Tarun Agarwala, J. - (1.) THE applicant, M/s. Videsh Sanchar Nigam Ltd. has filed an application under Section 446 of the Companies Act, 1956 (hereinafter referred to as 'the Act') praying that permission be granted to the applicant -company to further proceed against Srishti Video Corporation Ltd. in suit No. 1011 of 1998 (hereinafter referred to as 'the respondent -company in liquidation') pending before the Delhi High Court on such terms and conditions as this Court may impose.
(2.) THE relevant facts, in brief, as set out in this application are that the company in liquidation approached the applicant -company by a written request dated 9 -2 -1995 to reserve space segment on the Intelsat Satellite IS -704 at 66 degree East, a guaranteed 36 Mhz bandwidth transponder on a non -pre -emptible lease basis for a period of 10 years with a start date of 1 -4 -1995 in the C -band spot beam transponder covering the Indian sub -continent and the Middle East. The applicant -company agreed to arrange and provide the above requested space segment capacity to the respondent -company and an agreement dated 31 -7 -1996 was entered. By virtue of this agreement, the applicant -company granted intelsat lease capacity for a period of 10 years with a start date of 1 -4 -1995 to the respondent -company on such terms and conditions contemplated in the agreement. It was also contended that Clause 14 of the agreement contemplated that the respondent -company was to provide to the applicant -company a bank guarantee for an amount equal to one year lease rental charges. The respondent company also undertook to review annually the bank guarantee for the entire term of the agreement. The applicant -company stated that UTI bank gave a bank guarantee for Rs. 4.20 crores on behalf of the respondent -company for due and faithful performance of the terms and conditions of the agreement. Under the terms and conditions of the bank guarantee, the UTI Bank undertook and assured the applicant -company that if the respondent -company in any way fails to observe or perform the terms and conditions of the agreement and commit any breach of its obligations thereunder, the UTI Bank shall, on demand, by the applicant -company and without any objection or demur undertake and agree to pay to the applicant -company a sum of Rs. 4.20 crores of such lesser amount as the applicant -company may demand. The applicant -company submitted that the respondent -company failed to perform the terms and conditions of the agreement and committed the breach of its obligations under the agreement. As a consequence thereof, and in accordance with the terms and conditions of the agreement, the applicant -company informed the UTI Bank, that the respondent -company had failed to perform as per the terms and conditions of the agreement and had committed a breach of its obligation under the agreement and, therefore, the applicant -company was constrained to invoke the bank guarantee. The applicant -company demanded and called upon the UTI Bank to pay an amount of Rs. 1,62,43,650 immediately. It is alleged that the applicant -company reserved its right to the claim the balance amount of the bank guarantee as and when the applicant -company chose to invoke the balance amount of the bank guarantee.
(3.) THE applicant -company stated further that the UTI Bank informed the applicant -company that the liability of the UTI Bank under the bank guarantee stood extinguished on the payment of the partial amount invoked by the applicant -company and requested the applicant -company to return the original bank guarantee. The applicant -company stated that the stand of the UTI Bank to the effect that the bank guarantee stood extinguished on payment of the invoked amount was incorrect inasmuch as the applicant -company had partially invoked the bank guarantee and reserved its right to invoke the balance amount of the bank guarantee at a later date. On account of this impasse, the applicant -company instituted a suit No. 1011 of 1998 for specific performance of the bank guarantee against UTI Bank and also against the respondent -company. The relief claimed in the said suit is as quoted hereunder : "(a) direct the specific performance of the bank guarantee being B.G. No. 23/96 -97 dated 20 -7 -1996 in respect of Agreement dated 31 -7 -1996 executed between the plaintiff and the defendant No. 2; and (b) direct the defendant No. 1 to make the payment of Rs. 2,57,56,350 to the plaintiff as per the terms and conditions of the bank guarantee being B.G. No. 23/96 -97 dated 20 -7 -1996 in respect of Agreement dated 31 -7 -1996 executed between the plaintiff and the defendant No. 2; and (c) direct the defendant No. 1 to pay interest to the plaintiff on the aforesaid amount of Rs. 2,57,56,350 at the rate of 24 per cent per annum from 12 -7 -1997 till the date of decree or payment in full and final whichever is earlier; and (d) pass decree in terms of prayers (a) to (c) above; and (e) pass ex parte orders in terms of prayers (a) to (d) above; and (f) pass such further order or orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.";