IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:10.07.2008 C O R A M THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR Contempt Petition No.502 of 2008 M/s.Yashwitha Constructions (P) Ltd., Rep. By its Managing Director, Mr.Pramod Kumar Reddy No.16, Vivekananda Street, Tirumoolar Colony, Anna Nagar West, Chennai-600 040. ... Petitioner Vs. 1.Mr.Srinivas Bommidala, Managing Director, M/s.GMR Projects Pvt Limited, No.6-2-953, 1st Floor, Krishna Plaza, Khairatabad, Hyderabad 500 004, A.P. 2.Mr.I.Ram Mohan Rao, Authorised Signatory, M/s.GMR Projects Pvt Ltd., No.09 Kings Street, Off. Richmond Road, Bangalore 560 025. 3.Mr.S.K.Emmamuel, Chief Project Manager, M/s.GMR Projects Pvt Ltd., No.389/B, Trichy Main Road, Vazhuda Reddy, Villupuram 605 602. 4.Mr.S.Baskar, Senior Manager, Oriental Bank of Commerce, Rajasri, T-94, III Avenue, Anna Nagar (East), Chennai 600 040. ... Respondents Petition filed under Section 11 of the Contempt of Courts Act, 1971 praying to punish the respondents for having allegedly committed contempt of the orders of this Court passed in O.A.No.611 of 2008 dated 20.05.2008. For Petitioner : Ms.R.Subramanian, S.C. For Mr.K.Udayakumar For RR 2 and 3 : Mr.R.Krishnamurthy, S.C. For 4th respondent: Mr.M.Raja Manickam O R D E R Heard the submissions made by Mr.R.Subramanian, learned Senior Counsel for the petitioner, Mr.R.Krishnamurthy, learned Senior Counsel representing GMR Projects Private Limited, whose officials are shown to the respondents 2 and 3 in the contempt petition and Mr.M.Raja Manickam, learned counsel representing the 4th respondent, Oriental Bank of Commerce. 2.The National Highways Authority of India has awarded the BOT contract to the GMR Projects Private Limited to build, operate and transfer that stretch of National Highways between Tindivanam and Ulundurpet. The petitioner company is the sub contractor under GMR Projects Private Limited for construction of three minor bridges and drainage works. Since, according to the said GMR Projects Private Limited, the petitioner company did not complete the work within the stipulated time, they had to cancel the sub contract and entrust the work to some other sub contractor. Towards the mobilisation advance paid by the GMR Projects Private Limited, the petitioner company had offered bank guarantees, four in number, to the total extent of Rs.50,00,000/-. Pursuant to the cancellation of the sub contract, the GMR Projects Private Limited chose to invoke the bank guarantee and directed the fourth respondent, Oriental Bank of Commerce, Anna Nagar (East), Chennai to make payment on the said bank guarantees. Meanwhile, the petitioner company approached this Court on its original side by way of an application under Section 9 of the Arbitration Act in O.A.No.611 of 2008 in which this Court chose to pass the following interim order on 20.05.2008. "That 1.M/s.GMR Projects Pvt Ltd., Rep. By its Managing Director, 2.M/s.GMR Projects Pvt. Ltd., And 3.The Chief Project Manager, M/s.GMR Projects Pvt. Ltd., the respondents 1 to 3 herein be and are hereby restrained by an order of ad interim injunction till 11.06.2008 from invoking the Bank Guarantees bearing Nos.(1)B.G.08220002207 dated 29.11.2007 for Rs.12,50,000/- (2)B.G.No.08220002307 dated 29.11.2007 for Rs.12,50,000/- (3)B.G.No. 08220001008 dated 15.02.2008 for Rs.12,50,000/- and (4) B.g.No.08220001108 dated 15.02.2008 for Rs.12,50,000/- executed by the applicant and issued by the 4th respondent in favour of the second respondent on 29.11.2007 and 15.02.2008 and consequently restraining The Manager, Oriental Bank of Commerce, Anna Nagar (East) Chennai 600 040 the 4th respondent herein, from releasing any fund in favour of the respondents 1 to 3 on such terms and conditions till 11.06.2008." 3.Now the petitioner has come forward with this present contempt petition complaining that the said order was deliberately disobeyed by the fourth respondent in releasing the funds even after it was brought to his knowledge that such an order was passed by the Court on 20.05.2008. The contempt petition has been filed against the other respondents on the ground that they should not have encashed the DD issued by the fourth respondent even after coming to know that such an order was passed by this Court on 20.05.2008 itself. Though the bank guarantee was said to be invoked prior to the filing of the OA, admittedly the DD was issued only on 21.05.2008 at Chennai and it was encashed on 24.05.2008 at Bangalore. 