Gis Ltd. Vs. Indiana Conveyors Ltd.

Decided On : Mar-12-1999

Court : Kolkata

Notice (8): Undefined index: topics [APP/View/Case/meta.ctp, line 36]
Code Context


$shops2 = $shops['topics'];
$viewFile = '/home/legalcrystal/app/View/Case/meta.ctp'
$dataForView = array(
	'title_for_layout' => 'Gis Ltd. Vs. Indiana Conveyors Ltd. Semantic Analysis',
	'shops' => array(
		'LAW' => array(
			(int) 0 => 'section 9',
			(int) 1 => 'Indian Arbitration Act',
			(int) 2 => 'section 9',
			(int) 3 => 'section 9',
			(int) 4 => 'section 9',
			(int) 5 => 'section 9'
		),
		'CARDINAL' => array(
			(int) 0 => 'two',
			(int) 1 => 'one',
			(int) 2 => '26,00,000/-Issued',
			(int) 3 => '16/67',
			(int) 4 => '700',
			(int) 5 => '26,000/-',
			(int) 6 => 'six',
			(int) 7 => '8',
			(int) 8 => 'two',
			(int) 9 => '39',
			(int) 10 => 'two',
			(int) 11 => 'two',
			(int) 12 => 'about 78',
			(int) 13 => 'one',
			(int) 14 => 'two',
			(int) 15 => '38.50',
			(int) 16 => '25.0',
			(int) 17 => '8.50',
			(int) 18 => '13.50',
			(int) 19 => '5.00',
			(int) 20 => '14.0',
			(int) 21 => '19-8-98',
			(int) 22 => '5.0',
			(int) 23 => '19.0',
			(int) 24 => '1998.(iv',
			(int) 25 => '1',
			(int) 26 => '19.0',
			(int) 27 => 'two',
			(int) 28 => '16.0',
			(int) 29 => '3.0',
			(int) 30 => '16.0',
			(int) 31 => '3.0',
			(int) 32 => '17',
			(int) 33 => '26.0',
			(int) 34 => '12-6',
			(int) 35 => '20th/21st',
			(int) 36 => '39.0',
			(int) 37 => '17-12-98',
			(int) 38 => 'two',
			(int) 39 => 'two',
			(int) 40 => '39',
			(int) 41 => '12',
			(int) 42 => '16.12.98',
			(int) 43 => 'Thirty Nine',
			(int) 44 => 'two',
			(int) 45 => '39',
			(int) 46 => 'two',
			(int) 47 => '293',
			(int) 48 => '1988]1SCR1124',
			(int) 49 => '345',
			(int) 50 => '1981]3SCR300',
			(int) 51 => '1990(1',
			(int) 52 => '200',
			(int) 53 => '1990(1',
			(int) 54 => 'two',
			(int) 55 => 'two',
			(int) 56 => 'two',
			(int) 57 => 'two',
			(int) 58 => 'one',
			(int) 59 => 'two',
			(int) 60 => '26',
			(int) 61 => '39',
			(int) 62 => 'two',
			(int) 63 => 'two',
			(int) 64 => '38.50',
			(int) 65 => '38.50',
			(int) 66 => '25',
			(int) 67 => '14',
			(int) 68 => '38.50',
			(int) 69 => 'about 78',
			(int) 70 => '78',
			(int) 71 => 'two',
			(int) 72 => 'two',
			(int) 73 => 'two',
			(int) 74 => 'two',
			(int) 75 => 'two',
			(int) 76 => 'two',
			(int) 77 => 'two',
			(int) 78 => 'two',
			(int) 79 => '1990(1',
			(int) 80 => '200',
			(int) 81 => 'two'
		),
		'ORG' => array(
			(int) 0 => 'the Arbitration and Conciliation Act',
			(int) 1 => 'Bank Guarantee No',
			(int) 2 => 'the Bank of India',
			(int) 3 => 'Indiana Conveyors Pvt. Ltd.',
			(int) 4 => 'the Bank of India',
			(int) 5 => 'Bank Guarantee No',
			(int) 6 => 'Reliance Petroleum Ltd.',
			(int) 7 => 'FMC',
			(int) 8 => 'Hon'ble Court',
			(int) 9 => 'Bank Guarantees',
			(int) 10 => 'Bank',
			(int) 11 => 'Messers Modern India Construction Company',
			(int) 12 => 'Reliance Petroleum Ltd.',
			(int) 13 => 'Coke Handling Plant at Janmagar',
			(int) 14 => 'the Slate of Gujarat',
