Gauhati High Court
M/S Abc India Limited & 2 Ors vs Oil & Natural Gas Corporation Ltd. & Ors on 12 June, 2015
Author: Hrishikesh Roy
Bench: Hrishikesh Roy
IN THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
CRP NO. 459/2010
1. M/s ABC India Limited,
A Company incorporated under the Companies Act, 1956
having its registered office at Kedar Road, Guwahati, Assam.
(summons to be served on Manager, M/s ABC India Limited,
Registered office at Kedar Road, Guwahati) Assam.
2. The Chairman, ABC India Ltd.,
A Branch Office at 40/B, Baliganj Circular Road,
Kolkata-700019, West Bengal.
3. Branch Officer, Sivasagar, A.B.C. India Ltd.,
B.G. Road, Sivasagar, Assam.
... Petitioners/Pro-forma defendants 3,4 & 5.
VERSUS
1. Oil & Natural Gas Corporation Ltd.,
A Company incorporated under the Companies Act, 1956,
Having its registered office at Jeevan Bharti Tower-II,
124, Indira Chowk, New Delhi-110001 and one of its Assets at Nazira,
District-Sivasagar, Assam - 7856490. ... Respondent/Plaintiff.
2. UCO Bank, (A bank registered under the Law Industrial Finance Branch, Meleod House, 3 Netaji Subhas Road, Calcutta-700001, Having its Head Office at 10, B.T.M. Sarani, Calcutta-700001 (Summons to be served on its concerned authority, Head Office, UCO Bank at 10, B.T.M. Sarani, Calcutta-700001
3. The Chief Manager, UCO Bank, Industrial Finance Branch, Meleod House, 3 Netaji Subhas Road, Calcutta-700001.
4. The Senior Manager, UCO Bank, Industrial Finance Branch, Meleod House, 3 Netaji Subhas Road, Calcutta-700001.
...Respondents/Defendants 1, 2 & 3.
BEFORE
THE HON'BLE MR JUSTICE HRISHIKESH ROY
For the petitioner : Mr. R. Hussain,
Ms G. Sutradhar. ... Advocates.
For the respondent No.1. : Mr. G.N. Sahewalla ...Sr. Advocate.
Mr. N. Anix Singh,
Ms. N.K. Devi ... Advocates.
For the respondents No.1. : Mr. P.C. Goswami,
Mr. P. Deka,
Ms. M. Das. ... Advocates.
Date of hearing and Judgment : 12.6.2015.
CRP No.459/2010
Page 1 of 4
2
JUDGMENT AND ORDER
Heard Mr. R. Hussain, the learned Counsel appearing for the petitioners who are the proforma-defendants in the Money Suit No.15/2009 filed in the court of the learned Civil Judge, Sivasagar. Also heard Mr. G.N. Sahewalla, learned Senior Counsel appearing for the respondent ONGC, who are the plaintiff in the suit. The UCO Bank and their officers were the three contesting defendants in the suit and they are represented here today by the learned Counsel Mr. P.C. Goswami.
2. In the Money Suit, the ONGC applied for recovery of Rs.15 Lakh + interest on the strength of the Bank Guarantee furnished by the defendant Bank at the instance of the contractor M/s ABC India Ltd. (proforma-defendants 4, 5 &
6.)
3. In their Written Statement (W.S.), the proforma-defendants contended that the ONGC is not entitled to invoke the Bank Guarantee on account of the orders passed in the Title Suit No.177/2006 and the Misc. Appeal No.17/2006 which have attained finality after dismissal of the Misc. Appeal No.17/2006, by the learned Civil Judge, Sivasagar. The defendant bank on the other hand took the stand that the Civil Judge had no jurisdiction to decide the ONGC's claim and the matter should be referred to the Permanent Machinery of Arbitrators (PMA) as envisaged, through the O.M. dated 22.1.2004 issued by the Department of Public Enterprises of the Union Government. Supporting the bank's stand on the dispute being arbitrable, the plaintiff through their independent Petition No.182/10 filed on 5.2.2010 (Annexure-6) applied for reference.
4. Noticing the consensus of the plaintiff and the contesting defendants 1, 2 & 3 for reference of the dispute to the forum of the PMA, the learned Civil Judge, Sivasagar through the impugned order dated 20.8.2010 (Annexure-8) referred the matter in dispute to be decided by the permanent forum constituted through the O.M. dated 22.1.2004 issued by the Department of Public Enterprises of Government of India.
CRP No. 459/2010 Page 2 of 4 35. Assailing the legality of the reference of the dispute to the PMA, Mr. R. Hussain, the learned Counsel submits that the PMA has no jurisdiction to settle commercial dispute when a private party is involved and accordingly the petitioners argue that the Civil Judge committed an error in referring the dispute to the PMA which may otherwise be competent to decide a matter, if the dispute is confined to a Government Undertaking and a Public Sector Bank.
6. The Clause 1 of the O.M. dated 22.1.2004 shows that the PMA was created for settlement of disputes relating to commercial contracts between the Central Public Sector Enterprises (CPSE) and inter alia, the banks. But none of the Clauses of the Memorandum envisages settlement of dispute by the designated forum, when private parties are involved.
7. Confronted with the question of competence of the PMA to decide the suit when private contractors are arrayed as proforma defendants, Mr. G.N. Sahewalla, the learned Senior Counsel submits that unconditional Bank Guarantee are payable by the Guarantor Bank on demand and it is an independent contract where involvement is unnecessary of that party, at whose instance, the Bank Guarantee is issued. Therefore the Senior Counsel submits that names of the 3 proforma-defendants in the suit can be struck off so that the ONGC's claim in the suit can then be decided by the PMA, only against the defendant UCO bank.
8. In his turn, Mr. P.C. Goswami, the learned Counsel submits that the UCO bank had already taken the stand that the PMA is competent to adjudicate the dispute pertaining to the Money Suit No.15/2009, which is referred for arbitration to the PMA by the learned Civil Judge on 20.8.2010.
9. In response to the submission made by the plaintiff's lawyer, Mr. R. Hussain submits that if the names of the proforma-defendants are struck off, the adjudication of the dispute by the PMA created under the O.M. dated 22.1.2004 will be in order as no private party will be involved in the proceeding.
CRP No. 459/2010 Page 3 of 4 410. Since the plaintiff had made a prayer for striking off the names of the proforma-defendants to overcome the objection of the private party, it is made clear that the arbitration proceeding before the PMA as ordered, should continue only between the plaintiff and the defendants 1, 2 & 3 and not against the proforma-defendants of the Money Suit No.15/2009. It is ordered accordingly. Thus the Revision petition stands allowed to the extent indicated by leaving the parties to bear their respective cost.
11. The Registry should sent a copy of this order for information to the learned Civil Judge, Sivasagar.
JUDGE Datta.
CRP No. 459/2010 Page 4 of 4