ELMECH POWER & AIR CONDITIONING ENGINEERS PVT. LTD. v. BPTP LIMITED

1. This is a petition filed under Section 9 of the Arbitration & Conciliation Act, 1996 (in short the Act). By this petition injunction is sought qua two bank guarantees, the details with respect to which, are set out in the prayer clause. The first bank guarantee is dated 07.12.2010 valued at Rs. 17,31,181/-, while the second bank guarantee is dated 26.04.2011 valued atRs. 11.50 lacs.

2. Briefly, injunction is prayed for vis-a-vis the aforementioned bank guarantees in the backgroundof the following facts: 2.[1] The petitioner was awarded, it appears, a contract for execution of OMP 828/2013 2013:DHC:8407 internal electrical work with respect to a Multi-Storeyed Group Housing Project, known as. Park Elite Premium. The project is, apparently, situated in Sector - 84, Parklands, Faridabad in the state of Haryana. The value of the work, assigned to the petitioner, was apparently, a sum of Rs.4.60 crores. 2.[2] Pursuant to a Letter of Intent (LOI) dated 29.11.2010, a work order was issued to the petitioner on 02.12.2010. The relevant terms of the contract between the parties, in so far as they are relevant for the present purposes, are as follows:

(i) The petitionerwas to be paid a mobilization advance equivalent to 5%

(ii) The petitioner was required to submit a performance bond, in the shape of a performance banlc guarantee or to deposit an amount equivalent to 2.5% ofthe value within a period of 15 days of the issue of the work order but prior to a date before the release of the first stage payment.

(iii) In case the petitioner failed to execute the work, the respondent had the right to terminate the contract, after issuing a notice in writing in that behalf., Respondent also retained the right to get the work executed through another contractor, at the petitioner's risk and cost.

(iv) The time was of the essence. Consequently, the entire work was required to be completed and handed over to the respondent within 18 months from the date of the issuance of the LOI. 2.[3] To be noted, the mobilization advance, as per the averments made in the petition, could be adjusted against RunningAccount (RA) bills, in such a manner that, the total advance paid to the petitioner was recovered from the petitioner before 90% of the work was completed. 2.[4] It is also pertinent to note that even though the contract'^taining between the parties stated that no secured advance would be extended in favour of the petitioner, as per the petitioner's own assertion, a sum of Rs. 17,61,555/- was paid to the petitioner towards secured advance. The petitioner avers that the secured advance paid to the petitioner was equivalent to 75% of the material purchased by it, which was either available at site or stored. 2.[5] As per the petitioner's own averment by July, 2013 only 25% of the work has been completed by it. The delay in completion of the work, of course, has been attributed to the respondent. The reason given for delay is the inability on the part of the respondent, to make available the requisite work fronts. 2.[6] Against the work executed by the petitioner, it is averred that 16 RA bills have been raised, amounting in all to a sum of Rs. 1,53,59,788/-. It is stated that against the said RA bills, the respondent had released the payment of Rs. 1,45,09,788/- in favour of the petitioner, which includes the amount paid towards mobilization advance. 2.[7] The petitioner has averred that on 02.08.2013, the respondent issued two letters of even date. By virtue of the first letter, the contract obtaining between the parties was terminated with immediate effect and the petitioner was put on a black-list vis-a-vis the respondent and its sister concern. The second letter of even date, called upon the petitioner to depute its authorized representative for taking joint measurements of the work executed at site, within seven days of the issuance of the letter; failing which, it was indicated, that the measurements would be taken ex-parte. V ^08.[2] 2.[8] The aforesaid letters were followed by a letter dated 06.08.2013. By this letter the respondent called upon the petitioner to return the outstanding mobilization amount equivalent to Rs. 15,54,100/- and the material lying at site qua which a secured advance was paid amounting to Rs. 17,61,555/-. The petitioner was asked to do the needful within seven days of the issuance of the letter failing which suitable action, as deemed fit, would be taken.

3. It is in this background that the learned counsel for the petitioner argued that injunction, as prayed, ought to be granted for the following reasons.

(i) The petitioner was blacklisted without issuance of a show cause notice.

(ii) The work could not be executed by virtue of failure of the respondent to make available requisite work fronts.

(iii) On03.06.2013, material worth Rs. 5 lacs was stolen from the site, qua which the entire blame was put onthe petitioner and a sum of Rs. 3,08,000/was deducted in that respect from the RA bills of the petitioner in the form of adjustment of secured amounts.

(iv) In a fire, which broke out at the site, on 19.08.2013, material worth

4. Mr Dinesh Kumar, learned counsel for the petitioner, submitted that all these circumstances, presented a case ofirretrievable injustice and hence the prayer made ought to begranted.

5. Having heard the learned counsel for the petitioner and pemsed the record, I find that the petitioner has been completely lackadaisical, to say the least, in not filing the following documents: OMP 828/2013 Page 4of[6]

(i) The copies oftwo banic guarantees qua which injunction is sought, is not filed. What has been filed are copies ofthe letters extending the bank guarantees.

(ii) On being asked as to whether the bank guarantees have been invoked, the learned counsel for the petitioner informed me that the bank guarantees have been invoked, but was unable to say as to why the same had not been filed.