U.P.STATE SUGAR CORPORATION LTD. Vs. A.T.V.PROJECTS INDIA LTD.AND OTHERS
LAWS(ALL)-1996-11-155
HIGH COURT OF ALLAHABAD
Decided on November 13,1996

U.P.State Sugar Corporation Ltd. Appellant
VERSUS
A.T.V.Projects India Ltd.and Others Respondents

JUDGEMENT

R.R.K.TRIVEDI, J. - (1.) IN the aforesaid three petitions parties are common and the questions of law and facts involved are also identical. Learned Counsel for parties have agreed that all the petitions may be decided finally by a common judgment. Writ Peti­tion No. 30701 of 1992 shall be the leading case. Writ Petition No. 30701 of 1992
(2.) FACTS giving rise to this writ peti­tion are that the petitioner corporation in order to carry out its scheme of modernisa­tion and expansion of its existing sugar unit, namely Sugar Factory, Pipraich, district Gorakhpur, entered into an agreement with respondent No. 1 on 28-2-1989. The total agreed price for this work was Rs. 1538.00 lacs. The contract was to be completed by 27-5-1990. Paragraph 15 of this agreement provided the terms of payment. Para. 15.2 (a) provided that on receipt of the bank/in­surance guarantee in the prescribed proforma of the purchasers, five per cent of the contract price, i.e. Rs. 76.9 lacs shall be paid by petitioners by way and in nature of first instalment. Para 15.2(b) further provided that on receipt of the bank/insurance guarantee on the prescribed proforma of the purchasers, ten per cent of the contract price being Rs. 153.8 lacs (Rs. one crore fifty three lacs eighty thousand only) shall be paid within two months of the signing of this agreement as second installment. The aforesaid two payments were made by petitioner to the respondent No. 1 on fur­nishing bank guarantee No. 20/10, dated 7-3-1989 in respect of the amount of Rs. 76.9 lacs and Bank guarantee No. 20/16, dated 10-5-1989 for Rs. 153.8 lacs. The Bank guarantees were furnished by respondent No. 2, the Central Bank of India. On being dissatisfied with the performance of respon­dent No. 1 vide telegram dated 4-11-1991. Which was followed by the letter dated 20-11-1991, petitioner invoked the bank guarantee and required respondent No. 2 to pay the amount. Respondent No, 1 conse­quently filed suit. No. 680 of 1991 in the court of Civil Judge, Gorakhpur, under Sec­tion 20 of the Arbitration Act for appoint­ment of arbitrator for adjudication of the dispute. In this suit an application was filed for grant of temporary injunction restrain­ing petitioner from realising the aforesaid amounts of the bank guarantee. Learned Civil Judge by his order dated 22-4-1992 granted injunction against the petitioner not to realise the amounts of the aforesaid bank guarantees until the dispute is decided by arbitrator appointed by the Court. This order was challenged by petitioner in Civil Revision No. 157 of 1992 which has been dismissed by learned IX Additional District Judge, by order dated 18-8-1992. Aggrieved by the aforesaid two orders, this petition has been filed. Writ Petition No. 26289 of 1992 Facts, in short, giving rise to this petition are that petitioner corporation in order to carry out the scheme of modernisa-tion-cum-expansion of its sugar Unit Mahabir Sugar Mill, Siswa Bazar, district Mahrajganj, entered into an agreement with respondent No. 1 on 29-4-1988. The total contract money for carrying out the work was Rs. 1108 lacs. Under this agreement the work was to be completed by 31.12.1989 which was subsequently extended upto 31-12-1990. Under this agreement also the Bank guarantee No. 19/26, dated 25-6-1988 for Rs. 20 lacs and bank guarantee No. P. B. 4511180010617, dated 25-1-1989 for Rs. 55,40,000 were furnished by respondent No. 4, Central Bank of India. Aforesaid Bank guarantees were invoked and respondent No. 4 was required to pay the amount. Respondent No. 1 consequently filed suit No. 678 of 1991 and in this suit an applica­tion was filed for grant of temporary injunc­tion restraining the petitioner from realis­ing the amount of the bank guarantees. This application was allowed by order dated 22-4-1992, aggrieved by which petitioner filed the aforesaid writ petition in this Court on 24-7-1992. This Court on 28-7-1992 enter­tained the writ petition and passed an inter­im order staying operation of the order of the learned Civil Judge till 31-10-1992. On behalf of respondent No* 1 it has been submitted that before filing writ petition in this Court petitioner filed Civil Misc. Appeal No. 415/92/74 which was later on converted into a civil revision. In this civil revision Additional District Judge vide order dated 30-5-1992 refused to stay the order of injunction granted by the learned Civil Judge. However, this fact was not dis­closed in the writ petition. Writ Petition No. 28081 of 1992
(3.) THIS petition arises out of the order dated 30-5-1992 passed by the learned Civil Judge in suit No. 301 of 1992 by which learned Civil Judge restrained petitioner from encashing the bank guarantee No. 20/7, dated 25-2-1989 for Rs. 55,40,000 and the bank, defendant No. 2, was also restrained from paying the amount to the petitioner. The writ petition was filed in this Court on 24-7-1992 which was entertained on 28-7-1992 and operation of the order passed by the learned Civil Judge was stayed till 31-10-1992. In this petition application was filed by the petitioner on 11-8-1993 for amendment of the writ petition. By this amendment, ground No. 1 has been sought to be added in the writ petition which is to the effect that after deletion of Section 389 of the Companies Act by Section 150 of the Amendment Act, 1960, the Companies do not have any power to refer the matter to arbitration. However, this ground has neither been pressed nor argued on behalf of the petitioners. The application is conse­quently rejected.;


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