			(int) 15 => 'multi-national Company',
			(int) 16 => 'Turnkey Contract',
			(int) 17 => 'Reliance Petroleum Ltd.',
			(int) 18 => 'Structural Steel',
			(int) 19 => 'Reliance Pelroteum Ltd.',
			(int) 20 => 'the Work Order',
			(int) 21 => 'Bank Guarantee',
			(int) 22 => 'The Work Order',
			(int) 23 => 'Bank',
			(int) 24 => 'the Bank of India',
			(int) 25 => 'MICCO',
			(int) 26 => 'MT',
			(int) 27 => 'MICCO',
			(int) 28 => 'the Security Deposit Bank Guarantee No',
			(int) 29 => 'MICCO',
			(int) 30 => 'Security Deposit Guarantee',
			(int) 31 => 'Bank',
			(int) 32 => 'MICCO',
			(int) 33 => 'MICCO',
			(int) 34 => 'Performance Bank Guarantee',
			(int) 35 => 'MICCO',
			(int) 36 => 'the Bank of India',
			(int) 37 => 'IndiaCalcutta Industrial Finance Brahch5',
			(int) 38 => 'GIS Limited',
			(int) 39 => 'Modern India Construction Co.',
			(int) 40 => 'Advance Bank Guarantee',
			(int) 41 => 'bank Guarantee',
			(int) 42 => 'Purchase',
			(int) 43 => 'Bank Guarantee',
			(int) 44 => 'the Bank Guarantee',
			(int) 45 => 'Indiana Conveyors Ltd.',
			(int) 46 => 'Indiana Conveyors Ltd.',
			(int) 47 => 'Inoperative',
			(int) 48 => 'Bank of India',
			(int) 49 => 'the Supreme Court',
			(int) 50 => 'AIR 1995 SC',
			(int) 51 => 'AIR 1997',
			(int) 52 => 'SC',
			(int) 53 => 'the Bank at the Instance of the petitioner',
			(int) 54 => 'Agreement',
			(int) 55 => 'Various Supreme Court',
			(int) 56 => 'Injunctions',
			(int) 57 => 'the Judgment of the Division Bench',
			(int) 58 => 'Jurisdiction',
			(int) 59 => 'Tribunal',
			(int) 60 => 'Invoke',
			(int) 61 => 'Order',
			(int) 62 => 'xerox'
		),
		'DATE' => array(
			(int) 0 => '1996',
			(int) 1 => '17th December 1997',
			(int) 2 => '17th December, 1997',
			(int) 3 => '12th May, 1908',
			(int) 4 => '1998',
			(int) 5 => '15th June, 1998',
			(int) 6 => ''5',
			(int) 7 => 'one month',
			(int) 8 => 'six months',
			(int) 9 => '19th and 20th August, 1998',
			(int) 10 => '19th and 20th August 1998',
			(int) 11 => '20th August, 1998',
			(int) 12 => '21st August 1998.2',
			(int) 13 => '18th August',
			(int) 14 => '1998',
			(int) 15 => 'Monday',
			(int) 16 => ''98',
			(int) 17 => '10th of September',
			(int) 18 => '24th August, 1998',
			(int) 19 => '24th September, 1998.(v',
			(int) 20 => '10 days',
			(int) 21 => '15 days',
			(int) 22 => 'August '98',
			(int) 23 => 'August 1998',
			(int) 24 => 'November, 1998',
			(int) 25 => '16th December '98',
			(int) 26 => '16th March',
			(int) 27 => '1999',
			(int) 28 => '21st November, 1998',
			(int) 29 => 'Nov. 1998The',
			(int) 30 => '18.03.99',
			(int) 31 => '19lh and 20th August '98',
			(int) 32 => '19th-20th August '98',
			(int) 33 => '19th and 20th August, 1998',
			(int) 34 => '10 days',
			(int) 35 => '15 days',
			(int) 36 => '26th August',
			(int) 37 => '1998',
			(int) 38 => '18th August',
			(int) 39 => '1998',
			(int) 40 => '24th August, 1998',
			(int) 41 => '10th September 1998',
			(int) 42 => '20th August, 1998',
			(int) 43 => 'August 1998',
			(int) 44 => '19th and 20th August',
