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1 - 9 of 9 (0.28 seconds)Hindustan Construction Company Ltd vs Nhpc Ltd on 4 March, 2020
36. It was conceded on behalf of the respondent that the petitioner is
continuing to work on the site even after April, 2022 and no express letter
indicating termination of Contract has been served upon the petitioner. An
ambivalent situation prevails wherein the respondent though has served
Notice of Correction and the Delay Damages Notice, but has yet not served
any Notice of termination or has notified the petitioner to stop the work at
site after April, 2022. Therefore, as held in the cases of Hindustan
Construction Limited (supra) that though invocation of Bank Guarantee
cannot be prohibited or injuncted, it is held to be a fit case where the
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respondent is directed to give a prior Notice of 15 days expressing his
intention to revoke the Bank Guarantee before revocation of Bank
Guarantees.
The Code of Civil Procedure, 1908
U.P. State Sugar Corporation vs M/S. Sumac International Ltd on 4 December, 1996
31. It needs to be further examined whether petitioner is entitled to
injunction against invocation of Performance Guarantees. The law in regard
to injunctions for restraining invocation/ revocation of bank guarantee has
been clearly laid down by the Apex Court in U.P. State Sugar Corporation
vs. Surmac International Ltd. (1997) 1 SCC 568 wherein the principle was
clearly enunciated that on the enforcement of a Bank Guarantee or a Letter
of Credit in respect of Bank Guarantee which is sought to be encashed by a
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beneficiary, the bank giving such guarantee is bound to honour it as per its
terms irrespective of any dispute raised by its customer. It was held that the
existence of any dispute between the parties to the Contract is not a ground
to restrain the enforcement of Bank Guarantees. The only two exceptions
recognized for grant of order of injunction are:
Manohar Lal Sharma vs Narendra Damodardas Modi on 10 April, 2019
In the decision of Manohar Lal
Sharma Vs. Narendra Damodar Dass Modi (2019) 3 SCC 25, the Apex
Court highlighted the significance of the contracts pertaining to Defence
Services and observed that adequate military strength and capability to
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discourage and withstand external aggression and to protect the sovereignty
and integrity of India is a matter of utmost concern for the Nation. The
empowerment of defence forces with adequate technology and material
support is, therefore, a matter of vital importance. The parameters of judicial
review of administrative decisions with regard to Award of Tenders and
Contracts are confined to the scrutiny of the decision making process on the
parameters of unreasonableness and malafide. The Court should not exercise
its power of judicial review even if a procedural error is committed to the
prejudice of the Tenderer since private interests cannot be protected while
exercising such judicial review.
Himadri Chemicals Industries Ltd vs Coal Tar Refining Company on 7 August, 2007
33. The Apex Court in Himadri Chemicals Industries Ltd. vs. Coal Tar
Refining Company (2007) 8 SCC 2010 made a reference to the
aforementioned judgment and concluded that since the Bank Guarantee or a
Letter of Credit is an independent and a separate contract and is absolute in
nature, existence of any dispute between the parties to the contract would
not be a ground for issuing an order of injunction to restrain enforcement of
bank guarantee.
Reliance Airport Developers Pvt. Ltd vs Airports Authority Of India And Ors on 7 November, 2006
In Reliance Airport Developers Pvt. Ltd. vs. Airport Authority of India
(2006) 10 SCC 1 it was noted that certain areas of governmental activity,
national security being the paradigm, the courts have regarded themselves as
incompetent to investigate, beyond an initial decision as to whether the
government‟s claim is bonafide. In this kind of non-justifiable area, judicial
review is not entirely excluded, but is very limited.
Hind Construction Contractors By Its ... vs State Of Maharashtra on 30 January, 1979
28. This aspect was considered in detail by the Apex Court in its decision
in M/s Hind Contractors Vs. State of Maharashtra (1979) 2 SCC 70, and it
was held that whether the time is the essence of the Contract would
essentially be a question of the intention of the parties to be gathered from
the terms of the Contract. Even when the parties have expressly provided
that Time is the essence of the Contract, such stipulation would have be read
along with the other provisions of the Contract and on construction and
interpretation of the terms of the Contract, inference that completion of the
work by a particular date was intended to be fundamental, may be excluded.
For instance, if the Contract includes clauses providing extension of time in
certain contingencies or for payment of fine or penalty for every day or
week, the work undertaken remains unfinished on the expiry of the time
provided in the contract, such clauses would be construed as rendering
ineffective the express provision relating to the time being the essence of the
Contract.
M/S Nhpc Ltd. vs M/S Hindustan Construction Company ... on 4 December, 2020
35. Similar facts as in the present case came up for consideration in
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Hindustan Construction Company Ltd. vs. NHPC Ltd. O.M.P. 536 of 2014
decided by this Court on 30th May, 2014; Hindustan Construction Company
Ltd. vs. NHPC Ltd. O.M.P. 536 of 2014 decided by this Court on 12th
February, 2015; NHPC Ltd. vs. Hindustan Construction Company Ltd. FAO
(OS) 131 of 2015 decided by the Division Bench of this Court on 28th May,
2015, wherein it was held consistently that where the bank guarantee has not
yet been invoked by the respondent, the directions for prior Notice of certain
days before invocation is not violative of the settled law prohibiting any
injunction against revocation of bank guarantee. In these cases, it was
categorically observed that the factum of notice of invocation of bank
guarantee can be of no prejudice to the petitioner, since after giving such
notice, it will be open to the respondent to proceed to invoke the bank
guarantee subject to the petitioner seeking appropriate remedies. By
providing for prior Notice, the respondent was not being injuncted from
invoking the Bank Guarantee but merely some time was granted to the
petitioner to seek its remedies in case the respondent sought to encash it.
CONCLUSION
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