Punj Lloyd Ltd v. State Bank of Hyderabad

1. On 28.1.2016 i.e yesterday, the following order was passed:- "1. Learned counsel for the plaintiff has been informed by the Court that a suit seeking injunction of encashment of bank guarantees cannot be valued at one crore but the suit for injunction will have to be valued at the total amounts of the bank guarantees inasmuch as valuation fixed by the plaintiff with respect to CS(COMM) 61/2016 & 62/2016 page 1 of[5] 2016:DHC:9236 injunction is not final and can always be ordered to be amended by the Court as per actual valuation of the suit being the amounts of bank guarantees which are prayed for being not encashed.

2. Learned senior counsel for the plaintiff states that the court fees of the total amount of bank guarantees with respect to which injunctions are prayed will be deposited with the requisite authority by tomorrow or in the alternative instructions will be taken for not pressing ofthe reliefs with respect to all the bank guarantees.

3. List on 29"^ January, 2016."

2. Today, counsel for the plaintiff argues that the Court fees are not payable on the total value ofthe bank guarantees and relies upon the Full Bench judgment of this Court in the case ofShiela Devi & Ors. Vs. Kishan Lai Kalra & Ors. (1974) ILR 2 Delhi 491 to argue that plaintiff is entitled to fix valuation ofthe suit and thus fix the pecuniary jurisdiction value atjust over Rs.l crore. It is also argued that even if suit has to be valued at more than Rs.l crore, the maximum valuation which the plaintiffrequired to fix is on the total amount ofrenewal charges of the bank guarantees which in both the cases will be ofRs.6.50 crores.

3. Attention of the counsel for the plaintiff however has been drawn to the judgment of the Supreme Court in the case of Commercial Aviation and Travel Company and Others. Vs. Vimla Pannalal(1988) 3SCC CS(COMM) 61/2016 &62/2016 page 2 of[5] 423 and which deals with the issue that the Court can always direct the plaintiff to correct the under valuation once sufficient materials are available on record to indicate the valuation ofthe suit, and applying which ratio since effectively the plaintiffseeks injunction against the defendants not to encash the bank guarantees of approximately Rs.550*crores in both the suits, actually therefore in my opinion intelligent drafting cannot take away the real substance ofthe suits more so when various reliefs of injunction besides declaration are also claimed in the suits. Prima facie I am therefore of the opinion that the Court fees will be payable on the amounts of the bank guarantees in question viz on the amount of approximately Rs.550 crores and not at just over Rs.l crore as has been done in the suits or even on Rs.6.50 crores as is contended on behalf ofthe plaintiff.

4. I may note that there are two types of bank guarantees in the present case of which encashment is sought to be stayed and which are the advance payment guarantees and the performance guarantees. Advance paymentguarantees were given by the plaintiff with respectto advanceprice already paid by the defendant no.4/defendant no.5 in the two cases, and the plaint does not reflect that even a single bill for the work done by the CS(COMM) 61/2016 <6 62/2016 page[3] of[5] plaintiff was ever raised upon the owner of the work i.e defendant no.4/defendant no.5, and for which advance price received and which advance price is secured by the plaintiff by issuing the advance payment bank guarantees. It is however noted that the plaintiffas per the plaints has made averment that plaintiff in both the suits has spent amounts on the V contract of approximately Rs.450 crores, but, I find that there are no documents whatsoever with respect to any of such amounts spent for the work done under the contracts awarded to the plaintiff.

5. The aforesaid are only primafacie observations because at this stage counsel for the plaintiff states that he has instructions to withdraw the suits.

6. In view of the peculiar facts, as stated above and there existing the possibility of the plaintifffiling fresh suits, it has been specifically put to counsel for the plaintiffthat if plaintifffiles fresh suits, the plaintiffin such fresh suits which will be filed will mention this orderpassed today and also file in the fresh suits a copy of the present order, and to which counsel for the plaintiff concedes that the said aspect will be necessarily done in the fresh suitswhich will be filed andgives an undertaking as such on behalfof CS(COMM) 61/2016 &62/2016 page[4] of[5] the plaintiff.

7. The suits are accordingly allowed to be withdrawn as prayed, and more so because in the primafacie opinion of this Court, proper Court fees have not been paid for the suits to be entertained. VALMIKIJ. MEHTA, J JANUARY 29, 2016 Ne