- (1.) This appeal under Section 37(1)(b) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act, 1996") has arisen from judgment and order dated 10.01.2018 passed by Sri Alok Saxena, District Judge, Meerut rejecting appellant's application registered as Misc. Case No. 153 of 2017 filed under Section 9 of Act, 1996 whereby appellant had sought an injunction restraining respondents from encashing Bank Guarantee.
(2.) Facts in brief, as pleaded and evident from record, are that respondent-Paschimanchal Vidyut Vitran Nigam Limited (hereinafter after referred to as "PVVNL"), a Company registered under Companies Act, 1956 (hereinafter referred to as "Act, 1956"), is a State Government Company owned by State of U.P. and engaged in distribution of electricity in western part of State of U.P. under the licence obtained from U.P. Electricity Regulatory Commission. PVVNL issued a tender notice for Rural Electrification Works of Villages/Mazras of Muzaffar Nagar District for electrification of 865 Villages and Mazras in Muzaffar Nagar District. Appellant participated in the said tender process and was awarded work in terms of tender documents. A Letter of Intent dated 12.03.2015 was issued by respondent to appellant for the aforesaid work of Rural Electrification of Villages/Mazras of Muzaffar Nagar district under RGGVY Phase-II. Initially tender was floated for an amount of 150 crores but in terms of Letter of Intent, Rural Electrification Corporation reduced and sanctioned only an amount of Rs. 90.87 crores for the said work. The said contracts/agreements of work were executed between appellant and respondents, i.e., Contract of Supply Order No. 1281 for Rural Electrification for an amount of Rs. 81,76,24,263.02 and another contract for erection work of Rs. 9,11,19,736.98/-. The said contracts were executed on 27.04.2015. In order to ensure execution of contract, appellant also submitted two bank guarantees as under: (i) Performance Bank Guarantee bearing No. 0000115PBG140051 dated 17.04.2015 for an amount of Rs. 13,63,11,600/- issued through Abu Dhabi Commercial Bank, 75 Rahmatmanzil. Veernariman Road Mumbai-400020. (ii) Advance Bank Guarantee bearing No. 0000115APG140016 dated 17.04.2015 for an amount of Rs. 9,99,61,840/- issued through Abu Dhabi Commercial Bank, 75 Rahmatmanzil, Veernariman Road Mumbai-400020 issued against the mobilization advance and for a value equivalent to 110% of the mobilization advance.
(3.) The work as per terms of contract had to be completed within 18 months from the date of issue of Letter of Intent, i.e., 12.03.2015. However, respondents claimed that work did not proceed as per terms. There appears to be some dispute about cause of delay in work. After some correspondence between parties, respondent-PVVNL vide letter dated 12.07.2017 terminated the contract and proceeded to encash performance bank guarantee of Rs. 13.63 crores.;