GREAT EASTERN ENERGY Vs. JAIN IRRIGATION SYSTEMS LTD

JUDGEMENT

(1.) Rule. By consent of learned Counsel for the parties, the petition is heard finally.

(2.) Challenge in this petition is to judgement and order rendered by learned District Judge, Jalgaon in Misc. Civil Appeal No. 31/2008 whereby and whereunder interim injunction is clamped on petitioner from encashment of Bank Guarantee until disposal of suit (R.C.S. No. 138/2007), reversing dismissal order of application (Exh 6) for interim injunction passed by learned Civil Judge (S.D.).

(3.) The petitioner is a Corporation. The petitioner needed MDPE pipes worth Rs. 4,15,00,000/-. For procurement of the MDPE pipes, the petitioner invited competitive bidding through tenders. The tenders were called from domestic as well as intracountry suppliers. The domestic bidder was required to furnish bid security of Rs. 13,00,000/- (rupees thirteen lacs) vide a Bank Guarantee or demand draft in favour of the petitioner. The respondent No. 1 is manufacturer of MDPE and other pipes. The respondent No. 1 participated in the bidding process. The respondent No. 1 submitted tender document alongwith the Bank Guarantee through its banker i.e. the respondent No. 3. The Bank Guarantee was enforceable till 15th May, 2007. The petitioner sent Letter of Intent (LoI) by fax dated 14th March, 2007. The petitioner informed that the offer expressed in the Tender Document was accepted on the conditions shown in the Letter of Intent. The Bank Guarantee was irrevocable and encashable without providing any reason to the Bank. The respondent No. 1, in response to the Letter of Intent, communicated to the petitioner that the terms of the original bid floated by the petitioner were not in conformity with the Letter of Intent and it was not possible to supply the goods due to deviation of the original terms of the proposed contract. The respondent No. 1, however, informed that the supply of the MDPE pipes will be undertaken by it, in case the subsequent variations are rectified and original terms are restored. The petitioner informed the respondent No. 2 Bank on 9th May, 2007 to allow encashment of the Bank Guarantee. On the very next day, the respondent No. 1 informed the Bank that the petitioner had not placed the order as per the terms of the notice inviting the tenders and there were variations in the terms and as such, the Bank Guarantee may not be encashed. The respondent No. 1, on the day the validity of the Bank Guarantee was to come to an end, filed suit (R.C.S. No. 138/2007) for perpetual injunction. The learned Civil Judge initially passed status quo order on interim application (Exh6) filed by the respondent No. 1 for interim injunction sought under Order XXXIX Rules 1 and 2 of the Civil Procedure Code. The application was dismissed after hearing the parties. The respondent No. 1 preferred appeal (Misc. Civil Appeal No. 31/2008) against the order of dismissal of the application (Exh6). The learned District Judge allowed the appeal and clamped interim injunction restraining the petitioner from encashing the Bank Guarantee till disposal of the suit. The learned District Judge also directed the trial Court to dispose of the suit within period of six (6)months. This order of the learned District Judge is impugned by the petitioner.