M/S Basic Tele Services Ltd vs Union Of India & Another
2009 Latest Caselaw 2301 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  CS(OS)2686/1996

%                            Date of decision: 28th May, 2009

M/S BASIC TELE SERVICES LTD                     .......         Plaintiff
                        Through: Mr. Rajiv Nayar, Sr Advocatte with Mr
                                 Ajay Roy and Mr B. Dubey, Advocates.

                                Versus

UNION OF INDIA & ANOTHER                          ....... Defendants
                        Through: Mr. Dalip Mehra and Rahul Sood,
                        Advocates for the defendant No.1.
                        Mr Amar Gupta, Advocate for the defendant
                        No.2.


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

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

2.     To be referred to the reporter or not?   Yes

3.     Whether the judgment should be reported
       in the Digest?                                 Yes


RAJIV SAHAI ENDLAW, J.

1. The plaintiff has sued for declaration that the invocation

dated 30th October, 1996 by the Ministry of Communications

Department of Telecommunications of the defendant No.1 Union of

India of the bank guarantee issued by the defendant No.2 Bank at

the instance of the plaintiff in favour of the defendant No.1 is

contrary to the terms of the guarantee and that the defendant No.1

is not entitled to invoke the said guarantee and for permanent

injunction restraining the defendant No.2 from making payment

under the guarantee and also for mandatory injunction directing the

defendant No.1 to negotiate in good faith the terms and conditions of

the licence and the interconnect agreement for which the bid of the

plaintiff to the defendant No.1 had been accepted by the defendant

No.1.

2. Vide interim order dated 1st November, 1996 after issuance

of notice to the defendants and finding that the defendant No.1 had

already invoked the bank guarantee, the defendant No.2 bank was

restrained from remitting the proceeds of the bank guarantee to the

defendant No.1. The plaintiff was, however, asked to keep the bank

guarantee alive. On 28th August, 1998 on an application of the

plaintiff for exemption from extension of bank guarantee it was held

that there was no need for formal extension of bank guarantees and

non-extension of the bank guarantee will not affect the rights of the

defendant No.1 to get the remittance from the defendant No.2 bank

in the event of the matter being decided finally in favour of the

defendant No.1 on the basis of invocation made earlier during the

term of validity of the bank guarantee. The defendant No.1

preferred FAO(OS) 217/1998 against the said order; on the

concession of the counsel for the plaintiff and the counsel for the

defendant No.2 bank, in the said appeal on 31st August, 1998, it was

ordered that in the event of the plaintiff failing in the suit and the

defendant No.1 succeeding therein, neither the plaintiff nor the

defendant No.2 bank would object to payment of the bank guarantee

amount being made to the defendant No.1 notwithstanding the non-

extension of the validity of the bank guarantee. The counsel for the

bank also stated that the defendant No.2 bank would not deny

payment of the bank guarantee impugned, to the defendant No.1 on

the ground that the bank guarantee had not been extended.

3. The order restraining the defendant No.2 bank from

remitting the amount of the bank guarantee to the defendant No. 1

was confirmed vide order dated 5th October, 1999 during the

pendency of the suit. The defendant No.1 Union of India preferred

an appeal being FAO(OS)384/1999 against the said order and which

was admitted. In the meanwhile, the suit proceeded. On change in

pecuniary jurisdiction of this court, the suit was transferred to the

district court. The plaintiff applied for amendment of the plaint to

enhance the valuation of the suit and the said amendment was

allowed and the suit transferred back to this court and given the

original number. The FAO(OS) 384/1999 came up before the

Division Bench of this court on 18th February, 2008 when finding that

the trial in the suit had already been completed, the same was

disposed of with direction for earlier disposal of the suit.

4. On the pleadings of the parties in the suit, the following

issues were framed on 7th September, 2001.

"1. Whether the present suit is liable to fail for want of legal notice contemplated under Section 80 of the Code of Civil Procedure?

2. Whether the plaint does not disclose a cause of action?

3. Whether there was no concluded contract between the plaintiff and the defendant No.1?

4. Whether the plaintiff is entitled to the relief for declaration and injunction as prayed?

5. Relief."

The defendant No.1 applied for allowing it to raise an

objection that the suit is barred by Section 15 of the Telecom

Regulatory Authority of India Act 1997. This court, on 7th October,

2002 finding that the issue sought to be raised is a pure and simple

legal issue, allowed the amendment of the written statement to

incorporate the said plea and framed the following additional issue.

"Whether the present suit is barred by virtue of Section 15 of the Telecom Regulatory Authority of India Act, 1997, as amended?"

5. The plaintiff filed affidavit by way of examination in chief of

only one witness who was cross examined by the counsel for the

defendant No.1. The defendant No.1 also examined only one witness

who was cross examined by the counsel for the plaintiff. The

defendant No.2 did not lead any evidence.

6. The senior counsel for the plaintiff has been heard. The

defendant No.1, inspite of several opportunities, did not make any

oral submissions and while reserving judgment, opportunity was

given to the defendant No.1 to file synopsis of submissions, if any.

Written arguments have been filed on behalf of the defendant No.1.

Thereafter, the plaintiff also filed synopsis of arguments. The

counsel for the defendant no.2 bank stated that the defendant No.2

shall abide by whatever order is made by the court.

My issue-wise findings are as under:

Re: Issue No. 1: Whether the present suit is liable to fail for want of legal notice contemplated under Section 80 of the Code of Civil Procedure?

7. The suit was accompanied by IA.No.11071/1996 under sub-

section (2) of Section 80 of the CPC. Notice of the suit as well as of

the said application and of the application for interim relief was

ordered to be issued to the defendant No.1 Union of India, when the

suit came up first before the Court on 31st October, 1996. The

application under Section 80(2) of the CPC was thereafter being

listed alongwith the application for interim relief. The order dated

5th October, 1999 confirming the interim injunction during the

pendency of the suit, in para 36 thereof also deals with the plea of

the defendant No.1 of the suit being barred by Section 80 of the

CPC. It was then held that a suit to obtain an urgent and immediate

relief could be instituted against Government of India with the leave

of the court without serving the notice as required under Section

80(1). On the basis of the order dated 31st October, 1996 (supra) it

was held that the plaintiff was, vide the said order, granted the

permission to institute the suit without serving the notice. This was

deciphered from issuance of notice to the defendant No.1 before

granting the relief of injunction. It was further held that it thus did

not lie in the mouth of the defendant No.1 to plead that the suit was

bad for want of notice under Section 80 of the CPC. Again when the

matter came up for framing of issues on 7th September, 2001 it is

recorded that IA.No.11701/1996 had already been disposed of on 5th

October, 1999 and need not be listed again. Notwithstanding the

same this issue was framed.

