Gauhati High Court
M/S Vardan Associates Private Limited vs Numaligarh Refinery Limited And 7 Ors on 5 March, 2025
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GAHC010004202025
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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/142/2025
M/S VARDAN ASSOCIATES PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING
ITS REGISTERED OFFICE AT G-7, ASSOCIATES PLAZA, I BLOCK, SHASTRI
NAGAR, MEERUT-250004, UTTAR PRADESH, REPRESENTED BY ITS
MANAGING DIRECTOR, MR. SACHIN KUMAR TYAGI, S/O RAKESH
KUMAR TYAGI, R/O D-194, D BLOCK, SHASTRI NAGAR, MEERUT-250004
VERSUS
NUMALIGARH REFINERY LIMITED AND 7 ORS
A GOVERNMENT OF INDIA ENTERPRISE REPRESENTED BY ITS
EXECUTIVE DIRECTOR, PANKAGRAND, P.O.-NUMALIGARH REFINERY
COMPLEX, DIST- GOLAGHAT, ASSAM, PIN-785699
2:GENERAL MANAGER (COMMERCIAL)
NUMALIGARH REFINERY LIMITED
P.O.-NUMALIGARH REFINERY COMPLEX
DIST- GOLAGHAT
ASSAM
PIN-785699
3:HEAD (PROJECT-COMMERCIAL)
NUMALIGARH REFINERY COMPLEX
P.O.-NUMALIGARH REFINERY COMPLEX
DIST- GOLAGHAT
ASSAM
PIN-785699
4:GENERAL MANAGER (CONSTRUCTION)
ENGINEERS INDIA LIMITED
HOTEL MONARCH AACHAL
BANANI COMPLEX
Page No.# 2/9
NEAR BDO
SHIV MANDIR
SILIGURI-734011
WEST BENGAL
5:RESIDENT CONSTRUCTION MANAGER
ENGINEERS INDIA LIMITED
HOTEL MONARCH AACHAL
BANANI COMPLEX
NEAR BDO
SHIV MANDIR
SILIGURI-734011
WEST BENGAL
6:CENTRAL VIGILANCE COMMISSIONER
SATARKTA BHAVAN
BLOCK-A
GPO COMPLEX
INA
NEW DELHI-110023
7:M/S TRENCHLESS ENGINEERING SERVICES PRIVATE LIMITED (TESPL)
REPRESENTED BY ITS DIRECTOR
MR. BIPIN B GUPTA HAVING ITS REGISTERED OFFICE C-185
MAYAPURI PHASE-II
NEW DELHI-110064
8:BANK OF INDIA
SECTOR-18
NOIDA BRANCH
GAUTAM BUDDHA NAGAR-201301
REP. BY ITS BRANCH MANAGER
Advocate for the Petitioner : MR B D DAS, MR J LOTHA,MR P UPADHYAYA,MR D
BANIA,MRS R DEKA
Advocate for the Respondent : MR. S S ROY (FOR CAVEATOR), MRS. R DEVI (C.G.C (R-6)),MS
A DEKA(R-7),MR. D DOLEY (R-7),MR. R P SARMAH(R-7),MR. S BANIKYA(R-1,2,3),MR. M
GOGOI (R-1,2,3),MR. N DEKA(R-1,2,3),DY.S.G.I.
Linked Case : I.A.(Civil)/559/2025
M/S VARDAN ASSOCIATES PRIVATE LIMITED
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A COMPANY INCORPORATED UNDER THE COMPANIES ACT
1956 HAVING ITS REGISTERED OFFICE AT G-7
ASSOCIATES PLAZA
I BLOCK
SHASTRI NAGAR
MEERUT- 250004
UTTAR PRADESH REPRESENTED BY ITS MANAGING DIRECTOR
MR. SACHIN KUMAR TYAGI S/O RAKESH KUMAR TYAGI RES
VERSUS
NUMALIGARH REFINERY LIMITED AND OTHERS
A GOVERNMENT OF INDIA ENTERPRISE REPRESENTED BY ITS EXECUTIVE
DIRECTOR
PANKAGRAND
P.O -NUMALIGARH REFINERY COMPLEX
DISTRICT - GOLAGHAT
ASSAM
PIN- 785699.
2:GENERAL MANAGER (COMMERCIAL)
NUMALIGARH REFINERY LIMITED
P.O - NUMALIGARH REFINERY COMPLEX
DISTRICT - GOLAGHAT
ASSAM
PIN- 785699
3:HEAD (PROJECT COMMERCIAL) NUMALIGARH REFINERY LIMITED
P.O - NUMALIGARH REFINERY COMPLEX
DISTRICT - GOLAGHAT
ASSAM
PIN- 785699.
