Karnataka High Court

Karnataka Power Corporation Ltd vs M/S. Anand Transport Pvt. Ltd on 15 June, 2022

Bench: B.M.Shyam Prasad

                            -1-



        IN THE HIGH COURT OF KARNATAKA AT BENGALURU

           DATED THIS THE 15TH DAY OF JUNE, 2022

                          BEFORE

         THE HON'BLE MR.JUSTICE B.M.SHYAM PRASAD

         MISCELLANEOUS FIRST APPEAL NO.2023/2016

                           C/W

       MISCELLANEOUS FIRST APPEAL NO.2024/2016 (CPC)

IN MFA NO.2023/2016

BETWEEN:

1.     KARNATAKA POWER CORPORATION LTD
       A GOVERNMENT INCORPORATED
       UNDER THE COMPANIES ACT, 1956,
       HAVING ITS REGISTERED
       OFFICE AT NO.82,
       SHAKTHI BHAVAN,
       6TH FLOOR, RACE COURSE RAOD
       BANGALORE - 560 001.

2.     THE SUPERINTENDING ENGINEER (FUELS)
       M/S KARNATAKA POWER CORPORATION LTD
       NO.82, SHAKTHI BHAVAN,
       6TH FLOOR, RACE COURSE ROAD,
        BANGALORE - 560 001.

                                         ... APPELLANTS
(BY SRI. AJAY J NANDALIKE, ADVOCATE)

AND:

1.     M/S. ANAND TRANSPORT PVT. LTD
       A COMPANY INCORPORATED
       UNDER THE COMPANIES ACT, 1956,
                           -2-



     HAVING REGISTERED OFFICE
      AT MGM-CENTER, NO.1,
     9TH STREET DR. RADHAKRISHNAN SALAI,
     MYLAPORE CHENNAI-600 004.

2.   THE MANAGER
     STATE BANK OF HYDERABAD
     (NOW STATE BANK OF INDIA)
     CHENNAI MAIN BRANCH 2ND LINE,
     BEACH ROAD, CHENNAI - 600 001.
                                 ... RESPONDENTS

(BY SRI.P.S. RAJAGOPAL, SENIOR ADVOCATE A/W
    SRI. S.V. BHAT, ADVOCATE FOR 1;
    SRI. B.N. TULSI KUMAR, ADVOCATE FOR R2)

     THIS MISCELLANEOUS FIRST APPEAL IS FILED
UNDER SECTION 104 R/W ORDER 43 RULE 1(r) OF CPC,
AGAINST THE ORDER DATED 03.02.2016 PASSED ON
I.A.NO.2 IN O.S.NO.10243/2015 ON THE FILE OF THE X
ADDITIONAL    CITY    CIVIL   &   SESSIONS    JUDGE,
BANGALORE, (CCH-26), ALLOWING IA.NO.2 FILED U/O 39
RULE 1 & 2 OF CPC.

IN MFA NO.2024/2016

BETWEEN:

1.   KARNATAKA POWER CORPORATION LTD
     A GOVERNMENT INCORPORATED
      UNDER THE COMPANIES ACT, 1956,
     HAVING ITS REGISTERED
     OFFICE AT NO.82, SHAKTHI BHAVAN,
     6TH FLOOR, RACE COURSE RAOD
     BANGALORE - 560 001.
                          -3-



2.     THE SUPERINTENDING ENGINEER (FUELS)
       M/S KARNATAKA POWER CORPORATION LTD
       NO.82, SHAKTHI BHAVAN,
       6TH FLOOR, RACE COURSE ROAD,
       BANGALORE - 560 001.
                                     ... APPELLANTS

(BY SRI. AJAY J NANDALIKE, ADVOCATE)

AND:

1.     M/S. ANAND TRANSPORT PVT. LTD
       A COMPANY INCORPORATED
       UNDER THE COMPANIES ACT, 1956,
       HAVING REGISTERED OFFICE AT
       MGM-CENTER, NO.1,
       9TH STREET DR. RADHAKRISHNAN SALAI,
       MYLAPORE CHENNAI-600 004.

2.     THE MANAGER
       STATE BANK OF HYDERABAD
       (NOW STATE BANK OF INDIA)
       CHENNAI MAIN BRANCH 2ND LINE,
       BEACH ROAD, CHENNAI - 600 001.
                                   ... RESPONDENTS

(BY SRI.P.S. RAJAGOPAL, SENIOR ADVOCATE A/W
    SRI. S.V. BHAT, ADVOCATE FOR 1;
    R2 SERVED)

      THIS MISCELLANEOUS FIRST APPEAL IS FILED
UNDER ORDER 43 RULE 1(r) OF THE CPC, AGAINST THE
ORDER DATED 03.02.2016 PASSED ON IA NO.2 IN O.S.NO.
10244/15 ON THE FILE OF THE 10TH ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE, BENGALURU, ALLOWING IA
NO.2 FILED UNDER ORDER 39 RULE 1 & 2 OF CPC.

