mTHEmGHCOURTOFeHHATTISGafBffiQFttRDIGAtlJMEA'I' BILASPUWCG) l'Sihgfe:|:ienG|:|l •l:'i 1/":';: :. '::! ^1" (Mise Appeal No. °?^ of2005) : . :l?a\! :r;fc-! dLt' APPELLANT/ PLAINTIFF &4 A^ \C^K^ ^^" ''^^ y^y y ^ iSPONDENTS/ DEFENDENTS Telecomniumcationsl Consultants IrKliattd. i r havingits CorporatelOffice at TGIL Bhawan, GreateTKaUash I NewDelhi I ; VERSUS : • '.. ,' / ^k'Govt.ofClihattisgariii: ,^ Paiichayat & Rural, Devetopmeat Depariment CI'ihattisgarh Rural' Road J Development Agency Civfl Lines, Raipur 2. H.injabfeSiadhfiaaki ; 18D,6ScindiaHouse,] New Dellu.-110001 ; MEMOKAJ^ra»UMQFA^PILAJLlTNl)Ea()SDE&43SlTLELREAD WITH SECTION 104 OF THE CGDE OF CIVILPRQCiEDURE m .<.',::^ii.^ ::ii.f[l)!i :'s '•^i Most RespectfuUy Showefh: ' Misc GivU Appeal u/o 43fl)fr) of CPG Beingaggriev^d byorderpassed byHon'bIe ~ymA(l(Iiti<MiaII)istrict Judge Raipiir, in Civil suit No 1S/05 ^between fS/s Telecommunications Consultants India I^d , passed oB! 1^2^, on tlie-applicatjon of the plaintiff w^> 39 R 1&2 of CPC .This Misc CivU Appeal is being preferred linaer tlie foBowiag (acts & law. <1< iili INI !ll:i;;:li;Biiisa J^'.:3^1!iB '.l[^^^l^l& ;ii-ii.:;isa '•w.sws ^iS:8SiiSB! w 81 ^^WSSSSs!JsS^-^!Sw ^' HlGHGOURTOFCHHATTISGARHlATBILASPUR M.A. No. 238/2005 .^; ir <•—- Appellant Versus Respondente TelecommuniGation Consuttants India Ltd. Govt, of Chhattj^arh &another ShrtShwram,advo<»t®witHShriA.K.Gu|Aa,fi6unse}ft>r<h8 appeWant. Shrt AkhtlAgrawal, P.L. fortheState f' JUDQM£NT / (Passedonog-3-2005) Thls appeat ha®been prrfeffred by the appdlaritfptajrtfff agaln^t tha order dated 15/02S005 in Ovtl Suit No. 1-AQOC®passMl ^ AdctiUerial Digtrict Judge, Raipur re}ecting the applicaflon fited by ttie plaHiGffi upder Order 39Rule 1 and 2 ofGPC for<empora>y injuneUsn. J 2-. The appellant/plainflff filed tha Ovll Suit on ttieavermert thrt ns •Tpiffer fbr consfructkm and maintenance of mi^ roads under Pradhan IVIanhi Gram Sadak Yojna ftn- (he year 2003^2004 ^urM^ and year 2004- 2005 ta dlstrkA Kanker^^ aroe^ed ^ the ffl^^ bank girarante®fbr a sum of Rs. 33,31,036.80 <ortN»eontraet wtfue lof thetender, HOwever,thftWOrtfeou|dnot^mmence»th8^M^^te^^ •-^' ^i: te-. •s*. to woric was disturbed because of the naxalto acthritles affectlr®the malntenance of law and order whidt is a bountlen duty of cMwdant No.1 and as tt lailed todo so,a suitfor perpetual injijincUon wasflled b^bre Uie District Judge, Raipur sealdng restlaint i i^ainsl invocadon and encashment oftha bartc guarantes (tated 12/OS/20Q4 and against forfeiture of tha aam^ money; An applicaljwi fer temporary Injunction wasfltedundsrorderMRute1and2ofCPC. \ • • • ' • . 3- Lsamed frtal Gourt tlismlssed ^ injimcUon by the impugned OKIW and henise ^tls appeat has bean .pFeferred.' • ' ]::^ : : :: : ^ : ^ ^. Leamed counsel for ths appeUant hMJchaltenged Ihe Impugned order basteally onthe^urKlthatttiaappellantCCTtldmrtpertionn^ of agreemerit due fe» the naxallt& prolriem affeGtii^l the vrortc of construcUon ^ reacte as pw tha agre^ent and it yras the e^ of ttw respondentsimAwGlause 11 <rf»t®Generalc6rKBtions^1hecont^ ehsuresafety. ^- It Is aigued