity of contract between the plaintiff and the second defendant and consequently, held that the plaintiff has failed to establish prima facie case and balance of convenience in it’s favour. Thus, as there was no fraud or misrepresentation on the part of the second defendant, as the second defendant had neither consented to nor agreed for sub-contract in favour of the plaintiff, the plaintiff was held not entitled to any relief and his remedy is only to proceed against the first defendant. Consequently, the application for injunction moved by the plaintiff was dismissed. It is that order, which is subject matter of challenge in this appeal. 6. Mr. S. Ravi, learned senior counsel for the appellant/plaintiff, contended that the trial Court has failed to appreciate the connivance between the first defendant and second defendant in invocation of bank guarantees. Learned senior counsel placed strong reliance on Ex.A6 letter dated 02.07.2010 under which the first defendant placed letter of intent on the plaintiff as a sub-contractor. Learned senior counsel also relied upon and pointed out that having awarded sub-contract to the plaintiff, the first defendant also executed agreement awarding work in favour of the fourth defendant on the same day i.e. 02.07.2010, which also establishes fraud played on the plaintiff. Similarly, the fifth respondent is another sub-contractor, who was awarded sub-contract on 15.02.2011. Learned senior counsel also pointed out that the plaintiff has already filed a criminal complaint, which is under investigation by the police against the first defendant and the Government of India has already black listed the first defendant and all the said documents are already produced and marked before the trial Court. 7. According to the learned senior counsel, therefore, fraud is evident from the fact that there is a deliberate misrepresentation to the plaintiff that the project is a World Bank aided project whereas much later it turned out that it is LWE project.
7. According to the learned senior counsel, therefore, fraud is evident from the fact that there is a deliberate misrepresentation to the plaintiff that the project is a World Bank aided project whereas much later it turned out that it is LWE project. Learned senior counsel, therefore, submits that the format prescribed by the second defendant was adopted for furnishing bank guarantees, which also represented that it is a World Bank funded project. Learned senior counsel also placed reliance upon the rejoinder filed by the plaintiff before the trial Court wherein the plaintiff had stated that the second defendant was aware of the plaintiff, being awarded sub-contract and that it is the plaintiff, who has furnished all the bank guarantees. Learned senior counsel also pointed out the averment that the representatives of the second defendant visited Hyderabad and verified with the banker, third defendant, and on being satisfied of the credentials of the plaintiff and the bank guarantees, have accepted the same. Learned senior counsel, therefore, submits that it is, therefore, not open either for the first defendant or the second defendant to disown the plaintiff, as if there is no privity of contract and the aforesaid acts of the first and the second defendant, clearly established fraud, misrepresentation and connivance, which has resulted in the plaintiff parting with huge amount in the shape of bank guarantees, which are now sought to be invoked. 8. Learned senior counsel placed strong reliance upon the decisions of the Supreme Court in HIMADRI CHEMICALS INDUSTRIES LTD. v. COAL TAR REFINING CO. (2007) 8 SCC 110 ); NATIONAL THERMAL POWER CORPORAITON LTD. v. FLOWMORE PVT. LTD (1995) 4 SCC 515 ) and U.P. STATE SUGAR CORPORATION v. SUMAC INTERNATIONAL LTD. (1997) 1 SCC 568 ) in support of his contention that the trial Court has failed to appreciate that the plaintiff had established fraud, misrepresentation and connivance, between the first and the second defendant and consequently, it ought to have restrained the invocation of bank guarantees. 9. Learned counsel for the first respondent/first defendant while denying all the adverse allegations pointed out that the appellant was fully aware that it was not a World Bank project and in fact, it’s original letter of intent placed on the plaintiff was forged.
