Madhya Pradesh High Court
Meil Kbl (Jv) Through Shri G Aravinda ... vs Narmada Valley Development Authority ... on 9 March, 2018
1 AA No.40/2017
HIGH COURT OF MADHYA PRADESH
A.A. No.40/2017
MEIL-KBL(JV) through its authorized signatory
Vs.
The Chief Engineer, Narmada Valley Development
Authority (NVDA) & others
Indore, Dated: 9/3/2018
Shri Saurav Agrawal, Shri Vijay Asudani, Shri Ishaan
Chhaya and Shri Ravindra Bhawsar, learned counsel for
the appellant.
Shri Vivek Patwa with Shri Ramesh Chandra Sinhal,
learned counsel for the respondents.
Heard.
This appeal under Section 37 of the Arbitration and Conciliation Act is directed against the order dated 14/10/2017 passed by the Additional District Judge, Khargone rejecting the application under Section 9 of the Arbitration and Conciliation Act, 1996 (for short "Act of 1996").
The brief facts are that the tender dated 29/09/2010 was issued by the respondents No.1 to 3 for construction of Khargone Lift Canal including its distribution network and supplementary infrastructure on Turn Key basis. The NIT was a part of the project of the State Government to provide drinking water to the villagers. The bid of the appellant was accepted vide communication dated 21/3/2011 and as per the NIT, appellant had furnished performance security amounting to 5% of the contract price by way of Bank Guarantee. The Bank Guarantee as security for performance against deduction from their 2 AA No.40/2017 running bills was also furnished. There was delay in the execution of the contract which according to the appellant was attributable to the respondents No.1 to 3 and therefore, thrice extension was granted. The penalty was also imposed for delay in performing the contract. Several correspondences took place in this regard between the parties and the communication dated 29/08/2016 was issued by the respondent No.2 to the appellant disclosing the quantum of penalty levied on account of non achievement of target in II, IV, V and VI monthly slab periods and disclosing that a sum of Rs.2,08,24,088/- has been retained from the running bills and the remaining recoverable amount was Rs.53,00,65,812/-. The appellant had initially filed WP No.5926/2016 before this Court, but it was withdrawn vide order dated 6/9/2016 with liberty to take appropriate action in accordance with law. Thereafter, the appellant had approached the Chief Judge, City Civil Court at Hyderabad seeking the interim measure under Section 9 of the Act of 1996 which was disposed off on the ground of lack of jurisdiction. Thereafter, the appellant has filed a reference petition No.119/2016 before the Madhyastham Tribunal under the M.P. Madhyastham Adhikaran Adhiniyam, 1983 (for short "Act of 1983") and then the appellant had filed an application under Section 9 of the Act of 1996 before the Additional District Judge, Khargone which has been rejected by the order under appeal.
Learned counsel for the appellant submits that under Section 17 A, the Madhyastham Tribunal had no power to grant any interim relief, therefore, in view of Section 2 (4) of 3 AA No.40/2017 the Act of 1996 the application under Section 9 of the Act of 1996 is maintainable before the District Judge, Khargone and an error has been committed by the Court below in rejecting the said application as not maintainable. He further submits that the interim order was initially passed by the Court below, therefore, the Bank Guarantee could not have been encashed in the meanwhile.
Learned counsel for the respondents opposing the appeal has submitted that the Bank Guarantee has already been encashed because there was no interim order by the Court below, hence, nothing survives in the present appeal and that the matter is already at the advanced stage before the Madhyastham Tribunal and that in view of the penalty and the fact that the period of Bank Guarantee was coming to an end, it has been encashed as per the terms of the contract.
Having heard the learned counsel for the parties and on perusal of the record, it is noticed that in the application under Section 9 of the Act of 1996, the appellant had prayed for the following interim measure:-
"PRAYER:
For the reasons stated above, the petitioner herein prays that until the disputes are settled between the Parties through arbitration as per the terms of the contract this Honourable Court may be pleased to:
a. Grant an injunction by restraining the respondents, their agents, servants or any other persons claiming through or under them from invoking or encashing the schedule bank guarantees issued by respondents No.4 & 5 banks.
b. and further restrain the respondents No.4 & 5 banks from honouring/encashing the schedule 4 AA No.40/2017 bank guarantees.
c. Award costs.
d. Grant other reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."
The stay application is dated 10/7/2017 on which the notice was issued by the Court below on 12/7/2017. The facts disclosed in the IA No.1/2017 which was considered by the Court below on 20/07/2017 reveals that the prayer for stay was refused on 17/7/2017 and in the meanwhile the Bank had issued demand drafts in favour of the respondents No.1 to 3. The Court below in the order dated 20/7/2017 has noted that the Bank draft for encashing the Bank Guarantee was already issued by the Bank to the respondents No.1 to 3. The Court below by order dated 20/7/2017 had granted the interim protection to the appellant till 27/7/2017 which was the next date fixed in the matter, but thereafter on 27/7/2017 or on the subsequent dates, the interim order has not been continued. It is undisputed before this Court that the Bank Guarantees have now been encashed.
Learned counsel for the Bank has also submitted that demand drafts were issued after debiting the account of the appellant.
In view of the aforesaid subsequent development, the prayer of interim measure which was made by the appellant in its application under Section 9 before the Court below does not survive and has become infructuous and no relief can be granted to appellant in this appeal.
In these circumstance, the issue relating to the 5 AA No.40/2017 maintainability of the application under Section 9 of the Act of 1996 after approaching the Madhyastham Tribunal under the Act of 1983 has become academic which need not be gone into.
That apart, it has also been brought to the notice of this Court that before the Madhyastham Tribunal in the pending reference, the pleadings are complete and the matter is at the advanced stage, therefore, it is always open to the parties to make a prayer to the Tribunal for expeditious disposal of the reference which may be duly considered by the Tribunal having regard to the facts of the case.
In the aforesaid circumstances, no case for interference in the impugned order of the Court below is made out. The appeal is dismissed.
(PRAKASH SHRIVASTAVA) Judge vm Digitally signed by Varghese Mathew Date: 2018.03.12 17:20:08 +05'30'