that th®bank guarantea in que^on is a cortdlUonal bahk guararrtee and the amoyirt coukl be payabte onfy in case of toM or damage caused to or suffered by tte ©wemmantby reason <rf any breach bythe^ap|^lantandtt)atAeinvocation<rfthe tankguaran^^^to que^on was not stricUy Intwmsofthe guarantee as the tetter inv<^ bank guarantee dkl not stata the exact toss and damagW caused to or suffered by the Govemmentof ehhatBsgartiand for thfe reason Invocation of bankguarantee is b«linlaW,il|egatandvwongfal; ' ^. Leamed counsel for Ihe aH»e|lant ftirthw^ submitted that w^il® invoktng ttre bank guarantae the reSpoiictont No.1 has also torfeitod tfie eamest money deposlted bytheappellant vrtwchfe contraryto theClaus® -•ISoftheinstructionstobichfers.ltJstorthersutxnlttedthatbSWUseorthe naxalWa menace the State Governmert of GhhatB^artlcould not ajrard the second part of the project toany otter party as rio bedy was eomh'^ forward to execute the wmfe Orfclhe rther hantf, CtHinsel^^^^^^^to respondentNo.1 submitsthatttietenkftespondentiNo.Zwasanewssary l^g^^^s^-^^^r^^.^^^^^^^^g^^^^^^i^^^^SI^^^^^^^^^^^^^ -s' -41 <-* lartybefore Ihe trial CourtandnoUce ef thes^lltandttie apirficatjorisso fited were rwver served to respondent .2 and in the absence <tf defendant No.2 who is responslbte to honour the bank ginrantee.no order for temporaiy injunctton coukl be psKssdiin favour of the appallant; Leamed counsel for tha State further submittod ®iathe veiy tangu*®8of the banlc gua(antee,whteh is Annaxure ,^6 to]the appeal, goas to show ttart the bank guarantea wste uncorKfiltoratf and It was isaied by respondent No^ in favour of ttia plaintiff ancl th®M was duly sncashed. VMe (»mmunicaUondated 23®1/%X)5as theplainNfffailBdte peiform tha execution of wbrK undw the lagrewnert causihg a funclamenlalbreaGhofthecOntr^ttiedefendairtNoA'^ to depostt the value ofthebai*guaranteeissi^infennxirofti8t>hiinUff and dsposit ttie same in the acc&unt of the Ghliatt^wh Runjl Road Dsvelopment^ganc^ immedia^. R^^alspsubmUed byresi^^ No.1 that tto appellant^lnUff dkl nrt^^^^s^ al'lm fie exacuBon ofthe ^ireement ttioi,nh1hs ^meallwimitfer ciMnpleUoit^ the sakl woric was only elght monttis sxcluding |failny SMISWI and! before termihyng the agreement numbeFofnotlces WBT®issued tolhepteinUf fornon performance of their part of the contrart and becausa of this min- execution of the wwk by the plalntifffte dsvelopmental work in the tribal area of the State of ChhatUsgarti has beeni hsnnpered and tKerofere accordlng to the counsel ta' respondent No.1!, ttis contrart was r^htly terminated and ths tank guarantBe was invoksd as per the tenns and condiUonsc^thecwTtractandthesamecouldnotbestayed. ~l- The flretcontention ofthe counsel for theappeUant ttuttha bank guarantee in qusstton is a condttional banlc guarantee, has t6 be examined flrsl. The relevant exeerpte of bank guarantee are reproduced asunder: WB, Pw^isndSndBwikdohembywKlarialmto^ pay ff»anwunt eft»and pa^Ms undw Ws Quawrriee wShout any demwe muvly on a cfenwocf irem the EmpfoyBBEflgfrieer ^aV^ ffwl the evMWi'it <^me{i Is^ due by way af toss or damsgB