Delhi District Court
Brijbasi Fire Safety System Pvt. Ltd vs Nuvia India Pvt. Ltd. And Anr on 10 December, 2025
IN THE COURT OF SH. LAL SINGH,
DISTRICT JUDGE (COMMERCIAL COURT)-01,
SOUTH-EAST, SAKET COURTS, NEW DELHI
OMP (I) (COMM.) 95/2025
Brijbasi Fire Safety System Pvt. Ltd.
A-28, Hauz Khas,
New Delhi-110016.
............Petitioner
Versus
Nuvia India Pvt. Ltd.
Through
Managing Director Ashish Jha
E-11, B-1 Extension,
Mohan Cooperative Industrial Estate,
Mathura Road, New Delhi-110044.
...........Respondent No.1
Canara Bank
Through Chief Manager
Hauz Khas Branch
A-27, Hauz Khas Enclave,
New Delhi-110016.
...........Respondent No.2
Date of institution : 06.10.2025
Date of reserving order : 02.12.2025
Date of order : 10.12.2025
ORDER:
1. The present petition u/s 9 of Arbitration and Conciliation Act 1996, has been filed by the petitioner seeking restraint on invocation of Bank OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 1 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:57:22 +0530 Guarantee No. D61GPGE242545002 dated 10.09.2024 issued on behalf of the petitioner by respondent no.2 in favour of respondent no.1.
2. It is stated in the petition that the petitioner has filed the instant Petition seeking urgent relief of ad-interim/ interim injunction restraining the respondent No.1 from fraudulently and unlawfully invoking Bank Guarantee No. D61GPGE242545002 dated 10.09.2024 for a guarantee of Rs. 1,30,99,799/- issued by the respondent N o. 2 bank on behalf of the petitioner company in favour of the respondent No. 1. It is also stated that the petitioner is a company incorporated under the Companies Act and is inter-alia engaged in the supply of Disaster Management Equipment as well as Fire Fighting Vehicles/ equipment. The petitioner company is the leading brand in India for providing innovative solutions in the field of firefighting, safety, disaster management having experience of over 50 years in the field. Further the petitioner company is the sole authorized dealer for Hytrans System BV, Netherlands (company based in Netherlands) which is the only company which manufactures Mobile Pumping Units. It is submitted that in the year 2021, the respondent no.1 approached the petitioner company in relation to a requirement for purchase and installation of Mobile Pumping Unit (hereinafter referred to as "MPU") installation at Kundankulam, Tamil Nadu required by Nuclear Power Corporation India Ltd. (hereinafter referred as "NPCIL"). Relying on technical expertise of the petitioner company and keeping in view the fact that the Petitioner was the authorized dealer for Hytrans System BV, Netherlands, the respondent No.1 entered into a pre- tender consortium agreement dated 01.08.2023 with the petitioner company for bidding in consortium for Nuclear Power Corporation of India Ltd.
OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 2 of 23Digitally signed by lal lal singh Date:
singh 2025.12.10 16:57:41 +0530 (NPCIL) for Tender no. GEM/2023/B/3425263 for oil filter, Mobile Pump Unit, Fuel pre filter, Fuel Filter, Pump filter, Fume filter, Air Filter Piston with 'O' rings and seal, Crank Shaft, Cylinder liner, Oil injection valve, Seals, 'O' rings & gaskets, Gear box assembly for Kundankulam. It was mutually agreed between the petitioner and respondent No. 1 that respondent No. I would remain the lead bidder and petitioner company would act as the consortium partner and would provide complete technical and commercial support for the bid. Thereafter, tender no. GEM/2023/B/3425263 was floated by NPCIL on 18.05.2023 and accordingly, in view of the above understanding, the respondent No. I submitted its bid with petitioner company as the designated consortium partner. The contract was subsequently awarded by NPCIL to Respondent No. 1 on 03.06.2024 vide a contract no. GEMC-511687773485166 which was to be completed within 15 months. As per the terms of the said contract between the Respondent No. 1 and NPCIL, the respondent no. 1 was required to give a bank guarantee in favour of NPCIL @ 10% of the contract amount. It is also stated that following the award of the contract, Respondent No. 1 placed a purchase order dated 11.06.2024 bearing No. 00221212 IND/KKNPP/NPCIL-Mobile Pump Unit for KKNPP-3&4 in favour of the petitioner company (hereinafter referred to as "the Agreement"). As stipulated in the agreement between the Petitioner Company and Respondent No. 1, the core fundamental and unequivocal term of the engagement between the parties was that all the terms and conditions would be on a "back-to-back basis", flowing from the main contract between NPCIL and respondent no.1. Further, as per the purchase order dated 11.06.2024 the work was to be completed within 14 OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 3 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:57:59 +0530 months and was further stated/mentioned in the purchase order that the petitioner company and Respondent No. I would plan a 'Kick-off meeting with NPCIL on or before 24.06.2024. It is further stated that the purchase order dated 11.06.2024 also contained an arbitration clause at Clause No.5.2.