8. I may also record that it is the admitted position that a notice

dated 30th October, 1996 under Section 80, CPC was given by the

plaintiff to the defendant No.1. However, the suit was filed

immediately thereafter, without waiting for two months.

9. In the written arguments of the defendant No.1 it is contended

that on 31st October, 1996 the plaintiff was not granted leave to file

the case against the defendant No.1; that the relief of declaration as

prayed cannot be granted inasmuch as no notice under Section 80

had been given and the declaratory relief claimed is barred under

Section 80 of the CPC and for which reason the suit is liable to fail.

10. Though undoubtedly the interim order on an application under

Order 39 Rules 1 and 2 of the CPC, as the order dated 5th October,

1999 in which it was as aforesaid observed/held that the plaintiff had

on 31st October, 1996 been granted leave to sue without complying

with the provisions of Section 80(1) of the CPC, is not to colour the

decision at the stage of final disposal of the suit but an order under

Section 80(2) of the CPC is not such which once granted in a suit can

be adjudicated again at the time of final disposal of the suit.

Undoubtedly, the order dated 31st October, 1996 does not in as many

words states that leave under Section 80 (2) CPC is granted to the

plaintiff. The language thereof is as under:

"IA.No.11071/1996

This is an application under sub Section (2) of Section 80 of the Code of Civil Procedure for leave of the court for institution of the suit without serving any notice as required under sub-section (1) of Section 80. The suit has been filed against the Union of India and, therefore, Section 80, notice is required before filing of the suit. However, sub section (2) of Section 80 may be utilized by the plaintiff for seeking leave of the court but before granting the leave that very sub section says that notice has to go to the Union of India giving it a reasonable opportunity of showing cause in respect of the limitation prayed for in the suit. Therefore, notice without process fee to go to Mr Madan Lokur, Standing Counsel for the Union of India for 1-11-1996. Notice be given dasti."

11. The aforesaid order was interpreted by this court on 5th

October, 1999 as granting leave. The principles of res judicata /

constructive res judicata apply to successive stages in the same

proceedings also. In my view, this part of the order dated 5th

October, 1999 cannot be relooked by this court at this stage of final

decision of the suit.

12. Independently, of the above also in my view the suit is not

barred by Section 80 of the CPC. A suit to obtain an urgent or

immediate relief is permitted to be instituted with the leave of the

court without serving any notice as required by Section 80(1) of the

CPC. If the court is satisfied after hearing the parties that no urgent

or immediate relief need be granted in the suit, the court is required

to return the plaint for presentation after complying with the

requirements of section 80(1). In the present case the suit was

accompanied with the application for leave of the court. This court

also on 31st October, 1996 though not in express words granting

such leave, in compliance with the procedure in Section 80(2) issued

notice to the defendant No.1. The counsel for the defendant No.1 on

receipt of notice did not urge that no urgent or immediate relief was

required to be granted in the suit. On the contrary, on the very next

date i.e., 1st November, 1996 consent was given for restraining

remittance of the proceeds of the bank guarantee. No arguments, on

any subsequent dates, also appear to have been made in this regard.

The court also did not return the plaint with finding that no urgent or

immediate relief need be granted in the suit. On the contrary urgent

relief sought was granted.

13. At the fag end of the suit, it cannot be argued that the suit was

not for urgent relief. The argument of the defendant that the suit for

the relief of declaration cannot be for an urgent relief is also

misconceived. No objection is raised to the urgency of the relief of

injunction. The same is also borne out from the conduct of the

proceedings not only by the plaintiff but also by the defendant No.1.

A declaratory relief consequential whereto the urgent relief of

injunction is sought, would not defeat the urgency of the relief. The

two reliefs could not be split up and if as ancillary to the urgent or

immediate relief claimed, any other relief is also sought, the

provisions of Section 80(2) would not become inapplicable for such

reason. I am also of the view that the relief of declaration in the

present case is superfluous. The plaintiff even without claiming the

said relief could have sought the relief of injunction averring that the

invocation of the bank guarantee was not in terms thereof. The

grant of every injunction necessarily entails an inquiry / adjudication

by the court of the right or entitlement to the said injunction and

with respect whereto declaration can also be claimed. Considering

the purpose for which the suit was filed, the suit is held to be falling

within the domain of Section 80(2) of the CPC.

14. The issue No.1 is accordingly decided in favour of the plaintiff

and against the defendant No.1.

Re: Additional Issue: Whether the present suit is barred by virtue of Section 15 of the Telecom Regulatory Authority of India Act, 1997, as amended?

15. The Telecom Regulatory Authority of India Act 1997 came into

force on 25th January, 1997 first as the Telecom Regulatory Authority

of India Bill. Section 15 of the said Act, on the basis whereof the

jurisdiction of this court is pleaded to be barred, as amended w.e.f.

24th January, 2000 is as under:

"15. Civil Court not to have jurisdiction - No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act."

16. The Appellate Tribunal is established under Section 14 of the

said Act to adjudicate the disputes of the nature mentioned therein

and or to dispose of appeals against any direction, decision or order

of the Authority constituted under the Act. Under Section 14 A

application to the Appellate Tribunal for adjudication of the said

disputes is to be made and in the case of appeal period of 30 days for

preferring the same has been prescribed. Section 14M provides for

transfer of all applications pending for adjudication of disputes

before the Authority immediately before the date of establishment of

the Appellate Tribunal to the said Appellate Tribunal. Section 14N

provides for transfer of all appeals pending before the High Court,

before the commencement of the Telecom Regulatory Authority of

India (Amendment) Act 2000 to the Appellate Tribunal on its

establishment under Section 14.

17. There is no provision for transfer of the suits as the present

one to the Appellate Tribunal. The present suit was instituted on or

about 30th October, 1996 i.e., prior to the coming into force of the

Telecom Regulatory Authority of India Act 1997 or the Amendment

Act, 2000 thereof. There being no provision therein for transfer of

the pending suits even if the subject matter thereof is covered by a

dispute to be adjudicated by the Appellate Tribunal, it cannot be said

that the Appellate Tribunal is empowered to adjudicate this suit.

