SOMENDRA NATH DEKA Vs. CHAIRMAN-CUM-MANAGING DIRECTOR

JUDGEMENT

(1.) THIS is an application under Order 39 Rule 1 and 2 seeking injunction against encashment of performance bank guarantee for Rs. 49,27,896/ - issued by defendant No. 2 at the behest of the plaintiff in favour of defendant No. 1.This application came up for hearing before the Court on 18.3.2013 when an ex parte order was passed restraining defendant No.1 from invoking the Bank Guarantee in question.

(2.) IT is contended by the plaintiff in the plaint that the plaintiff is a class - I (A) Contractor of PWD roads and buildings of the State Government. An advertisement was stated to be issued on 23.01.2010 by defendant No. 1 for proposed housing for urban poor and rehabilitation of slum dwellers at William Nagar (East Garo Hills) Meghalaya under Integrated Housing and Slum Development Programme of the Government of Meghalaya. The plaintiff made a bid. The tender bid dated 30.01.2010 of the plaintiff was approved by defendant No. 1 and the work of contract value of Rs.9,85,57,921.15/ - was awarded to the plaintiff vide Letter of Award dated 07.06.2010. As per clause 13.1 of the Letter of Award /Letter of Intent, the plaintiff was to submit to NBCC a performance bank guarantee of any Nationalised Bank equivalent to 5% of contract value. Hence, the plaintiff furnished the bank guarantee of Rs. 49,27,896/ - in favour of defendant No. 1 issued by IDBI Bank -defendant No. 2.

(3.) THE defendants have in their written statement denied the contentions and submissions of the plaintiff. It is contended that the Letter of Award envisaged that the project was to be completed within 12 months. Reliance is placed on Clause 7 of the Letter of Award which stipulates that time is the essence of the Contract and the project should be completed within 12 months. It is also pointed out that a perusal of the various communications written by defendant No. 1 will show that the problem regarding insurgency is only an excuse for not being able to execute the contract. Reliance is placed on letter dated 18.12.2010 written by the plaintiff where the only complaint of the plaintiff was regarding non -availability of certain type of steel. Similarly, reliance is placed on letter dated 24.08.2011 written by the plaintiff to defendant No. 1 where it is stated that the work could not be completed due to the compelling circumstances of the inclement weather. In the said letter, the plaintiff assured that it will endeavour to cover the shortfall of the progress of the work. Plaintiff also reminded defendant No. 1 about non -payment of the bills of the plaintiff. Reference is then made to the minutes of the meeting held on 14.06.2011 and a letter written by the plaintiff on 02.09.2011 where the plaintiff requested for more time for completion of the project. It is further submitted that the plaintiff is a resident of Assam, Guwahati and is fully conversant and aware of the local conditions. He was aware about the problems existing at site when he made the bid. Hence, it is contended that the averments regarding insurgency are an afterthought in order to wriggle out of the consequences for breaching the terms and conditions of the Contract. Reliance is also placed on the General Conditions of the Contract wherein Clause 2 states that before tendering the tenderer is advised to visit the site and satisfy himself about the local conditions and other constrains at site including risk, weather conditions, contingencies and other circumstances (insurgencies etc.) which may influence or affect the tender prices. Hence, the plaintiff has failed to comply with Clause 2 of the General Conditions of the Contract and the plaintiff cannot escape its liabilities. In view of the above, it is stated that the present application for stay is liable to be dismissed.