3. Accordingly on 24.06.2024, a meeting was held with the representatives of NPCIL, petitioner company and the Respondent no. 1 at the Headquarters of NPCIL, Mumbai, wherein various aspects of the project were discussed and finally it was concluded that points related to technical aspects were not complete and final in any way and the same would require detailed engineering and detailed reviews for finalization and necessary approvals from NPCIL at appropriate stages. In the meanwhile in adherence to the contractual terms between the petitioner company and Respondent No. 1, the petitioner company duly furnished a Bank Guarantee (BG) bearing No. D61GPGE242545002 dated 10.09.2024 for the value of Rs. 1,30,99,799/- (One Crore Thirty Lakhs Ninety-Nine Thousand Seven Hundred Ninety- Nine Only) in favour of Respondent No. 1 as a security deposit. Petitioner contended that from the outset, the project execution was severely hampered due to inordinate delays on the part of NPCIL in providing necessary approvals and technical clearances. It is also stated that NPCIL had categorically instructed the petitioner company to not place the purchase order to Hytrans Systems BV, until explicit clearance was granted by NPCIL and the petitioner company adhered to the above said instructions of NPCIL and did not place the purchase order till clearances are obtained from NPCIL. It is further submitted that in the meeting held in the month of February 2025 between NPCIL, petitioner and the Respondent No. 1, the OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 4 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:58:05 +0530 NPCIL finally gave clearance for giving sub order to Hytrans Systems BV at the earliest. Thereafter, the petitioner company without any delay proceeded and placed the order with Hytrans Systems BV in the month of April, 2025. It is stated that on 28.07.2025, the Respondent no. 1 sent a letter to NPCIL for extension of time and contract price adjustment. In the said letter, it was specifically mentioned by the Respondent No.1 that the scope of work was to be delivered before 27.08.2025, however in the course of executing the contract, the consortium had to adapt to several unforeseen events which significantly disrupted the execution of the contract. It is contended that due to delay in providing clearance by NPCIL, the products to be provided by Hytrans System BV were rescheduled for June 2026 by Hytrans System BV due to heavy workload. It is also contended that after sending the abovesaid letter dated 28.07.2025 to NPCIL, the Respondent No.1 with mala-fide intention and to transfer the burden of non-performance upon the petitioner company, sent a letter dated 30.07.2025 blaming the petitioner company for the delays that were caused by NPCIL. Thereafter, the petitioner company on 18.08.2025 sent a letter to Respondent No.1 categorically refuting the allegations levelled by Respondent No. 1 against the Petitioner for delay in work. Respondent No. 1 in furtherance sent a letter dated 18.08.2025 to NPCIL explaining the project progress and proposed action plan for supply of equipment. It is contended that the Respondent No.1 after receiving letter from petitioner company on 18.08.2025, very cleverly sent the exact same letter word by word on their letter head to NPCIL and gave the action plan as provided by the petitioner company. Respondent no. 1 in their letter dated 18.08.2025 again attributed the delay on the part of NPCIL. As per the OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 5 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:58:12 +0530 petitioner, the contradictory stands of the Respondent No. 1 in letters sent to NPCIL and the Petitioner Company, bolsters their malafide conduct during the entire transaction. It is stated that on 22.08.2025, NPCIL sent a letter to Respondent No. 1 stating that installation and commissioning of MPU is very much essential for commissioning of KKNPP-3&4 reactors. Accordingly on 22.08.2025, the Respondent No. 1 sent a request letter to NPCIL for extension of time upto 30.09.2026 as per the revised schedule re- illustrated in the detailed action plan submitted by Respondent no. 1. Thereafter, on 14.09.2025, NPCIL again sent a letter to Respondent No. 1 to prepare and submit detailed action plan for completing of all Engineering documentation including seismic qualification and manufacturing activities adhering to the technical specification requirements and without any deviation to PO terms and conditions. In furtherance of the letter dated 14.09.2025, on 18.09.2025 the representative of NPCIL, petitioner company as well as the Respondent No. 1 had a detailed meeting at the Headquarters of NPCIL, Mumbai. In the said meeting held on 18.09.2025 certain things were discussed/agreed upon as was recorded in Minutes of Meeting dated 18.09.2025. It is stated that in the said meeting dated 18.09.2025 between the parties, it was nowhere discussed that NPCIL would cancel/ rescind the contract and/ or would invoke or encash the bank guarantee given by Respondent No. 1 in favour of NPCIL. The main intent and purpose of the meeting remained focused on completion of the pending work and finding way forward for early resolution of work without any dispute.
4. In furtherance of the discussion and meeting held on 18.09.2025 between the parties, the respondent No.1 sent a letter dated 24.09.2025 to OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 6 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:58:19 +0530 NPCIL for extension of time. It is submitted that as per the knowledge of the petitioner, no response to the said letter has been issued by NCPIL till date. Petitioner also submitted that keeping in view of the meeting dated 18.09.2025, there is every likelihood that NCPIL would grant extension to the Respondent No. 1 and the contract as intended would continue to be fulfilled by the Respondent No.l as per the proposed extension and action plan. It is submitted that petitioner received a letter dated 26.09.2025 from the Respondent No.1, wherein they maliciously put the petitioner to notice of breach of the performance of contract. It is stated that taking a serious objection to the conduct of the Respondent No.1, on 29.09.2025, the petitioner company wrote a letter in response to Respondent No. 1. It is also contended that seeing the mala-fide conduct of Respondent No. 1, the petitioner company anticipating an illegal invocation even wrote a letter dated 30.09.2025 to the Respondent No. 2 requesting the Bank Manager to inform the petitioner company before releasing the bank guarantee to Respondent No.1. Further, the petitioner company sent an email dated 03.10.2025 to Respondent No. 1 and its parent company in Europe unequivocally stating that the petitioner company is not in breach of any contract and it is fully cooperating and willing to perform the terms as discussed. Respondent No. 1 has chosen not to respond to the email dated 03.10.2025, however, it has been orally informed to the representatives of the petitioner company that the Respondent No. 1 has invoked the Bank Guarantee and is in the process to encash the same despite the fact that there is no default on the part of the Petitioner and completely ignoring the fact that NPCIL has never asked for encashment of bank guarantee issued in OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 7 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:58:25 +0530 favour of NPCIL by Respondent No.1.
5. The petitioner also contended that the petitioner has serious apprehension that the Respondent No. 1 would illegally invoke the bank guarantee with the sole intention to illegally enrich itself at the cost of the Petitioner Company. It is submitted that there is a strong prima facie case in favour of the petitioner company and special equities are also in its favour. Further, it is contended that if the bank guarantee is invoked, the petitioner company would, for no fault, suffer grave and irreparable loss, injury and injustice inasmuch as the invocation of bank guarantee would severely affect the petitioner company's credit line with respondent No.2. It is stated that the petitioner company is a small scale company who has already extended its credit line by placing the order for the products from Hytrans System in furtherance of the agreement after due clearances from NPCIL and further the petitioner company has given advance for the procurement of the products from their own pocket. It is also contended that the Respondent No. 1 is attempting to take pre-mature action against the petitioner company in complete contravention of the terms of the agreement between the parties. Thus, the petitioner prayed that Respondent no.1 be restrained from invoking or encashing any amount amount under the bank guarantee No. D61GPGE242545002 dated 10.09.2024 for Rs.1,30,99,799 and further prayed that Respondent no.2 be also restrained from paying any amount under the Bank Guarantee No. D61GPGE242545002 dated 10.09.2024 for Rs.1,30,99,799/-; and further Respondent No.1 be restrained from taking any adverse action against the petitioner pursuant to its letter dated 26.09.2025.