9. Learned counsel for the first respondent/first defendant while denying all the adverse allegations pointed out that the appellant was fully aware that it was not a World Bank project and in fact, it’s original letter of intent placed on the plaintiff was forged. Learned counsel relies upon part of the plaint allegations to show that the plaintiff himself is a recipient of mobilization advance to the extent of grant of Rs.5.78 crores. Learned counsel also denied that the first defendant was black listed, as alleged. 10. Learned counsel for the second respondent, on the other hand, submits that the work was allotted on competitive tender basis to the first defendant, who has furnished bank guarantees. Learned counsel has also submitted details of bank guarantees covering guarantees against mobilization advance and the guarantees submitted towards performance guarantees. The said bank guarantees also form part of the plaint schedule where the performance guarantees are listed under schedule I. The guarantees covering the mobilization advance are listed in schedule Ii and IV of the plaintiff and there is no controversy with regard to the same. It is also not in dispute that from out of the bank guarantees under schedule II of the plaint, two bank guarantees of Rs.50 lakhs each aggregating to Rs.1 crore were already invoked and encashed by the second defendant. Learned counsel, therefore, submitted that the plaint allegations did not contain any specific allegation of fraud or misrepresentation as against the second defendant and almost all the allegations are directed against the first defendant. 11. Learned counsel pointed out that the second defendant never agreed to nor permitted the first defendant to sub-contract the work either to plaintiff or defendants 4 and 5. In terms of the contract between defendants 1 and 2, the successful tenderer i.e. the first defendant was to furnish the performance bank guarantees as well as the bank guarantees against mobilization advance. Admittedly, the said guarantees were furnished in the name of the first defendant in favour of the second defendant by the third defendant bank without ever disclosing to the second defendant that the said guarantees are third party bank guarantees.
Admittedly, the said guarantees were furnished in the name of the first defendant in favour of the second defendant by the third defendant bank without ever disclosing to the second defendant that the said guarantees are third party bank guarantees. While substantiating the stand of the second defendant in its written statement with reference to the correspondence referred to above, the learned counsel placed strong reliance upon the said correspondence to substantiate that the second defendant only dealt with the first defendant and had no option but to invoke the bank guarantee on finding that the terms and conditions of the contract were not being met by the first defendant, though mobilization advance of Rs.9.5 crores was paid to the first defendant. Learned counsel placed strong reliance upon the letter of invocation to the extent of Rs.1 crore of the bank guarantees dated 01.06.2011 and that 20 days after encashment, under the letter of the bank dated 20.06.2011, for the first time, the bank voluntarily informed the second defendant that the bank guarantees are third party bank guarantees to which the second defendant protested immediately. 12. Learned counsel for the second defendant strongly refuted the letter produced by the plaintiff, Ex.P20, dated 04.08.2010 wherein the plaintiff is said to have furnished the bank guarantees, which were acknowledged by the Executive Engineer of the second defendant. The authenticity of such endorsement is very strongly disputed by the second defendant. It is, further, pointed out that the contract has since been terminated and the bank guarantees were rightly invoked and the first defendant had never questioned the said termination. Learned counsel, therefore, submits that in the absence of any specific pleadings to substantiate fraud or misrepresentation against the second defendant, the plaintiff is not entitled to any relief. Learned counsel also submitted that in the absence of any prayer for declaration mere injunctive relief sought for in the plaint is not sustainable. Learned counsel placed reliance upon the decision of the Supreme Court in RELIANCE SALT LTD. v. COSMOS ENTERPRISES AND ANOTHER (2006) 13 SCC 599) and STATE TRADING CORPORATION OF INDIA LTD. v. JAINSONS CLOTHING CORPORATION (1994) 6 SCC 597 ) in support of his contentions and submits that no interference in this appeal is warranted. 13.
Learned counsel placed reliance upon the decision of the Supreme Court in RELIANCE SALT LTD. v. COSMOS ENTERPRISES AND ANOTHER (2006) 13 SCC 599) and STATE TRADING CORPORATION OF INDIA LTD. v. JAINSONS CLOTHING CORPORATION (1994) 6 SCC 597 ) in support of his contentions and submits that no interference in this appeal is warranted. 13. In the light of these rival contentions, in order to find prima facie case and balance of convenience, it is necessary to first ascertain as to whether the appellant/plaintiff has been able to establish any fraud, misrepresentation or connivance vis-àis the second defendant. Therefore, the following question arises for consideration: “Whether the plaintiff has, prima facie, established that defendants 1 and 2 have played any fraud or exercised misrepresentation against the plaintiff in procuring the bank guarantees from the plaintiff and whether invocation of the bank guarantees is required to be restrained?” 14. A look at the plaint allegations point out that the primary allegations of misrepresentation and fraud are against the first defendant. So far as the second defendant is concerned, it cannot be disputed that the State cannot be said to have practiced fraud on the plaintiff, particularly, when the second defendant asserts that it had never agreed to nor consented for sub-letting or sub-contracting of the work awarded to the first defendant. Plaintiff has not been able to produce any documents, prima facie, to substantiate that a sub-contract, in his favour, was authorized and approved by the second defendant. A sheet anchor of the case of the plaintiff is Ex.P20 covering letter under which the plaintiff, allegedly, furnished the bank guarantees towards mobilization advance covering Rs.3.5 crores. A rubber stamp and signature of the Executive Engineer of the second defendant on the said letter is strongly disputed by the second defendant on the ground that the said signature and endorsement, allegedly, of the Executive Engineer is forged and fabricated. In support of that, reliance is placed upon the letters of the first defendant dated 15.07.2010, 04.08.2010 and 01.09.2010 under which the bank guarantees toward performance bank guarantee as well as mobilization advance were furnished by the first defendant to the Superintending Engineer, National Highways (Circle) of the second defendant. It is pointed out that the letter of the first defendant dated 04.08.2010 refers to mobilization advance of Rs.3.5 crores, which has the same reference as Ex.P20, plaintiff’s letter dated 04.08.2010.
