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2013 DIGILAW 279 (AP)

Corporation of Cochin v. A. P. Technology Development and Promotion Centre

2013-04-09

L.NARASIMHA REDDY

body2013
JUDGMENT The petitioner issued a tender notice on 17.03.2007 to choose an agency to provide municipal solid waste facility at Brahmapuram. The 1st respondent emerged as the successful tenderer. The value of the work was about Rs.20 crores and an agreement was executed on 25.07.2007. As required under the agreement, the bank guarantee to an extent of 10% of the value was furnished by the 2nd respondent, which had account with the 3rd respondent. Disputes arose between the parties and correspondence was going on. Respondents 1 and 2 filed O.S.No.342 of 2009 on 10.09.2009 in the Court of the XIV Additional Chief Judge (Fast Track Court), City Civil Court, Hyderabad, against the appellant and the 3rd respondent for injunction, to restrain them from encashing the bank guarantee. An application under Order 39 Rules 1 and 2 C.P.C. was also filed. Urgent notice was ordered on the same day. The notice is said to have been served upon the respondents on the next date i.e. on 11.09.2009. The trial Court passed an order of status quo on 17.09.2009. However, the petitioner has withdrawn the amount from the 3rd respondent Bank, by that time. Respondents 1 and 2 filed I.A.No.4090 of 2009 under Section 144 read with Section 151 C.P.C. with a prayer to direct the petitioner herein to redeposit the amount of Rs.1,96,37,000/-. It was mentioned that withdrawal of the amount is contrary to law and in view of the orders of status quo passed on 17.09.2009, the amount is liable to be put back into the account of the 2nd respondent in the 3rd respondent. On receipt of the notice in the I.A., the petitioner filed counter. It was pleaded that the bank guarantee was invoked on 07.09.2009, duly issuing an advance intimation to respondents 1 and 2 and that the 3rd respondent has transferred the amount to the account of the petitioner on 09.09.2009 itself. It was also stated that the question of invoking Section 144 C.P.C. by the respondents does not arise, since the petitioner did not derive the benefit under any order of the Court much less such an order was reversed by a superior Court. The trial Court allowed the I.A. through order, dated 26.10.2010, and directed the petitioner to deposit the amount into the account of the 1st respondent. Hence, this revision. The trial Court allowed the I.A. through order, dated 26.10.2010, and directed the petitioner to deposit the amount into the account of the 1st respondent. Hence, this revision. Sri O.Manohar Reddy, learned counsel for the petitioner, submits that respondents 1 and 2 were put on notice on 21.08.2009 itself about the proposal to invoke bank guarantee on account of their committing breach of contract and the amount has been transferred to the account of the petitioner on 09.09.2009 itself. He submits that the suit itself was filed one day after the amount was transferred and by the time the order of status quo was passed on 17.09.2009, the invocation of bank guarantee was complete in all respects. He contends that if there was any violation of the interlocutory orders passed in an application filed under Order 39 Rules 1 and 2 C.P.C., it is open to the respondents to file an application under Rule 2-A of Order 39 C.P.C. and obviously because there was no such order, they did not file an application under that provision. He submits that the occasion to invoke Section 144 C.P.C. would arise if only one of the parties to the suit derived the benefit under an order passed by a Court and such an order came to be reversed at a later point of time. He submits that it was only an order of status quo, that was passed in favour of respondents 1 and 2 and even that was neither modified nor reversed. The learned counsel further submits that even if the matter is viewed from the principle involved and not from the technicalities, there is no occasion to invoke Section 144 C.P.C. Sri Ashutosh Pathak, learned counsel for respondents 1 and 2, on the other hand, submits that there are absolutely no bona fides on the part of the petitioner, since it has withdrawn the amount covered by the bank guarantee after receiving the notice in the suit. He submits that the principle underlying under Section 144 C.P.C. can be invoked to undo the wrong done to a party to the suit and the trial Court has taken the correct view of the matter. He placed reliance upon certain precedents. The sequence of events in relation to invocation of bank guarantee by the petitioner has been furnished in preceding paragraphs. He placed reliance upon certain precedents. The sequence of events in relation to invocation of bank guarantee by the petitioner has been furnished in preceding paragraphs. It is sufficient to recapitulate that the petitioner issued a letter of intimation, dated 21.08.2009, to respondents 1 and 2 proposing to invoke bank guarantee and the same was received by them. The bank was informed about the invocation of bank guarantee on 09.09.2009. The suit was filed on 10.09.2009. Urgent notice ordered in the I.A. filed under Order 39 Rules 1 and 2 C.P.C. was served upon the petitioner on 11.09.2009. On that day itself, the amount was transferred to the account of the petitioner. An order of status quo was passed on 17.09.2009. The application to direct the petitioner to redeposit the amount was filed on 08.10.2009. The trial Court decided the I.A. on the basis of the pleadings contained in the affidavit and the counter. Neither oral nor documentary evidence was adduced at that stage. The application was filed under Section 144 read with Section 151 C.P.C. It becomes debatable as to whether Section 151 C.P.C. can be invoked at all when a specific provision is mentioned. Be that as it may, the relief in the form of restitution provided for under Section 144 C.P.C. can be claimed only when the circumstances mentioned in that provision, exist. A typical case in which the provision can be invoked is the one where (a) the Court passed an order in an application filed by one of the parties to the proceedings; (b) on the strength of the order so passed, such party has derived certain benefit to the detriment of the other party and (c) the aggrieved party has initiated steps vis-à-vis such an order by way of review, appeal or revision and the same resulted in setting aside of the order. It is only when these events take place that the relief of restitution can be claimed. In the instant case, it was not even alleged that the petitioner derived any benefit under any order passed by the Court. It was respondents 1 and 2 that filed a suit and the I.A. The petitioner did not file any application whatever. Secondly, by the time the amount covered by the bank guarantee was transferred to the account of the petitioner, there did not exist any order of the Court. It was respondents 1 and 2 that filed a suit and the I.A. The petitioner did not file any application whatever. Secondly, by the time the amount covered by the bank guarantee was transferred to the account of the petitioner, there did not exist any order of the Court. Therefore, it cannot be said that the petitioner derived the benefit of an order. Added to this, it was not even stated that order of the trial Court has been varied, modified or set aside. Reliance is placed by the learned counsel for the petitioner on the judgments reported in SujitPal Vs. PrabirKumar Sun (AIR 1986 Calcutta 220), JamaluddinVs. Mirza Quader Baig ( 1995 (1) ALT 115 ), KavitaTrehan Vs. M/s. Balsara Hygiene Products Limited (AIR 1992 Delhi 92), S. Prabhavathi Vs. Rohini Kilaru (2006(5) ALD 606) and Mohammed Abdul Sattar Vs. Shahzad Tahera ( 2012 (2) ALD 393 ). In none of the precedents referred to above, it was held that Section 144 C.P.C. can be pressed into service in respect of any developments or events which have taken place even before any order was passed by a Court. Most of the cases arose under Order 39 Rules 1 and 2 C.P.C and an application filed under Rule 2-A thereof. In case a plaintiff to the suit is dispossessed in violation of order of temporary injunction, he can seek restitution of the possession by filing an application under Section 144 C.P.C. On the same analogy, reliefs can either be granted or denied, depending on the facts and circumstances of the case. It has already observed that in the instant case there did not exist any order of the Court by the time the petitioner got the amount covered by the bank guarantee. The effort made by respondents 1 and 2 was mainly to prevent the petitioner from utilizing the amount, which it has got by invoking the bank guarantee. Once the invocation of bank guarantee is complete, it makes no difference whether the amount so derived has been spent or is kept in the account. Apart from these aspects, the dispute between the petitioner and the respondents has to be dealt with finally. Once the invocation of bank guarantee is complete, it makes no difference whether the amount so derived has been spent or is kept in the account. Apart from these aspects, the dispute between the petitioner and the respondents has to be dealt with finally. In the event of the adjudication that takes place in that behalf makes it obligatory on the part of the petitioner to keep the amount covered by the bank guarantee in tact, it can certainly be required to make that amount available. Hence, the C.R.P. is allowed and the order under revision is set aside. It is, however, directed that the petitioner shall be under obligation to make available the funds covered by the bank guarantee in the event of the suit being decreed. There shall be no order as to costs. The miscellaneous petition filed in this revision shall also stand disposed of.