INDU PROJECTS LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) CM Nos. 18349-52/2013

(2.) The learned Single Judge after analyzing the law on the subject and on going through the facts and circumstances of the case has declined to grant injunctions against the encashment of the bank guarantees. Several points were argued before the learned Single Judge, one of them being that the bank guarantees themselves have been wrongfully invoked. Another aspect which was argued was that the factum of loss or damage has not been established and therefore the invocation was bad / fraudulent. It was also argued that special equities arose in the case, inasmuch as, according to the appellants / petitioners there were difficulties with regard to the availability of site, availability of steel and unprecedented rains which delayed the execution of the underlying contracts. It was also argued that because of these difficulties extensions had been granted from time to time.

(3.) After examining these facts in the light of the law on the subject, the learned Single Judge came to the conclusion that the invocations were within the terms of the bank guarantees and that it was not necessary for the appellants / petitioners to have quantified the loss or damage which had occurred or was likely to be suffered by the respondent. It was also concluded by the learned Single Judge that this was not a case in which the concept of special equities could have been invoked. He was of the view that the expression "special equities" have been interchangeably used with the expression "irretrievable injury" or "irreparable injustice". The learned Single Judge further concluded that a broad test as to whether such an irretrievable injury or irreparable injustice had been caused or special equities had arisen would be to find out as to whether the aggrieved party would be in difficulty to realise or recover the amounts which are reflected in the bank guarantees from the opposite party if the aggrieved party were to ultimately succeed in the principal action based on the underlying contract that it may launch against the opposite party.