DENEL PROPRIETARY LTD. Vs. UOI

JUDGEMENT

(1.) THESE appeals impugn the common order dated 22.03.2010 of dismissal of OMPs No. 703/2009, 710/2009 and 711/2009 and two separate orders both dated 12.04.2010 of dismissal of OMPs No. 682/2009 and 702/2009. All the said OMPs were preferred by the appellants under Section 9 of the Arbitration and Conciliation Act, 1996 seeking to restrain the respondent from invoking the Bank Guarantees furnished at the instance of the appellant to the respondent. While the order dated 22.03.2010 is a detailed one, the orders dated 12.04.2010 merely follow the earlier order dated 22.03.2010. Notices of these appeals were issued. The amount in respect of some of the Bank Guarantees was got deposited in this Court. Some of the Bank Guarantees are stated to be still alive. Mr. Mohan Parasaran, learned ASG informs that an amount of Rs.15,89,87,349/ - against the following Bank Guarantees already stands deposited in this Court and there is thus no need for keeping them alive.

(2.) MR . Mohan Parasaran, learned ASG further informs that the following Bank Guarantees are still being kept alive

(3.) IN view of the aforesaid stand of the respondent UOI, we have enquired from the senior counsels for the appellant, the purpose of the present appeals. We have put to them that even if we are to find in their favour, the said finding considering the nature of the proceedings will only be a prima facie finding. It is not for this Court in Section 9 proceedings to adjudicate the respective claims and contentions. Rather, restraint, even if were to be granted to the encashment of the Bank Guarantees, cannot be unconditional resulting in an irreversible situation. If the respondent was to be restrained from invoking the Bank Guarantees and the Bank Guarantees were to lapse, in the event of it being ultimately held that the respondent was entitled to have the Bank Guarantees kept alive and / or to encash the same, if the Bank Guarantees are not alive, the respondent would be deprived of the benefits of the arbitral award if ultimately in its favour. Even otherwise, ordinarily, the orders of restraint of encashment of Bank Guarantees are conditional i.e. subject to the Bank Guarantees being kept alive.