4.The petitioner has come forward with a specific averment that the fourth respondent chose to issue the DD in the presence of the Advocate for the petitioner, who had gone to the Branch for serving a notice on the fourth respondent informing him that there was such an order passed by the Court and that the DD was issued by the fourth respondent proclaiming that they were prepared to face any consequence as they were determined to safeguard the interest of their valued customer namely, the GMR Projects Private Limited. 5.On the other hand, the learned counsel for the fourth respondent would contend that there is no semblance of truth in such a contention raised by the petitioner. So far as the other respondents are concerned, it is the contention of the petitioner that the DD was encashed after the order of this Court was communicated to them and that they should not have chosen to encash it after the receipt of a copy of the order. However, the respondents 2 and 3 have come forward with a contention that even after they got knowledge of such an order, they were of the view that since the bank guarantee had been invoked prior to the passing of the order, no harm would be caused if the DD was encashed and that the encashment of the DD would not amount to contempt. However, now realising the mistake, they had committed, they come forward with an offer to redeposit the entire amount of Rs.50,00,000/- with the fourth respondent bank which may be kept in the form of bank guarantee given by the petitioner by renewing the bank guarantee or by issuing a fresh bank guarantee if necessary for which the bank shall not charge any cost either on the petitioner or on the other respondents. The said course is also agreeable for the Bank. 6.One Mr.B.R.Srikanth, the authorised representative of GMR Projects Private Limited has also filed an affidavit to the effect that there is no post of Managing Director in the company GMR Projects Private Limited and that the entire affairs are looked after by the Board of Directors without there being any post as Chairman or Managing Director and moreover, Mr.Srinivas Bommidala was never acting as the Managing Director of the said Company. No serious dispute has been raised regarding the said contention made in the affidavit of Mr.B.R.Srikanth. Hence, this Court deems it fit to exonerate the first respondent from the contempt petition. So far as the question of keeping the bank guarantee intact is concerned, the learned Senior Counsel appearing on either side have brought to the notice of this Court that the very OA itself was dismissed yesterday. However, the parties to the petition through their respective counsel agree that the said amount of Rs.50,00,000/- should be kept as bank guarantee, the invocation of which shall depend upon the order to be passed by the arbitrator, who has already been appointed and ceased of the matter. 7.The fourth respondent has also filed a counter affidavit tendering an unconditional apology for the release of the funds. Similarly the respondents 2 and 3 have also filed counter affidavits tendered the similar apologies. This Court, after considering all the above said facts and circumstances, is of the view that it shall be just and necessary to accept the apology tendered by the said respondents and close the contempt petition. 8.Accordingly, the Contempt Petition is closed. However, it is made clear that the amount covered by the DD No.162493 000064000 dated 07.07.2008 now handed over in the presence of the Court to the fourth respondent bank shall be kept as bank guarantee which shall be subject to the result of the arbitration proceedings. 10.07.2008 Index: Yes/No Internet: Yes/No sgl To 1.Mr.Srinivas Bommidala, Managing Director, M/s.GMR Projects Pvt Limited, No.6-2-953, 1st Floor, Krishna Plaza, Khairatabad, Hyderabad 500 004, A.P. 2.Mr.I.Ram Mohan Rao, Authorised Signatory, M/s.GMR Projects Pvt Ltd., No.09 Kings Street, Off. Richmond Road, Bangalore 560 025. 3.Mr.S.K.Emmamuel, Chief Project Manager, M/s.GMR Projects Pvt Ltd., No.389/B, Trichy Main Road, Vazhuda Reddy, Villupuram 605 602. 4.Mr.S.Baskar, Senior Manager, Oriental Bank of Commerce, Rajasri, T-94, III Avenue, Anna Nagar (East), Chennai 600 040. P.R.SHIVAKUMAR,J. Sgl Cont.P.No.502 of 2008 10.07.2008