Hence, the question of the jurisdiction of this court being barred

does not arise.

18. Similarly, the action of the defendant No.1 impugned in this

suit had been taken not in pursuance of any power conferred by or

under the TRAI Act but prior to the coming into force thereof. Thus,

under the second limb of Section 15 of the said Act also it cannot be

said that this court does not have any power to grant the injunction

claimed.

19. The defendant No.1 has in its written arguments quoted

Section 15 of the TRAI Act 1997 as it stood prior to the Amendment

Act thereof of 2000. The same also does not provide for transfer of

the suits instituted prior to the coming into force of the Act in 1997

to the Regulatory Authority. The objection in this regard itself was

taken by the defendant No.1 for the first time after the coming into

force of the Amendment Act, 2000 and thus the reliance on the

provisions in the Act as originally passed is misconceived.

20. A perusal of the Act as it stood prior to the 2000 Amendment

also shows that under Section 14 thereof if a dispute arose which the

Authority was empowered to adjudicate the aggrieved person was

required to make application with respect thereto to the Authority.

The dispute within the meaning of Section 14 could only mean the

dispute arising after the coming into force thereof and could not

refer to the dispute which had already arisen and had been the

subject matter of a lis before a Fora competent to adjudicate the

same prior to coming into force of the said provision. There was no

provision in the Act prior to 2000 Amendment also of transfer of

pending disputes to the Authority which under the Act was

empowered to adjudicate the same.

21. The additional issue is thus answered in favour of the plaintiff

and against the defendant No.1.

Re: Issue No.2: Whether the plaint does not disclose a cause of action?

Issue No. 3: Whether there was no concluded contract between the plaintiff and the defendant No.1?

Issue No. 4: Whether the plaintiff is entitled to the relief for declaration and injunction as prayed?

22. The discussion under these issues is found to be

interconnected and hence they are taken up together. The plea of

the plaint not disclosing any cause of action is taken on the ground

that invocation/payment under the bank guarantee can be injuncted

only on the ground of fraud and irretrievable loss or damage. It is

contended that, neither of the two grounds are pleaded or made out;

there is neither any pleading or averment of fraud nor of

irretrievable loss or damage. It is also the contention of the

defendant No.1 that though improper invocation could also be a

ground for injuncting payment under the bank guarantee but the

same has not been pleaded. It is further the contention in the

written arguments that such an objection also could be available only

to the defendant No.2 bank and not to the plaintiff and the defendant

No.2 bank had not raised any such objection and thus the payment

under the bank guarantee, on the ground / for the reason of the

invocation being not proper, could not be injuncted.

23. The contention of the defendant No.1 of there being no plea of

the plaintiff of the invocation being not proper is incorrect. The

plaintiff has in para 7 of the plaint pleaded that clause 3 of the bank

guarantee requires that the Letter of Invocation should clearly state

the breach which has occasioned the invocation of the bank

guarantee. It is further pleaded that the impugned Letter of

Invocation does not state or specify the reason why the guarantee

has been invoked by the defendant No.1. It is yet further pleaded

that the impugned invocation is not in accordance with the terms of

the guarantee itself and is thus bad in law, illegal and non-est. It is

further the plea that " it is well settled law that invocation of a bank

guarantee has to be in terms of the guarantee. An invocation not in

terms of the guarantee is bad and liable to be set aside".

24. The defendant No.2 has also filed an affidavit dated 31st

August, 1998 in this court in which also it is inter alia the case of the

defendant No.2 bank that the Invocation Letter dated 19th October,

1996 of the defendant No.1 was not in conformity with the terms of

the bank guarantee and as such the purported invocation was totally

improper. It is further pleaded therein that the defendant No.2 bank

had by its letter dated 31st October, 1996 to the defendant No.1

stated that the invocation of the said bank guarantee vide letter

dated 19th October, 1996 was improper and invalid and accordingly

the defendant No.2 bank was under no obligation to make any

payment under the bank guarantee. The same plea has been taken

by the defendant No.2 in its written statement also.

25. The only witness examined by the defendant No.1 did not deny

the receipt of the letter dated 31st October, 1996 from the defendant

No.2. Thus, the plea of the defendant No.1 of the defendant no.2

bank having not taken the plea of the invocation being not in terms

of the agreement is also not found to be correct. Even otherwise, I

am of the view that the plea of the invocation not being in terms of

the bank guarantee is available to the person at whose instance the

bank guarantee has been given and is not required to be taken by

the bank alone. The bank has no personal interest in the matter and

does not want to be a privy to any dispute. It is the person at whose

instance the guarantee has been issued, who has vital interest in

encashment or in restraining encashment thereof and if the

invocation is not in terms of the bank guarantee, the plea is certainly

available to that person. The matter can be looked at also from

another angle. Even if the bank is to contend that the invocation is

not in terms of the bank guarantee and the beneficiary of the bank

guarantee contends otherwise, the matter will have to be resolved by

some authority. In the facts of the present case, such authority could

be the court only. The bank could not be expected to rush to the

court for the said adjudication. For this reason also I am unable to

uphold the contention of the said plea being not available to the

plaintiff.

26. Thus I find that there was cause of action for the plaintiff to

approach the present court for restraining the encashment of bank

guarantee and the reason of the invocation being not in terms of the

bank guarantee is pleaded by the plaintiff.

27. The plaint in the circumstances discloses the cause of action.

The issue No.2 is decided in favour of the plaintiff and against the

defendant No.1.

