SKIPPER STEELS LIMITED Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) The instant suit is filed by the Plaintiff praying for perpetual injunction restraining the Defendant No. 2 from invoking or receiving any payment in respect of the bank guarantee, subject matter of the suit; perpetual injunction restraining the Defendant No. 1 from making any payment to the Defendant No.

(2.) in respect of the said bank guarantee; mandatory injunction upon the Defendant No. 1 to cancel the said bank guarantee along with other prayers. 2. The original Plaintiff was M/s Skipper Steel Limited which now M/s Skipper Limited, is engaged any business of manufacture and sale of three legged tubular hybrid towers made of iron. The Defendant No. 2, Bharat Sanchar Nigam Ltd. in short BSNL, required such towers. Accordingly a tender enquiry dtd. 11/04/2007 for supply of the towers, was issued by the BSNL. The Plaintiff duly submitted its bid. The tender notice contained various terms and conditions. In terms of tender conditions the Plaintiff furnished a bank guarantee which was issued by the original Defendant No. 1, namely, Oriental Bank of Commerce. The later was subsequently merged with the present Defendant No. 1 Punjab National Bank Limited. The bank guarantee was for the sum of Rs.11,22,950.00 bearing no.05440030507. Bids were opened on 15/5/2007 and the Plaintiff was a successful bidder. In terms of letter dtd. 12/7/2007, BSNL intimated the Plaintiff to attain the Price Negotiation Committee meeting. Subsequently, in course of meetings, held by the parties, the Plaintiff was informed by the Defendant No. 2, namely, BSNL ladder cable tray and antenna holders would have to be fixed in the towers, to be supplied by the Plaintiff. This was an additional feature of the said towers which was not included in the tender terms. Tender conditions did not include ladder cable tray and antenna holders. The Plaintiff by letter dtd. 25/7/2007 required the bill of materials of Defendant No. 2 to ascertain particulars of the aforesaid imposition of the Defendant no. 2 before taking any definite stand. The Defendant forwarded the Plaintiff a copy of its bill of material. It transpired from the bill of materials that ladder cable tray and the antenna holders, if manufactured in accordance with bill of materials of the Defendant no. 2, would rise up the weight of the towers substantially resulting in additional manufacturing costs. In those circumstances, the offer of the Plaintiff in the form of quoted price which was based on the tender terms, no longer appear to be apposite. This was communicated by the Plaintiff to the Defendant no. 2 in terms of the letter dtd. 30/7/2007.

(3.) It is the case of the Plaintiff that the Defendant no. 2 altered the terms and conditions of the tender by including additional specifications of ladder cable tray and antenna holders which did not find place in the notice of tender. The Defendant no. 2 issued an advance purchase order dtd. 22/9/2007. The Defendant no. 2 accepted the Plaintiff's contention that supply of antenna holders are beyond the tender terms, yet insisted upon supplied of these additional items; the Defendant no. 2 also threatened the Plaintiff to invoke the bank guarantee furnished by the Plaintiff. In terms of the advance purchase order the Plaintiff is required to convey its unconditional and unequivocal acceptance and performance security deposit in the prescribed format within specified period failing which the advance purchase order would be treated as cancelled. The advance purchase order read with the Defendant no. 2's bill of materials is not an acceptance of the Plaintiffs bid but is a counter offer by the Defendant no. 2 which the Plaintiff would be required to accept. Ultimately, in terms of letter dtd. 12/10/2007, the Plaintiff informed the Defendant no. 2 that the former should not proceed further in the matter and its bid should be treated as cancelled. Consequently, it is requested to the Defendant no.2 that the bank guarantee be returned and/or cancelled. According to the Plaintiff, bank guarantee can be invoked only in certain contingencies as contemplated therein. Therefore, a special equity works in favour of the Plaintiff for cancellation of the bank guarantee. Accordingly, the Plaintiff filed the instant suit praying for perpetual injunction, restraining the Defendant no. 2 from invoking or receiving any payment in respect of the bank guarantee; perpetual injunction restraining the Defendant no. 1 from making any payment to Defendant no. 2 in respect of the bank guarantee; mandatory injunction upon the Defendant no. 1 to cancel the bank guarantee along with other prayers.