Delhi District Court
Towell Engineering International Llp vs Cinda Engineering And Construction ... on 6 September, 2023
IN THE COURT OF
SH. PREM KUMAR BARTHWAL, DISTRICT JUDGE,
COMMERCIAL COURT-01, SOUTH DISTRICT,
SAKET COURTS, NEW DELHI
OMP (I) (COMM) NO. 1667/2023
CNR NO. DLST01-007125-2023
M/s. Towell Engineering International LLP
Registered office at : Plot No. A-27,
Indapur MIDC (Loni Deokar), Taluka Indapur,
Pune-413132, Maharashtra. ..... Petitioner
Versus
M/s. CINDA Engineering & Construction Pvt. Ltd.
Registered office at : P-24, Green Park Extn.,
New Delhi-110016 ..... Respondent
Date of Institution : 25.07.2023
Reserved for order : 29.08.2023
Date of order : 06.09.2023
ORDER
1. Vide this order, I shall dispose off the petition filed on behalf of petitioner U/s 9 of Arbitration and Conciliation Act, 1996 ("Act") whereby the petitioner seeks to restrain the respondent, M/s. Cinda Engineering & Construction Pvt. Ltd. from invoking and encashing the bank guarantee dated 04.05.2023 furnished by the petitioner.
2. According to the petitioner, the applicant/petitioner M/s. Towell Engineering International LLP is a duly partnership firm and M/s. Dhamra LNG Terminal was to be constructed at OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 1 of 17 Dhamra, Odisha, India and the petitioner had entered into contract with the respondent for performance of the work of engineering, detailed design, procurement of equipment and materials and construction work which were required to establish the aforesaid LNG terminal. It is submitted that the respondent company had executed a contract dated 28.11.2019 with the petitioner, inter alia, to entrust the petitioner to provide and supply all work, services and equipment set forth in the document 3 to the aforesaid contract dated 28.11.2019 necessary to construct the aforesaid LNG Terminal. It is submitted that as per the aforesaid agreement the original value of the work scheduled to be executed by the petitioner was Rs.26,61,39,553/-. It is submitted that due to the reasons, attributable to the respondent, the time for completion of the works under the agreement dated 28.11.2019 was extended from time to time including the time when COVID-19 pandemic impacted the works. It is submitted that on 30.09.2020 extension of time was granted to the petitioner by the respondent to complete the works under the Agreement by 31.03.2021. It is submitted that an amendment to the scope of work was issued by the respondent on 11.03.2021 reducing the scope of work for Steel Structure Fabrication & Erection work from 2600 MT to 1900 MT approx. thereby reducing the Original Contract amount from Rs.26,61,39,553/- to Rs.17,58,79,301.74 and the reduction in scope of work was on mutual understanding. It is submitted that on 28.04.2021, the petitioner apprised the respondent about delay in execution of the works causing delay in implementation of works and on 31.08.2021, the petitioner intimated the respondent about the completion of their revised scope of work excepting OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 2 of 17 approx. 40 MT of Supplies to be dispatched, for which the petitioner would issue direct payment authority letter. It is submitted that the respondent has already has withheld approx. about Rs.5 Crore outstanding amount including retention amount and the petitioner has requested the respondent to not invoke the CPBG as the petitioner completed the supplies with a further request to release the outstanding payment for which the Petitioner shall issue a PBG and the petitioner also requested the Respondent to amend the PO and on 11.04.2022 the Respondent had emailed the copy of the contract amendment to the petitioner with reduced scope of work as executed at the site.
3. It is submitted that on 12.04.2022 through an email, the petitioner wrote to the respondent and stated that the amended quantity of work is not matching with the quantities actually supplied i.e. actual quantities supplied was 1958 MT & Erection works quantity was of 1000 MT while the amendment showed a supply of 1833 MT & Erection Quantity as 1833 MT with request to correct the mismatch and send a revised copy of the contract amendment and also intimated that the petitioner is processing the BG Extension for the revised contract value of Rs.17,58,79,301.74/-. It is submitted that on 28.06.2022 the respondent raised a claim of Rs.9.32 Crore on the petitioner under two broad categories/heads i.e. (a) Back Charges towards Risk & Cost on substituted performance, and (b) Liquidated Damages for delay in completion of work.
