OMNI AGATE SYSTEMS PRIVATE LIMITED Vs. SOUTHERN RAILWAY

JUDGEMENT

(1.) THESE appeals are filed challenging the order dated 15.11.2010 dismissing the applications - O.A.Nos.653 and 657 of 2010 filed under Section 9 of the Arbitration and Conciliation Act and declining to grant injunction restraining the 1st respondent -Southern Railway from invoking the Bank guarantee given by the appellant for Rs.6,00,000/- and Rs.2,77,200/- respectively.

(2.) BRIEF facts are as follows:- The 1st respondent -Southern Railways had invited tenders for erection of 3 LED screens in Chennai Central Railway Station and 2 LED screens in Egmore Railway Station for a period of three years and the place of installation was notified. Appellant was declared as a successful tenderer and awarded the contract for three years - 2008-2011 on payment of licence fee. The licence fee, security deposit and performance guarantee required to be furnished for the works at Chennai Central and Egmore are as follows:

(3.) CONTENDING that economic duress amounting to coercion and special equities, arisen from a particular situation like fraud, irretrievable injustice are some of the recognised exceptions available to the plaintiff seeking injunction, the learned counsel placed reliance upon a judgment of the single Judge of Bombay High Court in DAIICHI KARKARIA PVT.LTD., BOMBAY VS. OIL AND NATIONAL GAS COMMISSION, (AIR 1992 BOMBAY 309). It was further submitted that the Bank guarantee is a conditional one and unless the condition precedent for enforcement of the bank guarantee is satisfied, the appellant cannot be permitted to invoke the bank guarantee. Reliance was placed upon MAHATMA GANDHI SAHAKRA SAKKARE KARKHARNE VS. NATIONAL HEAVY ENGINEERING CO.OP.LTD., ((2007) 6 SCC 470).