Nina Percept Pvt. Ltd. (Formerly ... vs Gammon Engineers And Contractors ...
2022 Latest Caselaw 9049 Bom

                                                                           43.CARBPL.26420.22..doc




                                        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ANJALI   Digitally signed by
         ANJALI TUSHAR
                                          ORDINARY ORIGINAL CIVIL JURISDICTION
TUSHAR   ASWALE
         Date: 2022.09.12
ASWALE   19:01:13 +0530
                                                 IN ITS COMMERCIAL DIVISION
                                   COMMERCIAL ARBITRATION PETITION(L) NO. 26420 OF 2022


                               Nina Percept Pvt Ltd
                               (formerly known as Nina
                               Waterproofing Systems Pvt Ltd)             ..Petitioner
                                       Vs.
                               Gammon Engineers and Contractors
                               Pvt Ltd & Anr                              ..Respondents




                               Mr.Karl K. Shroff a/w Ms.Sheetal Parkash i/b Jayesh Desai &
                               Associates, for the Petitioner.




                                                                 CORAM:- B. P. COLABAWALLA,J.

DATE :- SEPTEMBER 12, 2022.

P. C.:

Taken out of turn due to urgency made out by the

Petitioner.

2 Mr. Shroff, the learned counsel appearing on behalf of the

Petitioner, has tendered a draft amendment which is taken on record

and marked "X" for identification. The Petitioner is allowed to amend

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the Petition as per the draft handed in, within a period of one week from

today. Re-verification is dispensed with.

3 The above Section 9 Petition has been filed to injunct and

restrain Respondent No.1 and /or its officers, agents, servants, and/or

employees from invoking the Performance Bank Guarantee dated 6 th

February, 2018 (Exhibit-B to the Petition). In the event the bank

guarantee is already invoked, it is also prayed that Respondent No.2

(ICICI Bank Ltd), be restrained from paying Respondent No.1 any sums

under the Performance Bank Guarantee dated 6th February, 2018.

4 These aforesaid reliefs are sought in the factual background

which is this. Under a Letter of Intent dated 24 th January, 2018,

Respondent No.1 awarded a Water Proofing Contract to the Petitioner.

There were amendments to the scope of work for which the

amendments to the work order as also purchase order came to be issued

from time to time. Clause 28 of the Special Conditions and General

Conditions of the work order sets out the defect liability period and

Clause 33 relates to dispute resolution.

5 Mr. Shroff, the learned counsel appearing on behalf of the

Petitioner, submitted that under the contract, the Petitioner was to issue

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two bank guarantees, one for cash retention and other being the

Performance Bank Guarantee. He submitted that in the present case,

the issue in the Petition is only with reference to the Performance Bank

Guarantee as the Cash Retention Bank Guarantee has already been

returned by the 1st Respondent to the Petitioner on 13th May, 2022.

6 Mr. Shroff submitted that though the entire contract is fully

completed and even the defect liability period has expired, the

Performance Bank Guarantee has not been returned to the Petitioner.

He brought to my attention that the 1st Respondent, by its

communication dated 1st July, 2021, had infact noted that the

Performance Bank Guarantee submitted by the Petitioner for the value

of Rs.1,70,80,000/- issued by ICICI Bank Ltd would be returned by the

1st Respondent to the Petitioner for cancellation at the earliest. He

submitted that despite this, the bank guarantee has not been returned.

7 Mr. Shroff submitted that this does not stop here. He

thereafter brought to my attention a communication dated 31 st August,

2021 issued by the 1st Respondent to the Petitioner wherein it is

confirmed that the Petitioner has successfully completed the Water

Proofing Contract. Mr. Shroff submitted that in these circumstances, it

would be highly unjust if the 1 st Respondent is not restrained from

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invoking the bank guarantee. He submitted that admittedly no amounts

are due and payable by the Petitioner to the 1 st Respondent and even the

contract has been successfully performed and the defect liability period

has also expired. In these circumstances, if an injunction is not

granted, irretrievable injustice would be caused to the Petitioner, was

the submission. In support of this proposition, Mr. Shroff relied upon

an unreported decision of a learned Single Judge of this Court (S. J.

Vazifdar, J. as he then was) dated 13th September, 2011 passed in

Notice of Motion No.__ of 2011 in Suit (L)No. 2331 of 2011

[Man Industries (India) Ltd v/s Indusind Bank Ltd & Ors].