It is pointed out that the letter of the first defendant dated 04.08.2010 refers to mobilization advance of Rs.3.5 crores, which has the same reference as Ex.P20, plaintiff’s letter dated 04.08.2010. The trial Court has marked this correspondence on behalf of the second defendant, as Exs.R8 and R9 but other details of the said exhibits are not mentioned in the appendix. It is evident from the aforesaid documents that all the bank guarantees are furnished by the first defendant in favour of the second defendant. 15. Further, even the sub-contract agreement, Ex.P6, dated 02.07.2010, relied upon by the plaintiff, is executed by and between the plaintiff and the first defendant. In terms of the said sub-contract agreement also, though the second defendant is not a party thereto, under clause 12, the performance bank guarantees are required to be furnished by the sub-contractor on behalf of the main contractor. I am, therefore, unable to find even prima facie any documentary evidence showing that there was any privity of contract between the plaintiff and the second defendant, particularly, in view of the specific stand of the second defendant that it had never consented to or authorized the sub-letting or sub-contracting of the contract awarded to the first defendant. 16. Further, under separate letters of the third defendant bank dated 09.08.2010 and 20.09.2010, the third defendant bank had confirmed to the second defendant of having furnished all the bank guarantees with the expiry date mentioned in the last column of the table with respect to each bank guarantee. No where in the said letters of bank any reference to third party bank guarantees is mentioned. Further, the mobilization advance was, admittedly, paid to the first defendant under RTGS and demand drafts, which is evidenced by documents produced by the defendants and the entire exhibited correspondence relating to the execution of the work is between the second defendant and the first defendant. It is evident that after the bank disclosed that the bank guarantees are third party bank guarantees, the second defendant filed a complaint on 08.07.2011 with the banking Ombudsman, Reserve Bank of India against the third defendant bank, which is said to be pending. 17.
It is evident that after the bank disclosed that the bank guarantees are third party bank guarantees, the second defendant filed a complaint on 08.07.2011 with the banking Ombudsman, Reserve Bank of India against the third defendant bank, which is said to be pending. 17. All this, therefore, clearly shows that there is no privity of contract between the second defendant and the plaintiff and consequently, the plaintiff has failed to establish any fraud and misrepresentation or connivance as against the second defendant in invocation of the bank guarantees. 18. At this stage, it is also necessary to notice the legal position as well. The decision of the Supreme Court in HIMADRI CHEMICALS INDUSTRIES LTD’s case (1 supra) was already relied upon by the trial Court. The Supreme Court in NATIONAL THERMAL POWER CORPORAITON LTD.’s case (2 supra) has held that even if there is an inter se dispute between the party at whose instance the guarantee is issued and the beneficiary, it is no ground for preventing the beneficiary from invoking the bank guarantee. In the present case, there is no dispute so far as the plaintiff and the second defendant is concerned, as there is no privity of contract between them. Hence, the second defendant, which is the beneficiary, cannot be restrained from invoking the bank guarantees furnished by the first defendant in favour of the second defendant, at the instance of the plaintiff. In the decision in U.P. STATE SUGAR CORPORATION’s case (3 supra) it was clearly held by the Supreme Court in para 13 as follows: “13. The same question came up for consideration before this Court in Svenska Handelsbanken V. Indian Charge Chrome [ (1994) 1 SCC 502 ]. This Court once again reiterated that a confirmed bank guarantee/irrevocable letter of credit cannot be interfered with unless there is established fraud or irretrievable injustice involved in the case. Irretrievable injury has ot be one of the nature noticed in the case of Itek Corpn. v. First National Bank of Boston [566 Fed Supp 1210]. On the question of fraud this Court confirmed the observations made in the case of U.P. Coop. Federation Ltd [(1998) 1 SCC 174] and stated that the fraud must be that of the beneficiary, not the fraud of anyone else. (emphasis supplied) Thus, even if there is fraud, it must be of egregious nature so as to vitiate the entire transaction.