28. The plaintiff has sued for restraining the encashment of the

bank guarantee, besides on the ground of the invocation thereof

being not in terms of the guarantee on the ground -

(A) that the defendant No.1 had on 16/01/1995 issued tender

for providing basic telephone services under a licence to be

issued for that purpose on non exclusive basis for various

telecom territories. The bidders were alongwith their bids

required to submit bank guarantee valid for six months for

each service area for which the bid was made and of the

value prescribed in the tender document. The plaintiff in

term of its bid furnished the bank guarantee of the

defendant no.2 bank, in the sum of Rs 50 crores;

(B) that the extended time for submission of the tender was till

23rd June, 1995. On 27th May, 1995 the defendant No.1

issued clarifications/replies to the queries of the prospective

bidders on/to various terms and conditions of the tender and

in pursuance to clause 4 of Section II of the tender

document - these clarifications in terms of the tender

document were to form a part of the tender document. One

of the said queries was as to - could an awardee decline the

award without forfeiting the earnest money. In response to

the said query it was clarified that the awardee i.e. the

person whose bid has been accepted and who had been

allotted the licence will not forfeit the earnest money if he

refuses to accept the counterbid offered by the telecom

authority. Yet another query was whether the selected

bidder had the right to decline to accept the licence under

the terms specified by the Government if they have changed

from the original tender, without forfeiting the earnest

money. The response thereto was "yes, if there is a

substantial change". Yet another demand of the prospective

bidder was for supply of a draft licence copy with all terms

and conditions at that stage or at least prior to the issue of

Letter of Intent. The reply was that the draft licence

agreement will be given to the selected bidders alongwith

the Letter of Intent. In response to another query it was

clarified that the inter connect agreement will be open to

review by mutual agreement between the DoT and the

licencee;

(C) It is further the case of the plaintiff that the plaintiff was not

found successful qua any of the bids made by it; however,

the defendant No.1 came out with a policy to impose a cap

on the number of circles that could be awarded to a single

successful bidder. This necessitated fresh bids being invited

for those circles which had been vacated by the successful

bidders. Some of the circles were re-tendered. A notice

dated 1st December, 1995 inviting fresh bids for some circles

was issued;

(D) The plaintiff made fresh bid for the area of Tamil Nadu.

Since the bank guarantee of Rs 50 crores by way of earnest

money submitted by the plaintiff alongwith its earlier bid

was still valid, the same was offered against the fresh bid

also of the plaintiff and was got renewed for a further period

of upto 30th June, 1996. The bid aforesaid of the plaintiff for

Tamil Nadu was found to be highest and a Letter of Intent

dated 13th March, 1996 was issued by the defendant No.1 to

the plaintiff. The plaintiff was called upon to convey its

acceptance and to furnish performance bank guarantee and

financial guarantee in the requisite amount. The Letter of

Intent was, however not accompanied with the draft licence

and interconnect agreements as had been assured in

pursuance to the clarifications aforesaid. The plaintiff

accordingly vide its letter dated 29th March, 1996 to the

defendant No.1 demanded the draft licence and inter

connect agreements and without which it was contended

that the performance and financial guarantees could not be

furnished. Certain other details / information were also

sought by the plaintiff from the defendant No.1. The plaintiff

in these circumstances also sought extension of time for

submitting the Letter of Acceptance;

(E) The licence and interconnect agreement were, however, not

furnished to the plaintiff and for this reason the validity of

the bid, of the bank guarantee aforesaid of Rs 50 crores by

way of earnest money as well as the time for the plaintiff

conveying unequivocal acceptance of the Letter of Intent

was extended from time to time;

(F) The defendant No.1 on 1st July, 1996 furnished to the

plaintiff the draft of the licence and interconnect

agreements and called upon the plaintiff to convey its

unequivocal and unconditional acceptance of the same by

31st July, 1996;

(G) It is the case of the plaintiff that the terms and conditions of

the draft licence and interconnect agreement had been

substantially changed from the terms specified in the

original tender and the clarifications.

Discussions/correspondence commenced between the

parties in this regard and the time for plaintiff to convey its

acceptance of the Letter of Intent was again extended from

time to time. Similarly, the validity of the bid and the bank

guarantee was extended. Pursuant to the said discussions,

certain revised drafts of the licence and interconnect

agreement were also forwarded by the defendant No.1 to

the plaintiff but according to the plaintiff the same still

contained substantial changes from the tender document

and the clarifications issued earlier;

(H) It is the case of the plaintiff that the defendant No.1 instead

of resolving several issues which had been raised by the

plaintiff, by its letter dated 19th October, 1996 signed on 30th

October, 1996 and to the defendant No.2 bank, invoked the

earnest money bank guarantee of Rs 50 crores.

It is the case of the plaintiff that earnest money bank

guarantee is conditional bank guarantee which can be invoked only

in the circumstances provided therein and neither of which

circumstances had occurred.

29. At this stage, it would be appropriate to set out the relevant

terms of the bank guarantee as under:

"The conditions of this Obligation are :

1. If the bidder withdraws its bid during the period of bid validity specified by Authority or

2. If the bidder having been notified of the acceptance of its bid by the Authority during the period of the bid validity

a) fails or refuses to execute the contract form if required; or

b) fails or refuses to furnish the Performance Bank Guaratnees and/or Financial Bank Guarantee in accordance with the Instructions to Bidders;

3. We undertake to pay to the Authority, an amount not exceeding Rs 50,00,00,000/- upon receipt of its first written demand, without any demur if the Authority note that the amount claimed by is due or owing to the occurrence of one or both of the two conditions, specifying the occurred condition or conditions."

30. It is the case of the plaintiff that the plaintiff, at the time of

invocation of the bank guarantee by the defendant No.1, was still in

the process of negotiation with the defendant No.1 and had neither

failed or refused to accept the contract nor to furnish the

performance and financial bank guarantee, the stage whereof would

also have arisen on the finalization of the contract/agreement. It was

in these circumstances that the relief of mandatory injunction in the

nature of specific performance was also claimed in the plaint, though

not pressed and no issue was framed thereon and which is even

otherwise infructuous today.

31. It is further the case of the plaintiff that the draft agreement

forwarded by the defendant No.1 to the plaintiff as well as the

revisions therein pursuant to representation of the plaintiff

contained substantial changes from the tender document and were

thus in the nature of counter offer by the defendant No.1 and for non

acceptance whereof the earnest money bank guarantee could not be

encashed. The plaintiff, of course, contended that it was bona fide

still negotiating with the defendant No.1 but the defendant No.1 put

pressure on the plaintiff by invoking the bank guarantee.

32. The defendant No.1 in its written statement has not

controverted the factual pleas aforesaid of the plaintiff including as

to the clarifications issued to the prospective tenderers on 27th May,

1996. It is, however, the case of the defendant No.1 that the plaintiff

as well as others to whom Letters of Intent had been issued after

receiving copies of the licence / interconnect agreement had made

some suggestions; that the defendant No.1 had clarified that it would

consider such suggestions to the extent acceptable and accordingly

some modifications were made and revised drafts issued. The

defendant No.1 denies that the draft agreements as revised

contained substantial changes from the tender document. It was

denied that any counter offer had been made by the defendant No.1

to the plaintiff. The defendant No.1 thus pleaded that the plaintiff

having failed to give acceptance to Letter of Intent and having failed

to submit the performance and financial bank guarantees, the

defendant No.1 had no option but to invoke the bank guarantee. It

was contended that the plaintiff had neither declined to sign the

documents nor given acceptance thereof.