8 I have heard Mr. Shroff at some length. The matter has

been moved ex-parte without giving notice to the Respondents. From

the documents on record, it appears that the Petitioner gave two bank

guarantees to the 1st Respondent. First was a Cash Retention Bank

Guarantee in the sum of Rs.85,40,000/- and the second was the

Performance Bank Guarantee in the sum of Rs. 1,70,80,000/-. The

Cash Retention Bank Guarantee has infact been returned by the 1 st

Respondent. The dispute in the present case is only in relation to the

Performance Bank Guarantee in the sum of Rs.1,70,80,000/-. The

record clearly shows that the 1st Respondent, by its communication

dated 1st July, 2021 had informed the Petitioner that it would return

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this Performance Bank Guarantee at the earliest. Over and above this,

the 1st Respondent has also issued a certificate (page 152 of the paper

book) confirming that the Petitioner has successfully completed the

Water Proofing Contract. In these facts, I am in agreement with Mr.

Shroff that if the injunction restraining the 1 st Respondent from

invoking or encashing the bank guarantee is not granted, irretrievable

injustice would be caused to the Petitioner. In the view that I take, I

find support in the decision of a learned Single Judge of this Court dated

13th September, 2011 in the case of Man Industries (India) Ltd v/s

Indusind Bank Ltd & Ors (supra). The facts in that case were

similar to the facts before me. The learned Single Judge, after relying

upon a decision of the Supreme Court in the case of Larsen & Toubro

v/s MSEB reported in AIR 1996 SC 334 in fact granted an

injunction from invoking/encashing the Bank Guarantee because even

in that case the contract was satisfactorily performed. The relevant

portion of this decision reads thus:-

"11.Mr. Tulzapurkar, on the other hand, relied upon the judgment of the Supreme Court in Larsen & Toubro v. MSEB, AIR 1996 SC 334. In that case, clause 70.4.01 of the contract provided that upon successful completion of all the performance tests at site, the owner shall issue to the contractor a taking over certificate as proof of the final acceptance of the equipment. A certificate was issued stating that the trials were generally satisfactory. All the commissioned equipments under the contract were take over for regular operation and maintenance as per the contract. The appellant, accordingly, addressed a letter stating that the plant was completed and so all the bank guarantees had served their contractual requirements. It must be noted that the certificate merely stated that the trials were generally satisfactory and that the

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certificate was issued "after reasonable completion" of the plant works. The Supreme Court held as under :-

"11. ...................The appellant wrote to the first respondent on 21.2.1994 that the plant was completed and so all Bank Guarantees have served their contractual requirements. On a perusal of the relevant clauses in the contract executed between the appellant and the first respondent, and the communication of the first respondent dated 10-6-1994, it is fairly clear that the stipulations or conditions mentioned as per Clauses 70.2, 70.3 and 70.4 have been successfully fulfilled and the Plant was admittedly taken over by the first respondent. The Guarantee given by the Citi Bank, N.A. Dated 10 th of May, 1989 appearing in Volume II at pages 122 to 126 will enure only till successful completion of the trial operations and the plant is taken over. That event having ensued, the invocation of the Guarantee given by the Citi Bank dated 10-5-1985 in the sum of Rs. 2.72 crores is not encashable on its terms and in order to prevent irretrievable injustice, an injunction as prayed for, to respondents 1 and 4 deserves to be issued on that score. The Court below was in error in not doing so. We hereby restrain respondents 1 and 4 from invoking the Bank Guarantee aforesaid."

In the present case, the certificate dated 11th July, 2011, is more categorical regarding the plaintiff's compliance with the contractual provisions. The judgment, therefore, would apply with equal if not greater force to the present case.

9 In these circumstances, there shall be ad-interim relief in

terms of prayer clauses (A) and (B) which read thus:-

A) "That pending the disposal and final hearing of the present Arbitration Petition and the arbitral proceedings, this Hon'ble Court be pleased to injunct and restrain the Respondent No. 1 itself and/or its officers, agents, servants, employees from invoking the said Performance Bank Guarantee dated 6.2.2018 (Exhibit B hereto);

B) That pending the disposal and final hearing of the present Arbitration Petition and the arbitral proceedings, this Hon'ble Court be pleased to injunct and restrain the Respondent No. 2 itself and/or its officers, agents, servants, employees form paying Respondent No. 1 under the said Performance Bank Guarantee dated 6.2.2018."

10 It is needless to clarify that since this order is passed in the

absence of the 1st Respondent, the 1st Respondent shall be at liberty to

make an application to have the ad-interim order vacated. A copy of

this order shall be served on Respondent No.1 as well as Respondent

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No.2 within a period of one week from today. Place the above matter

for hearing and final disposal as per its turn.

11 This order will be digitally signed by the Private

Secretary/Personal Assistant of this Court. All concerned will act on

production by fax or email of a digitally signed copy of this order.

                                        ( B. P. COLABAWALLA, J. )




Aswale                                                         page 7 of 7