- (1.) THE Court : In view of lawyers not being present, Mr.K.M. Subramanium, a Project Director of Larsen and Toubro Limited, the appellant abovenamed company assisted by Mr.S.K. Bhatt, Chief Legal Advisor of the appellant company argues the matter. Despite notice being given, the respondent is absent.
(2.) THIS appeal emanates from the judgment and order dated July 10, 2012 passed by the learned Single Judge dismissing the application made under Section 9 of the Arbitration and Conciliation Act, 1996, inter alia, asking for injunction restraining the respondent from encashing or invoking the bank guarantee that was furnished by the appellant in favour of the respondent as and by way of guarantee to the performance in respect of a contract entered into by the parties for setting up a power plant in the State of Chattisgarh. Mr. Subramanium submits that despite a sum of Rs.140 crores approximately still due and payable from the respondent by the appellant, the appellant did not stop their work. Even then the respondent attempted to encash the performance guarantee that gave rise to the proceeding before the learned Single Judge. At the initial stage, the respondent's Counsel assured the Court that they would not encash the same till the matter was heard. Subsequently, the matter was heard at length and dismissed by His Lordship by the judgment and order passed on July 10, 2012 impugned herein. On perusal of the judgment and order we find that the learned Judge, although satisfied about a strong prima facie case made out by the appellant, declined to interfere and/or protect the appellant in view of well-settled principle of law relating to bank guarantee. His Lordship observed, the case made out by the appellant did not come within the four corners of the exception that would restrain the bank guarantee from being encashed. Mr.Subramanium informs us that the respondent already invoked the bank guarantee. However, the appellant is not aware whether they actually received the sum or not. We have considered the judgment and order of the learned Single Judge. We are told that arbitration has not started as yet. We feel, interest of justice would sub-serve, if we direct the respondent to keep the proceeds of the bank guarantee in a fixed deposit earmarked for arbitration till the disposal of the appeal. We permit the respondent to apply for vacating and/or variation of this order upon notice to the appellant.
(3.) THE application is made returnable tomorrow, i.e., July 13, 2012. Let a further notice be served upon the learned Advocate for the respondent. Urgent xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.;