Delhi High Court
Mulanur Renewable Energy Private ... vs Regen Powertech Private Ltd & Anr on 17 January, 2018
$~29, 30 & 31 (Common Orders)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 17th January, 2018
+ FAO(OS) 8/2018
MULANUR RENEWABLE ENERGY
PRIVATE LIMITED ..... Appellant
Through: Mr. Sankh Sengupta with
Ms. Tine Abraham and Ms.
Vatsala Kumar, Advs.
versus
REGEN POWERTECH PRIVATE LTD
& ANR ..... Respondent
Through: Mr. Jayant K. Mehta with
Mr. Neevanandham
Rajagopal, Mr. Anush
Raajan, Mr. S. Aravindan
and Mr. Rahul Kukreja,
Advs.
+ FAO(OS) 9/2018
GREEN INFRA WIND SOLUTIONS
LIMITED ..... Appellant
Through: Mr. Sandeep Sethi, Sr. Adv.
with Mr. Sankh Sengupta
with Ms. Tine Abraham and
Ms. Vatsala Kumar, Advs.
versus
REGEN POWERTECH PRIVATE LTD
& ANR ..... Respondent
Through: Mr. Jayant K. Mehta with
Mr. Neevanandham
Rajagopal, Mr. Anush
Raajan, Mr. S. Aravindan
and Mr. Rahul Kukreja,
Advs.
FAO(OS) Nos.8, 9 & 10/2018 Page 1 of 6
+ FAO(OS) 10/2018
MULANUR RENEWABLE ENERGY
PRIVATE LIMITED ..... Appellant
Through: Mr. Sankh Sengupta with
Ms. Tine Abraham and Ms.
Vatsala Kumar, Advs.
versus
REGEN POWERTECH PRIVATE LTD
& ANR ..... Respondent
Through: Mr. Jayant K. Mehta with
Mr. Neevanandham
Rajagopal, Mr. Anush
Raajan, Mr. S. Aravindan
and Mr. Rahul Kukreja,
Advs.
CORAM:
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE C.HARI SHANKAR
JUDGMENT (ORAL)
GITA MITTAL, ACTING CHIEF JUSTICE
Cav. No.27/2018 in FAO(OS) No.8/2018
Since the ld. counsel for the respondents entered appearance,
caveat stands discharged.
CM Nos.1600-01/2018 in FAO(OS) No.8/2018
CM Nos.1717-18/2018 in FAO (OS) No.9/2018
CM Nos.1847-48/2018 in FAO(OS) No.10/2018
Allowed, subject to all just exceptions.
CMs stand disposed of.
CM No.1602/2018 in FAO(OS) No.8/2018
CM No.1719/2018 in FAO (OS) No.9/2018
CM No.1849/2018 in FAO(OS) No.10/2018
1. Notice.
2. Mr. Jayant K. Mehta, ld. counsel accepts notice for the
respondents in all these appeals.
3. Having regard to the nature of the applications, we have
orally heard the ld. counsel for the parties and delay in filing the
appeals is condoned.
CMs stand disposed of.
FAO (OS) No.8/2018 & CM No.1599/2018 (for stay)
FAO (OS) No.9/2018 & CM No.1716/2018 (for stay)
FAO (OS) No.10/2018 & CM No.1846/2018 (for stay)
4. We have heard Mr. Sandeep Sethi, ld. Senior Counsel
appearing for the appellant and Mr. Jayant K. Mehta, ld. counsel
who appeared on behalf of the respondents, as caveater, on advance
notice.
5. The appellant assails the orders passed by the ld. Single
Judge in O.M.P. (I) 24/2017 & O.M.P.(I) 25/2017 dated 29th
November, 2017 and O.M.P. (I) 37/2017 dated 8th December, 2017
granting the protection of notice of five workings days to the
respondents herein on invocation by the appellants of bank
guarantee furnished to it by the respondents.
6. It appears that with regard to contract of setting up and
developing Wind Power Project, the appellants had placed a
purchase order on the respondents for supply of Wind Turbine
Generators (WTGs). For this purpose, the parties had inter alia
entered into a Wrap Agreement. In terms of the agreement, the
respondents had submitted irrevocable and unconditional bank
guarantees for securing performance of the agreement.
7. Apprehending encashment of the bank guarantees, the
respondents invoked the jurisdiction of the ld. Single Judge by way
of the three petitions under Section 9 of the Arbitration and
Conciliation Act, 1996 seeking orders restraining the appellants
from invoking or receiving money under the performance bank
guarantees. These petitions were considered and disposed of by
the ld. Single Judge in terms of the impugned orders dated 29th
November, 2017 (in OMP(I) No.24/2017 & OMP(I) No.25/2017)
and impugned order dated 8th December, 2017 (in OMP(I)
No.37/2017). Reasons for the same stand recorded in the order
dated 29th November, 2017 passed in OMP(I) No.25/2017. The
orders dated 29th November, 2017 in OMP(I) No.24/2017 and
order dated 8th December, 2017 issue the same direction for the
reasons recorded in the order dated 29th November, 2017 in
OMP(I) No.25/2017.
8. A perusal of the impugned order in OMP(I) No.25/2017
would show that the ld. Single Judge has clearly recorded that as
on date, there were no notices of default issued by the appellant
herein to the respondent herein in all three petitions. It is also
noted that there was no material to support the apprehension
expressed by the respondents that the appellants intended to invoke
the bank guarantees in near future.
9. However, influenced by the fact that the appellants, in
similar situation, had earlier not only invoked the other bank
guarantees issued by the respondents between the parties, as well
as that it had encashed the same before the respondents could have
approached the Court to seek protection, the ld. Single Judge took a
view that the respondents had a valid apprehension that the
appellant may, only to defeat the entitlement of a legal remedy to
the respondents, invoke the bank guarantees behind its back so as
to leave the respondents remediless.
10. Premised on this conclusion, the ld. Single Judge was of the
view that equity deserves to be balanced between the parties and
consequently, directed the appellant herein to give a "notice of five
working days" to the respondents before invoking the bank
guarantees in question.
11. OMP(I) No.24/2017 and OMP(I) No.37/2017 have thus been
decided by the ld. Single Judge on the force of this order.
12. In our view, given the admitted position that no action for
invocation of the bank guarantee has been commenced by the
appellants, the requirement of issuing "notice of five working days"
to the respondents before its invocation would tantamount to the
grant of prayers made in the petition under Section 9 of the
Arbitration and Conciliation Act, 1996, inasmuch as the appellants
would stand interdicted from invoking the bank guarantee without
issuing a notice of five working days, all before invocation.
13. In the given facts and circumstances of the case, the
direction for issuance of notice of five working days to the
respondent before invocation of bank guarantee is neither in terms
of the contract nor in terms of the bank guarantee which has to
abide by well-settled principles of law. In view thereof, the
impugned orders dated 29th November, 2017 in OMP (I) No.24 &
OMP (I) No.25/2017 and order dated 8th December, 2017 in
OMP(I) No.37/2017 are not sustainable and hereby set aside.
These appeals are disposed of in the above terms.
In view of the order passed in the appeals, pending
applications do not survive for adjudication and the same are
accordingly disposed of.
14. We make it clear that we have not expressed any opinion on
the merits of the case.
ACTING CHIEF JUSTICE
C.HARI SHANKAR, J
JANUARY 17, 2018/pmc
