LAWS(CAL)-2024-4-186

RKD NIRAJ JV Vs. UNION OF INDIA

Decided On April 23, 2024
Rkd Niraj Jv Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) The petitioners came out successful in a tender process floated by the respondent no. 2 and entered into a work agreement. Pursuant to such agreement, three bank guarantees were executed in favour of respondent no. 2 by the petitioners. Subsequently a dispute arose between the petitioners and the respondent no. 2 and the said respondent terminated the contract with the petitioners on September 30, 2023. One of the bank guarantees bearing no. BG O5172ILG000321for Rs.1,06,46,000.00 was invoked and encashed by respondent no. 2 by a letter dated September 25, 2023 from the respondent no. 5, that is the Branch Manager of the Punjab National Bank (PNB), Broad Street Branch.

(2.) Two other bank guarantees remained to be encashed. The petitioners approached the Commercial Court at Rajarhat under Sec. 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as, "the 1996 Act") giving rise to MISC. CASE (ARB) No. 76 of 2023, inter alia praying for injunction restraining the respondents from taking any steps and/or in furtherance of any notice for invocation of bank guarantees bearing no. BG O51721LG000621 and BG 045720ILPER0008. The petitioners also sought an order for setting apart a sum of Rs.1,06,46,000.00 which had already been received by the respondent no. 1 towards encashment of the earlier bank guarantee. On October 4, 2023, the Commercial Court passed an ad interim injunction in terms of prayer (c) till October 18, 2023. Prayer (c), it is to be noted, pertained to the prayer restraining the respondents from taking any steps and/or in furtherance of any notice for invocation of the remaining two bank guarantees. However, no order was passed regarding setting apart the amount already encashed in respect of the third.

(3.) According to the petitioners, the order was communicated on the same day to respondent no. 4 and 5, the Branch Managers of the Park Street and Broad Street Branches of the PNB respectively. Whereas respondent no. 5, the Manager of the Broad Street Branch, despite the bank guarantee being already invoked, reversed the process by cancelling the demand draft issued to respondent no. 2 and returned the amount of Rs.5,64,00,000.00 with regard to BG O51721LG000621, respondent no. 4, the Park Street Branch Manager, did not do so and proceeded with invocation of BG 045720ILPER0008 for Rs.5,56,52,128.00.