Kerala High Court
M/S. Auto Gas Energy India Ltd vs Indian Oil Corporation Ltd on 12 January, 2017
Author: Shaji P.Chaly
Bench: Shaji P.Chaly
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
WEDNESDAY, THE 29TH DAY OF MARCH 2017/8TH CHAITHRA, 1939
WP(C).No. 3517 of 2017 (L)
---------------------------
PETITIONER(S):
-------------
M/S. AUTO GAS ENERGY INDIA LTD
39/4141, M.G.ROAD, RAVIPURAM,
COCHIN-16, REPRESENTED BY MANAGING DIRECTOR,
BIJU VARGHESE,
AGED:49 YEARS, S/O VARGHESE
BY ADVS.SRI.A.T.ANILKUMAR
SMT.V.SHYLAJA
RESPONDENT(S):
--------------
1. INDIAN OIL CORPORATION LTD
REGISTERED OFFICE, INDIAN OIL BHAVAN
G-9, ALI XAVAR JUNG MARG,
BANDRA (EAST) MUMBAI, 400051,
REPRESENTED BY ITS SENIOR MANAGER (AUTO LPG)
2. BANK OF BARODA
P.NO1772, M.G.ROAD, PALLIMUKKU,
ERNAKULAM - 682016,
REPRESENTED BY ITS MANAGER
R1 BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR
SRI.P.GOPINATH
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
29-03-2017, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WP(C).No. 3517 of 2017 (L)
---------------------------
APPENDIX
PETITIONER(S)' EXHIBITS
-----------------------
P1 THE TRUE COPY OF THE BANK GUARANTEE
P2 THE TRUE COPY OF THE COUNTER INDEMNITY FOR GUARANTEE
P3 THE TRUE COPY OF THE LETTER EVIDENCING THE EXTENSION OF BANK
GUARANTEE
P4 THE TRUE COPY OF THE LETTER ISSUED BY TH E 2ND RESPONDENT
P5 THE TRUE COPY OF THE LETTER DATED 12-01-2017 ISSUED BY THE
PETITIONER TO THE 2ND RESPONDENT
P6 THE TRUE COPY OF THE LETTER DATED 17/01/2017 ISSUED BY THE 2ND
RESPONDENT TO THE PETITIONER
P7 THE TRUE COPY OF THE LETTER DATED 19/01/2017 ISSUED BY THE
PETITIONER TO THE RESPONDENT
P8 THE TRUE COPY OF THE LETTER DATED 21/12/2017 ISSUED BY THE 2ND
RESPONDENT TO THE PETITIONER
RESPONDENT(S)' EXHIBITS:
-----------------------
ANNEXURE R1(a): TRUE COPY OF THE EMAIL DATED 10.1.2016 ISSUED BY THE
1ST RESPONDENT TO THE PETITIONER
ANNEXURE R1(b): TRUE COPY OF THE EMAIL DATED 23.1.2016 ISSUED BY THE
1ST RESPONDENT TO THE PETITIONER
ANNEXURE R1(c): TRUE COPY OF THE EMAIL DATED 10.3.2016 FROM THE
1ST RESPONDENT TO THE PETITIONER
ANNEXURE R1(d): TRUE COPY OF THE EMAIL TRIAL DATED 1.4.2016 TO 29.6.2016
FROM THE IST RESPONDENT TO THE PETITIONER
ANNEXURE R1(e): TRUE COPY OF THE EMAIL DATED 30.7.2016
FROM THE PETITIONER TO THE IST RESPONDENT
ANNEXURE R1(f): TRUE COPY OF THE EMAIL TRIAL DATED 24.8.2016 TO
14.11.2016 FROM THE IST RESPONDENT TO THE PETITIONER
//TRUE COPY//
P.A. TO JUDGE
dlk
SHAJI P. CHALY, J.
----------------------------
W.P.(C) No.3517 of 2017
----------------------------------------
Dated this the 29th day of March, 2017
JUDGMENT
Petitioner is a company registered under the Indian Companies Act, 1956. Petitioner has entered in to a contract with the first respondent. Accordingly, Ext.P1 bank guarantee secured from the second respondent was provided to the first respondent towards security for the contract work of designing and erection of Auto LPG dispensing station namely M/s.Anjaneya Petroleum for an amount of Rs,5,00,500/- agreeing to pay the amount to the first respondent on their demand. According to the petitioner, for availing the bank guarantee petitioner has deposited an amount of Rs.5,00,500/- by way of a fixed deposit with the first respondent. As per the terms of the bank guarantee the validity is up to 24.4.2014 later, the bank guarantee was extended till 15.6.2016 as per the instructions given by the petitioner. That apart it is stated that, petitioner had availed a cash credit facility of Rs.95,00,000/- from the second respondent for the purpose of the business of the petitioner. Due to the adverse financial situation prevailing in the community and the delay in getting bill amount, petitioner could not pay the current interest due against that cash credit facility. On 5.1.2017 petitioner was issued with W.P.(C) No.3517 of 2017 2 Ext.P4 letter by the second respondent informing that the cash credit facility of the petitioner has been slipped to a non performing asset. Petitioner has issued necessary reply to the same. Grievance voiced by the petitioner in this writ petition is that, the bank guarantee which is expired and which is of no use to the first respondent is detained by the first respondent without assigning any sufficient reasons. It is thus seeking appropriate direction, this writ petition is filed.
2. First respondent has filed a detailed statement basically admitting that period of the bank guarantee has expired. However, the contentions put forth by the first respondent is that petitioner who is duty bound to carry out the maintenance of the Auto LPG stations is not repairing the same in spite of earnest efforts of the respondents and after continued efforts made by the first respondent. It was thus the bank guarantee is detained in order to ensure that the petitioner is carrying out the AMC contract in accordance with the terms of the agreement.
3. Heard learned counsel for the petitioner, learned standing counsel for the first respondent and perused the documents and pleadings on record.
W.P.(C) No.3517 of 2017 3
4. Fact remains the bank guarantee has expired which is of no use to the first respondent. Therefore, I do not find any reason for the first respondent to detain the bank guarantee. Petitioner has stated that, the bank guarantee was secured by making a fixed deposit and he is in financial constrains consequent to non payment of the interest against a cash credit facility.
5. Therefore, I find that the action of the first respondent detaining the bank guarantee is not in accordance with law. Therefore, there will be a direction to the first respondent to release the bank guarantee to the petitioner, within three weeks from the date of receipt of a copy of this judgment. However, I make it clear that, if the petitioner is saddled with any provisions of the AMC contract, the respondent will be at liberty to enforce them by resorting to other proceedings and securing necessary documents from the petitioner.
Writ petition is disposed of accordingly.
Sd/-
SHAJI P. CHALY, JUDGE dlk/29/3/