			(int) 45 => '1998',
			(int) 46 => '12th May 1998',
			(int) 47 => '12th May 1998',
			(int) 48 => '19th/20th August 1998',
			(int) 49 => 'May 1998',
			(int) 50 => '19/20th August 1998'
		),
		'PERSON' => array(
			(int) 0 => 'Invoking',
			(int) 1 => 'Sodepur',
			(int) 2 => 'Coke Handling Plant',
			(int) 3 => 'Schedule',
			(int) 4 => 'B.T.M. Sarant',
			(int) 5 => 'Malik',
			(int) 6 => 'Malik',
			(int) 7 => 'Malik',
			(int) 8 => 'Jayanta Mltra',
			(int) 9 => 'Mltra',
			(int) 10 => 'Bill',
			(int) 11 => 'Invoking',
			(int) 12 => 'Mallick',
			(int) 13 => 'Registrar'
		),
		'FAC' => array(
			(int) 0 => 'the Instance of your petitioner;(b'
		),
		'GPE' => array(
			(int) 0 => 'U.S.',
			(int) 1 => 'Multi',
			(int) 2 => 'the State of West Bengal',
			(int) 3 => 'U.S.',
			(int) 4 => 'Jamnagar',
			(int) 5 => 'Gujarat',
			(int) 6 => 'M.T.',
			(int) 7 => 'M.T.',
			(int) 8 => 'Meetings',
			(int) 9 => 'Indiana',
			(int) 10 => 'Indiana',
			(int) 11 => 'Indiana',
			(int) 12 => 'Indiana',
			(int) 13 => 'Indiana',
			(int) 14 => 'Indiana',
			(int) 15 => 'Indiana',
			(int) 16 => 'Indiana',
			(int) 17 => 'Indiana',
			(int) 18 => 'Indiana',
			(int) 19 => 'Clause',
			(int) 20 => 'Mumbai',
			(int) 21 => 'Meetings'
		),
		'ORDINAL' => array(
			(int) 0 => 'first',
			(int) 1 => 'first',
			(int) 2 => 'first',
			(int) 3 => 'first',
			(int) 4 => '26th',
			(int) 5 => 'first'
		),
		'PERCENT' => array(
			(int) 0 => '15%',
			(int) 1 => '75%',
			(int) 2 => '10%',
			(int) 3 => '10%',
			(int) 4 => '15%',
			(int) 5 => '10%',
			(int) 6 => '15%',
			(int) 7 => '10%',
			(int) 8 => '10%'
		),
		'PRODUCT' => array(
			(int) 0 => 'Calcutta',
			(int) 1 => 'Para-2'
		),
		'WORK_OF_ART' => array(
			(int) 0 => 'Minutes'
		),
		'NORP' => array(
			(int) 0 => 'Items'
		),
		'LOC' => array(
			(int) 0 => 'petitioner.15'
		)
	),
	'desc' => array(
		'Judgement' => array(
			'id' => '862384',
			'acts' => ' <a href="/act/51725/arbitration-and-conciliation-act-1996-complete-act">Arbitration and Conciliation Act, 1996</a> - Section 9',
			'appealno' => 'Ordinary Original Civil Jurisdiction, A.P. Nos. 13 and 14 of 1999',
			'appellant' => 'Gis Ltd.',
			'authreffered' => '',
			'casename' => 'Gis Ltd. Vs. Indiana Conveyors Ltd.',
			'casenote' => ' - ',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => ''To                                                                                21st Nov.  1998

 The Assistant General Manager
 Bank of India
 Calcutta Industrial Finance Brahch
 5, B.T.M. Sarant (Brabourne Road)
 Calcutta 700 001.

 Dear Sir,
     
     Sub:   Advance Bank Guarantee No : G16/87 dated 17-  12-97
            for Rs. 39,00,000/-fssued by you on behalf of GIS Limited,
            Unit: Modern India Construction Co.;                                                                             Yours faithfully,
                                                                             For Indiana Conveyors Ltd.
                                                                             Sd/-Illiglble.
