Delhi High Court
Forcast vs Steel Authority Of India Ltd. And Ors. on 17 September, 1997
Equivalent citations: 1998(1)ARBLR210(DELHI), 71(1998)DLT201
Author: K.S. Gupta
Bench: K.S. Gupta
JUDGMENT K.S. Gupta, J.
(1) Submission advanced by Mr. C.R. Somasekharan appearing for the respondents was that the amount of the Bank guarantee in question has been credited by the State Bank of India, Commercial Branch, Calcutta, in the account of respondent No. 1 on June 9, 1997 & therefore, O.M.P. No. 29/97 has been rendered infructuous and may be dismissed as such. On the other hand, submission advanced by Mr. B. Sen appearing for the petitioner was that in the arbitration matter between the parties notice has been issued by the International Court of Arbitration to respondent No. 1 and if the amount of the Bank guarantee in question has been transferred in the account of respondent No. 1, it may be ordered either to deposit the same in Court or to keep in a separate account to safeguard the interest of the petitioner.
(2) It is not in dispute that in Suit No. 3126/96 filed by the petitioner against the respondents, which was treated as an application under Section 9 of the Arbitration and Conciliation Act, 1996 (O.M.P. No. 29/97) an order of status quo in regard to encashment of Bank guarantee in question was made on December 20, 1996. By a subsequent order dated July 30, 1997 that status quo order was vacated and thereafter on July 31,1997, respondent No. 1 invoked the Bank guarantee in question and on September 9,1997, amount of that Bank guarantee has been transferred in the account of respondent No. 1 by the Bank. With the transfer of the amount of the Bank guarantee in question O.M.P. No. 29/97 has been rendered infructuous. Respondent No. I is one of the biggest public sector undertakings and there should not be any difficulty in recovering the amount of the encashed Bank guarantee if the arbitration proceedings pending before International Court of Arbitration are ultimately decided in favour of the petitioner and against respondent No. 1. Thus the submission referred to above advanced on behalf of the petitioner is repelled being devoid of merit. O.M.P. No. 29/97 is dismissed as having become infructuous.