VIDEOCON INDUSTRIES LTD Vs. COAL INDIA LTD

JUDGEMENT

(1.) This is another application in aid of a suit seeking an order of injunction from this Court restraining the defendant from invoking a bank guarantee. The plaintiff company [plaintiff] seeks such an order to restrain invocation of a bank guarantee for Rs.8,65,17,900/- dated 29th June, 2011 and renewed in 2013 upto December, 2014, furnished by them in favour of the first and second defendants. The first defendant is Coal India Ltd. The second defendant is South Eastern Coalfields Ltd., a subsidiary of the first defendant. The third defendant is Allahabad Bank.

(2.) This bank guarantee was furnished in connection with a contract between the parties evidenced by a Letter of Assurance [LOA] issued by the first/second defendants [hereinafter referred to collectively as the defendants]. It was dated 12th August, 2011 and valid for two years uptill 11th August, 2013.

(3.) The validity of the Letter of Assurance [LOA] was extended by the defendants upto 11th November, 2013. It is quite clear from the available evidence that this extension was made by the defendants considering some factors in the performance of the contract, which were not within the control of the plaintiff. This is so because the minutes of the meeting of the Standing Linkage Committee [Long Term] [SLC(LT)]for power to review the status of existing coal linkages/LoAS in power sector and other related matters dated 7th January, 2013 stated that such cases were to be brought before the SLC [LT] for making suitable recommendations. These minutes are to be read with the Minutes of the meeting of the Committee held on 20th December, 2013. These documents were produced by Mr. P.K. Dutta, learned senior counsel for the defendant. That the case of the plaintiffs was considered by this Committee is quite undisputed.