VINITEC ELECTRONICS PRIVATE LIMITED Vs. HCL INFOSYSTEMS LIMITED

JUDGEMENT

(1.) The present appeal is directed against the judgment and order dated 3rd November, 2004 passed by the learned Single Judge in OMP No.273/2004, rejecting the petition filed under Section 9 of the Arbitration and Conciliation Act seeking an interim injunction pending arbitration against encashment / remittance of the performance bank guarantee at 10% of the contract value furnished to the respondent or any one acting on its behalf.

(2.) An agreement was entered into between the appellant and the respondent on 10th May, 2000, whereunder the respondent agreed to buy UPS Systems from the appellant for a consideration value of Rs.1,68,12,400/-. Payment term in clause 15 (a) to (d) thereof provided for phased payments linked with supply of equipment with performance bank guarantee of 10% to be provided at 15(b) stage. At the stage when the appellant demanded payment of the balance amount, the respondent agreed to pay the same provided appellant furnished performance bank guarantee so agreed to by the appellant and in terms of the aforesaid agreement the appellant furnished a conditional bank guarantee for Rs.16,81,238.50p. The aforesaid conditional bank guarantee furnished on 10th August, 2001 was amended on 20th August, 2001. At this stage, we may point out the principal amendment, which was brought in by the amendment dated 20th August, 2001. The following paragraph appearing in the bank guarantee dated 10th August, 2001 reads as follows:

(3.) The aforesaid stipulation in paragraph 4 of the bank guarantee dated 10th August, 2001 came to be substituted under the amendment dated 20th August, 2001 and paragraph 4 of the bank guarantee, which was amended, reads as under: