Delhi High Court - Orders
Mep Hyderabad Bangalore Toll Road Pvt. ... vs National Highways Authority Of India on 25 July, 2024
Author: Prateek Jalan
Bench: Prateek Jalan
$~43
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB. A. (COMM.) 11/2021
MEP HYDERABAD BANGALORE
TOLL ROAD PVT. LTD. .....Petitioner
Through: Mr. Rajiv Shankar Dvivedi, Mr.
S.K. Sarkar, Mr. Rishabh Jain,
Advocates.
versus
NATIONAL HIGHWAYS
AUTHORITY OF INDIA .....Respondent
Through: Mr. Manish Bishnoi, Ms. Pallavi
Singh, Mr. Khubaib Shakeel,
Advocates for NHAI.
Mr. Rajesh Kumar Gautam, Mr.
Anant Gautam, Mr. R.P. Daida,
Ms. Likivi Jakhalu, Ms. Kavitoli
G. Yepth, Mr. Dinesh Sharma, Ms.
Shivani Sagar, Mr. Kushagra
Nilesh Sahay, Advocates.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 25.07.2024
CCP(O) 8/2021
1. The captioned appeal was filed against an order of the Arbitral Tribunal, dated 18.02.2021, by which the Tribunal dismissed the appellant's application under Section 17 of the Arbitration and Conciliation Act, 1996 ["the Act"], for an injunction against invocation of a performance bank guarantee. The arbitral proceedings have since ARB. A. (COMM.) 11/2021 Page 1 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/07/2024 at 05:07:22 culminated in an award dated 14.10.2022. In the meanwhile, as recorded in an order dated 05.05.2021, the appellant sought leave to withdraw the appeal, which was granted.
2. The proceedings remain pending for consideration of a contempt petition filed by the appellant [CCP(O) 8/2021], alleging violation of an order of status quo, regarding invocation of the bank guarantee, passed on 25.02.2021 ["Injunction Order"] and continued on 26.02.2021.
3. The order dated 25.02.2021 reads as follows:
"1. Mr. Mukul Rohtagi, learned Senior Counsel for the petitioner, was on his legs at 01:15 p.m.
2. After lunch today, this Court was engaged in a specially fixed company matter (i.e. CO.PET. 6/2019), which is still unconcluded. It is now 04:30 p.m. and is not possible to continue with this matter.
3. Accordingly, re-notify for further submissions on 26th February, 2021 as part-heard.
4. As the prayer for stay of invocation of the bank guarantee is being heard by this Court, and in order to ensure that the petitioner is not rendered infructuous mid-submission, status quo regarding invocation of the bank guarantee would be maintained till tomorrow."
4. An adjournment request on behalf of learned Senior Counsel for the appellant was accepted on 26.02.2021, and the interim protection was extended until the next date of hearing, namely 02.03.2021.
5. The contempt alleged, however, is that despite the order of status quo granted by this Court, the issuing bank (Indian Bank, which had succeeded to the business of Allahabad Bank) ["the Bank"] had encashed the bank guarantee and credited the amounts to the account of the respondent - National Highways Authority of India ["NHAI"], on 26.02.2021 at 04:00 pm, and the same was communicated to the parties at 06:00 pm on the same day. These facts were brought to the knowledge of ARB. A. (COMM.) 11/2021 Page 2 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/07/2024 at 05:07:22 the Court on 02.03.2021, when the following order was passed:
"1. Mr. Saurabh Kirpal, learned counsel appearing for the petitioner, submits that despite the order of this Court, requiring maintenance of status quo regarding invocation of the bank guarantee, the bank has proceeded to encash the bank guarantee and credit the amounts covered thereby in the account of the respondent. He, therefore, submits that he has moved a petition for contempt, vide Diary No. E- 257428 of 2021. As such, he requests that this matter be re-notified along with the said contempt petition.