6. Respondent No.1 has filed reply to the above petition OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 8 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:58:31 +0530 contending therein that it is a settled position of law that the Bank Guarantee is an independent contract between the bank and the beneficiary i.e. Respondent No. 1 herein and that the bank's obligation to honor the guarantee in this case, is independent of the underlying contract between the Petitioner and Respondent No. 1 and is encashable once the conditions of the invocation are met. Respondent No.1 further contended that the contractual disputes between the parties, if any, are not a ground to restrain encashment and in fact, such alleged disputes are irrelevant to the bank's independent obligation under the guarantee. It is further contended that the invocation of the bank guarantee in question by Respondent No.1 is in accordance with the terms of the Bank Guarantee and meets all conditions stipulated therein and therefore, the Court, cannot restrain the bank from honoring it by relying on the covenants of the underlying contract. Further, any such interference effectively compels the bank to breach its own independent contractual obligation with the beneficiary and amounts to directing the bank to commit an illegality, which is wholly impermissible in law. It is also contended that it is settled position of law that encashment of a bank guarantee can be stayed only in rare cases involving egregious fraud, irretrievable justice or special equities. None of these conditions are pleaded and/or established in the present case. In fact, no plea or assertion of fraud has been raised in the petition. Respondent No.1 further contended that the petition discloses no case of irretrievable injustice so as to warrant any restraint on the encashment of the Bank Guarantee in question. Further, in any event, the present case does not fall within the narrow and exceptional category of cases where interference is justified, nor does it present any circumstance of OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 9 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:58:36 +0530 an irreversible or extraordinary nature capable of overriding the express and unconditional terms of the Bank Guarantee. It is the contention of the Respondent No.1 that the Bank Guarantee in question is unconditional in nature and therefore, invocable strictly on its own terms, independently of any further contract.
7. Respondent No.1 also contended that under the Bank Guarantee in question, the only requirement for invocation is the Respondent No. 1's written demand on the Bank stating that the "Applicant is in breach of its obligation(s) under the contract, without the Beneficiary needing to prove or to show grounds for such demand or the sum specified therein." It is further submitted that since all conditions and terms for the request of payment under the Bank Guarantee in question were met, the payment should have been done by the Bank as specified in the bond, that is to say "without demur, merely on a demand from the Beneficiary/Government". Further, it is also contended that the relief sought in the Section 9 Petition is not interim in nature. The Bank Guarantee in question was furnished to Respondent No. 1 strictly in terms of the Purchase Order executed between the Petitioner and Respondent No. 1, which governed their independent contractual obligations, and was not connected with or issued as a counter-guarantee for any Bank Guarantee furnished by Respondent No. 1 to NPCIL. As per the admitted terms of the Purchase Order, delivery of goods was to be completed by the Petitioner on or before 11.08.2025, and neither was the delivery effected within the stipulated period nor was the delivery schedule ever extended by Respondent No.1. It is further contended that the non-delivery of supplies by the Petitioner within the contractual period prescribed under the Purchase OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 10 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:58:45 +0530 Order, i.e., by 11.08.2025, constitutes a clear breach of contract. Respondent No.1 also contended that despite NPCIL having extended the contract now till February 2026, the Petitioner has once again expressed its inability to make deliveries even by that extended timeline, as evident from the Production Schedule submitted by it to Respondent No.1, which stipulates December, 2026 as the proposed delivery date. Faced with this situation, the Respondent No.1 was once again constrained to address a communication to NPCIL on 21.10.2025, requesting a further extension of time till December 2026 to align with Petitioner's projected schedule. Further, as per Respondent No.1, the record would go to show that Respondent No.1, as the Lead Consortium Partner, maintained a consistent position throughout, both before NPCIL and the Petitioner. The Respondent No. 1 had repeatedly sought extensions of time from NPCIL (28.7.20205, 29.8.2025 & 24.9.2025) while simultaneously, through its communication dated 30.07.2025 and 26.09.2025, it had categorically informed the Petitioner that it (Petitioner) had not fulfilled its contractual obligations. It is also contended that the record clearly demonstrates collusion between the petitioner and Respondent No. 2 Bank, whereby the Bank deliberately delayed encashment of the Bank Guarantee to enable the petitioner to obtain a stay order on 06.10.2025.