4. According to the petitioner, the Project commencement date was 16.10.2019 and was intended to be completed in 11 months and the original completion date was stipulated as 06.09.2020 as per CL 5.1 of Particular condition of Contract but OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 3 of 17 the Project was delayed majorly due to delay in provision of IFC drawings thereby causing uncertainty about the scope of works. It is further submitted that the review and approval of fabrication and detailing drawings by respondent took more than reasonable time and also the observations/comments provided by respondent were on piecemeal basis thereby expanding the review and approval period. It is submitted that the detailing, procurement of raw material, fabrication and erection activities were delayed due to COVID 19 restrictions being imposed by the competent authority in various locations where the execution of works for the Project was carried out, viz. Odisha, Chhatisgarh and Nashik.
5. It is submitted that during second phase of COVID-19 outbreak competent authority had issued orders to divert the industrial oxygen for the medical purposes which also impacted petitioner's production of fabricated sections since oxygen makes an important input for any fabrication work and doesn't have any alternative to it and the same was also communicated to the respondent. It is further submitted that there were various changes and modification instructed by the respondent in between the designing process which also delayed the review and approval process of fabrication drawings and also the availability of site for erection works were delayed by the respondent. According to the petitioner, as on December 2020, only 800 MT site was ready against the total scope of 2600 MT which in turn delayed the fabrication works. It is submitted that the payment of invoices raised by petitioner were delayed without any justified reasons as provided in the Contract and in view of the above delays, the petitioner was entitled of EOT for 622 days. The gist of claims totalling to Rs.14,33,70,539/- as agitated by OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 4 of 17 the petitioner against the respondent in appropriate forum is detailed in para 17 of the petition. It is submitted that on 13.07.2022, the petitioner replied to the respondent's letter dated 28.06.2022 and denied and all disputed allegations including the back charges and liquidated damages being claimed by the respondent. On 28.07.2022, the respondent attempted to re- assert its claim of Rs.9.32 Crores with warnings to take action against the petitioner as per the contract, if the claimed amount is not paid to the respondent.
6. It is further submitted that on 28.06.2023, the respondent asked the petitioner to make the payment of Rs. 9.32 Crore within 30 days, failing which, the respondent threatened to encash/invoke of the Bank Guarantee and vide letter dated 10.07.2023 the respondent gave its final warning to purportedly to take action as per the Agreement including encashment of Bank Guarantee if the Claim of the respondent for Rs.9.32 Crore is not met with till 28.07.2023. In view of the hindrances caused and the loss and damage suffered by the petitioner on account of non-assistance and failures by the respondent, disputes and differences has arisen by and between the parties and such disputes and differences is to be settled by the mechanism of arbitration under Clause 15 of the Agreement.
7. According to the petitioner, the invocation and consequent attempt of encashment of bank guarantee by the respondent shall be wrongful and illegal as the claim of Rs 9.32 Crores is essentially premised upon two categories/heads i.e. one for Backcharges and second for Liquidated Damages which are not attributable to the petitioner. It is submitted that the relevant Clauses of the Agreement does not permit and/ or allow the OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 5 of 17 respondent under any circumstance to recover any claims under these heads by invocation and encashment of BG No. 007GT02202880002 dated 04.05.2023 furnished by the Petitioner as against security for performance of the terms of the Agreement under the revised scope of work.
8. It is submitted that the respondent is backcharging for both risk purchase as well as liquidated damages although the same are connected with the same event of delay and the petitioner should not be penalized twice for the alleged delays which are not solely attributable to the petitioner. It is further submitted that the respondent has not followed the procedure of law while making risk purchase and had neither notified the petitioner during risk purchase nor mitigated the loss to the petitioner and that the respondent is not at all entitled for the alleged risk purchase cost. It is submitted that since the petitioner is not solely responsible for the delays, the respondent is not responsible for the alleged liquidated damages as the delays were attributable to the respondent and Covid-19 pandemic amongst other reasons which were beyond the control of the petitioner. According to the petitioner, the respondent claim of Rs. 9.32 Cr. is totally unjustified, untenable and illegal. It is submitted that the respondent has no right to withhold the payment of Rs. 5 crores plus on the pretext of alleged risk purchase and liquidated damages. It is further submitted that since the respondent has already withheld substantiate amount of the petitioner without any contractual and legal basis and further attempt of the respondent to invoke the Bank Guarantee of Rs. 1,75,87,930/- dated 04.05.2023 is an apparent egregious fraud on the part of the respondent.
OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 6 of 17
9. It is submitted that if the respondent is not restrained from encashing the bank guarantee the same will aggravate the financial burden on the petitioner and that the petitioner is already suffering financial difficulty on account of the non- payment of its dues by the respondent and this may lead to a situation where the petitioner may not be able to settle the legitimate claims of its vendors thereby tarnishing goodwill and reputation of the petitioner. It is further submitted that in the event of invocation or encashment of any further bank guarantee by respondent, irreparable loss and injury shall be caused to the petitioner which cannot be adequately compensated in monetary terms whereas no prejudice shall be caused to respondent if the said Bank Guarantee is not invoked/encashed till final adjudication of the disputes.
10. The respondent, M/s. Cinda Engineering & Construction Pvt. Ltd. has filed its reply to the petition contending that the petition has been filed on misconceived grounds and that the law on injunction against bank guarantee is well established and an injunction on invocation of bank guarantee cannot be granted in a routine manner; that the petitioner has miserably failed to make out a case for grant of injunction against invocation of Bank Guarantee and therefore, the present petition ought to be dismissed with exemplary costs. According to the respondent, the bank guarantee is unconditional and irrevocable and that the bank guarantee is not dependent upon fulfillment of any pre-conditions and as such the disputes between the parties have no bearing on the invocation of the bank guarantee which is an independent contract between the bank and the respondent. It is contended that no case for 'Special Equities' is made out as the petitioner OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 7 of 17 has failed to establish how it would be unable to recover the bank guarantee amounts in arbitration proceedings and just because the petitioner disputes the claim for liquidated damages does not by itself amount to irretrievable injustice. It is contended that the petitioner would not be able to recover the amounts in arbitration to make out a case of 'Special Equities' which the petitioner has miserably failed to make out in the pleadings. It is contended that the quantum of liquidated damages and the recovery of amounts by the respondent cannot be adjudicated in proceedings U/s 9 of the Arbitration and Conciliation Act 1996 and the dispute between the parties as to the imposition of liquidated damages is not a ground to stay invocation of the bank guarantee. It is further contended that even COVID-19 does not entitle for any 'Special Equities' in favour of the petitioner. It is contended that prior to 23.03.2020 a total of 1121.35 MT of IFC Drawings were issued by the respondent out of which only 25 MT of work was carried out thereby delaying the execution of the works under the Agreement and the same is evident from the respondent's letter dated 20.03.2020 which shows that the petitioner was in default much prior to the onset of COVID-19. It is contended that the petitioner has delayed the execution of the works under the Agreement by more than two years and even after granting an extension of time, the petitioner could not complete the works. It is further contended that out of 2600 MT, the petitioner carried out a supply of 1928.38 MT and installation of 1001 MT which were defective and due to this, the respondent had to engage other agencies to complete the works and incurred a cost exceeding Rs. 9.32 crores. It is contended that the petitioner was given an extension of time while reserving all the rights under the OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 8 of 17 Agreement and merely because the extension was given does not mean the respondent is precluded from imposing liquidated damages.
11. According to the respondent, the petitioner was to complete the shop drawings by 31.12.2020 (as per the extended time and petitioner's email dated 03.07.2020) but despite receiving all IFC Drawings, the 612 MT of shop drawings were returned to the petitioner with comments for amendment and 386 MT of shop drawings were pending submission as of 30.12.2020 and this shows that the petitioner had defaulted on its obligations even after granting an extension of time and therefore, no case for grant of relief in the form of stay on invocation of bank guarantee is made out in the present case. It it contended that the bank guarantee is an independent contract between the respondent and the bank and is not subject to disputes between the petitioner and the respondent under the agreement and merely the dispute between the parties cannot be a ground to stay invocation of an unconditional and irrevocable bank guarantee. It is contended that bank guarantee is a commercial document and an injunction on invocation shakes the very foundation of the commercial transactions between the parties and invocation of bank guarantee can only be stayed in exception cases, none of which are made out in the facts of the present case. It is contended that bank guarantee is a performance bank guarantee furnished under Clause 9.2 of the Agreement to ensure the performance of the obligation under the Agreement in a timely manner and that the BG in unconditional and irrevocable and not linked to fulfilling any conditions precedent and due to this, the BG can be encashed for any non-performance by the petitioner of OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 9 of 17 its obligations under the Agreement. It is contended that in the present case, the respondent has a claim for Rs. 9.32 crores against the petitioner under a total of 8 heads that includes (a) back charges (b) liquidated damages and (c) supply of material and equipment on a chargeable basis. It is contended that all of these heads individually and collectively constitute a non- performance of obligations by the petitioner under the Agreement and therefore the respondent can invoke the BG for recovery of amounts under any of these heads (either singularly or collectively). It is contended that Clause 3.16 of the Requisition which forms part of the Agreement clearly permits encashment of BG for delay penalty and, therefore, encashment of bank guarantee on account of liquidated damages is permitted contractually. It is contended that in the present case, the respondent is invoking bank guarantee not merely on account of the liquidated damages but on account of non-performance of obligations by the petitioner which is the reason and purpose behind furnishing a Performance Bank Guarantee.