33. In response to the pleading of the plaintiff of the invocation of

the bank guarantee being not in terms of the guarantee the

defendant pleaded that clause 3 of the bank guarantee did not

require reasons to be stated and it was enough that there was

already a breach committed by the plaintiff. It is pleaded that the

plaintiff itself knew that it was in breach in not giving acceptance of

Letter of Intent and not furnishing the performance and financial

bank guarantees as required and thus could not challenge the

invocation on the ground of the said facts having not been mentioned

in the invocation letter.

34. At this stage, it is appropriate also to set out the invocation

letter dated 19/30th October, 2006 whereby the bank guarantees

were invoked.

"To,

The Manager, Deutech Bank, Tolstoy House, 15-17, Tolstoy Marg, New Delhi - 110001.

Sub: Encashment of Bank Guarantee No.796/372/95 dt 22-6-95 for Rs Fifty Crores.

Dear Sir,

Please refer your above mentioned Bank Guarantee and Extensions submitted on behalf of M/s Basic Teleservices Ltd for Tamil Nadu Circle Area in Tender No. 314-7/94-PHC. The Director General Telecom, the Telecom Authority, has ordered that above mentioned bank guarantee be forfeited.

You are, therefore, requested to encash the above mentioned Bank guarantee and remit the amount through a crossed account payee demand draft in favour of Pay and Accounts Officer, Dept of Telecom (HQ) payable at Delhi.

Please acknowledge the Receipt."

35. Most of the documents filed by the plaintiff in support of its

case have been admitted by the defendant No.1. Thus, the factual

controversy requiring oral evidence was confined only to prove

documents which were not admitted and as to whether there were

substantial changes in the draft licence / interconnect agreements

forwarded by the defendant No.1 to the plaintiff, from the tender

documents or not. The cross examination of the witness of the

plaintiff, particularly on 10th December, 2002, 13th January, 2003 and

14th January, 2003 to a large extent is found to be relating to matters

on which issues had not been framed and which are not to be

adjudicated.

36. The witness of the plaintiff in cross examination deposed that

the defendant No.1 had in the agreement proposed after issuance of

Letter of Intent taken away the right of renewal of the agreement

available to the plaintiff under the tender document, thereby making

a substantial change in the agreement. He further deposed that

while under the tender document, the licence could be revoked only

on breach of licence conditions, under the proposed agreement, the

licence was made revocable merely by giving 180 days notice and for

reasons not necessarily of breach of licence conditions by the

plaintiff. Similarly, it was deposed that while the tender document

did not contain any stipulation for providing specifications of the

services being provided to the subscribers, under the proposed

agreement the plaintiff was obliged to give specifications of the

services being provided to its subscribers, to the defendant No.1.

37. Yet another substantial change deposed by witness of plaintiff

was of giving prior information to the department of the rates to be

fixed by the plaintiff. The counsel for the defendant No.1 of course

suggested to the witness of plaintiff that the other substantial

changes listed in annexure 3 to the letter dated 18th October, 1996 of

the plaintiff to the defendant No.1 were not substantial and which

was denied.

38. The witness of the defendant No.1 in his affidavit by way of

examination in chief denied that the draft agreement contained any

deviations and deposed that essentially and substantially it was in

line with the tender document. He further deposed that the

substantial changes listed out by the plaintiff were in fact in

consonance with the tender conditions. It was also deposed that the

plaintiff having expressed its willingness to go forward was not

entitled to object. On invocation of the bank guarantee it was

deposed that the conditions for invocation thereof existed since the

plaintiff had failed to furnish the performance and the financial bank

guarantees. He further deposed that the draft agreements being in

terms of the tender document were not a counter offer which

required an acceptance of the plaintiff. It was further deposed that

the plaintiff had been raising new issues in its successive letters.

Evidence was also given to the effect that M/s HFCL Benzeq Telecom

Limited had also instituted a suit in this court restraining

encashment of earnest bank guarantee given by them in similar

circumstances and the others to whom Letters of Intent had been

issued had accepted the Letters of Intent and furnished performance

and financial bank guarantees. It was further deposed that

extensions were given from time to time not because there were any

negotiations but by way of grace and the sister company of the

plaintiff to which Letter of Intent with respect to another circle had

been issued had executed the agreement even with the alleged

amendments.

39. The witness of the defendant in his cross examination deposed

that he was not personally aware of the transaction with the plaintiff

and had no personal knowledge of the contents of his affidavit by

way of examination in chief and the same was based on official

records. He replied that he was not carrying the official records

forming the basis of his affidavit with him. He denied the suggestion

that there were substantial deviations between the tender conditions

and the draft agreements.

40. In the face of the aforesaid material I will take up the aspect of

invocation of the bank guarantee first. From the language of the

bank guarantee set out hereinabove the defendant No.2 bank had

bound itself to pay the amount thereof if either of the two conditions

mentioned therein existed. However, the bank had further agreed /

undertaken to pay the said amount "without any demur if the

authority note that the amount claimed by is due to or owing to the

occurrence of one or both of the two conditions, specifying the

occurred condition or conditions."

41. Both counsels have filed plethora of judgments with respect to

injunctions relating to Bank Guarantees, mentioned in their written

arguments/synopsis but it is not found necessary to burden this

judgment with those.

42. What follows from a reading of the aforesaid bank guarantee is

that though payment thereunder was conditional upon the happening

/ existence of the conditions mentioned therein but the bank was not

to conduct its own enquiry to determine whether the contingency

had occurred or not but was to be bound by the statement of the

defendant No.1 to the effect that the conditions on the occurrence of

which the payment under the guarantee was to fall due had occurred

/ existed. Once the defendant No.1 being the beneficiary of the

guarantee informed the defendant No.2 Bank of happening of the

contingency, the defendant No.2 Bank had no right to contest such

claim of the defendant No.1.