Reply on merits also Respondent No.1 denied the contentions of the petitioner. Thus, the Respondent No.1 prayed that the present petition be dismissed with cost.
8. Argument heard.
9. Ld. counsel for petitioner submitted that the admitted record of correspondences between the parties clearly shows that the delay, if any, was OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 11 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:58:50 +0530 not directly attributable to the petitioner. It is also submitted that even otherwise delay does not automatically constitute a breach. It is further submitted that admittedly the contract is still subsisting and the delivery period has been refixed in view of the extension granted by NPCIL till 27.02.2026 and therefore, there is no breach of contract till date. It is argued that Bank Guarantee as per the contact is only a security for performance of the contract which can only be triggered in the event of breach. It is submitted that if the Bank Guarantee is allowed to be prematurely encashed, it could make the performance of the contract impossible for the petitioner who would crumble under the weight of heavy and untimely financial loss due to no fault of petitioner. Moreover, all the advances to Hytrans have been paid by the petitioner. It is also submitted that even the Bank Guarantee in question is valid till 30.11.2026. Ld. counsel for the petitioner also submitted that the court can interfere in the invocation of Bank Guarantee, if there is fraud of egregious nature, special equities, irretrievable injustice, irretrievable loss and unjust enrichment. It is argued that service to the respondent no.1 could not be effected on the address of respondent no.1 and in these circumstances, if the bank guarantee is invoked, then the great harm will be caused to the petitioner, as it will not be in a position to recover the said amount from the respondent no.1, even if, petitioner succeeds in arbitration. It is also submitted that no prejudice will be caused to the respondent no.1 if the respondent no.1 is restrained from invoking the bank guarantee. He further submitted that the present petition may be allowed and respondent no.1 be restrained from invoking the bank guarantee.
10. On the other hand, Ld. counsel for respondent no.1 submitted OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 12 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:58:57 +0530 that the Bank Guarantee is an independent contract between the bank and the beneficiary. He submitted that so far as Bank Guarantee is concerned, the petitioner is a third party as there is no privity of contract between the petitioner and the respondent no.1. It is argued that even if there is any dispute between the petitioner and respondent no.1, then also same has no bearing on the Bank Guarantee. It is also submitted that beneficiary is entitled to encash back Bank Guarantee irrespective of pending contractual disputes. It is argued that the present petition does not satisfy any limb of triple test. There is not even a whisper of fraud, let alone fraud of an egregious nature. Further, the petition contains no plea identifying the perpetrator, the manner of commission or the discovery of fraud. It is submitted that the petitioner's case is confined to issues of performance delays and alleged breach which are matters firmly outside the fraud exception and squarely within contractual /arbitral adjudication. It is also argued that equally, the petition discloses no case of irretrievable injustice or special equities. Ld. Counsel for respondent no.1 submitted that the present petition may be dismissed with cost.
11. Ld. counsel for respondent no.2 submitted that though the bank has to pay the amount of Bank Guarantee on the request of applicant/ beneficiary, however, the bank has not released the amount of Bank Guarantee, because the address of the beneficiary could not be verified.
