Delhi High Court - Orders
Skyline Engineering Contracts (India) ... vs The Canara Bank Limited And Anr on 20 April, 2020
Author: V. Kameswar Rao
Bench: V. Kameswar Rao
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (I) (COMM.) 91/2020, IA 3708/2020
SKYLINE ENGINEERING CONTRACTS (INDIA)
PVT. LTD. ..... Petitioner
Through: Mr. Rupesh Gupta and Mr. Nikhil
Kohli, Advs.
versus
THE CANARA BANK LIMITED AND ANR. ..... Respondents
Through:
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
ORDER
% 20.04.2020 IA 3708/2020 (for exemption)
Exemption allowed subject to all just exceptions. Application stands disposed of.
O.M.P (I) (COMM.) 91/2020
1. Issue notice to the respondents returnable on April 27, 2020.
2. This petition has been filed by the petitioner with the following prayers:
"In the light of the facts and circumstances of the present case and submissions made hereinabove, the Applicants most respectfully pray that this Hon'ble Court may be pleased to:
a) Pass an ex-parte ad-interim order restraining the Respondent No. 1 and 2 from encashing the Bank Guarantee Nos. 081068 & 081069;
b) Pass an order directing the Respondent No. 1 and 2 to return the Bank Guarantee Nos. 081068 & 081069 to the Petitioner;
c) Pass any order(s), direction(s) as may deem fit and proper in the interest of justice."
3. It is the submission of the learned counsel for the petitioner that the petitioner had notified the respondents about the listing of the matter today before the Court. In this regard, he has drawn my attention to Page 209 of the documents which is a communication addressed to respondent nos. 1 and 2. He also states he and even the Registry have, yesterday, informed the respondents telephonically about the listing of the matter today through video conferencing.
4. It is his submission that the petitioner had entered into an agreement with respondent no.2 for construction of a Group Housing Project titled 'Vedaanta' situated in Sector 108, Gurugram on December 8, 2008. Pursuant thereto, against mobilization advanced by the respondent no.2, petitioner had furnished two Bank Guarantees with numbers 081068 and 081069 for a total sum of Rs. 1,16,10,000/- in favour of respondent no.2. He states, the mobilization advanced was to be recovered by respondent no.2 from the running bills. It is his submission that the entire amount towards mobilization advanced was adjusted against the bills of the petitioner from time to time. According to him, in the year 2019, petitioner was asked by the respondent no.2 to extend the aforesaid Bank Guarantees, which the petitioner did only to avoid any adverse action. It is also his submission that the entire project has been constructed and the same has been handed over to the respondent no.2. According to him on March 20, 2020, respondent no.2 had issued letters to respondent no.1 / Bank for invocation and encashment of the aforesaid Bank Guarantees. According to him, the action of the respondent no.2 to invoke the Bank Guarantees is contrary to the terms of the Bank Guarantees. In this regard he has drawn my attention to Pages 196 and 200, where it is clearly specified under what circumstances, Bank Guarantees can be invoked. The relevant Para at Page 196 is reproduced as under:
"AND WHEREAS the Contractors have requested us, the undersigned to give the guarantee as hereinafter provided to the Company, NOW WE, Canara Bank, Green Park Extension, New Delhi Branch having our Head Office at 112, J.C. Bose Road, Bangalore and our Delhi's Controlling Office at Ansal Tower, Nehru Place, New Delhi (hereinafter referred to as "the Guarantor") so as to bind our successors and assigns, do at the request of the Contractors and in consideration of the premises, hereby absolutely irrevocably and unconditionally guarantee [as the primary obligor and not merely as surety] that in the event of any breach / default on the part of the Contractors in making the payment (in discharge of their obligations) of the said mobilization advance of Rs.66,10,000/- [Rupees Sixty Six lakh ten thousand only] or any part thereof which is recoverable from the running bills in accordance with the provisions of the Work Contract (i.e. recovery to commence on prorate basis and thereafter, in similar manner till 80% of completion of awarded work or within 18 months whichever is earlier), and / or performance of work as provided in the Work Contract, we shall within two days upon the Company notifying such breach default to us (such notification to the conclusive as to such breach / default), without any protest, objection or demur pay to the Company all moneys not paid by the Contractors to the company under the Work Contract comprising the said Mobilisation Advance to which this Guarantee shall reply and we shall indemnify and keep indemnified, saved, defended and harmless, the Company against all costs, charges, expenses, damages, losses etc. whatsoever which may be incurred or suffered by the Company by reason of any such breach / default in payment on the part of the contractors."
5. He states, when complete mobilization advanced has been recovered by respondent no.2 from the running bills, respondent no.2 could not have invoked the Bank Guarantees. He also states the validity of the Bank Guarantees even though expired in the month of December, 2019, still the respondent no.2 can invoke the Bank Guarantees within a period of three months thereafter, which the respondent no.2 did on March 20, 2020. On a specific query from the Court as to what is the position as of today, learned counsel for the petitioner states, the Bank Guarantees have not been encashed by the bank as of today.
6. If that be so, respondent bank shall maintain status quo with regard to the encashment of the two Bank Guarantees being 081068 and 081069 for an amount of Rs. 1,16,10,000/- till the next date of hearing.
7. Liberty is granted to the counsel for the petitioner to communicate this order to the respondents through whatsapp messages.
8. List on the date fixed.
V. KAMESWAR RAO, J APRIL 20, 2020/jg