eaused to or wouki be -^- Ts ^ <k-« t-i^ <l.i caused to or sulfofed byffie GovwnmeRt by masonof biwchby Ihe saU comactw(s) ot wvjf af fhe twms and comSltons contained h ihe salel Agmomail of by raasoo ef the sa»tf {^nfraateffs^ fetoB to pwfam fhe safcf agieemei'ri. Any sueh demand mado wi e Bsuikshatt be conclusve as regansfe amountdkw afldpayBfefe feylhe Beink under ttilsguamMee. Howsvw, our lablSly uncfer Ws guamntBe aheS be teslrteted to an ammM ncst excGetlngRs. 33,31,036.80 (Rivees\Tf»ty Vwae tocs Wrtywie fhousandVwtywcwKliM^sa^ghtyoi^. We underiakB to pay to ffie {Govwnment any money ao damwxfed fcy (he ExecuSM Engrfneer natwiVisteneSnff wy dlsfMte OF eSspiMs ifaiaed byffie corrimctoi'fs) In wysutt or f»oceedngspwxSng betom any Court orWiunal Mettng Wietvte ow labtSty (ndsr Wsprese»»f6emgafeso<uteao6fW»gurtocafc Ttie paynant ao nwclebywwiderWs bowlshalf be wrijy cfocfta^gB of owlaMty for p^ment thewunder and ffse con actof(s) dwlfhaveno ^ttm agsanst tis tar maldng sucft paynent 8. Learned counsel tortt>®appellantheavNy r^les on tfw judgment of Supreme Court In the matter of Hlndustan Constructimi Conq»ariyLtd. Vs.State of BJharAOhere reportedin (1998i)8 SCe^Sandatbmits ttiat sfipulations in the present banlc guarantee are Uentical to the sUpulaUMis in ths case cited by hhn where the Apex Gourt has hald that ^putaUon in tiat cs e would not be sakl to be uncondiUonat or unequhnxal andas suchthe defendants could rwt be saldto have had an unfettered right to invoke that bank guarantae and ctanand immediate payment thereoffrom the bank. •<^ • .' ~ . •' ' ' •'•••'.• '. . •'..'.. • ' • ' : 3. LeamedGounselfortherespondentNo.t refenlngto^iragraph 12 of the sahl jydgmsnt cortends that the tenns under which the tonk guarantee was issued in that case are dNferert to ttiosa of the bBink 's!s^^.vf{,^. ^\ y 5- s<- / V"'!: ^: guarantee in the presentcasa. Retevantportim pfthelMnkguaraitfeeln thatcaseisreplroducedasuntler: 1 W»State Bankof IfKSa, incorpiaialfd undw ff» St^e Bairicof ln(Sa Al^, 19 , andfia'wngone afar bmndws al NysysanwS CM.Vead^Bt Msag, f:wt, Bmiriiay-400023 ( hawnalter i^Bnsdto as'ffie sairf Beaik'), as Insfructed ty e CootnBcfa»; agi8& iinwniStkin^anclimwoa^toyuweMwewpriWfy obligatoraniifK^assWslymw^tha^ fMymentwl'Sw Executlm Engtoer; KharW B^?I^»sfaff^ fefaa, ChaSama, Pc^KesmsHtt^, DlslriietSfghbhum.WM', wi his finrf demand wMm^ vMMtsom^r iig/ af ^yectton onour part andwithout Ms Sivt'cMmte ifte cwiti'wttor, Ihe amount not excee^ng Rs. 10,00,000- axpresseflF<h^Sf^Qiius»G^^aJSwi^mw<^^ «wrfra<rfhawixrtlN^ftdB^tyWconfr^^ e ngM af dsam te ttieemptoyw tcs'feoawwy afVw w^ofe orparfrf^ afcahcB mofctlfaationfoanfiomtto confracftar UfKfer(he confract to- Thus, comparing ttie ^pulaUons in botti the perfonnaiK» bank guarantees, it is inanWBsUy ctear that as per fte bank giBrantoe in th® presentcass.thedafendant N6.2 h»underN(antopaythaamountdue and pa^ible uncterlhjsguaranteeon dsmand and that arysueh demand macte on the bank shall be conclushre as regards amount due and payable bythe bank though not®xceedin8Rs.33^1fl3&fi0. (I. Thus, ths case cited l^ ttie appellant B not applhabte in ttie present wtoffads because ths Apex Court tekh®irto consittoRdon B» "subsequent sfipulations has hsW that tank guarantee in Biat case U(S a condlUonal bank guarantee wha^ th®stipulatfort in the bart( guaraintBe (rfthepresentGasetoavasnon^tott^ honmir the demarwl mato by the Executhre Engmeer w conchre^ ;<;- '€ ^ '" ^s '^ v^ «».