12. I have considered the submissions of Ld. counsels for parties and perused the file.
13. The instant petition has been filed by the petitioner seeking interim relief in the nature of restraining the respondent no.1 from invoking OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 13 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:04 +0530 or encashing any amount under the Bank Guarantee dated 10.09.2024 for a sum of Rs.1,30,99,799/- and also restraining the respondent no.2 from paying any amount under the aforesaid Bank Guarantee. It is the case of petitioner that the respondent no.1 and petitioner entered into pre-tender consortium agreement dated 01.08.2023 for bidding in consortium for Nuclear Power Corporation India Ltd. (NPCIL) for tender no. GEM/2023/B/3425263 for installation of mobile pumping unit at Kundankulam, Tamil Nadu, as required by NPCIL. The tender no. GEM/2023/B/3425263 was floated by NPCIL on 18.05.2023. The contract was awarded by NPCIL to the respondent no.1 on 03.06.2024, vide contract no. GEMC-511687773485166 which was to be completed within 15 months. Following the award of contract, the respondent no.1 placed purchase order dated 11.06.2024 bearing no. 00221212IND/KKNPP/NPCIL-mobile pump unit for KKNPP-3 & 4 in favour of the petitioner. As per the purchase order dated 11.06.2024, the work was to be completed in all respects within 14 months. Thereafter, in adherence to the contractual terms between the petitioner and respondent no.1, the petitioner duly furnished Bank Guarantee (BG) dated 10.09.2024 for the value of Rs.1,30,99,799/- in favour of the Respondent no. 1 as security. Admittedly, there was delay in execution of the contract and to this effect several correspondences and meetings were taken place between the parties as already mentioned above in detail. Parties also admitted that vide communication dated 17.10.2025, NPCIL has now extended the contractual period till 27.02.2026. It is the contention of the Respondent no. 1 that delay on the part of the petitioner is causing substantial financial loss and damages to the Respondent no. 1. As per the OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 14 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:08 +0530 Respondent no. 1, despite NPCIL extended the contract till February, 2026, the petitioner has once again expressed its inability to make deliveries even by that extended timeline, as evident from the production schedule submitted by the petitioner to the Respondent no.1, which stipulates December, 2026 as the proposed delivery date. However, petitioner contended that the delay was not directly attributable to the petitioner. As per the petitioner, admittedly, the contract is still subsisting and delivery period has been extended by NPCIL till 27.02.2026 and therefore, there is no breach.
14. It is also the contention of the petitioner that if the Bank Guarantee is allowed to be illegally and prematurely encashed, it could make the performance of the contract impossible for the petitioner and petitioner would crumble under the heavy and untimely financial losses for no fault of the petitioner. However, the Respondent No.1 contended that the Bank Guarantee is an independent contract between the Bank (Respondent no. 2) and the Beneficiary (Respondent no. 1). As per the Respondent no. 1, the beneficiary is entitled to encash the Bank Guarantee (BG), irrespective of pending contractual disputes. In these circumstances, terms and conditions of the Bank Guarantee dated 10.09.2024 is required to be examined. The clause 2 and 4 of the Bank Guarantee dated 10.09.2024 is reproduced as under:-
2. At the request of the Applicant, we as Guarantor, hereby irrevocably undertake to pay the Beneficiary any sum or sums not exceeding in total an amount of Rs.1,30,99,799.00 (Rupees One Crore Thirty Lakhs Ninety-Nine Thousand Seven Hundred And Ninety-Nine), upon receipt by us of the Beneficiary's demand stating that the Applicant is in breach of its obligation(s) under the Contract, without the OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 15 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:14 +0530 Beneficiary needing to prove or to show grounds for your demand or the sum specified therein.
4. We undertake to pay the Beneficiary any money so demanded not withstanding any dispute or disputes raised by Seller(s) in any suit or proceeding pending before any Court or Tribunal relating thereto liability under this present being absolute and unequivocal.
Thus, it is amply clear that as per clause 2 of BG, the guarantor (Bank) has undertaken to pay the Beneficiary (Respondent No. 1) an amount of Rs.1,30,99,799/- upon demand of Beneficiary, stating that applicant (petitioner) is in breach of its obligation under the contract, without Beneficiary needing to prove or to show grounds of such demands. Further, as per Bank Guarantee, the bank has also undertaken to pay the Beneficiary the amount so demanded, irrespective of any dispute. Therefore, in view of the aforesaid terms of the BG, the Bank (Respondent No. 2) is under obligation to pay the amount as mentioned in BG to the Beneficiary i.e. Respondent No. 1, on the demand of Respondent No.1, irrespective of pending contractual disputes.
15. In judgment titled as CRSC Research and Design Institute Group Co. Ltd. Vs. Dedicated Freight Corridor Corporation of India Limited & Ors., 2020:DHC:3447-DB, Hon'ble High court of Delhi has observed as under:-
14. We are unable to agree with the contention of the senior counsel for the appellant that this Court, when approached for the interim measure of interference with unequivocal, absolute and unconditional BGs, is required to interpret the OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 16 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:19 +0530 contract and/or form a prima facie opinion whether the beneficiary of the BGs has wrongfully invoked the BGs. Such exercise, in our view, is to be done in a substantive proceeding to be initiated by the appellant for recovery of the monies of the BGs, if averred to have been wrongly taken by the respondent No.1 by encashment of BGs. If any interim relief is also claimed in the said substantive proceedings, the need for taking a prima facie view, will arise therein; however not while dealing with an application for the interim measure of restraining invocation/encashment of BGs. In the said proceedings, no question of taking a prima facie view arises and the enquiry is confined to, whether on the basis of the documents, a case of fraud of egregious nature in the matter of obtaining/furnishing BGs, is made out. As far as the argument of the senior counsel for the appellant, of special equities is concerned, the same is but a facet of the second exception aforesaid of irretrievable harm or injustice. Needless to state that from the entire arguments of the senior counsel for the appellant, no case of fraud of egregious nature in the matter of making/obtaining of the BGs is made out. All that emerges is that there are disputes between the appellant and the respondent No.1 and it is not even whispered that the respondent No.1 built the entire charade of entering into the contract, only to obtain BGs and to profiteer from the appellant. With respect to the ground urged by the senior counsel for the appellant, of special equities, the Solicitor General has stated that the appellant is a Chinese OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 17 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:25 +0530 entity and if ultimately in arbitration, which has already commenced between the parties, the monies are found due to the respondent No.1 from the appellant, the respondent No.1 would have no means or ways available to it for recovering the same from the appellant and/or to enforce the arbitral award in China. On the contrary, it is contended that the respondent No.1 is a Public Sector Undertaking and the monies, if ultimately found due to the appellant from the respondent No.1, can always be recovered by the appellant from the respondent No.1.
15. Fraud, as an exception to the rule of non-interference with encashment of BGs, is not any fraud but a fraud of an egregious nature, going to the root i.e. to the foundation of the bank guarantee and an established fraud. The entire case of the appellant, we are afraid, fails to qualify so. The Single Judge has written at length on the subject and save for as aforesaid, we need not say more.
16. Irretrievable injustice, as an exception to the rule of non-
interference with encashment of BGs, is again not a mere loss, which any person at whose instance bank guarantee is furnished, suffers on encashment thereof. It is always open to such person to sue for recovery of the amount wrongfully recovered. What has to be proved and made out to obtain an injunction against encashment, is that it will be impossible to recover the monies so wrongfully received by encashment. There is not even a whisper to this effect, neither in the pleadings nor in the arguments.
OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 18 of 23Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:30 +0530
17. No case, thus, to interfere with the judgment of the Single Judge is made out.
16. In the judgment titled as SPRNG Energy Private Limited Vs. FS India Solar Ventures Private Limited, 2024:DHC:7263, Hon'ble High Court of Delhi has observed as under:-
25. It is settled that mere allegation of fraud will not suffice for restraining the petitioner from encashment of a bank guarantee. The party alleging fraud shall have to prima-facie establish fraud as a triable issue adducing strong evidence. The Hon‟ble Supreme Court in Ansal Engineering Projects Ltd. v. Tehri Hydro Development Corpn. Ltd., (1996) 5 SCC 450 has held as under:-
"4. It is settled law that bank guarantee is an independent and distinct contract between the bank and the beneficiary and is not qualified by the underlying transaction and the validity of the primary contract between the person at whose instance the bank guarantee was given and the beneficiary. Unless fraud or special equity exists, is pleaded and prima facie established by strong evidence as a triable issue, the beneficiary cannot be restrained from encashing the bank guarantee even if dispute between the beneficiary and the person at whose instance the bank guarantee was given by the bank, had arisen in performance of the contract or execution of the works undertaken in furtherance thereof. The bank unconditionally and irrevocably promised to pay, on demand, the amount of liability undertaken in the guarantee without any demur or dispute in terms of the OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 19 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:35 +0530 bank guarantee. The object behind is to inculcate respect for free flow of commerce and trade and faith in the commercial banking transactions unhedged by pending disputes between the beneficiary and the contractor."