     THESE MISCELLANEOUS FIRST APPEALS COMING
ON FOR ORDERS THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
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                        JUDGMENT

These appeals are by the defendants in two

separate but similar suits in O.S.No.10243/2015 and

O.S.No.10244/2015 presently pending before the

Commercial Court, Bengaluru (CH-83). The impugned

orders in these two appeals are also similar but by the X

Additional City Civil and Sessions Judge, Bengaluru (for

short, 'the civil Court'). With the coming into force of the

Commercial Courts Act, 2015, these two suits and three

other similar suits are referred to the Commercial

Courts.

2. The civil Court by the separate impugned

orders dated 3.2.2016 has restrained the appellants by

an order of temporary injunction from invoking the

original bank guarantees (both of which are dated

25.9.2013) and restraining the Bank - second

respondent from making payments under the bank

guarantees till the disposal of the suit. This Court on

20.9.2018 has permitted the appellants to register their

claims with the second respondent but continuing the

direction to the second respondent not to pay any

amount under the bank guarantee.

3. Sri Ajay N. Nandalike, the learned counsel

for the appellants, and Sri P.S.Rajagopal, the learned

Senior Counsel for Sri S.V.Bhat [who is on record for

the common first respondent], are heard for final

disposal of the appeals. They unanimously submit that

the present two suits and the other three similar suits,

which are referred to the concerned Commercial Court,

are taken up together. During the pendency of the

appeals, the appellants have permitted the respondent

to operate under the subject contracts beyond the initial

period of one year and the first respondent, without

prejudice to the claims against the appellants, has

performed its part of contract.

4. The learned Senior Counsel and the learned

counsel further submit that the first respondent has

amended the respective plaints in the light of the

subsequent events raising additional claims, including

the claim towards charges that the first respondent had

to incur to renew the subject two bank guarantees. The

appellants have filed their additional pleadings

contending inter alia that for the amounts payable by

the first respondent, including the amount payable for

the two years now completed, if they can receive the

amounts under the bank guarantees, their claims would

be satisfied but for the claim for interest. The first

respondent has completed its evidence and the

appellants have commenced their evidence.

5. The question for consideration, in the light of

these subsequent events, would be:

"Whether this Court must intervene with the impugned orders to ensure that the interim arrangement, which has prevailed during the pendency of these appeals, is continued until the final adjudication of two suits".

6. Sri P.S.Rajagopal submits that the appeals

could be disposed of continuing the arrangement

leaving open all the questions to be decided by the

Commercial Court including the costs incurred by the

first respondent in renewal of the bank guarantees over

the period of six years. This Court must consider the

subsequent events of the first respondent in working the

contract beyond the initial period of one year

notwithstanding its case that the contract could not

have been renewed beyond the period of one year, and

Sri Ajay J. Nandalike cannot argue against the merits of

this arrangement prevailing until the final adjudication

of two suits given the fact that the trial is at its fag end.

5. Therefore, this Court is of the considered

view that given the subsequent events and the first

respondent's conduct, the interim arrangement should

prevail until final adjudication with liberty to the first

respondent to seek vindication of its claims for cost of

renewal of the Bank Guarantee. This Court must also

opine that given the circumstances of the case, the

parties must cooperate with the Commercial Court in

expeditious disposal of the suits and the Commercial

Court must endeavor to ensure that these two suits and

the connected three other suits are decided within an

outer limit of seven (7) months. It is needless to observe

that all questions are to be left open to be decided by

the Commercial Court. For the foregoing, the following:

ORDER

(a) The appeals stand disposed of

modifying the impugned orders both dated

3.2.2016 in O.S.No.10244/2015 and

O.S.No.10243/2015 with a direction to the

second respondent to continue with the

arrangement that has prevailed ever since

this Court's order on 20.09.2018;

(b) The first respondent shall be at

liberty to vindicate its claim for cost that is

incurred towards renewal of bank

guarantees since 25.9.2013 as part of its

claim;

(c) The parties shall cooperate with

the Commercial Court in expeditious

disposal of the suits as aforesaid and the

Commercial Court shall endeavor to decide

the suits on merits within an outer limit of

seven (7) months from the date of receipt of

certified copy of this order.