                                                                             Authorised Signatory.'',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Kolkata',
			'court_type' => 'HC',
			'decidedon' => '1999-03-12',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'Vinod Kumar Gupta, J.',
			'judgement' => '<p style="text-align: justify;">The Court</p><p style="text-align: justify;">1. These are two applications under section 9 of the <a href="/act/51725/arbitration-and-conciliation-act-1996-complete-act">Arbitration and Conciliation Act, 1996</a> filed by one of the contracting parties to a contract agreement The petitioner has asked for the following reliefs from the court :</p><p style="text-align: justify;">'(a) Injunction restraining the respondent company. Its agents servants and assigns from Invoking the said Bank Guarantee No. G16/67 dated 17th December 1997 for Rs. 26,00,000/-Issued by the Bank of India in favour of Indiana Conveyors Pvt. Ltd., at the Instance of your petitioner;</p><p style="text-align: justify;">(b) Injunction restraining the respondent company, its servants, agents and assigns from receiving any payment from the Bank of India against the said Bank Guarantee No. G 16/67 dated 17th December, 1997; for Rs. 26,00,000/-;</p><p style="text-align: justify;">(c) Injunction restraining the respondent company, its agents, servantsand assigns to receive any payment from Reliance Petroleum Ltd.,and/or its project partners FMC--a U.S. based Multi-nationalwithout leaving a sum of Rs. 79,61,162.52 p. on account of yourpetitioner to secure its claim;</p><p style="text-align: justify;">(d) Ad interim order in terms of prayers (a), (b) and (c) above;</p><p style="text-align: justify;">(e) Costs of an incidental to this application be paid by the respondent;</p><p style="text-align: justify;">(f) Such further order or orders be passed as this Hon'ble Court may deem fit and proper.'</p><p style="text-align: justify;">2. At first sight, and on first impression this case also appeared to be yet another in the long series of cases coming up in the courts from time to time relating to the restraint orders against the invocation or enacash-ment of unconditional Bank Guarantees executed by a Bank in favour of the beneficiary. After the arguments however have been concluded, I am convinced that this is not one of those usual cases where a party to a contract has come to court seeking a restraint order against the encashment/invocation of the bank guarantees. This case, both on facts as well as in law stands on an entirely different footing. Brief facts first :</p><p style="text-align: justify;">The petitioner claims to be the owner of a unit known as Messers Modern India Construction Company which has its workshop at Sodepur in the State of West Bengal. It claims to carry on the business of fabrication of structural steel material. It appears that Reliance Petroleum Ltd., a company which is not party to the present petition (nor was it required to be so) awarded a turnkey contract work to the respondent for Coke Handling Plant at Janmagar in the Slate of Gujarat which the respondent undertook to execute along with its project partner, a U.S. based multi-national Company. By way of the allotment of a sub-contract in the course of execution of the aforesaid main Turnkey Contract, the respondent wanted the petitioner to carry out the work of fabrication and manufacture of steel structural to be supplied by the petitioner to the respondent for errection/use in the aforesaid Coke Handling Plant of Reliance Petroleum Ltd. at Jamnagar, Gujarat. A Work Order accordingly was issued by the respondent in favour of the petitioner on 12th May, 1908 which was for the supply of Structural Steel, fabrication, sand blasting and painting as per the specifications of Reliance Pelroteum Ltd. Since the Work Order dated I2th May, 1998 constitutes the foundation of the regulating terms and conditions of contract between the parties, it shall be worthwhile and desirable to refer to these terms and conditions in extenso.</p><p style="text-align: justify;">3. The scope of the work has been defined in Clause 1 of the Work Order. It Includes the work of the supply of structural Steel and fabrication as per the fabrication drawings to be given by the respondent to the petitioner. It also Includes the work of sand blasting and painting of structurals as per the technical specifications to be given to the petitioner by the respondents. The quantum of work appproximately has been mentioned at 700 M.T. and in the price column it is mentioned that Rs. 26,000/- per M.T. would be the rate/price charged by the petitioner from the respondents. The delivery period has been mentioned as 15th June, 1998. The clause relating to payment terms, being very Important for our purposes is reproduced verbatim hereinbelow. It reads as under :</p><p style="text-align: justify;">'5. Payment Terms</p><p style="text-align: justify;">(a) 15% of the contract price as Interest free advance on submission of Bank Guarantee of equivalent amount in our proforma valid for six month.