KALPAVRIKSHA ENGINEERS AND MANAGEMENT CONSULTANTS PRIVATE LIMITED Vs. NATIONAL PROJECTS CONSTRUCTION CORPN LIMITED

JUDGEMENT

(1.) THIS order will dispose of application (I.A No.8462/91) of the petitioner under Section 41 read with IInd Schedule of the Arbitration Act for restraining the respondent from invoking and encashing the bank guarantee No.NPL/28/89 dated May 23,1989 subsequently renewed vide letter dated August 9,1990. The facts necessary for the disposal of this application are as follows: The respondent by its letter dated May 23,1989 awarded the work of "providing project management consultancy services for Lower Periyar Hydroelectric Peroject in Kerala" to the petitioner on the terms and conditions contained therein (for short 'Agreement'). The petitioner was to give consultancy on several matters including the following:

(2.) ACCORDING to the agreement the respondent was required to pay to the petitioner 10% of the total fee amounting to Rs.2.25 lacs as initial payment against furnishing of a bank guarantee by the latter for the said amount. This initial payment was to be adjusted from running payment of work on pro rata basis at the rate of 10% of the amount of running account bills. There is no dispute that the initial payment was made to the petitioner against irrevocable and unconditional bank guarantee,being bank guarantee No.P.L/BG/28/89 dated May 23,1989 issued by New Bank of India for a sum of Rs.2.25 lacs in favour of the respondent. The bank g provides as follows:

(3.) AT this stage learned counsel for the respondent appeared and submitted that the Managing Director of the respondent company has been authorised by the agreement to appoint an arbitrator for resolution of the disputes between the parties and the court should not appoint an arbitrator as this will amount to filing an agreement different from the one to which parties consented. The oral prayer of the learned counsel for the respondent cannot be considered now as the order has already been pronounced.