The Tripura High Court modified the order directing the appellant to pay 50% decretal amount before the court and the rest of the 50% as a bank guarantee to 25% in view of the limited profits earned by it in the financial year 2021 and the fact that it was operating PAN India.
Brief Facts:
The appellants filed the present appeal seeking modification of the impugned order wherein it was directed that subject to 50% of the decretal amount within a period of two months before the court and submission of the Bank Guarantee in respect to the remaining 50% amount, the judgement and decree passed in the commercial suit shall be stayed.
Contentions of the Applicant:
The learned counsel appearing for the appellant contended that the appellant is a public sector undertaking and was at best entitled to fees only at the rate of 10% of the project cost and was acting on behalf of the Government of Tripura in the execution of the PMGSY project to provide connectivity by way of all-weather road. It was further contended that the appellant was a loss-making organization and had recently bailed out of the financial crisis but was still struggling with financial instability on various fronts and as the organisation was operating PAN India, there was no question of escaping from liability.
Contentions of the Respondent:
The learned counsel appearing on behalf of the respondents referred to the 58th Annual Report of the appellant company which showed a profit of 37.65 crore rupees for the financial year 2021-2022 and further referred to the 62nd Report of its parent company which showed larger profits for the same year. It was further argued that the appellant has illegally encashed the bank guarantee provided by the respondent and had also forfeited the security deposit which was lying in their custody for a long time.
Observations of the Court:
The court after considering the submissions held that the appellant company should deposit only 25% of the decretal amount to be paid in the Registry of the court rather than 50% through bank draft and the remaining 25% is to be deposited in the Registry of the court in the form of bank guarantee subject to renewal from time to time.
The court stated that the present order was passed keeping in mind the limited profit earned by the appellant company in the financial year 2021 as was shown in the annual report relied on by the respondent and also considering the fact that the appellant company was a Public Sector Undertaking operating PAN India.
The decision of the Court:
The court modified the impugned order and disposed of the application.
Case Title: Hindustan Steel Works Construction Ltd. vs Kalyani Debnath and ors.
Coram: Hon’ble Mr. Justice Aparesh Kumar Singh and Hon’ble Mr. Justice Arindam Lodh
Case No.: I.A. No.03 of 2023 in Commercial Appeal No.03 of 2023
Advocate for the Applicant: Mr. S.M. Chakraborty and Ms. Mampi Chakraborty
Advocate for the Respondent: Mr. D. Bhattacharya, Mr. K. De and Mr. A. Sengupta
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