Calcutta High Court
Nicco Corporation Ltd vs Oil & Natural Gas Corporation Ltd. & Anr on 1 March, 2010
Author: Patherya
Bench: Patherya
GA No. 519 of 2010
CS NO.27 OF 2010
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
NICCO CORPORATION LTD. Plaintiff/Petitioner/Applicant
Versus
OIL & NATURAL GAS CORPORATION LTD. & ANR
Defendant/Respondent
BEFORE:
The Hon'ble JUSTICE PATHERYA Date : 1st March, 2010.
MR.ANINDYA MITRA,SR.ADVOCATE, MR.PRATAP CHATTERJEE,SR.ADVOCATE, MR.A.MITRA, MR.S.MUKHURJEE, MS.R.KAJARIA, ADVOCATES FOR PETITIONER MR.JAYANTA MITRA,SR.ADVOCATE MR.ANUPKANTI PODDAR, ADVOCATE FOR RESPONDENT NO.1 MR.S.B.SARAF, ADVOCATE FOR RESPONDENT NO.2 The Court : By this application the petitioner seeks a restraint order on the respondents from invoking the bank guarantee dated 1st October, 2007.
The case of the petitioner is that by notice dated 1st February, 2010, the agreement between the parties was terminated under clause 24.2(ii) of the general conditions of contract. Clause 24.2 of the conditions of contract postulates deduction of 2 liquidated damages from sums lying with the contractor including bank guarantee issued by the contractor. As the maximum sum on account of liquidated damages that can be realised cannot exceed 10% of the total value the invocation of the bank guarantee and withholding of sums far exceeding the maximum 10% is unjustified. Hence, orders sought be passed as prayed for.
Counsel for the respondent no.1 submits that this application cannot be entertained in view of the jurisdictional bar and this court having held in G.A.No.393 of 2010 that the parties were governed by the forum selection clause calls for dismissal of this application. The terms of the bank guarantee postulates payment on first demand being made in writing without demur. Therefore, without considering the disputes that may have arisen in respect of the underlying contract terms of the bank guarantee must be honoured as agreed by parties. Therefore the interim order passed be vacated.
Having considered the submissions of the parties as clause 1.2 of the bank guarantee dated 1st October, 2007 postulates payment on "first payment in writing" without "any demur reservation contest or protest and without any reference" the invocation of the bank guarantee cannot be stalled. In fact, the bank guarantee has been invoked and sums encashed though as directed by order 3 dated 23/2/2010 the sums have been set apart. This order also in view of the terms of the bank guarantee cannot be continued and is, accordingly, vacated.
The plea that the respondent is not entitled to realise more than 10% of the liquidated damages cannot be considered at this stage as this is not the case with which the petitioner came to court with and, therefore, did not put the respondent on notice enough to meet such case. Accordingly, no order can be passed on this application and the application is accordingly dismissed.
In case the petitioner seeks realisation of sums payable to it, if any, the petitioner will be at liberty to take steps in accordance with law.
All parties concerned are to act on a photostat signed copy of this order on the usual undertakings.
( PATHERYA, J.) sb/Assistant Registrar(C.R.)