4:G(CONSTRUCTION) ENGINEERS INDIA LIMITED
HOTEL MONARCH AACHAL
BANANI COMPLEX
NEAR BDO
SHIV MANDIR
SILIGURI- 734011
WEST BENGAL. ENERAL MANAGER
5:RESIDENT CONSTRUCTION MANAGER
ENGINEERS INDIA LIMITED
HOTEL MONARCH AACHAL
BANANI COMPLEX
NEAR BDO
Page No.# 4/9
SHIV MANDIR
SILIGURI- 734011
WEST BENGAL.
6:CENTRAL VIGILANCE COMMISSIONER
SATARKTA BHAVAN
BLOCK- A
GPO COMPLEX
INA
NEW DELHI - 110023.
7:M/S TRENCHLESS ENGINEERING SERVICES PRIVATE LIMITED (TESPL)
REPRESENTED BY ITS DIRECTOR
MR. BIPIN B GUPTA HAVING ITS REGISTERED OFFICE C-185
MAYAPURI PHASE-II
NEW DELHI- 110064.
8:BANK OF INDIA
SECTOR- 18
NOIDA BRANCH
GAUTAM BUDDHA NAGAR - 201301
REPRESENTED BY ITS BRANCH MANAGER.
------------
Advocate for : HARSHADITTYA ROY DAS
Advocate for : DY.S.G.I. appearing for NUMALIGARH REFINERY LIMITED AND
OTHERS
BEFORE
HON'BLE MR. JUSTICE KARDAK ETE
ORDER
05.03.2025
Heard Mr. B.D. Das, learned Senior Counsel assisted by Mr. J. Lotha, leared
counsel for the petitioner. Also heard Mr. N. Deka, learned counsel for the
respondent nos.1,2,3,4 and 5 and Mr. R.K.D. Choudhury, learned Dy.SGI for the
respondent no.6 and Mr. R.P. Sarmah, learned Senior Counsel assisted by Mr. D.
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Doley, learned counsel for the respondent no.7 and Mr. A. Dhanuba, learned
counsel for the respondent no.8.
2. This is an application praying for restraining the respondents for invoking
the applicant's Bank Guarantee No. 7117IPEBG220002 dated 01.02.2022 of Rs.
2,13,82,350/- (Rupees Two Crore Thirteen Lakhs Eighty Two Thousand Three
Hundred Fifty).
3. The applicant has filed the connected writ petition being WP(C) 142/2025,
challenging the termination order dated 12.12.2024, whereby, the contract vide
letter of acceptance dated 07.12.2021 and the purchase order dated 05.05.2022
for the work of "HDD with intersection technique (performing pilot hole by
deploying rigs from both sides) by utilizing electromagnetic steering technology
for precise real time tracking" and the total HDD length of approximate 3800
meters for an amount of Rs. 71,27,45,000/- (Rupees Seventy one crore twenty
seven lakhs forty five thousand) only has been terminated. The
applicant/petitioner has deposited a bank security of Rs. 2,13,82,350.00
(Rupees Two Crore Thirteen Lakhs Eighty Two Thousand Three Hundred fifty)
being 3% of the total contract value by way of Bank Guarantee dated
01.02.2022. The term of the said Bank Guarantee was subsequently, extended
by a letter dated 03.09.2024, extending the validity up to 03.08.2025.
4. During the pendency of the writ petition, the respondents by a letter dated
02.01.2025 requested the Bank of India, respondent no.8 herein, for invoking
the Bank Guarantee No. 7117IPEBG220002 dated 01.02.2022 of Rs.
2,13,82,350.00 (Rupees Two Crore Thirteen Lakhs Eighty Two Thousand Three
Hundred fifty) and requested to remit the said Bank Guarantee in favour of the
respondent no.1, which has come to the knowledge of the applicant on
21.02.2025.
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5. Mr. B.D. Das, learned Senior Counsel for the applicant submits that the
total contract value was 71,27,45,000/- (Rupees Seventy One Crore Twenty
Seven Lakhs Forty Five Thousand) only for which the Bank of India has provided
Bank Guarantee Rs. 2,13,82,350.00 (Rupees Two Crore Thirteen Lakhs Eighty
Two Thousand Three Hundred Fifty) being the 3% of the total contract value by
way of aforesaid Bank Guarantee and the same has been extended up to
03.08.2025 in favour of the Respondent No. 1, Numaligarh Refinery Limited. He
submits that the applicant has completed about 70% of the work and he has
been paid an amount of Rs. 39.64 Crore and thereafter, for the completion of
the balance portion of the work in reference to the applicant has engaged
respondent no. 7 at an amount of Rs. 21.8 Crore for which an agreement dated
22.11.2024 was also executed between the applicant/writ petitioner and
respondent no. 7.
6. The respondent authorities by an order dated 12.12.2024 terminated the
contract awarded to the applicant. The contract in question in favour of the
respondent no. 7 at an amount of Rs 73.95 Crore on the basis of a subsequent
NIT dated 24.10.2024 on an abnormally high amount in favour of the
respondent no. 7 without considering the show cause reply submitted by the
applicant prior to the termination of the contract only to give benefit to the
respondent no. 7.
