RSPL LIMITED Vs. SIMPLEX INFRASTRUCTURES

JUDGEMENT

(1.) The appeal arises out of an ex parte ad interim order. The scope of such an appeal is very limited. Yet the appellant has something to say in this case, both on account of the quality of the order impugned - or the lack of it - and the injunction that has been issued against what is perceived to be an unconditional bank guarantee.

(2.) It is the order impugned that requires first attention. The one-page order gives the impression that since a new suit had been filed and a new application had been carried to court by someone who was prepared on the matter, the court felt obliged to grant an order without looking into the facts or complying with the obligations and duty cast upon the court before issuing any injunction. There are sentences that parrot the compliance of a prima facie case having been made out or the plaintiff suffering irreparable injury without a line in support of how the prima facie case was made out or how the plaintiff would suffer irreparable injury if the injunction was not granted. The bank guarantee is not referred to in the order and it would not be a surprise if the bank guarantee was not even read.

(3.) The issue in the present appeal, or the pretence of an issue that is sought to be made out, is as to whether the bank guarantee was conditional or unconditional. Surely, such thought ought to have occurred to the trial court before passing the impugned order. The ancillary issue raised in this appeal by the plaintiff-respondent is that since the bank guarantee was conditional and the invocation therein not in accordance with such condition, the invocation was justifiably restrained. Such reason, of course, does not appear from the order impugned dated February 4, 2019. According to the appellant, which is arrayed as the first defendant in the suit, three bank guarantees were obtained from the plaintiff-contractor on account of mobilisation advance, retention money and performance. Two of such bank guarantees were furnished by the Bank of Baroda and the performance guarantee was furnished by Canara Bank. The appellant asserts that the contract was terminated by a letter dated January 31, 2019 and such letter was received by the plaintiff-contractor on February 2, 2019. The plaint was filed on February 4, 2019. The order bears the same date. It must be recorded that the plaintiff does not accept that it was served the notice of termination on February 2, 2019 as alleged by the appellant herein. It is the further case of the appellant that by the time the order of injunction was issued on February 4, 2019, Bank of Baroda had discharged its obligation and had allowed the encashment of the two bank guarantees furnished by it. The only bank guarantee that remained outstanding was the one in lieu of performance, furnished by Canara Bank.