VIMAL SERVICE LTD Vs. BANK OF INDIA

JUDGEMENT

(1.) THE petitioner, a company registered under the Companies act, 1956, by invoking jurisdiction of this Court under Art. 226 of the constitution of India, has inter alia prayed for issuance of appropriate writ, order or direction against the respondent-Banks, more particularly respondent No. 1-Bank of India, to the effect that the respondent No. 1-Bank may be directed to discharge its obligation under irrevocable revolving Letter of Credit dated 1st June, 2005 and amendment to the Letter of Credit dated 30th June, 2005; and the respondent No. 1 may be directed to make payment of the outstanding amount to the petitioner-Company as on 14th August, 2006. It is further prayed that the respondent No. 1 may also be directed to make payment of rentals in terms of agreement to the lessee company i. e. M/s. A. K. Enterprise; and all these payments may be made with interest at the rate of 24% per annum treating the amount as outstanding from the due date of each of the bills issued by the petitioner, keeping in mind the irrevocable revolving Letter of Credit dated 1st June, 2005.

(2.) BOTH the respondents are Nationalized Banks as per the Banking Company (Acquisition and Transfer of Undertakings) Act, 1970. The respondent No. 1 is having its one of the branches at Nehru Place at New Delhi as well as at ilora Park at Vadodara (State of Gujarat ). The petitioner was dealing with the respondent No. 1 through its agent Bank i. e. respondent No. 2, having its branch at 30-31, Bhagat Colony, G. I. D. C. , Makarpura Industrial Estate, Makarpura, vadodara.

(3.) THE say of the petitioner is that the petitioner-Company is in the business of providing low cost fuel (Furnace Oil) operated Power Plant machinery on rental basis to generate electricity; and if any party is in need of such power generating plant, it is required to have a large premises for installing such machinery which would be prepared as per the requirement of the Company by the party. The petitioner is carrying out such work on receipt of work order and all necessary documents from the party placing orders. The petitioner manufactures such generating plant after importing certain machinery and parts from a foreign supplier and some from local market and in turn establish power plant in the premises of the party. This power plant would be rented to the party by the petitioner. The said power plant generates economical electricity for the purpose of running the factories, industrial units, etc. and the cost of production would substantially be cheaper than the electricity generated by the diesel fuel operated generating sets or power plant. One such order was given to the petitioner by one M/s. A. K. Enterprise having its office at C-9/12, Yamuna Vihar, Delhi as the said Company was desirous to get the said power plant installed at m/s. Ved Cellulose Ltd. at Gaziabad (U. P. ). M/s. A. K. Enterprise is also a company incorporated under the Companies Act, 1956 and the said Company placed order bearing No. AKE/dg/vcl/vsl/009 dated 7th June, 2005 to the petitioner. The Memorandum of Understanding (Mou) was arrived at on 7th June, 2005 at Vadodara and a copy of the same is on record at Annexure-A.