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2016 DIGILAW 716 (UTT)

Gogoal Hydro Private Limited v. Bharat Heavy Electricals Limited

2016-10-07

SERVESH KUMAR GUPTA

body2016
JUDGMENT : Servesh Kumar Gupta, J. Having heard the learned counsel of the appellant as well as learned Senior Counsel on behalf of Bharat Heavy Electricals Limited (BHEL)/caveator, exemption application (CLMA No.10584 of 2016) is hereby allowed and appellant is exempted from filing the certified copy of application moved by him before the learned Trial Judge under section 9 of the Arbitration Act read with Section 151 CPC. 2. At the outset, learned Senior Counsel has submitted that this appeal is premature and not maintainable because no substantial order has been passed by the learned District Judge because impugned order, which has been challenged under this appeal, entails only the issuance of notice to the opposite party. District Judge has neither refused nor granted any interim relief on the application moved by the appellant to seek ad interim relief. 3. This problem has been dealt with extensively by the Larger Bench of Andhra Pradesh High Court in case of “East India Udhyog Limited Vs. Maytas Infra Limited”, reported in (2015) 0 Supreme (AP) 261. 4. The sum and substance of the law as opined by the Bench of Andhra Pradesh High Court, is that apart from passing any substantial order under Section 9 of the Arbitration Act, if the Lower Court issues an interim ex-parte injunction in favour of the appellant or refuses to pass any such order that is also appeallable under Section 37 of the Act. 5. So now, I proceed to appreciate the controversy to some extent. It appears that the appellant entered into an agreement with BHEL and pursuant whereof, letters of intent were issued to him on 19.09.2014 and 26.09.2014. 6. Further, in order to advance the agreement, he furnished two bank guarantees on 10.10.2014 to the tune of some rupees seven lakh and rupees nine lakh odds. 7. The tender of the appellant was accepted, where-under, the work had to be completed by 30.01.2015 and 28.03.2015. It was a stipulation of the agreement entered between the duo that the dispute (if any) arises, the same shall be forwarded for its resolve to some Arbitrator but such Arbitrator should not be appointed at the instance of BHEL wing of Rudrapur. 8. It was a stipulation of the agreement entered between the duo that the dispute (if any) arises, the same shall be forwarded for its resolve to some Arbitrator but such Arbitrator should not be appointed at the instance of BHEL wing of Rudrapur. 8. It has been urged by learned counsel of the appellant that although, he could not complete the work as stipulated in the contract but the whole blame for not completing such work within the time frame cannot be attached to him but it must go to authorities/officials of the respondent because they could not supply the necessary accessories and required items, which were essential in order to complete the agreed work, all the same, he made several representations to the concerned officers but they did not pay any heed on the same. 9. The period of bank guarantee is now going to expire on 09.10.2016 and the learned Court below, without appreciating the exigency of the matter, has simply issued the notice to the respondent. 10. Learned Senior Counsel on behalf of the BHEL has relied upon the Supreme Court’s judgment in the case of “Bses Ltd. (Now Reliance Energy Ltd.) Vs. Fenner India Ltd. and another” reported in (2006) 2 SCC 728 as well as the judgment of this Court in the case of “Shailendra Bhardwarj & Others Vs. Chandra Pal & another” reported in 2013 (1) UD 272. 11. The sum and substance of both the judgments, so relied by learned Senior Counsel for the respondent, is that there should not be any injunction against forfeiting of the bank guarantee, until and unless, it has been obtained by fraud or forfeiting the same is irretrievable injury to the contractor. 12. The irretrievable injury is to be appreciated by the Court after rendering the opportunity to the respondent for filing its counter affidavit but I think that if the respondent is not stopped from forfeiting the bank guarantee, then the whole purpose of initiating the proceedings under Section 9 of the Arbitration Act, seeking to appoint the Arbitrator in terms of the contract between the parties, shall be frustrated. 13. Therefore, I issue the ad interim injunction stopping the respondent from forfeiting the bank guarantee, as indicated above, but at the same time, I also forbid the appellant not to en-cash the bank guarantee himself as well. 14. 13. Therefore, I issue the ad interim injunction stopping the respondent from forfeiting the bank guarantee, as indicated above, but at the same time, I also forbid the appellant not to en-cash the bank guarantee himself as well. 14. Bank concerned is directed to keep this bank guarantee alive till the dispute is adjudicated by the Court of District Judge. 15. Appellant shall also furnish an undertaking with the Bank concerned that he has no objection, if such bank guarantee is extended till the matter is adjudicated. 16. Appeal is disposed of here itself with the direction that both the parties henceforth shall raise their claims and counter-claims before the Court below. 17. Let a certified copy of this order be supplied to learned counsel for the parties today itself on payment of usual charges pre-hand.