2. To my mind, there was no necessity for the petitioner to move a contempt petition, as, if the petitioner succeeds to make out a case, the Court could always direct the respondent to deposit the amount realized by way of invocation of the bank guarantee. Nevertheless, in view of the request made, re-notify on 10th March, 2021.
3. The Registry is directed to list the contempt petition filed vide Diary No. E-257428 of 2021 along with this matter on 10th March, 2021."
6. In the contempt petition, the appellant impleaded the Managing Director & CEO of the Bank, the Executive Director and the Assistant General Manager, as contemnor Nos. 1, 2 and 3, and officers of NHAI as contemnor Nos. 4 and 5.
7. Contemnor Nos. 1 and 2 were dropped from the proceedings, by order dated 04.02.2022. Notice has been issued to all other contemnors, who have filed affidavits and are represented today.
8. Factually, the position is largely undisputed. NHAI had invoked the appellant's bank guarantee on 19.02.2021, after the impugned order of the Tribunal and before filing of this appeal. The amount was, however, not encashed until 25.02.2021, when the Injunction Order was first passed by this Court.
9. The appellant informed the Bank of the Injunction Order by a communication of the same date, i.e., 25.02.2021, but did not have a copy of the order available with it at that time. By a communication of the ARB. A. (COMM.) 11/2021 Page 3 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/07/2024 at 05:07:22 same date, the Bank required the appellant to produce a copy of the Injunction Order. The matter was listed before this Court on the next day, i.e., 26.02.2021, when the hearing was adjourned as aforesaid and the interim protection was continued. However, at that stage, the Bank was not party to the proceedings and copies of the aforesaid orders were not available. According to the Bank, it was therefore bound to honour the bank guarantee.
10. As far as NHAI is concerned, Mr. Manish Bishnoi, learned counsel for NHAI, submits that the contemnors had expressed unconditional apology in their affidavits in response to the contempt petition. He submits that the bank guarantee had been invoked prior to the filing of the appeal or the Injunction Order. The amount was remitted by the Bank without any further communication from NHAI.
11. It is the undisputed position that NHAI did not, in fact, send any further communication to the Bank after the order dated 25.02.2021. However, it did receive a communication from the Bank on 25.02.2021 at 07:49 pm, which stated that the transaction for remittance of the amount had failed due to technical glitches and that the proceeds of the bank guarantee would be remitted within the first working hour on 26.02.2021. To this, NHAI did not respond, even though the amount was, in fact, remitted only on the next evening at 04:00 pm.
12. The aforesaid facts, to my mind, reveal a certain recklessness on the part of NHAI. Its defence to the allegation of contempt is that it did nothing proactively after the order of 25.02.2021, but this begs the question as to whether it ought to have done so, i.e., to inform the Bank of the Injunction Order and request the Bank to hold on the remittance.
ARB. A. (COMM.) 11/2021 Page 4 of 5This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/07/2024 at 05:07:23 That would, in my view, have been the proper course for any litigant, and most certainly for a statutory authority.
13. That said, the facts do not, to my mind, reveal a wilful breach of the sort which requires these contempt proceedings to be kept alive. The contemnors have all expressed their unconditional apology, which is accepted.
14. With regard to the observation in the order dated 02.03.2021, that the Court can direct NHAI to deposit the amount realized by way of encashment of the bank guarantee, it may be mentioned that in the final award passed by the Tribunal, the amount recovered by NHAI has been adjusted against the awarded amount.
15. Mr. Rajiv Shankar Dvivedi, learned counsel for the petitioner, wishes to place on record that the petitioner's challenge to the final award remains pending before this Court in O.M.P.(COMM.) 411/2023. Those proceedings are obviously independent of the present contempt petition.
16. CCP(O) 8/2021 is disposed of with the aforesaid observations.
PRATEEK JALAN, J JULY 25, 2024 'Bhupi'/ ARB. A. (COMM.) 11/2021 Page 5 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/07/2024 at 05:07:23