M/S Harjee Engineering Works P. ... vs M/S Hindustan Steel Works Ltd. & ...
2009 Latest Caselaw 1921 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI


                                                    Date of Reserve: March 27, 2009
                                                        Date of Order: May 06, 2009

+ OMP 326/2008
%                                                             06.05.2009
    M/s Harjee Engineering Works P. Ltd.              ...Petitioner
    Through : Mr. Hem C. Vashisht and Ms. Jyoti Chatterjeet, Advocates

        Versus

        M/s Hindustan Steel Works Ltd. & Ors.                          ...Respondents
        Through: Nemo


        JUSTICE SHIV NARAYAN DHINGRA

1.      Whether reporters of local papers may be allowed to see the judgment?

2.      To be referred to the reporter or not?

3.      Whether judgment should be reported in Digest?


        JUDGMENT

1. This petition under Section 9 of the Arbitration & Conciliation Act, 1996

(for short, "the Act") has been filed by the petitioner praying inter alia that

this Court should pass an interim injunction restraining respondent No.3 bank

from releasing the amount in favour of respondent No.1 in respect of the

following bank guarantees :

1. Bank Guarantee No.97/05 dated 13th January 2006 of Rs.47,00,000/-.

2. Bank Guarantee No.96/05 dated 13th January 2006 for Rs.58,00,000/-

3. Bank Guarantee No.98/05 dated 13th January 2006 of Rs.25,00,000/-.

(All drawn on Punjab & Sind Bank, Hemkunt Colony Branch, New Delhi).

2. It is submitted by petitioner that the above bank guarantees were not

invoked by respondent No.1 as per the terms and conditions of the bank

OMP 326/2008 M/s Harjee Eng. Works P Ltd. vs. M/s Hindustan Steel Works Ltd. & Ors. Page 1 Of 3 guarantee. The contract of the petitioner with respondent No.1 was cancelled

on 1st September 2007. Each of bank guarantees provided that it could be

invoked within 90 days of cancellation of contract only. The invocation of

Bank Guarantees done by the petitioner beyond 90 days was bad in law.

3. Respondent has taken a preliminary objection that this petition under

Section 9 of the Arbitration & Conciliation Act, 1996 was not maintainable as

there was no arbitration agreement between the parties and this Court even

otherwise has no territorial jurisdiction as only Courts at Kolkata would have

the jurisdiction in view of the MoU entered into between the parties on 12th

April 2004. No cause of action has arisen in Delhi. The contract between the

petitioner and the respondent No.1 was executed at Kolkata, West Bengal.

The work was to be executed at Kahalgaon, STP, District Bhagalpur, Bihar.

The letter for encashment was issued from Kahalgaon, Bihar.

4. A perusal of the entire petition of the petitioner would show that the

petitioner has not pleaded the existence of an arbitration agreement in the

petition. Nor it is pleaded as to when the written arbitration agreement was

signed between the parties. A copy of the arbitration agreement has also not

been attached with the instant petition. Neither a copy of the contract

entered into between petitioner and respondent No.1 has also been attached

with the petition. What has been attached with the petition is awarding of

contract by NTPC to respondent No.1 i.e. Hindustan Steel Works Construction

Limited. This contract is not between the petitioner and respondent No.1 and

even if an arbitration clause is there in the contract between NTPC and

Respondent No.1, the same does not bind the petitioner and respondent

No.1. Respondents No.2 and 3 in this case are unnecessary parties as it is not

OMP 326/2008 M/s Harjee Eng. Works P Ltd. vs. M/s Hindustan Steel Works Ltd. & Ors. Page 2 Of 3 even the case of the petitioner that he had any contract with respondent No.2

and the arbitration clause with respondent No.2 and 3. The Bank Guarantee

contract between the bank and respondent No.1 is an independent contract.

The dispute resolution provision given in the contract between respondent

No.1 and 2 reads as under:

"22.1.0 It is specifically agreed that all disputes or differences whatsoever, arising out of this Contract between the parties whether during the progress of the work or after its completion, shall be settled in accordance with the stipulations of Memorandum No.3/5/93-PMA dated 30/06/93 of Govt. of India, Ministry of Industry, Deptt. Of Public Enterprises"

5. Obviously, this provision of dispute resolution between the Government

enterprises in accordance with the stipulations of Ministry of Industry

regarding public enterprises cannot govern the disputes of petitioner with

respondent No.1.

6. I find that the petition does not disclose existence of an arbitration

agreement between the parties and the same is liable to be dismissed and is

hereby dismissed.

May 06, 2009                                            SHIV NARAYAN DHINGRA J.
rd

OMP 326/2008 M/s Harjee Eng. Works P Ltd. vs. M/s Hindustan Steel Works Ltd. & Ors. Page 3 Of 3