Himadri Chemicals Industries Ltd vs Coal Tar Refining Company on 7 August, 2007
Basic stand of the Corporation is that it has got no connection with dues
receivable by OP No.1 from Inland Water Transport Directorate. It is a matter
between OP No.1 and the Directorate. Corporation had provided financial
assistance to OP No.1 under the Raw Material Assistance Scheme. There has
been persistent default on the part of OP No.1. Agreement with OP No.1
clearly empowers the Corporation to invoke the bank guarantee in the event
of default by OP No.1. Since there has been default by OP No.1, Corporation
is well within its right to invoke the bank guarantee.
Learned counsel for the applicants has referred to a decision of the Supreme
Court in the case of Himadri Chemicals Industries Ltd. Vs. Coal Tar
Refining Co., reported in (2007) 8 SCC 110 and contends that the law
relating to grant or refusal to grant injunction in the matter of invocation of
bank guarantee or letter of credit is well settled by the Supreme Court.
While there can be no dispute to the proposition of law relating to invocation
of bank guarantee, Court is however of the view that dispute between the
parties is not of such a nature or magnitude that it is beyond resolution. As a
matter of fact, OP No.1 has not disputed the dues payable by it to the
Corporation. All that it seeks is reasonable time to repay the outstanding
dues.