12. According to the respondent, it is engaged in engineering procurement and construction services. The respondent is carrying out construction of Liquid Natural Gas Terminal ("LNG Terminal") for DTPL Dhamra LNG Terminal Private Limited ("DTPL" or "Project Owner") at Dhamra, Odisha, India (the "Project Site") and to this extent an agreement was executed between the respondent and DTPL. It is contended that the respondent called upon bids to subcontract a portion of the work and that the petitioner furnished its proposal for supplying and installing certain steel structures (the "works") details of which were mentioned in the requisition list and based on the quotation OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 10 of 17 furnished by the petitioner, a Letter of Intent dated 15.10.2019 ("LoI") was issued. It is contended that the Agreement was executed between the parties and total consideration agreed under the Agreement was Rs. 26,61,39,553/- for the fabrication and installation of 2600 MT of steel structure. It is contended that as per the Agreement (Clause 5.0), the works were to commence by 16.10.2019 and to be completed by 06.09.2020. Further, the performance bank guarantee was to be furnished on or prior to the effective date i.e. 16.10.2019 but the petitioner failed to furnish the same and that the petitioner had been defaulting in its obligations under the agreement since very beginning. It is conteded that the petitioner was repeatedly informed about the delays on its part and even a notice of default dated 08.09.2020 was issued under Clause 5.3 of the Agreement calling upon the petitioner to take remedial steps within three days to avoid the termination of agreement. It is further submitted that the record of the Minutes of the various Meetings make it evident that the petitioner did not carry out the works despite extension of the time and the petitioner was unable to meet the extended schedule and had defaulted in its obligations. It is submitted that the performance guarantee was furnished by the petitioner on 25.11.2020 after a delay of more than one year and the respondent had also issued the letter dated 24.12.2020 stating the various delays on the part of the petitioner including but not limited to (a) pending submission of Shop Drawings, (b) non- awarding of contract for priority structures and (c) non- submission of the Purchase Orders showing procurement of materials and this shows that even after an extension of time, the petitioner failed to meet the revised deadline. It is contended that OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 11 of 17 on 06.01.2021, the respondent had issued another letter informing the petitioner that pursuant to the extension of time, the petitioner agreed to complete the fabrication work by 31.12.2020 but only 30% of the total quantity was fabricated by the petitioner. It is further contended that it was informed that a total of 1000 MT of drawings were still pending at the petitioner's end which shows that the petitioner was in no position to complete the works even as per the extended time and the petitioner had breached its obligation under the Agreement. It is contended that the delays were solely due to the petitioner as there was shortage in deployment of the resources and the same was effecting even the subsequent activities to be carried out by the respondent. It is contended that the petitioner failed to deploy additional resources and did not rectify the defects noted by the respondent. According to the respondent, the petitioner also issued frivolous invoices which showed incorrect quantities of the executed work and the same was pointed out by the respondent vide letters dated 20.02.2021, 05.05.2021 and 13.05.2021. It is contended that the petitioner even committed the breach of HSE norms which formed part of the agreement and the petitioner failed to provide even basic and hygiene facility to the workmen due to which a penalty of Rs. 25,000/- was imposed upon the petitioner vide letter dated 15.03.2021. It is contended that the respondent had issued notice of default under Clause 3.14 read with Clause 14 of the Agreement on 03.08.2021 and 23.08.2021 calling upon the petitioner to take remedial and the petitioner delayed the entire project and the same had cascading effect on the completion of the entire project. It is contended that the respondent had issued multiple letter OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 12 of 17 stating various breaches committed by the petitioner and that the respondent has claims towards supply of materials and equipments and BOCW cess and that backcharges and liquidated damages claimed vide letter dated 28.06.2022 were only two out of the eight heads of the claims. It is contended that the petitioner has failed to make out a case for injunction on the invocation of the Bank Guarantee and the petition is liable to be dismissed with exemplary costs.
