(1.) THIS PETITION UNDER SECTION 9 OF THE ARBITRATION & CONCILIATION ACT, 1996(HEREINAFTER REFERRED TO AS THE `ACT') SEEKS AN INTERIM INJUNCTION PENDING ARBITRATION, AGAINST THE ENCASHMENT/REMITTANCE OF THE PERFORMANCE BANK GUARANTEE AT 10% OF THE CONTRACT VALUE TO THE RESPONDENT OR ANY ONE ACTING ON ITS BEHALF. THE GUARANTEE DATED 10TH AUGUST, 2001 AS AMENDED ON 20TH AUGUST, 2001 WAS PROVIDED BY THE PETITIONER/APPLICANT TO THE RESPONDENT IN THE SUM OF RS.16,81,238.50P., ISSUED BY THE ORIENTAL BANK OF COMMERCE, KIRTI NAGAR BRANCH, NEW DELHI. THE ENCASHMENT OF THE SAID BANK GUARANTEE IS SOUGHT TO BE STAYED BY THIS PETITION.
(2.) THE FACTS OF THE CASE ARE AS FOLLOWS:- THERE WAS A CONTRACT DATED 10TH MAY, 2000 FOR THE VALUE OF RS.1,68,12,400/-(RUPEES ONE CRORE SIXTY EIGHT LACS TWELVE THOUSAND AND FOUR HUNDRED ONLY) AND IT IS THE PETITIONER'S CASE THAT AFTER 30 PER CENT OF THE CONTRACT VALUE WAS PAID TO THE PETITIONER, A BANK GUARANTEE IN QUESTION WAS FURNISHED TO THE RESPONDENT. THE ORIGINAL CLAUSE OF THE BANK GUARANTEE DATED 10TH AUGUST, 2001 READS AS FOLLOWS:-
(3.) THEREFORE, WE, THE BANK, HEREBY AFFIRM THAT WE ARE GUARANTORS AND RESPONSIBLE ON BEHALF OF THE SUPPLIER UPTO A TOTAL OF RS.16,81,238.50 (RUPEES SIXTEEN LACS EIGHTY ONE THOUSAND TWO HUNDRED THIRTY EIGHT AND PAISE FIFTY ONLY) AND WE UNDERTAKE TO PAY ANY SUM OR SUMS WITHIN THE LIMIT OF RS.16,81,238.50 (RUPEES SIXTEEN LACS EIGHTY ONE THOUSAND TWO HUNDRED THIRTY EIGHT AND FIFTY PAISE ONLY) AS AFORESAID UPON RECEIPT OF WRITTEN DEMAND FROM THE PURCHASER AND COMPANY WITHIN THE VALIDITY OF THIS BANK GUARANTEE, ESTABLISHING THE SUPPLIER TO BE IN DEFAULT FOR THE PERFORMANCE OF THEIR WARRANTY OBLIGATIONS UNDER THE CONTRACT.