</p><p style="text-align: justify;">(b) 75% of the progressive payment on pro-rate basis against despatch documents.</p><p style="text-align: justify;">(c) 10% final payment within one month from completion of total supply on submission of performance bank guarantee of equivalent amount on our proforma valid till warranty period.</p><p style="text-align: justify;">(d) You will also submit 10% valued of the contract price bank guarantee Immediately and before claiming the first advance as security deposit valid till completion of the work.'</p><p style="text-align: justify;">4. The Work Order also Includes an arbitration clause which reads as hereunder :</p><p style="text-align: justify;">'8. Arbitration</p><p style="text-align: justify;">In all cases of disputes which can not be settled by mutual negotiations the matter shall be referred for arbitration in accordance with the provision of Indian Arbitration Act 1940 and rules thereunder to be read together with all statutory amendments and modifications of the work for the said act.</p><p style="text-align: justify;">The venue of such arbitration shall be at Calcutta.'</p><p style="text-align: justify;">5. As will be noticed, 15% of the total contract amount was to be lent as advance by the respondent to the petitioner on Interest free basis on the condition of the petitioner submitting a Bank guarantee of this amount which was to remain valid for six months. The petitioner was also to submit another bank guarantee of an amount equivalent to the value of 10% of the total contract price as security deposit and for due performance till the completion of the contract work. It is the undisputed case of the parties that these two bank guarantees, one for Rs. 39 lacs in respect of an covering the 15% interest free advance, and the other for Rs.26 lacs covering the 10% equivalent value of the contract price for and by way of security deposit and for due performance of contract were in fact executed and furnished by the Bank of India to the respondent at the instance of the petitioner. It appears that during the execution of the contract certain disputes and differences, normal in any such execution of a contract work appeared and cropped up between the parties. It also appears that the parties came around to a negotiated settlement, in their efforts to strive for a compromise and accordingly meetings were held between the parties on 19th and 20th August, 1998 in which such disputes and differences which might have cropped up or might have occurred in the past were settled between the parties amicably, and the terms of such settlement was reduced into writing, as would be apparent from a record of the Minutes of these two meetings. Since such terms of settlement, as were recorded in the Minutes of the two Meetings held on 19th and 20th August 1998 are very relevant for our purposes, it shall be desirable to re-produce the entire document purporting to be a record of such Minutes. The documents reads as under:</p><p style="text-align: justify;">'The following has been agreed by and between M/s. Indiana and GIS/ MICCO:</p><p style="text-align: justify;">As discussed earlier, MICCO has agreed to despatch all the balance of about 78 MT fabricated items against the above orders by 20th August, 1998 on Indiana's transport. If materials for one or two trucks is left over, these will be despatched on 21st August 1998.</p><p style="text-align: justify;">2. Payment Schedule by Indiana :</p><p style="text-align: justify;">(i) As on 18th August, 1998 the outstanding payment from Indiana against above Job is approx. Rs. 38.50 lacs.</p><p style="text-align: justify;">(ii) Indiana confirmed that out of above amount, Rs. 25.0 lacs approx. will be paid to MICCO latest by Monday the 24th Aug '98. The excess amount of advance approx. Rs. 8.50 lacs will be adjusted from the balance amount of Rs. 13.50 lacs, thereby the balance will be approx. Rs. 5.00 lacs.</p><p style="text-align: justify;">(iii) Further bill of approx. Rs. 14.0 lacs have been submitted to Indiana on 19-8-98 & 20-8-98. This amount alongwith balance Rs. 5.0 lacs, total Rs. 19.0 lacs will be paid within 10th of September, 1998.</p><p style="text-align: justify;">(iv) After despatch of the balance materials as mentioned in clause 1 above, the bill to be submitted to Indiana on 24th August, 1998 will be amounting to Rs. 19.0 lacs approx. In two parts i.e. Rs. 16.0 lacs and Rs. 3.0 lacs, Rs. 16.0 lacs to be released by 24th September, 1998.</p><p style="text-align: justify;">(v) The last progress bill of approx. Rs. 3.0 lacs as said above will be submitted to Indiana after reconciliation of the despatched quantities with drawings by both the parties within 10 days from the date of last despatch and Indiana will release the payment and the Security Deposit Bank Guarantee No.G16/68 dated 17-12-97 for Rs. 26.0 lacs and its amendment dated 12-6-98 within 15 days time thereafter. MICCO has agreed to this as a special case although Security Deposit Guarantee has to be released on completion of work/despatches as per terms of the order.