7. He submits that as on date, the aforesaid Bank Guarantee has not been
invoked. However, the applicant apprehends that the same would be invoked by
putting pressure on the respondent no.8 during the pendency of the writ
petition. Therefore, if the said Bank Guarantee is invoked, irreparable loss and
injury would cause to the applicant and therefore, an appropriate order may be
passed not to invoke the said Bank Guarantee.
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8. On the other hand, Mr. N. Deka, learned Standing Counsel appearing for
the respondents while questioning the maintainability of the writ petition,
vehemently submits that the Bank guarantee is an independent contract
between bank and the beneficiary and the bank is always obliged to honour its
guarantee as long as it is an unconditional and irrevocable one. The beneficiary
and the party at whose instance the bank has given the guarantee is immaterial
and is of no consequence. Therefore, he submits that since the applicant has
miserably failed to show any case of fraud, irretrievable injustice or special
equities, there is no reason to stay or injunct, the invocation or encashment of
the bank guarantee, as the invocation is in terms of the bank guarantee in
question. Therefore, he prays that the present application may be dismissed.
9. Mr. N. Deka, learned Standing Counsel, in support of his submissions has
placed reliance, on the following judgments of the Hon'ble Supreme Court:-
(i) U.P. State Sugar Coroporation Vs. Sumac International Ltd. reported in
(1997) 1 SCC 568,
(ii) Standard Chartered Bank Vs. Heavy Engineering Corporation Limited and
Another (2020) 13 SCC 574,
10. I have considered the submissions of the learned counsel for the parties
and perused the materials on record.
11. On consideration of the matter, it reflects that the respondent authorities
has terminated the contract awarded to the applicant vide order dated
12.12.2024, after the contract was awarded to the respondent no.7, on the
basis of the subsequent NIT dated 24.10.2024. The contract value awarded to
the petitioner was of Rs. 71,27,45,000/- (Rupees Seventy one crore twenty
seven lakhs forty five thousand) only and for which the respondent no. 8 has
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provided a bank guarantee of Rs. 2,13,82,350.00 (Rupees Two Crore Thirteen
Lakhs Eighty Two Thousand Three Hundred fifty) only being the 3% of the total
contract value by way of Bank Guarantee vide dated 01.02.2022 and the said
Bank Guarantee has been extended on 03.09.2024 up to 03.08.2025 in favour
of the respondent no.1. It is noticed that the subsequent NIT dated 24.10.2024
and the awarding of contract to the respondent no.7 by an agreement dated
22.11.2024 is prior to the termination of the contract of the applicant and
without considering the reply to show-cause notice submitted by the applicant.
12. It is true that the settled position in law as held by the Hon'ble Supreme
Court is that the Bank Guarantee is an independent contract between bank and
the beneficiary and the bank is always obliged to honour its guarantee as long
as it is an unconditional and irrevocable one. The dispute between the
beneficiary and the party at whose instance the bank has given the guarantee is
immaterial and is of no consequence. However, an exceptions has been curved
out by the Hon'ble Supreme Court the above Rule, that when there is a clear
case of fraud, irretrievable injustice or special equities, the same can be
interfered with. The Court ordinarily should not interfere with the invocation or
encashment of the bank guarantee so long as the invocation is in terms of the
bank guarantee.
13. This Court vide order dated has directed the learned DSGI to obtain
instructions in respect of the status of the representation filed by the petitioner
before the Central Vigilance Commission. Today, Mr. R.K.D. Chaudhury, learned
DSGI by placing the instruction as sought for in the writ petition submits that
the letter dated 23.12.2024 by the petitioner has not been received by the
Central Vigilance Commission. As regards the complaint dated 13.12.2024
registered as 84423/2025 on the Commission's Portal has been sent to Ministry
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of Petroleum and Natural Gas for investigation and Report vide letter dated
25.02.2025.
14. On the consideration of the above instruction, it appears that the
complaint filed by the petitioner has been sent to the concerned Ministry for
investigation.
15. The respondent authorities, although had filed an affidavit questioning the
maintainability by way of preliminary objection to the writ petition and the
present interlocutory application, no affidavit has been filed on merit in response
to the writ petition.
16. Having considered the submissions of the learned counsel for the parties
and considering that the termination of the contract has been put to challenge
in the writ petition which is pending for disposal, I am of the view that interest
of justice would be served if this interlocutory application is disposed of by
directing the parties to maintain status-quo till the writ petition is disposed of, as
it would appear that irretrievable injustice may cause to the applicant, if the
Bank Guarantee is allowed to be invoked during the pendency of the writ
petition. More so, in view of the fact that parties have agreed to complete the
pleadings and fix the matter in the 1 st week of April, 2025 for final disposal.
Accordingly, it is directed that parties to maintain status-quo till the next date.
17. With the above observation and direction, this interlocutory application
stands disposed of.
JUDGE
Comparing Assistant
