TARUN BUILDERS PVT LTD Vs. BANK OF INDIA

JUDGEMENT

(1.) THE present revision petition has been filed by M/s. Tarun Builders Private Limited (hereinafter described as 'the petitioner) directed against the order passed by the learned civil judge (Sr. Division), Jagadhari dated 5. 8. 1997 and that of the judgment of the learned Additional District Judge, Jagadhan dated 17. 2. 1998. By virtue of the impugned order the learned trial Court had refused to award an ad-interim injunction to the petitioner and the appeal was dismissed by the learned Additional District Judge.

(2.) THE relevant facts are that respondent No. 2 M/s. Kay Inns. Pvt. Ltd. had invited tenders for construction of a three star hotel at Yamuna Nagar. The tender of the petitioner was accepted. As per terms of acceptance respondent No. 2 was to give Rs. 5 lacs, as mobilisation advance to the petitioner which was to be deducted from the running bill of the petitioner at the rate of Rs. 1 lac per bill. Mobilisation advance was given on 4,4. 1996 and 10. 4. 1996. To secure the return of mobilisation advance the petitioner gave a bank guarantee of Rs. 5 lacs, to respondent No. 1. It was given on 20. 3. 1996. After the mobilisation advance had been recovered from the running bill, the bank guarantee was to be returned to the petitioner. It is pointed that execution of the work was delayed. On 26. 8. 1996 the officers of respondent No. 2 did not allow the petitioner to do any work. The petitioner submitted four running bills for the work done and contends that amount of Rs. 1 lac. had to be adjusted in each of the bill towards re-payment of mobilisation advance. He filed a petition Under Section 11 of the Arbitration Act. Meanwhile, respondents No. 2 had sent a person to respondent No. 1 for encashment of the bank guarantee. When petitioner came to know about it, it filed a suit in Delhi High Court. Initially ad-intcrim injunction was granted. But subsequently the plaint was returned for presenting the same before a proper court having jurisdiction. The petitioner thereupon on the above said facts filed a suit for permanent injunction alongwith an application for temporary injunction to restrain respondent No. 2 from encashing the bank guarantee. Respondent No. 2 contested the petition seeking ad-interim injunction and the suit. It was alleged that work allotted to the petitioner was to be completed within a time frame of 8 months i. e. uptil November, 1998. The petitioner completed only 20% of the work and it appeared that it will not be able to complete the work. It is not disputed that Rs. 5 lacs, was towards the mobilisation advance. It was denied that bank guarantee was to secure the bank guarantee of mobilisation advance.

(3.) THE main argument advanced by the learned counsel for the petitioner was that bank guarantee was given amounting to Rs. 5 lacs. It was as a security for repayment of mobilisation advance. The mobilisation advance was to be deducted from the running bill. He further urged that certain bills were submitted and Rs. 1 lacs, was to be deducted from each bill. On facts it was further alleged that respondent No. 2 had delayed in giving the material and, therefore, the construction could not be set up. It was further argued that in case of mobilisation advance, the bank guarantee could not be encashed as is being done by respondent No. 2.