13. I have heard the detailed arguments as addressed by ld. Counsels for both parties and have carefully perused the record in the light of relevant law.
14. The law on injunction qua bank guarantee is well established. To summarize the legal position, injunction against invocation of bank guarantee can only be granted if the either of the following conditions is fulfilled:
(a) Fraud of egregious nature, which vitiates the entire transaction; or
(b) Irretrievable injury/injustice of an exceptional nature where it is impossible for the guarantor to reimburse itself, if it ultimately succeeds in final adjudication of disputes.
Hon'ble Delhi High Court in a case titled CRSC Research & Design Institute Group Co. Ltd. Vs. Dedicated Freight Corridor in FAO(OS) (COMM) 123/2020 decided on 03.12.2020, while upholding the detailed judgment dated 30.09.2020 passed by the Hon'ble Single Judge of Hon'ble Delhi High Court which had comprehensively considered the law regarding circumstances of staying the invocation of bank guarantee in OMP (I)/(COMM) No. 184/2020,has held as under:-
OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 13 of 17 "7. The settled law with respect to grant of an injunction which has the effect of restraining encashment of a bank guarantee, is (a) when in the course of commercial dealings an unconditional bank guarantee is given or accepted, the beneficiary is entitled to realize such a bank guarantee in terms thereof irrespective of any pending disputes; (b) the Bank giving such a guarantee is bound to honour it as per its terms, irrespective of any dispute raised by its customer; (c) the very purpose of giving such a bank guarantee would otherwise be defeated; (d) the Courts should therefore be slow in granting an injunction to restrain the realization of such a bank guarantee; (e) the Courts have carved out only two exceptions i.e. (i) a fraud in connection with such a bank guarantee would vitiate the very foundation of such a bank guarantee - if there is such a fraud of which the beneficiary seeks to take the advantage, he can be restrained from doing so; fraud has to be an established fraud which the bank knows of and the evidence must be clear, both as to the fact of fraud and as to the bank's knowledge; and, (ii) the second exception relates to cases where allowing the encashment of an unconditional bank guarantee would result in irretrievable harm or injustice to one of the parties concerned; since in most cases payment of money under such a bank guarantee would adversely effect the bank and its customers at whose instance the guarantee is given, the harm or injustice contemplated under this head must be of such an exceptional and irretrievable nature as would override the terms of the guarantee and the adverse effect of such an injunction on commercial dealings in the country; it must be proved to the satisfaction of the Court that there would be no possibility whatsoever of the recovery of the amount from the beneficiary, by way of restitution."
15. Now coming to the facts of the present case, no instance of fraud or irretrievable injury is made out by the petitioner from its pleading or submissions. From rival averments made by the parties, it is evident that there are allegations and counter- allegations being leveled by the parties. Perusal of the record and the Agreement dated 28.11.2019 reveals that the parties had agreed for resolution of disputes by arbitration in Clause 15 as under:
OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 14 of 17 "15.0 ARBITRATION 15.1. If any dispute or difference of any kind whatsoever shall arisen between the Company and the Contractor in connection with, or arising out of the Contract, or the execution of the Contract Works, ·whether during the progress of the Contract Works or after their completion and whether before or after the termination, abandonment or breach of the Subcontract, it shall be referred to arbitration as hereinafter provided.
All disputes or differences shall be referred to a tribunal comprising three (3) arbitrators under the (Indian) Arbitration and Conciliation Act, 1966. Each party to the arbitration shall appoint one (1) arbitrator and the two (2) arbitrators thus appointed shall choose the third arbitrator who will act as presiding arbitrator of the tribunal (together forming the "Arbitral Tribunal"). The decision(s) of the Arbitral Tribunal shall be final and binding on the Parties. The venue of arbitration shall be New Delhi. The governing law of the arbitration shall be the substantive laws of India.