</p><p style="text-align: justify;">3. Since all the materials will be delivered by 20th/21st August '98 and after the full advance of Rs. 39.0 lacs getting adjusted as mentioned above, the advance Bank guarantee No. G16/67 dated. 17-12-98 will be returned by Indiana to MICCO latest by 26th August 1998 for cancellation.</p><p style="text-align: justify;">4. The final 10% payment will be released to MICCO by Indiana on submission of Performance Bank Guarantee by MICCO as per provision of the above order.'</p><p style="text-align: justify;">6. It is the case of the petitioner in this petition under section 9 of the Act that despite having agreed to return the two bank guarantees, as would be clear in Clause (v) of Para-2 and Para-3 of the aforesaid Minutes, the respondent did not return the two bank guarantees to the petitioner and Instead, sent a communication dated. 21st November, 1998 to the Bank of India calling upon the bank to either renew the bank guarantee of Rs. 39 lacs upto 16th December '98 with the claim period extended upto 16th March, 1999 or Instead, if the same was not to be done, to treat the aforesaid communication as their claim for the amount of the bank guarantee and to arrange to send the same by a demand draft. The communication dated 21st November, 1998 reads as under :</p><p style="text-align: justify;">'To 21st Nov. 1998The Assistant General ManagerBank of IndiaCalcutta Industrial Finance Brahch5, B.T.M. Sarant (Brabourne Road)Calcutta 700 001.Dear Sir,Sub: Advance Bank Guarantee No : G16/87 dated 17- 12-97for Rs. 39,00,000/-fssued by you on behalf of GIS Limited,Unit: Modern India Construction Co.With reference to the above Advance Bank Guarantee, we hereby request you to arrange for an extension of the above mentioned bank Guarantee upto 16.12.98 with a claim period upto 18.03.99, as the party has not completed the work as per the Purchase Order terms and conditions.</p><p style="text-align: justify;">In case the party is not willing to extend the above Bank Guarantee, please treat this as our claim for the amount of the Bank Guarantee and arrange to send us a Demand Draft in favour of 'Indiana Conveyors Ltd. for Rs. 39,00.000.00 (Rupees Thirty Nine lacs only) payable at Mumbai and oblige.</p><p style="text-align: justify;">Thanking you, Yours faithfully,For Indiana Conveyors Ltd.Sd/-Illiglble.Authorised Signatory.'</p><p style="text-align: justify;">7. With regard to the other bank guarantee also, it is the case of the respondent that it is entitled to invoke the same.</p><p style="text-align: justify;">8. The case of the petitioner in short is that the respondent is liable to return both the bank guarantees to the petitioner because the respondent, in the meetings held on 19lh and 20th August '98 had agreed to do so. Based on the aforesaid agreement of the respondent to return the two bank guarantees, the bank guarantees have become Inoperative and unenforceable. Having agreed to return the bank guarantees, it is not open to the respondent to invoke them since that would be contrary to the express terms of the agreement having been arrived at between the parties on 19th-20th August '98. The further case of the petitioner is that. In any event since the amount of loan of Rs. 39 lacs had already been adjusted in the sale price of the materials supplied by the petitioner to the respondent, and further since the respondent admittedly owed to the petitioner huge sums of money, the bank guarantees had become Irrelevant and it was on the basis of these pending claims of the petitioner and the fact that nothing remained to be paid by the petitioner to the respondent that the respondent had agreed to return the bank guarantees to the petitioner.</p><p style="text-align: justify;">9. Mr. Malik, learned senior Advocate appearing for the respondent objected to the maintainability of this petition and submitted that this court should not pass any order of injunction restraining the invocation/ encashment of the two bank guarantees. Various submissions were made by Mr. Malik with regard to the absence of Bank of India as a party-respondent in this case and the non-maintainability of the petition on that ground. Various Judgments of the Supreme Court were relied upon by both the parties, for and against the proposition about the powers of the court in issuing Interim injuctlon with regard to the encashment/Invocation of the bank guarantees. Notable among these decisions of the apex court are the cases reported in :--</p><p style="text-align: justify;"> : AIR1994SC853 ; : AIR1996SC334 ; AIR 1995 SC 293 : : [1988]1SCR1124 ; AIR 1997 SC 345; : [1981]3SCR300 : : AIR1994SC626 ; : AIR1996SC2268 ; : (1996)5SCC450 and : AIR1997SC2477 .