EAST COAST BOAT BUILDERS AND ENGINEERS LTD Vs. CHIEF MANAGER BANK OF INDIA
HIGH COURT OF DELHI
EAST COAST BOAT BUILDERS AND ENGINEERS LTD.
CHIEF MANAGER,BANK OF INDIA
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SANJAY KISHAN KAUL, J. -
(1.) The Plaintiff is a public limited company duly incorporated and registered
under the Companies Act, 1956 and the suit has been instituted through Shri O.P.
Srivastava, Director, who has been authorised to institute the suit through
Board Resolution dated 30.6.1999.
(2.) It is the case of the plaintiff that prior to 1980, the fisheries in India
depended mainly on imported trawlers but in 1980, the Government of India
initiated a ten year programme for promotion of indigenous construction of
trawlers. The fishing company was to pay the initial seed money equivalent to
5% of the price of the trawler leaving the balance to be met by loan and
subsidy. The plaintiff was entrusted with building of trawlers in the name of
different fishing trading companies through Shipping Development Fund Committee
(SDFC). A set of four agreements including a Tripartite Agreement between the
builder, the buyer and the SDFC was executed in this behalf.
(3.) A builder like the plaintiff was required to invest fund for the said purpose
and in furtherance of the agreement, bank guarantees had also to be furnished.
It is towards this object that the plaintiff approached the defendant who
requested for 15% margin money to be deposited as security. The plaintiff
complied with the requirement and the bank guarantees to the tune of Rs.10.54
crore were issued by the defendants in this behalf in favour of the Shipping and
Credit Investment Corporation of India (SCICI). The said bank guarantees were
invoked but defendant No.2 bank did not remit payment to the beneficiary since
by December 1989, the bank guarantees had lapsed. This gave rise to arbitral
proceedings between the defendants and SCICI which resulted in an award in
favour of the defendants. The objections to the award are still pending.;
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