Federation Ltd [(1998) 1 SCC 174] and stated that the fraud must be that of the beneficiary, not the fraud of anyone else. (emphasis supplied) Thus, even if there is fraud, it must be of egregious nature so as to vitiate the entire transaction. It is also necessary that the fraud must be that of the beneficiary and not the fraud of anyone else. In the present case, the beneficiary is the second defendant and as already held above, there is neither any specific allegation nor any material to establish fraud even prima facie so far as the second defendant is concerned. 19. In RELIANCE SALT LTD.’s case (4 supra) it was held that subsequent breach of contract on the part of a party to the contract will not amount to fraud, as the fraud, which vitiates the contract must have a nexus with the acts of the party prior to entering into the contract. Obviously, on the facts of the present case, there are no allegations of any fraud prior to entering into the contract by the plaintiff with the first defendant much less so far as the second defendant is concerned. In STATE TRADING CORPORATION OF INDIA LTD.’s case (5 supra) it was held that in order to seek a temporary injunction on the ground of fraud or irretrievable injury, the plaintiff must make out a strong prima facie case or special equities in his favour. 20. As has been held above, since there is no material to hold privity of contract between the plaintiff and the second defendant, the plaintiff cannot seek to restrain the second defendant from invoking the bank guarantees. The order of the trial Court, therefore, requires no interference but for the reasons mentions above, insofar as the invocation of the bank guarantees relating to work-I is concerned. Question, as framed above, is answered accordingly so far as bank guarantees given for work-I is concerned. 21. So far as work-II is concerned, it is necessary to point out that the plaintiff alleges to have been given sub-contract relating to the said work-II also in his favour, which is relating to widening of two lanes from Chintalnar to Maigudam road from KM 0.00 to KM 65.00 under LWE project.
21. So far as work-II is concerned, it is necessary to point out that the plaintiff alleges to have been given sub-contract relating to the said work-II also in his favour, which is relating to widening of two lanes from Chintalnar to Maigudam road from KM 0.00 to KM 65.00 under LWE project. As per the plaint allegations, the performance bank guarantees, as mentioned in schedule III of the plaint covering Rs.3,56,86,677/-, are said to have been furnished by the plaintiff on behalf of the first defendant in favour of the second defendant. 22. During the hearing, learned counsel for the second defendant has categorically stated that the bank guarantees, which are subject matter of work-I, which was awarded to the first defendant by the second defendant, are as shown under schedule I, III and IV of the plaint. It is categorically stated by the learned counsel for the second defendant that the second defendant is no way concerned with work-II for which the performance bank guarantees, as noted under schedule III, were said to have been furnished by the plaintiff. It is also stated by the learned counsel for the second defendant that no such work-II was allotted since the second defendant is not concerned with the said work. The performance bank guarantee, allegedly, furnished by the plaintiff, as shown under schedule III of the plaint, therefore, obviously, cannot be invoked by the second defendant. It is also not the case pleaded by the second defendant either in the written statement or in the counter affidavit that they are any way concerned with the said work-II and the schedule III bank guarantees. In view of that, therefore, since the second defendant is no way concerned with work-II nor with the bank guarantees under schedule III of the plaint, the invocation and encashment of those bank guarantees is clearly not warranted. The authority, which has, allegedly, allotted the said work-II to the first defendant, which has since been sub-contracted, allegedly, to the plaintiff, is not impleaded in the suit nor any other details of the said work, are on record. Hence, in my view, to the extent of bank guarantees under schedule III, the appellant/plaintiff is entitled for injunction, as against the second defendant. 23.
Hence, in my view, to the extent of bank guarantees under schedule III, the appellant/plaintiff is entitled for injunction, as against the second defendant. 23. In view of that, the impugned order of the trial Court dismissing I.A.No.1596 of 2011 in O.S. No. 367 of 2011 is confirmed and injunction restraining invocation of bank guarantees with respect to bank guarantees covered under schedule I, II and IV of the plaint is dismissed. The appeal is, accordingly, allowed in part to the extent of granting injunction against the second defendant with regard to the bank guarantees under schedule III of the plaint alone. As a sequel, the miscellaneous applications, if any, shall stand closed. In the circumstances, there shall be no order as to costs.