</p><p style="text-align: justify;">10. Mr. Malik also very strongly relied upon a Division Bench Judgment of this court reported in 1990(1) Cal LT 200 to putforth his point that bank guarantee being a separate contract, independent of the original main contract between the parties, any dispute with regard to the invocation or the encashment of the bank guarantees could not form the subject matter of the arbitration agreement existing between the parties and therefore, since the Arbitrator had no Jurisdiction in any dispute relating to the bank guarantees, this court under section 9 of the Act should not exercise its jurisdiction to issue any injunction in respect of any such bank guarantees which formed a separate and independent contract, distinct from original parent contract between the parties.</p><p style="text-align: justify;">11. Mr. Jayanta Mltra, learned senior advocate appearing for the petitioner on the other hand contended that in this particular case neither the Division Bench Judgment of this court reported in 1990(1) Cal LT 200 was applicable nor was this court required to apply any of the guiding factors, as laid down by the apex court from time to time with regard to grant or refusal of Injunctions relating to the encashment/invocation of the bank guarantees. According to Mr. Mltra this case stands on an entirely different footing. In this case the respondent has entered into an agreement with the petitioner whereby he has agreed to return the two bank guarantees which were earlier executed in his favour by the Bank at the Instance of the petitioner, in accordance with the terms and conditions of the Agreement which was originally entered into between the parties.</p><p style="text-align: justify;">12. Various Supreme Court Judgments cited by the learned counsel for the parties undoubtedly have taken a consistent view that the courts should be very slow in granting injunctions against the encashment/ invocation of the bank guarantees. The general view of the apex court clearly points to the principle that in all cases relating to bank guarantees, grant of injunction is only an exception, based on two broad principles, refusal being almost a Rule, The two broad principles, rather two broad parameters which the courts have to consider in favour of granting Injunctions against encashment of bank guarantees relate to the question of fraud and irretrievable injustice, or as some call it special equities.</p><p style="text-align: justify;">13. If one looks to the facts of the present case one will have no hesitation in saying that the case of the petitioner can be said to be covered by both the aforesaid parameters of fraud and Irretrievable injustice, bordering on special equities. When a parry to a contract admittedly has no claim against the other, its act of invoking or encashing a bank guarantee admittedly having been furnished in support of the aforesaid claim may amount topractising fraud against that party in a given set of circumstances and if the party practising fraud is allowed to encash the bank guarantee, the other party does suffer Irretrievable injustice. When the very claim for which or in support whereof the bank guarantee was furnished, has already been satisfied or stands extinguished, that party invoking the bank guarantee surely cannnot be permitted to do so because special equities having in the mean time been created in favour of the other party would Immediately come in the way of the first party in being allowed to encash the bank guarantee. Even though these factors exist, in the present case however we are not strictly concerned with these guiding factors because this case stands on an altogether different footing as the bank guarantees have actually ceased to remain operative. These two guiding factors therefore need not be pressed in aid of the petitioner.</p><p style="text-align: justify;">14. The petitioner's entire case is based on the Minutes of the meetings held on 19th and 20th August, 1998. It clearly transpires from a reference to these Minutes that the respondent has agreed to release/return the bank guarantee of Rs. 26 lacs within 10 days from the date of despatch of the last quantities immediately on the submission of the last progress Bill or within or 15 days time thereafter. With regard to the bank guarantees for Rs. 39 lacs the respondent had agreed that it would be returned by the respondent to the petitioner latest by 26th August, 1998 for cancellation. These two commitments made by the respondent about the return of the two bank guarantees was based on the agreed assertions by the parties that as on 18th August, 1998 the respondent owed to the petitioner, against the petitioner having performed the Job, an amount of Rs. 38.50 lacs and that the respondent having confirmed that out of the aforesaid outstanding amount of Rs. 38.50 lacs, 25 lacs would be paid to the petitioner by the respondent latest by 24th August, 1998. Actually the Minutes also record that a further bill of Rs. 14 lacs, over and above the aforesaid admitted outstanding liability of Rs. 38.50 lacs has already been received by the respondent and that the amount covered by this bill would also be paid by 10th September 1998. In the very opening para of the Minutes, the parties have agreed that the petitioner shall despatch the balance of about 78 MTs. of fabricated Items latest by 20th August, 1998. When the parties talked of the balance of 78 Mts.. and when the parties were clear about the past liabilities and the mode and manner of clearing them, there was no doubt that the materials received by the respondent prior to 19th/20th August 1998 had been realised by them and that no outstanding unsettled dispute remained to be sorted out. It was in this background that the respondent had agreed to return the two bank guarantees to the petitioner.