15.2 If any dispute arises in connection with the Contract and the Contractor is of opinion that such dispute touches or concerns the Subcontract Works, then provided that the arbitrators hm.Je not already been agreed upon or appointed in pursuance of the preceding sub-clause, the Contractor may by notice in ·writing to the Subcontractor require that any dispute under this Subcontract shall be referred to the arbitrator to whom the dispute under the Contract is referred and if such arbitrator (hereinafter called the "joint arbitrator") is willing so to act such dispute under this Subcontract shall be so referred to. In such event, the joint arbitrator may, subject to the consent of the Company, give such directions for determination of the two said disputes either concurrently or consecutively as he may think just and convenient and provided that the Subcontractor is allowed to act as a party to the dispute between the Company and the Contractor. The joint arbitrator may in determining the dispute under this Subcontract take account of all material, facts proved before him in the dispute under the Contract.
15.3 If at any time before an arbitrator has been agreed upon or appointed in pursuance of sub-clause 15.1 of th is Clause, any dispute arising in connection with the Contract is made the subject of proceedings in any court between the Company and the Contractor, and if the Contractor is of the opinion that such dispute touches or concerns the Subcontract Works, he may, by notice in
-writing to the Subcontractor, abrogate the provisions of sub-clause 15.1 of this Clause and thereafter no dispute OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 15 of 17 under this Sub-contract shall be referable to arbitration without further submission by the Contractor and the Subcontractor.
15.4 The execution of the Subcontract Works shall continue during arbitration proceedings unless the Contractor shall order the suspension thereof or for any part thereof".
16. The petitioner's claim that Bank Guarantee was submitted pursuant to the purchase order and was reduced given the descoping of the works establish that the parties, of their own free will, had executed the bank guarantee in question and there is no case of perpetration of any fraud whatsoever while executing the said bank guarantee. The right to invoke Bank Guarantees was independent of the dispute between the parties and banks are bound to honour bank guarantees, irrespective of the disputes between the parties. In fact, there are allegations and counter allegations leveled by the parties qua the agreement/contract executed between the parties and the said allegations are yet to be tested on the anvil of truth during the arbitration proceedings between the parties. In the considered opinion of this Court, the present petition does not disclose any prima-facie case in favour of the petitioner or against the respondent. The balance of convenience also lies in favour of the respondent as it is the said respondent, who is the beneficiary of the bank guarantee in question. There is no case of any irreparable loss which cannot be compensated in terms of money in case injunction is not granted to the petitioner. At best, the petitioner can claim damages, if its assertions/claims are found to be correct during the arbitral proceedings or if the invocation of the Bank Guarantee is found to be wrongful in the arbitration proceedings. Admittedly, the rival claims cannot be examined in OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 16 of 17 a petition under section 9 of the Act and have to be dealt with by the Arbitrator, to be appointed in accordance with the provisions of Arbitration & Conciliation Act. Accordingly, this Court is of considered opinion in the given facts and circumstances that the instant petition filed by the petitioner under Section 9 of Arbitration & Conciliation Act is devoid of any merits and the same is hereby dismissed.
17. Needless to say, all observations in this order, are intended only to ascertain whether a case for grant of interim protection, by the Court, in exercise of its jurisdiction under Section 9 of the 1996 Act, exists or not, and are not to be treated as an expression of opinion, even prima facie, on the merits of the dispute, which may find its way, eventually, to the Arbitral Tribunal, or on the merits of any application that either party may choose to move before such Tribunal.
18. Nothing stated herein shall tantamount to any expression on the merits of the case.
19. File be consigned to record room after necessary compliance.
Announced in the open Court on 06th Day of September 2023 (Prem Kumar Barthwal) District Judge (Commercial Courts)-01 (South)/Saket Courts, New Delhi OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 17 of 17 OMP (I) (COMM.)1667/23 TOWELL ENGINEERING INTERNATIONAL LLP Vs. CINDA ENGINEERING AND CONSTRUCTION PRIVATE LIMITED 06.09.2023 Present : None.
Vide separate order, dictated, typed and announced in the open Court today, the petition U/s 9 of Arbitration and Conciliation Act stands dismissed with no order as to costs. File be consigned to record room after necessary compliance.
(Prem Kumar Barthwal) District Judge (Commercial Court)-01 (South)/Saket Courts, New Delhi/06.09.2023 OMP (I) (Comm.) Towell Engineering International LLP Vs. No. 1667/2023 Cinda Engineering & Construction Pvt. Ltd. Page No. 18 of 17