M/S Sri Ganesh Engineering Works vs Northern Railway & Ors on 14 March, 2023

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Delhi High Court - Orders

M/S Sri Ganesh Engineering Works vs Northern Railway & Ors on 14 March, 2023

Bench: Chandra Dhari Singh

                  $~33
                  *    IN THE HIGH COURT OF DELHI AT NEW DELHI
                  +       O.M.P.(I) (COMM.) 78/2023
                          M/S SRI GANESH ENGINEERING WORKS                    ..... Petitioner
                                             Through:     Mr. Tanmay Mehta, Mr. Rahul
                                                          Shukla, Ms. Vijayshree Pattnaik and
                                                          Ms. Sayantani, Advocates

                                             versus

                          NORTHERN RAILWAY & ORS.                           ..... Respondents
                                             Through:     None

                          CORAM:
                          HON'BLE MR. JUSTICE CHANDRA DHARI SINGH
                                             ORDER

                  %                          14.03.2023
                  I.A. 4977/2023 (Exemption)

Exemption allowed subject to just exceptions. The application stands disposed of.

O.M.P.(I) (COMM.) 78/2023

1. The instant petition under Section 9 of the Arbitration and Conciliation Act, 1996 has been filed on behalf of petitioner seeking the following relief:-

"A. Stay the respondent from invoking the Bank Guarantees being no.(i) 16781/GL0002421 dated 01.07.2021 for a sum of Rs. 96,34,213/- (ii) 16781/GL0004421 dated 15.09.2021 for a sum of Rs. 1,76,62,723/- and (iii) 16781/GL0002521 dated 08.07.2021 for a sum of Rs. 1,76,62,723/- issued by Union Bank of India, Shahakarnagar Branch, Bengaluru-560092, till final adjudication of dispute between the parties..."

Signature Not Verified Digitally Signed By:DAMINI YADAV Signing Date:14.03.2023 18:31:15

2. Learned counsel appearing on behalf of petitioner submitted that the petitioner is a partnership firm, having its registered office at Plot No.55-56, 8th Cross, Bhuwaneshwari Nagara, Dasarahalli Main Road, Hebbal, Bangalore, Karnataka-560024 and the respondent is Northern Railways and its chief administrative officer. It is submitted that the petitioner was awarded a contract for miscellaneous works in Darybad-Barabanki Section of Lucknow division.

3. It is submitted that Clause 33.0 of the tender document confers exclusive jurisdiction to Courts in Delhi/New Delhi for adjudication of all the disputes between the parties. The total cost of the work at the accepted rates worked out to Rs. 32,11,40,441.09 (Rupees Thirty Two Crores Eleven Lakhs Forty Thousand Four Hundred and Eleven rupees and Nine paisa only). The entire work had to be completed within 24 months from the date of issue of letter of acceptance i.e. on or before 2nd May, 2023.

4. Learned counsel appearing on behalf of petitioner submitted that the contract is being governed by Northern Railway General Conditions of Contract-2020 and the petitioner was asked to submit the Performance Bank Guarantee in terms of Clause 5.2 of Special Tender Conditions and Instruction to Tenderer equivalent to 3% of the contract value amounting to Rs. 96,34,212.33 within 21 days from 3rd May, 2021. It is submitted that the 'Performance Guarantee Bond' for a sum of Rs. 96,34,213/- on 1st July, 2018 was issued by Union Bank of India. In addition to said Bond, the petitioner also submitted two Mobilization Advance Guarantee Bond dated 8th July, 2021 for a sum of Rs. 1,76,62,723 /- and dated 15th September, 2021 for a sum of Rs. 1,76,62,723 /-. It is further submitted that the respondent, vide termination order dated 9th March, 2023, terminated the contract with the Signature Not Verified Digitally Signed By:DAMINI YADAV Signing Date:14.03.2023 18:31:15 petitioner by referring to the Notice dated 28th February, 2021 as 7 days' notice and issued to the Bank a letter dated 9th March, 2023 invoking the Bank Guarantee. It is also submitted that if the Bank Guarantee is invoked or encashed, the petitioner is likely to suffer irretrievable injustice or prejudice and therefore, the instant petition under Section 9 of the Arbitration Act has been filed.

5. Heard.

6. On filing PF within a week, issue notice to the respondents through all permissible modes, including dasti, returnable on 13th April, 2023.

7. The operation of the letter dated 9th March, 2023, which is appended as Document-M to the petition is kept in abeyance till the next date of hearing.

Dasti.

CHANDRA DHARI SINGH, J MARCH 14, 2023 Dy/ms Click here to check corrigendum, if any Signature Not Verified Digitally Signed By:DAMINI YADAV Signing Date:14.03.2023 18:31:15

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Delhi High Court - Orders