HINDUSTAN COPPER LIMITED Vs. RANA BUILDERS LIMITED

JUDGEMENT

(1.) The appellant herein was the respondent in an application being A. P. No. 8 of 1998 filed by the respondent herein under Section 9 of the Arbitration and Conciliation Act, 1996 praying for an injunction restraining the respondent therein (appellant herein) from giving any effect to its letters of invocation of the bank guarantee No. 49/252 for Rs. 1.38 crores or 49/263 for Rs. 1.93 crores that were furnished by the Bank of Baroda, Sayajigunj Branch.

(2.) The above appeal is directed against the order of learned single Judge dated 4th May, 1998 whereby the appellant was directed to return the two bank drafts dated 8th January, 1998 to the bank for cancellation and the Branch Manager, Sayajigunj Branch of the Bank was directed to invest the amounts thereof in a separate fixed deposit account free from any lien and keep the same renewed until further orders of the Court. The said fixed deposit account, it was directed, shall lie to the credit of the arbitration proceedings between the parties and the same shall abide by the result of the Award.

(3.) The brief facts are that :The appellant issued a Letter of Intent for carrying out the works mentioned therein by the respondent. In terms thereof, the respondent furnished a bank guarantee for Rs. 1.38 crores in lieu of security deposit. The said guarantee being No. 49/252 dated 28th December, 1994. On 1 14th January, 1995, contract in writing was entered into between the appellant and the respondent. By the said contract, the respondent agreed to carry out excavation and removal of 4 (four) Million cubic meters rock works at the appellant' Malanjkhand Copper Project at Balaghat in M. P. It contained an Arbitration clause for referring the dispute to the Chairman-cum-Managing Director of appellant or his nominee.