<• regai^ ^ amount duaand (wqu^ byth^ noi^nthstanding any dfeputew dlsputite^ra^ suitor procaedings pencUi^ befor»any^^©^ arKl tfw ilayiityofcl^eratentlto.Z^ unequlvoGal. ^ - l^amedcounsel ftff ^^wpondwit relyiTO mattsr d DaBwoo Itotora Indto^^^^^^ ntported in (M03) 4 SCC^?0 sutM^ gua»antee:in\ttie:case)under^refeiaane^ the Hon'bto^pweourttasheldsu^rtRulatK^^I^ irrevocable and the ballt guarantewK? ceuld li*^; bei inwked By 11ha responctents andthetanktsllabletofi^^ ^. ttie conhact haveno retwance^ 13. HeparUctdariyrefen^to^ira^ that case als&it si^a^i^i^Ut^W guaran^ Is eneashabte in braii^^ttie tem^ MimsaiKlthetemls^ <^Uiei|SrttrsaGt.:|t)yi V Daewoo Motors briia l.td.ana ite contenfen wasi ngt jaceBpted. »s|Uw quo^wordscarmotb&read^isola^.in^ there is such identteal ^ulat^ but Uaesame^ntt baread^ta because subsec|Uent|y 1h& I^K hte ^ to hwwur 1tw ttank giaran^asarKlwh^invel^^by^ExjKi.rt^ any objection or any^stipulatfon in^a i^enw^ l^- Thus, Ihe cwitertlon ^ l^ s^>(»Uantthat^ b^ quesUontsawnditronal^bankgyarah^h^^ '^ The secondoyaeUon Rrfsed by ^ guarant»a tn ^ present c^ <a^^ EnginewiiW<^^WWtosWtomhlsleBW<W®l^ thatt^ampuntclaiB^isdue^'^^^^o^ 'suffered by theaGoverrmle^ By«rese^<rfbreach?!^^ However, the tetterda^ liwoMTO^tiankgiEBrantBe^^^ •'tstter:tt:"tras^hot''l)een;;steteiEllsb^,:1het€xafeutti»s^^ Wvs ^lly^iS^i^%l'^^^^^^ ^ -7 >v; quantffication oftheamounlclaimed byway <rf loss or damagescaussd te or suffered by the Govemment or Uwt In the absence <rf any such sUpulatton the laank guarantee is bad in law and for this reason ateo ttie ei^shmentoftankguaKanteet^tobss^^l^thttorderoftemporary^ injuncfion. In suppwt of thls contenUon he relies on the judynerit of ttie Apex Court in the mrtter ofNatKmalHigllwayAuthorityeflndlaWB. Ganga EntwiMlses andAnotter repwted tn]^R 2008 SC 3823 where theCourtheldthrtlffteenfbreementisintBnnstrf^^^ ttWCourtsmustnotihterf^w^theartforeementofttwbankguaranteB. Rslewmt portion ofthe saklJudgmaht is belng reproduced as uncter: InowvKw, VieHighCowtfBllinwnvlnaotiolclng.By inwldng (he Bao* gumwits®aodfer enfcfl^np ff»fMrf aecimty Ihwe Is no staUtofy right, 9Jfeicis»ef whidf WBS belng (Mtared Them te no term n ttie conlract wtrich Is Con^my to »pfwrisions of Vie hKSan ContrarfAct 7ito(m<^ Ow*act^|mep^^ (terf a pwaw» cafi wWKlreM tris offisr A^bre te acc^stanoe. But wWKhawal <^ an oftw, b^aiv V Is acceptocf fe a cCTnpfetn^ dnBiB»wrfaqBectftom ftwfeaure of eanw^security mon^whteh has been ^wan for a particutar pt^soato. A pwsaf mey frave a rfgrfrf fo wlthc^vw t^ offw Iwt If he t»»maeto hls ollBr QR a concSSonth^ sa^eame^ nmh^ f^ IwfoilW^ not enteriry into wr^w^ or U somB aet Is ^not peffonned, Wsen even ttough /»may hawB a^ i^^ fo wffhefraw Ws oflfef; h»hea no ri^ te icfmm fta? e eame^seei^ 1»fietwr^tohln^ FBifMiw^W^ emneall^eet^, in nowey, allfecteaw s^s^^ undw VieJn(San Cefrtgacf Act SfGft aam<»(fe9ef^y» gfven !eM Wsen towisuiB VM»eav^^ exfefence; ff wou<y (»anahomrtbus sauatfon (hrt a pwson w<x^J^Ws ffl»n<»od^jMBddcfe (to;o(^^ ; intoe3chtenceof^yBofMa(Mw1he tfvwi^aelwwtegeor feeneffitrfte oim wrong^^ai^^ '^wys^^!