Madhya Pradesh High Court
M/S Ivrclmccdldm Consortium vs Hindustan Copper Limited on 7 March, 2022
Author: Vishal Dhagat
1
IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VISHAL DHAGAT
ON THE 7th OF MARCH, 2022
ARBITRATION APPEAL No. 11 of 2022
Between:-
M/S IVRCLMCCDLDM CONSORTIUM THROUGH
ITS RECOGNIZED AGENT MR. RAMCHANDRA
SHRIMALI AGE 63 YEARS S/O MR. JAMNALAL
SHRIMALI PROJECT IN CHARGE (CONSUITANT
MINING) 8-2-350/5/A/24/1B, ROAD NO. 2, BANJARA
HILLS, HYDERABAD R/O 277 B-BLOCK, MEERA
NAGAR, BHUWANA, UDAIPUR, RAJASTHAN 313001
(RAJASTHAN)
.....PETITIONER
(BY MR. SATISH AGRAWAL, ADVOCATE)
AND
1. HINDUSTAN COPPER LIMITED ASHUTOSH
CHOWDHARY AVENUE KOLKATA AND AT
MALANJKHAND COPPER PREOJECT P.O.
MALANJKHAND, TEHSIL BAIHAR DISTRICT
BALAGHAT (M.P.) (MADHYA PRADESH)
2. INDIAN OVERSEAS BANK TELANGANA
RASTRAPATI ROAD BRANCH , 4-2-25 TO 28 AND 32,
1ST FLOOR, RASTRAPATI ROAD,
SECUNDARABAD, TELANGANA (TELANGANA)
3. UNION BANK OF INDIA(FORMERLY ANDHRA
B AN K ) HYDERABAD SPECIALIZED CORPORATE
FINANCE BRANCH, BELVEDERE RAJBHAWAN
ROAD,DOOR NO 6-3-891 AND 892, SOMAJIGUDA,
HYDERABAD (ANDHRA PRADESH)
4. STATE OF INDIA COMMERCIAL CLIENT GROUP
B R A N C H SBI DOOR NO 8, PUNJAGUTTA,
HYDERABAD (ANDHRA PRADESH)
.....RESPONDENTS
(NONE)
This appeal has come up for hearing on this day. The court passed the
following:
ORDER
Appellant has filed this appeal under Section 37(1)(b) of Arbitration and
Conciliation Act, 1996 challenging orders dated 04.03.2022 & 05.03.2022 passed
by learned Principal District Judge Balaghat in MJC(AV) No.01/2022 and in
Signature
SAN Not
Verified I.A.No.01/2022.
Digitally signed by
VINOD KUMAR 2. Counsel appearing for appellant submitted that impugned order is patently
TIWARI
Date: 2022.03.09
17:27:59 IST
illegal, erroneous and contrary to law. Contract agreement was entered between
appellant and HCL on 09.04.2015 for development of underground mine. Said
contract expired on 28.12.2021 by efflux of time. No penalty has been imposed
upon appellant. During pendency of contract, National Company Law Tribunal
Hyderabad (hereinafter referred to as NCLT ) had admitted company petition filed
by creditor against appellant and initiated corporate insolvency resolution process.
NCLT passed orders dated 26.07.2019 & 31.07.2019 and allowed liquidation of
Corporate Debtor as a going concern. Appellant had filed a letter to respondents
for extension of time for completion of project by 04.07.2024. Contract period
was extended for a period of six months only. Respondents by letter dated
28.10.2021 refused further extension of contract period. It is submitted that 215
Crores resources investment has been made in project and besides it, there is
performance security and unpaid pending certified amount upto Rs.65 Crores.
Delay occurred due to default on part of respondents, therefore, dispute resolution
clause was invoked. It is submitted that contract has come to an end on
28.12.2021 by efflux of time and contract has become null and void after
28.12.2021, therefore, Performance Security/Bank Guarantee cannot be invoked.
Respondents has floated tenders for balance work to be done. In view of same,
appellant submitted that respondents will encash Performance Security/Bank
Guarantee available with them. If respondents are permitted to encash the
Performance Security/Bank Guarantee in violation of conditions of Contract, then
appellant would suffer irreparable and irretrievable loss. Counsel for appellant
submitted that bank guarantees are valid till 31.05.2022 and appellants undertakes
to keep said bank guarantees alive and valid till disposal by arbitration proceedings.
It is submitted that in view of aforesaid circumstances, injunction restraining
Respondent No.1 from encashing/invoking Performance Security/Bank Guarantee
may be passed till pendency of Arbitration proceedings and prayer is made for
grant of ex-parte injunction order. Counsel appearing for petitioner relied on
judgment passed by Delhi High Court dated 13.05.2020 passed in case of
Signature Not
Leighton India Contractors Private Limited Vs. DLF Limited & Ors. It is
SAN
Verified
submitted that in said case, it was held that prima-facie case has been made for
Digitally signed by
VINOD KUMAR
TIWARI
Date: 2022.03.09
17:27:59 IST
securing interest of petitioner and direction was given to DLF to create a fixed
deposit on auto renewal mode as DLF has already encashed Performance
Security/Bank guarantee.
3. Heard learned counsel for appellant.
4. Court of Principal District Judge, Balaghat had issued notices on
application filed under Section 9 of Arbitration and Conciliation Act, 1996 to
respondents. Prayer for ex-parte injunction was rejected, thereafter, appellant has
filed another application for grant of interim ex-parte injunction order along with
application for urgent hearing. Said application was also rejected vide order dated
05.03.2022 on ground that earlier application for grant of ex-parte injunction has
already been rejected vide order dated 04.03.2022, therefore, subsequent
I.A.No.1/2022 is also dismissed. Court of Principal District Judge Balaghat has
declined to grant ex-parte injunction to appellant and had issued notices to
respondent on an application filed under Section 9 of the Act for grant of interim
measures. Case is listed for reply of respondents on 16.03.2022. The application
for issuing and restraining order is pending for consideration before Principal
District Judge, Balaghat. Even if bank guarantee is encashed by respondents, then
also District Court can pass orders to secure the amount of bank guarantee
encashed by respondents. No irreparable or irretrievable loss will be caused to
appellant. The issue regarding grant of injunction over encashment of Performance
Security/Bank guarantee is under consideration in an application under Section 9 of
the Act before Principal District Judge, Balaghat and issue regarding encashment of
Performance Security/Bank Guarantee is also under consideration before NCLT
Hyderabad as per pleadings made by appellant in paragraph-20 of application filed
before Principle District Judge, Balaghat. Only ex-parte injunction has been refused
by Court below, therefore, no irreparable or irretrievable injury will be caused to
appellant and substantive matter is sub judice before Principle District Judge,
Balaghat. So far as order, which has been passed by Delhi High Court is
concerned, the same has been passed exercising original jurisdiction by Delhi High
Court after hearing both the parties.
Signature
SAN Not
Verified
5. In view of same, I do not find any illegality, arbitrariness or error in orders
Digitally signed by
VINOD KUMAR
TIWARI dated 04.03.2022 & 05.03.2022 passed by Principal District Judge, Balaghat.
Date: 2022.03.09
17:27:59 IST
Arbitration Appeal is dismissed at motion stage with liberty to appellant to raise all
grounds before Principal District Judge, Balaghat.
(VISHAL DHAGAT)
JUDGE
nd
Signature
SAN Not
Verified
Digitally signed by
VINOD KUMAR
TIWARI
Date: 2022.03.09
17:27:59 IST