43. "Demur" is defined in the shorter Oxford Dictionary, 6th

Edition as delay, waiting, procrastination or objecting or a state of

indecision. Black's Law Dictionary 6th Edition defines the same as

"to take an exception to the sufficiency in point of law of a pleading

or state of facts alleged". Thus when the defendant No.2 bank

agreed/undertook that it shall pay the amount of the bank guarantee

upon receipt of first written demand from the defendant without any

demur, it agreed to pay the money without delay, procrastination,

lingering and without taking any objection as to the existence or

happening of the conditions on happening of which the money was

payable.

44. However, the guarantee does not end on that. The bank was to

pay immediately without demur only if the telecom authority "noted"

that the amount claimed under the bank guarantee upto a maximum

of Rs 50 crores was due to the authority owing to the occurrence of

one or both of the two conditions. Not only so the said writing of the

telecom authority was also required to specify the occurred condition

or conditions. Thus, the Letter of Invocation was required to note,

i.e., contain a writing (i) that the amount claimed under the bank

guarantee was due to the defendant No.1, and; (ii) that the said

amount had fallen due owing to the occurrence of one or both of the

two conditions on occurrence of which the money under the

guarantee was payable, and; (iii) specify the condition/conditions

which had occurred leading to the bank guarantee being invoked.

45. If the written demand was to contain all of the said

ingredients, then it was not open to the defendant No.2 bank or for

that matter even to the plaintiff to dispute or controvert or to seek

proof of the statement of the telecom authority to the effect that the

amount was due or owing or that the condition had occurred or not

occurred. The letter of invocation only intimates to the defendant

No.2 that the Telecom Authority has ordered that the bank

guarantee be forfeited and the Director General Telecom had

requested the bank to encash the bank guarantee and remit the

amount thereof through a crossed account payee demand draft in

favour of the Pay and Accounts Officer, Department of Telecom. The

letter nowhere notes either that the amount claimed was due or

owing or that any of the conditions on the occurrence whereof the

amount was payable had occurred and hence the question of

specifying a condition does not arise.

46. The defendant No. 1 would contend that since the guarantee

was invocable only on the conditions aforesaid and not otherwise,

the mere issuance of the invocation letter should be deemed to imply

the occurrence of the conditions on which the guarantee could be

invoked. The question which arises for adjudication is whether

occurrence of such conditions is to be read into the letter aforesaid

or not. The effect thereof would be to do injustice / violation to the

language of the bank guarantee and to ignore the terms thereof

requiring the written demand of the Telecom authority to note

therein that the amount was due or owing and that the conditions

had occurred and to specify the condition/s.

47. The bank guarantee is an instrument of trade and commerce.

The courts have adopted the policy of restraining themselves from

interfering therewith for the reason of the same interfering in the

trade and commerce. It has been held that where the parties have

agreed that the payment under the bank guarantee issued at the

instance of one in favour of the other shall be made, unconditionally,

without any demur and simply on demand being made and the

parties have acted on the said premise, the courts ought not to come

in the way. Most of the bank guarantees are unconditional and

expressly state so. In those cases, where payment is agreed to be

made on mere demand without requiring any conditions to be

specified, the law aforesaid has developed. However, the defendant

No.1 in the present case though presumed to be aware of the

possibility of obtaining such an unconditional guarantee, opted not to

do so but was satisfied with a bank guarantee which as per its own

terms was conditional i.e., invocable only on the happening of the

conditions specified therein. Though the defendant No.1 took care to

provide that the bank should make the payment on demand and

without any demur on its unilateral statement of conditions

prerequisite invocation of the bank guarantee having occurred but

nevertheless imposed a further restriction on itself of notifying the

bank of the occurrence of the conditions as well as specifying the

condition.

48. The requirement aforesaid of the demand under the bank

guarantee stating that the amount was due and that the condition on

which it was to fall due had occurred and specifying the said

condition cannot be said to be superfluous or unnecessary or of no

effect or a mere formality. The effect / purport thereof is that the

official of the defendant No.1 making the demand should apply his

mind and take responsibility, of the conditions only on happening of

which the guarantee could be invoked having occurred. The mere

invocation of bank guarantee and payment thereunder does not

prevent the person at whose instance the guarantee had been

furnished from averring that the guarantee had been wrongly

invoked and the payment received thereunder was not due. Such

person can initiate proceedings not only for recovery of amount

wrongfully received under the decree but also for

damages/compensation for wrongful invocation of the bank

guarantee. Thus invocation of the bank guarantee is not a mindless

matter and the guarantee cannot be invoked at the whims and fancy

of the person in whose favour it is given. Invocation thereof carries

with it the responsibility / liability for wrongful invocation if any.

49. In the present case the department of Telecom of the

Government of India which then was foraying for the first time into

allowing private players in the field of telecommunication which till

then was in the domain of the Government only, deemed it

appropriate that its official invoking the bank guarantee, before

doing so, should take responsibility of ascertaining that the

conditions only on the occurrence which the guarantee could be

invoked had occurred. In the circumstances it is well nigh possible

that in that era of uncertainty of how the telecom sector was to be

opened to the private sector it was deemed appropriate that before

guarantees in such huge amounts were encashed by the

Government, a senior/appropriate officer / authority takes

responsibility for invocation thereof. The Bank Guarantee in

question does not admit of encashment on the basis of a mere

demand or mere averment of plaintiff being in breach or default or

on mere averment of Telecom Authority ordering forfeiture thereof.

Thus, in my view the terms/language aforesaid of the bank guarantee

cannot be dismissed as irrelevant and to be not given effect to. The

court will intervene to prevent any action on the part of beneficiary

which is contrary to the terms to the terms of Bank Guarantee.

Strict adherence to the terms of the Bank Guarantee has to be

ensured. It has to be given full effect to and if it is given effect to,

the conclusion is inescapable that the letter of invocation/demand

does not fulfill the terms of the invocation of the bank guarantee. If

that be so, it has to be necessary held that the invocation is not in

terms of the bank guarantee. Axiomatically it follows that the

invocation being bad, no liability for payment thereunder occurred.

The defendant No.2 bank is therefore found justified in taking the

stand in its letter dated 31st October, 1996 and the plaintiff found

entitled to claim injunction restraining payment under the bank

guarantee.

50. The Division Bench of this court in M/s Har Prashad & Co

Ltd Vs Sudershan Steel Mills AIR 1980 Delhi 174 has held that the

duty of the beneficiary in making the demand on the bank is like the

duty of the plaintiff to disclose the cause of action in the plaint; just

as a plaint is liable to be rejected for non disclosure of the cause of

action, a demand by the beneficiary of the bank guarantee is liable to

be rejected by the Bank if it does not state the facts showing that the

conditions of the bank guarantee have been fulfilled; if this

obligation is not fulfilled by the beneficiary, he is not entitled to

payment of the amount of the bank guarantee.

