RELIANCE INFRASTRUCTURE LTD. Vs. NLC INDIA LTD.

JUDGEMENT

(1.) By this application, the applicant seeks stay/ injunction on the encashment of two bank guarantees viz. one of the State Bank of India (defendant no.2) for US$ 49,19,714 and the other of IDBI Bank (Defendant No.4) for an aggregate sum of Rs.122 Crores which have been invoked by the defendant no.1 on 24/12/2021 and 27/12/2021.

(2.) It is submitted by Mr. Kamat, the learned counsel for the first defendant that the last date for lodging a claim to the said Bank guarantees is 31st December 2021 and therefore, the said bank guarantees had to be invoked within the said time. The learned counsel submits that these are the bank guarantees to secure the monies that have already been advanced by the Banks.

(3.) The learned counsel for the applicant - plaintiff Mr. Seksaria submits that though these bank guarantees have been invoked they are yet to be encashed. He would submit that the invocation of the bank guarantees is to be in terms of the said bank guarantee. He takes the Court to one of the bank guarantees of State Bank of India at page 92 of the interim application and draws the attention of the Court to paragraph 3, to submit that the obligation to make payment under the guarantee is subject to the proviso that the purchaser has advised the Bank that the contractor has failed to fulfill his contractual obligation stipulated in the underlying contract. He submits that the bank guarantee has been invoked by the respondent no.1 only on the ground of unforeseen circumstances as can be seen from the invocation letter dated 24th December 2021 and not on any failure to fulfill the contractual obligation by the plaintiff. He submits that therefore the invocation is bad in law and urges that the encashment of the subject bank guarantees be stayed. This matter was heard briefly on 27/12/2021, when the following order was passed :-