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13. Mr. J.P. Sengh, learned senior counsel, also submits that since the plaintiff was not found to be successful and none of the conditions of the bank guarantees have been breached, which is also evident upon reading of the invocation letter, the bank guarantees as also the earnest money are to be returned to the plaintiff, and, thus, prays that the order of injunction be confirmed.

14. Per contra, Mr. Birbal, learned counsel appearing on behalf of the defendant no.1/DDA, submits that the guarantees were unconditional. It is submitted that the plaintiff had made a false declaration in the bid document. The necessary verification was carried out by the officials of the DDA and as it was found that the plaintiff has mislead the DDA and accordingly the bank guarantees were invoked. Mr. Birbal has also relied upon the terms of the bid document to buttress his argument that DDA was well within its right to invoke the bank guarantees as not only did the plaintiff make a false declaration to the extent that they had experience in precast concrete walls and slabs, but the plaintiff also gave a specific undertaking to the extent that in case the information furnished by the plaintiff would found to be incorrect, the DDA would be well within its right to invalidate the bid and initiate action as per the tender conditions. Accordingly, the DDA initiated action as per the tender conditions. To this end, Mr. Birbal has drawn our attention to conditions of the tender document, more particularly Sections 3 and 4 of the Integrity Pact to be furnished by the bidders. Mr. Birbal submits that as per Section 3 of the Integrity Pact if the bidder/contractor, before the award or during the execution has committed a transgression and his reliability and credibility is in question, he would be disqualified from the tender process and the principal i.e. DDA would be authorized to take action as mentioned in the „Guidelines on Banning of business dealings‟. As per Section 4 of the Integrity Pact, if the principal has disqualified the bidder from the tender process prior to the award according to Section 3, the Principal would be entitled to demand and recover the damages equivalent to the earnest money deposited/bid security.

(Emphasis Supplied)

16. It is, thus, the case of defendant no. 1/DDA that since the DDA had upon verification learnt that the plaintiff had made a false declaration with regard to his experience which was to be guaranteed under the terms of the bank guarantees the DDA was well within its right to invoke the bank guarantees.

17. Additionally, learned counsel for the DDA submits that while issuing the injunction the plaintiff was directed to keep the bank guarantees alive and in case the Court was inclined to stay the invocation of the bank guarantees the plaintiff should be directed to keep the bank guarantees alive during the pendency of the suit. It is also contended that the balance of convenience is in favour of the DDA for the reason that the plaintiff does not have any roots in the country and in case the DDA succeeds the DDA would have no means to recover the amount; while on the converse since the DDA is a statutory body and a limb of the Government of India, the amount can always be recovered by the plaintiff from the DDA.

18. Mr. Birbal also submits that the plaintiff does not have a prima facie case in its favour as the plaintiff has breached the integrity clause. It is further submitted that having regard to the fact that upon investigation it has been learnt that a false declaration has been made by the plaintiff, the plaintiff should not be given a benefit of discretionary relief.

19. In support of his arguments, Mr. Birbal submits that the law with regard to grant of injunction in the matter of invocation of a bank guarantee or a letter of credit is well settled. The courts should be slow in granting stay of invocation of bank guarantees. In support of this contention, reliance is placed by Mr. Birbal on Himadri Chemicals Industries Ltd. v. Coal Tar Refining Co., (2007) 8 SCC 110, more particularly para 10, which reads as under:

(Emphasis Supplied)

40. The invocation in the present case is completely silent and this silence continues to haunt the defendant no. 1/ DDA even as of today for the reason that in case the DDA is of the view that a fraud has been played upon the DDA, there is nothing on record to show that the DDA has contemplated any action against the plaintiff herein. The bank guarantees were furnished by the plaintiff in the year 2012 and admittedly any lapse or fraud having been played by the plaintiff upon the DDA came to the knowledge of the DDA as far back as in March, 2013. Till date DDA has not taken any action against the plaintiff, no legal notice has been issued; infact till date the plaintiff has not even been informed about the fraud or false declaration. Even otherwise, the DDA is unable to show as to how it can illegally enrich itself by invocation of the bank guarantee when it does not cover any of the clauses which form part of the conditions for furnishing of the bank guarantees.