51. In M/s Ansal Properties & Industries P Ltd Vs

Engineering Projects India Ltd AIR 1998 Delhi 176 the Bank had

undertaken to pay forthwith on demand in writing and without

protest or demur moneys payable by the contractor to the Company

as specified in any notice of demand made by the Company to the

bank with reference to the guarantee. The invocation letter did not

mention if any loss was caused nor was the amount of loss suffered

mentioned. Relying on United Commercial Bank Vs Bank of

India AIR 1981 SC 1426 and other judgments of this court, it was

held that the invocation letter did not fulfill the requirements agreed

in the bank guarantee for invoking the same. It was further held

that the person at whose instance bank guarantee is furnished is not

a stranger to the transaction and has a right to contend that the

invocation is not in accordance with the terms and conditions agreed

and incorporated in the guarantee.

52. I may mention that another Single Judge of this Court in Delhi

Lotteries Vs Rajesh Aggarwal AIR 1998 Delhi 332, in para 35 of

the judgment inter alia held that Har Prasad & Co. Ltd (supra) was

modified by the Division Bench in, also M/s Har Prasad & Co. Ltd

Vs M/s Sudershan Steel Rolling Mills AIR 1983 Delhi 128.

However, that is not correct. The latter judgment is of, after the

bank guarantee had been invoked in terms thereof.

53. This court again in Maihar Cement Vs Krishna Gears (P)

Ltd AIR 2000 Delhi 362 distinguished all cases where the bank

guarantees contained express stipulations that the amount would be

due and payable on demand from the beneficiary stating that the

amount claimed was due by way of demand/damage caused by the

breach of the terms and conditions of agreement and as such loss

had occurred from those where money under the bank guarantee

was payable merely on demand and unconditionally.

54. With respect to a bank guarantee having identical language as

in the present case, interim injunction was also issued in Gujarat

Optical Communications Ltd. Vs. Deptt. of Telecom 87 (2000)

DLT 859. In the trial in the present, nothing has come out to

persuade me to take a contrary view.

55. Another Division Bench of this court in M/s Punj Sons (P)

Ltd. Vs. Hong Kong & Shanghai Banking Corp. 1994 (1) Vol. 22

All India Banking Law Judgments 364 also held that where the terms

of the bank guarantee required the demand to state that the amount

was due by way of loss & damage but the invocation letter

straightaway sought to enforce the bank guarantee, the invocation

was not in terms of bank guarantee and injunction at instance of

party who had furnished the bank guarantee should follow. Similarly,

in V.V. Gupta Vs. NDMC 2006 (3) A.D. Delhi 619, Puri

International (P) Ltd. Vs. N.B.C.C. 66 (1997) DLT 698 and

Mahalingham Shetty Co. Vs. N.P. C. Corp. 1990 Rajdhani Law

Reporter 410 injunctions were issued on the ground of invocation

being not in terms of the bank guarantee. The principle that where

the guarantee is limited on its terms, enforcement has to be within

the conditions/limitations was also reiterated in Intertoll I.C.S. Cec

ons O&M Co. P. Ltd. Vs. N.H.A.I. 2006 II AD (Delhi) 402 and

recently in N.H.A.I. Vs. Elasmex-TWS-SNC Joint Venture 150

(2008) DLT 215.

56. Reference must also be made to Hindustan Construction Co.

Ltd. Vs. State of Bihar AIR 1999 SC 3710. The bank guarantee as

per its terms was to be invoked by the Chief Engineer. Invocation by

the Executive Engineer was held to be wholly wrong and the Bank

held to be under no obligation to pay.

57. The beneficiary is not to parrot like repeat the language of the

bank guarantee while invoking the same (though it is desirable, to

leave no controversy as to valid invocation). However, I find in the

present case the defendant No.1, in the invocation letter, besides

stating that the Authority has ordered forfeiture of bank guarantee

and instructing manner of payment, does not say anything else.

There is nothing in it from which it can be deducted that any of the

conditions, only on happening of which the defendant No.2 Bank was

obliged to pay had occurred. It does not even say that demand for

payment was being made in terms of bank guarantee.

58. Though the decision on the aspect aforesaid is sufficient for

granting injunction to the plaintiff but as required by the CPC,

decision on the other aspects of challenge to the invocation is also to

be rendered. It is also the contention of the plaintiff that in the

circumstances aforesaid there was no concluded contract between

the parties and for this reason the guarantee could not be invoked.

59. The tender issued is an invitation to offer and the bid is the

offer pursuant to the said invitation. The tender usually contains

detailed terms and conditions and immediately on acceptance of the

bid/tender, a binding contract comes into existence. Nothing is then

left for the parties to negotiate or agree upon. Even if there is a

requirement of executing a formal agreement, draft thereof is

annexed to the tender; execution thereof is a formality of putting

signatures on dotted lines; generally the coming into force of binding

contract on acceptance of bid is not dependent on such execution. A

binding contract is one in which all the terms and conditions

necessary for the contract have been settled/agreed to. An

agreement to agree in future on certain aspects is not a contract or

an enforceable agreement in law. In these cases, when merely on

acceptance of the bid, the contract comes into existence, if

thereafter the successful bidder does not act in terms of the

contract, the earnest money is forfeitable by encashment of bank

guarantee. However, the pleadings in this case show that the

present case is not of such a kind. The tender was not accompanied

with the draft agreements to be executed on acceptance of the bid by

issuance of Letter of Intent. Though the tender contained certain

terms and conditions, but in the clarifications given on 27th May,

1996 and which admittedly formed part of the tender conditions, it

was stated that the draft of the agreements to be signed would be

given alongwith the letter of intent. Presumably, the draft

agreements containing all the terms and conditions were not ready

till then.

60. I may at this stage record that the original tender and the

clarifications forming part of the tender and which are not

controverted as aforesaid are contained in the part II instead of part

III file of the suit. Similarly several of the documents are also to be

found in part II instead of part III file of the suit.

