M/S. INTERNATIONAL TRANSMISSION LTD. Vs. ISOLUX CORSAN INDIA ENGINEERING AND CONSTRUCTION PVT. LTD. AND ANOTHER

JUDGEMENT

(1.) This is an appeal against the order of the learned Additional District Judge-cum-Commercial Court, Gurugram rejecting the appellant's petition under section 9 of the Arbitration and Conciliation Act, 1996 for an injunction restraining payment under the guarantee issued by respondent No. 2-Canara Bank at the request of the appellant in favour of respondent No. 1.

(2.) An agreement was entered into between the appellant on the one hand and a joint venture of C&C Construction Ltd. and the first respondent on the other under which the joint venture was to purchase equipment such as hardware fittings and conductor and earth wire accessories from the appellant. Subsequently the agreement was amended under which respondent No. 1 took over the responsibilities and liabilities of the joint venture. The agreement, therefore, ultimately subsisted only between the appellant and respondent No. 1.

(3.) Pursuant to the terms of the agreement, the Canara Bank at the request of the petitioner issued the said guarantee in favour of the first respondent. The bank irrevocably and unconditionally agreed to make payment to the first respondent of an amount up to or equal to the advance payment at first demand forthwith upon the first respondent giving written notice to the bank that in its sole and absolute judgment, the appellant had failed to observe or perform any of the terms, conditions or provisions of the contract on its part to be observed or performed. Clause-1 of the guarantee reads as under:-