^s';s;'. ^— -e- ^ ^••i lc/^ '^ •^ •fc,-» (' 'v nwst be femembeiwlth^ f»ftieiria/fyhi Qmemment confracte, sucft a femi is ahmys Ini^/deel In anler to enswe ttiat CHdy a genwne peuty makesa Wd. V such» ', ' ." ferm was not ttiem men a pwson wfto doas nat haw ff» capacffy or a peiso»who has: nat Wenffon c^ entenng into ihe conhaet wiS malwsWd. Thie wftofe pwpoae afsiwha clause^l.e. tosee^»ta^yg^uin» AtGte are lecehwd woiM be toat ff twMare was nat pemwtteet Tha» Is an^her /Wso wty UwJmpagned jtKlgmerri cwinolbe su^alne<f. K Is Svltled lawt^t» coofrarf of guaiwitee Is a cwi^etv swf s^amte^ co^ra<rf&yftseff. 7^(w wgan^enfefcementcrf^^W^^ 'wi dwnanel Bank giial'antee" is vwy clewi If the enfoicement is fn teims ofttie^guaiaMee, Wieii Ccwte must m^ MettefB v^ tt»ff^MCwnent <^ Swik^ guaramtee. TVieCowtcwioiriyMeffweWielMoca^ift Is eyah^tefmsofffieyiamnteewWWie isaryf»uel. Cowts camot restrmfi liwocaffiin af an vbn dsmaneS guatantee" m accoivlanee wMi itstenns ty leolangat Iwms of ffie'wxleriying conlraet. Theejd^ence oriwn exf^ence of an undef^ng oontfaet become 'mMsvsM w^en fhe Imocatton Is Interms offfie 8w»(fgufusotee; The Bank giwantee sffpulSated (fta^ ff tto &fd t*a» wBhcfratW) iwfffwn ^20 dlays or ff ff>» pwformanee security was not gwan or V ihe pwfsvmwiw seamty vms notgluan w ifan^lBemai^was n^signed, fhe guaranteecouki be witoKeeleTh9^BwilfffM»witeiw« enforcedtieifomthe l»dwaswrittKtwiWRi»Mwti20elay^, Tnerefore, ff coy<sfnot tosafef ff^tfw <mcica(ten offf» Bank guaiantee was agamst th»temis of ffie Banlf guaiantee, Iftt washitenns^SwBankgiwwilee.one fallste undei^andastetKMthoHlghCotirtcatildsay Swtthe guarairiee wukl^tiothw been tnvolted. IfWw "l^^ •-',:.... k-. (~ ''• guaiwriBewasrig/hSyhN^ied, themwasnoquestkMaf eSfecSng reAmdas has beGfi donebyfheHglh Court i £>. In the instant case, the bank guarantee has been Invoked wittrin the termsof bankguaranteeand itis nol open totte plalnUff wthe bank ID questton the encashment on the ground of soms conditton of ffie agreement. '7. The dSwr ob^cUons of the appellantiat this sta^ cannot be considered SK the tssua tnvohred ht ttie-pFesent ^peal is whettier tha respondent No.1 can be restrained by an orcfer of tomporaiy ir^uncUort from encashlng the psrtormance bank guarantee that hasbeen l&sued in its favour by defemlant No.2 rt the Instancs ofth®plalnW and on ttie aforesaid corKlttK>nlamsaUsfledthattt)8teamedAddittonalDistrtetJu<to& has not commitled any lllegalBy by re|eeUr^ ttie applicatton for temporary injuncUon prefisrred by theappellaBt and thus flw appeal preferred by the appellantfedevokl ofanymeflt aridthesame isiliattto to be dismiaied. t8. Conssquentlyithsappeal is dlsmissed and the ^iy granted earUer standsvacated. Sd/- ' i Dhirendra Mishra Judge JyoBshl