61. The Letter of Intent dated 13th March, 1996 itself provides that

the detailed terms and conditions shall be enumerated in the licence

agreement and the interconnect agreement to be signed

subsequently and that a copy of these documents would be made

available within a short span of time. The aforesaid state of affairs

shows that no binding contract was to come into force between the

parties on the acceptance of the bid of the plaintiff or on issuance of

Letter of Intent by the defendant No.1 to the plaintiff and upon

breach whereof the earnest money bank guarantee could be invoked

/ forfeited. The question of invoking/forfeiting earnest money bank

guarantees arises only when inspite of a binding enforceable

agreement having come into existence the plaintiff fails to act in

terms thereof. It is only then that the plaintiff can be said to be in

breach. However, when after the acceptance of the bid and issuance

of Letter of Intent the detailed terms and conditions are still to be

worked out between the parties, the parties, even after issuance of

Letter of Intent / acceptance of bid cannot be said to be bound to

each other by an enforceable agreement. It could at best be an

agreement to enter into a contract the terms and conditions whereof

were still to be negotiated between the parties. The position would

have been different had the plaintiff unequivocally undertaken to

accept, sign and execute whatever agreement containing whatever

detailed terms and conditions were to be put up by the defendant

No.1 to the plaintiff. In that case it could have been argued that the

plaintiff had agreed to accept the detailed terms and conditions as

stipulated by the defendant. Here the successful bidder was given

right to decline to accept the licence without forfeiting the earnest

money if the change was substantial. If there was to be a difference

between the parties as to whether the change is substantial or not,

there could be no forfeiture without decision by the appropriate fora

whether the changes were substantial or not. Whichever way we

look at it, the only conclusion which follows is that there could be no

breach by the plaintiff of a binding contract owing whereto the bank

guarantee could be encahsed.

62. From all the documents on record it follows that the position

was quit fluid. There is on record at page 771 of part III of the file, a

letter dated 22nd April, 1996 of the defendant No.1 to the plaintiff.

While replying to the queries of the plaintiff, the defendant No.1

admitted that while in the tender documents the figure of 3904 was

furnished as the number of villages where the telephones were yet to

be provided, in accordance with the data of the National Informative

Centre documents but as per further clarifications from directorate

the figure had been revised to 6072. The said figure was apparently

given owing to having a nexus to the bid to be made in pursuance to

the tender. A perusal of annexure 3 (listing the deviations in the

licence agreement from the tender conditions), to the letter dated

18th October, 1996 of the plaintiff to the defendant No.1 shows as

many as 53 deviations. The deviations are not disputed by the

defendant No.1. The controversy is whether the same are

substantial or not. As aforesaid, the telecom sector till then was

under State control. The State was not operating the same from the

point of view of profitability. The State did not carry on the business

of telecommunication to earn profits and was as such not concerned

with whether the expenses were justified or not justified or could be

reduced. The perspective of the defendant No.1 and of the plaintiff

of the said operation is entirely different. What could be substantial

for a person intending to run the business for profit motive may be

only operational for the State carrying on the same activities as a

service to the citizens of the country. Without examining each and

every of the 53 deviations and even if one were to limit to the

deviations brought out in the cross examination as aforesaid, to me

they appear to be substantial. A private player was to make

investment in the business and the yield whereof in the initial years

was bound to be small on the basis of certainty of the terms of the

licence and of renewal thereof. If the said terms were to be changed,

it would certainly be substantial. Similarly, it is pointed out that

while as per the tender document, the grant of other licence in the

service area was to be after taking into account the commercial

interest of the existing operator the said condition was sought to be

removed from the licence agreement. This change, by no means can

be said to be not substantial.

63. I therefore find this aspect also in favour of the plaintiff.

64. The very fact that an option had been given to the plaintiff to

not opt to accept the letter of Intent without entering forfeiture of

earnest money bank guarantee in the event of the changes in the

proposed agreement being substantial shows that the matter was

subject to review by mutual agreement. It is for this reason only that

the draft proposed agreements were to be sent alongwith the Letter

of Intent. Not only were the drafts not so sent but even otherwise

the drafts delivered subsequently show substantial changes from the

tender documents. In this regard, in the clarifications, in reply to

question No.6 pertaining to clause 13.6 of the tender document

pertaining to interconnect agreement it was provided that the

interconnect agreement will be open to review by mutual agreement

between the DoT and the licencee. This is yet another indicator of

there being no binding agreement till the time when the bank

guarantee was invoked.

65. The senior counsel for the plaintiff during the course of

hearing also had handed over another compilation listing the crucial

deviations from the tender condition. Though it is not felt necessary

to discuss the same, suffice it is to record my satisfaction that on

perusal thereof the changes are found to be substantial by me.

66. I thus find that there was no concluded agreement between the

plaintiff and the defendant No.1 till the date of invocation of the

bank guarantee.

67. Though the Senior counsel for the plaintiff has also referred to

HFCL Bezeq Telecom Ltd V UOI 69 (1997) DLT 317 wherein, an

identical suit for identical relief and relating to the same tender was

decreed and encashment of the bank guarantee restrained but I find

another judgment of this court in D.S. Constructions Ltd Vs Rites

Limited 127 (2006) DLT to be more apposite. In that case also upon

finding that there was no concluded contract between the parties,

this court held the invocation of the bank guarantee to be fraudulent.

It was held that an action of invocation of the bank guarantee despite

knowledge that there was no right to invoke the same is fraudulent

and constitutes a ground for injunction. This court had also invoked

the provisions of Section 134 of the Contract Act to hold that the

bank in the position of a surety, stood discharged when the principal

is discharged. It was held that in the absence of a binding contract,

there can be no occasion for furnishing a guarantee for breach

thereof. The present case stands on a much better footing. Here the

defendant No.1 was probably aware that it was legally not entitled to

invoke the bank guarantee; perhaps for this reason only the words

required to be stated for demanding the money under bank

guarantee were intentionally not stated in the letter of invocation.

68. In the light of the discussions above I also find that the plaintiff

is entitled to the relief of declaration that the invocation by the

defendant No.1 of the bank is contrary to the terms of the guarantee

and to injunction on that ground as well.

Re: Issue No. 5: Relief ?

69. In the light of my findings above, the suit of the plaintiff is

entitled to be decreed for the reliefs claimed in para 21(a) to (c) of

the plaint. The whole conduct of the defendant not only prior to the

suit but even after the institution of the suit also leads me to impose

costs on the defendant No.1. Counsels fee assessed at Rs 1 lac.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW (JUDGE)

May 28, 2009 M