CISC-SRSC JOINT VENTURE Vs. CENTRAL COALFIELDS LTD.

JUDGEMENT

(1.) The present writ petition has been preferred mainly for the reasons that for No. justifiable reason, the Petitioner has to continue and keep alive the bank guarantee, worth Rs. 55 Lacs.

(2.) Learned Counsel for the Petitioner submitted that initially contract was given to the Petitioner for a period running from 1st February, 2003 to 31st January, 2004 for transportation of the coal and the contract is now over and the work has been done. As per the learned Counsel for the Petitioner, at the relevant time the bank guarantee was to be given and, therefore, during the pendency of the contract, the aforesaid bank guarantee worth Rs. 55 Lacs was given towards the satisfactory performance of the contract. Learned Counsel for the Petitioner further submitted that alter completion of the contract, some dispute arose for payment of money and ultimately, an arbitrator was appointed and the Petitioner made a claim for Rs. 4 Crores before the arbitrator and the Respondents also filed a counter claim for Rs. 42 Crores. The Petitioner was compelled to keep the bank guarantee alive for years together,' without any justifiable reasons. Learned Counsel for the Petitioner also submitted that the arbitrator passed an award and decided that the Petitioner is entitled for a sum of Rs. 262 Lacs and the counter claim, made by Respondent No. 1 was totally rejected. It is further submitted by the learned Counsel for the Petitioner that Respondent No. 1 preferred an application under Section 34 of the Arbitration Act, 1996 before the Sub Judge-V, Ranchi. The same is also pending since years. This application was preferred in the year, 2008. For No. reasons, again Petitioner was compelled to keep the bank guarantee worth Rs. 55 Lacs alive. Learned Counsel for the Petitioner submitted that basically the bank guarantee was given for satisfactory performance of the contract for the period, running from 1st February, 2003 to 31st January, 2004. The work is over but the dispute is going on and there is No. clause that during the period of dispute also, the bank guarantee will be kept alive. However, the Petitioner being a bonafide company has continued the bank guarantee, but enough is enough and now the Respondents are not proceeding with their application under Section 34 of the Arbitration Act, 1996 before the Sub Judge-V, Ranchi (now pending before the Sub Judge-IV, Ranchi). It is further submitted by the learned Counsel for the Petitioner that the Respondents have No. claim at all as per the arbitration award and, therefore, the present petition has been preferred. Further prayer has been made by the learned Counsel for the Petitioner that renewal of the bank guarantee may not be insisted upon and the Petitioner is ready and willing to give an undertaking that in case any amount is found payable by the Petitioner, the same will be paid forthwith and such undertaking will be filed separately before this Court within a period of one week from the date of the order of this Court by the Managing Director/Partners of the Petitioner-company.

(3.) Learned Counsel for the Respondents submitted that the contract for transportation of coal was given to the Petitioner for the period, running from 1st February, 2003 to 31st January, 2004 i.e. for one year and the aforesaid bank guarantee was taken for satisfactory performance of contract. Now the contract is already over, but the dispute for the amount payable is going on, initially before the arbitrator and now before the Sub Judge-IV, Ranchi under Section 34 of the Arbitration Act. 1966 and, therefore, the bank guarantee must be kept alive, so that the amount can be realized from the Petitioner, without any loss of time.