ICICI BANK LIMITED Vs. IVRCL LTD. AND ORS.

JUDGEMENT

(1.) THIS appeal is preferred by ICICI Bank Limited (hereinafter called the appellant), under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996, (hereinafter called the Act), aggrieved by the order passed by the Chief Judge, City Civil Court, Hyderabad in Arbitration OP No. 1031 of 2015 dated 22.06.2015. The appellant herein is the 2nd respondent in O.P. No. 1031 of 2015. The said O.P. was filed by the 1st respondent herein under Section 9 of the Act requesting the Court below to grant an injunction restraining the Nepal Electricity authority (2nd respondent herein) from invoking the bank guarantees issued by the appellant through Laxmi Bank Limited, Nepal and Nepal Investment Bank Limited, Nepal (respondents 3 and 4 herein); and to restrain the appellant and respondents 3 and 4 from honouring or encashing the bank guarantees. Parties shall, hereinafter, be referred to as they are arrayed in this appeal.

(2.) IN the petition filed by them before the Court below, under Section 9 of the Act, the 1st respondent stated that the 2nd respondent had invited a tender for construction of civil works; they participated in the tender process, and were the successful bidder; a letter of intent was issued on 07.10.2010, and a letter of acceptance was issued by the 2nd respondent to the 1st respondent; an agreement was entered into between respondents 1 and 2 on 04.11.2010; the 2nd respondent had violated the conditions of the contract; they had, by their letter dated 10.01.2014, proposed appointment of a dispute adjudication board, and Mr. Dinakar Sharma as the arbitrator, but to no avail; they had issued four bank guarantees through respondents 3 and 4 to respondent No. 2 for various amounts; two of them were valid till 15.07.2016 and the remaining two were valid upto 15.07.2015; the appellant had, in turn, given a counter -guarantee to respondents 3 and 4 banks; the 2nd respondent held the bank guarantees of respondents 3 and 4 which were counter -guaranteed by the appellant; the 2nd respondent failed to fulfill its obligations for execution of the contract, in making payment, in the appointment of a dispute adjudication board, in the supply of drawings, and in obtaining clearances from the prescribed authorities; the 2nd respondent had, under the guise of the contract agreement, cheated the 1st respondent, and had played fraud on them extracting work from them without making any payment; there was no drawback or failure, in the performance of the contract, by them; the 2nd respondent had, with a fraudulent intention and with the intention of extracting money from them, been trying to invoke the bank guarantees without providing sufficient cause or reason; and if the 2nd respondent was not restrained from encashing the bank guarantees, two of which would expire by 15.07.2015 and the other two by 15.07.2016, they would be put to grave and irreparable loss and injury.

(3.) IN its order in ARB OP No. 1031 of 2015 dated 22.06.2015, (the order now under appeal before us) the Court below noted the submission, urged on behalf of the 1st respondent, that they had entered into a contract with the 2nd respondent on 04.11.2010; they had also entered into a memorandum of understanding on 12.10.2010 and had, accordingly, furnished bank guarantees to the 2nd respondent towards mobilisation advance; the delay in initiation of the project was solely to be attributed to the 2nd respondent; there was abnormal delay on the part of the 2nd respondent in getting the environmental clearance and clearance from the forest department for laying the approach road for the project, and in not appointing the project Manager consultant as per the clauses in the contract till 19.10.2012; despite the abnormal delay, the 1st respondent had completed 90% of the work, and had submitted the bills; the 2nd respondent, instead of clearing the bills, was threatening to invoke the bank guarantees furnished by the first respondent, and issued by the appellant and respondents 3 and 4; and, hence, they were seeking interim injunction.