26. Further, it is also settled that mere financial difficulty will not amount to irretrievable injury and injustice to stay encashment a bank guarantee. The Hon‟ble Supreme Court in U.P. State Sugar Corpn. v. Sumac International Ltd., (1997) 1 SCC 568 observed as under: -
"12........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 affect the bank and its customer 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......"
27. Additionally, the judgment of the English Court in Simon Carves (supra) relied on by the petitioner is distinguishable. The English Court held that if the underlying contract, pursuant to which the bank guarantee has been provided, clearly/expressly imposed restrictions on the beneficiary from making a demand under the guarantee, then in those circumstances an injunction can be passed by the court. However, the true purport of the restrictions imposed in the underlying contract will be decided at the time of final hearing. In the present case, no such OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 20 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:40 +0530 restrictions have been imposed on the invocation of the bank guarantee. Additionally, it is an independent contract. The guarantee is unconditional and irrevocable and the bank is obligated to make payments without any demur, contest or protest, without any reference to buyer, merely on a letter of demand from the respondent. Therefore, the judgment of Simon Carves (supra) is not applicable to the facts of the present case.
28. In view of the above, the petitioner has failed to show any reasonable ground to restrain the respondent against encashment of bank guarantee. At best, the argument raised by the petitioner is that the respondent is wrongly interpreting the terms of the MSA and the bank guarantee to their advantage and to the detriment of the petitioner. The same in my view does not fall within the exceptions carved out with respect to stay on encashment of bank guarantee in favor of the petitioner. The petitioner has failed to show any fraud of egregious nature hitting the very foundation of bank guarantee by the respondent or irretrievable harm or injustice, other than mere monetary loss, being caused to the petitioner."
Further, in the judgment titled as Tacon Infrastructure Pvt. Ltd. Vs. National Highways Authority of India & Ors., 2025:DHC:1608, Hon'ble High Court of Delhi, observed as under:
7. The law surrounding the invocation of unconditional BG is well settled in a catena of decisions of the Supreme Court and this Court. The BG which provides that they are payable by the guarantor on demand is considered to be unconditional. If such BGs are given in the course of a business dealing, the same can be invoked by the beneficiary irrespective of any pending disputes between OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 21 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:45 +0530 the parties. The bank has no choice but to honor the BGs despite any opposition being made by the customer because in essence, BGs represent an independent and distinct contract between the Bank and the beneficiary which is not affected by the underlying contract. Any petition seeking to restrain the realization of such BGs has to make out exceptional circumstances. It can either be fraud which vitiates the very underlying premise of the BG, or special equity wherein the realization would cause irretrievable harm or injustice to one of the parties concerned. It is but obvious that the invocation of any BG would cause harm to the bank and to the customer. That by itself would not qualify as irretrievable harm or injustice. The harm or injustice, to make out a case for injunction, has to be such as to override the very terms of the guarantee.
17. In the instant matter also, petitioner has not alleged any fraud or fraud of an egregious nature against the Respondent No. 1 and moreover, in the petition also, no such contention or averments raised by the petitioner. In the present matter, the petitioner has failed to show or disclose any fraud of egregious nature or irretrievable injustice or special equities. The ground taken by the petitioner that invocation of the Bank Guarantee may affect petitioner's credit line is not sufficient for interference of this court, with unequivocal, absolute and unconditional Bank Guarantee (BG). Thus, in view of the above legal position as well as overall facts and circumstances of the present case, there is no merit in the present petition and the same deserves to be dismissed. Accordingly, present petition under section 9 of OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 22 of 23 Digitally signed by lal lal singh Date:
singh 2025.12.10 16:59:50 +0530 Arbitration and Conciliation Act, filed by petitioner is dismissed.
18. Interim order dated 06.10.2025 is hereby vacated.
19. File be consigned to record room.
Digitally signed by lal lal singh Date:
singh 2025.12.10
16:59:56
Announced in Open Court +0530
on 10.12.2025 (LAL SINGH)
District Judge (Commercial Court)-01
South East/Saket Courts, New Delhi.
OMP (I) (COMM.) 95/2025 Brijbasi Fire Safety System Pvt. Ltd. Vs. Nuvia India Pvt. Ltd. & Anr. Page 23 of 23