</p><p style="text-align: justify;">15. The agreement arrived at between the parties, as reflected in the Minutes of the Meetings held on 19th and 20th August. 1998 is supplemental to the agreement (Work Order dated 12th May 1998). It is an extension of the same primary, parent agreement. If in the primary/parent/ main agreement of 12th May 1998 there was a provision whereby the petitioner was to furnish two bank guarantees, in the supplemental agreement arrived at in the meeting held on 19th/20th August 1998 the respondent had agreed to return these two bank guarantees, their purpose admittedly having been served. The return of the two bank guarantees therefore and the refusal on the part of the respondent not to do so is adispute having arisen between the parties to the agreement dated 12th May 1998. Whether the respondent is under a contractual obligation to return the two bank guarantees to the petitioner, as it undertook to do in the agreement arrived at in the meetings held on 19/20th August 1998 and, whether the petitioner is entitled to ask the respondent to return these two bank guarantees to It, and in the meanwhile not to take any action which would amount to Invoking or encashing the bank guarantees, or disputes squarely covered by the arbitration agreement between these two parties. These are not the disputes in the traditional sense relating to the encashment/invocation of the two bank guarantees. These disputes have noting to do whatsoever with the terms and conditions of the bank guarantee. In that view of the matter therefore neither the bank has anything to do with the matter nor is the Judgment of the Division Bench of this court in 1990(1) Cal LT 200 is applicable to the facts of the case.</p><p style="text-align: justify;">16. If the arbitrator has to decide the dispute with regard to the respondent's obligation to return the bank guarantees, this court cannot remain oblivious or shirk its responsibility of looking to the prlma facie nature of the petitioner's case to find out whether the merits of the case warrant the grant of any interim Injunction under section 9 of the Act or not.</p><p style="text-align: justify;">17. From what I have narrated the inescapable conclusion which emerges is that the petitioner has a strong prima facie case in its favour and that the situation warrants that this court should, while exercising its Jurisdiction under section 9 of the Act restrain the respondent from invoking/encashing the aforesaid bank guarantees, to enable the parties to have the adjudication of this dispute through arbitration.</p><p style="text-align: justify;">18. The petitions accordingly are allowed. It is directed that pending the adjudication of disputes by arbitration and until the award is finally passed by the arbitral Tribunal, the respondent shall not Invoke/encash the two bank guarantees in question.</p><p style="text-align: justify;">No order as to costs.</p><p style="text-align: justify;">Later : After the Judgment was pronounced, Mr. Mallick appearing for the respondent made an oral prayer for staying the operation of this Order. On consideration the prayer is rejected.</p><p style="text-align: justify;">Let a xerox singed copy of this Judgment be given to the parties, duly countersigned by the Assistant Registrar of this court, upon their undertaking to apply for and obtain certified copy of the same upon usual undertaking.</p><p style="text-align: justify;">19. Petitions allowed<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '(1999)2CALLT78(HC)',
			'ratiodecidendi' => '',
			'respondent' => 'Indiana Conveyors Ltd.',
			'sub' => 'Arbitration',
			'link' => null,
			'circuit' => null
		)
	),
	'args' => array(
		(int) 0 => '862384'
	)
)
$title_for_layout = 'Gis Ltd. Vs. Indiana Conveyors Ltd. Semantic Analysis'
$shops = array(
	'LAW' => array(
		(int) 0 => 'section 9',
		(int) 1 => 'Indian Arbitration Act',
		(int) 2 => 'section 9',
		(int) 3 => 'section 9',
		(int) 4 => 'section 9',
		(int) 5 => 'section 9'
	),
	'CARDINAL' => array(
		(int) 0 => 'two',
		(int) 1 => 'one',
		(int) 2 => '26,00,000/-Issued',
		(int) 3 => '16/67',
		(int) 4 => '700',
		(int) 5 => '26,000/-',
		(int) 6 => 'six',
		(int) 7 => '8',
		(int) 8 => 'two',
		(int) 9 => '39',
		(int) 10 => 'two',
		(int) 11 => 'two',
		(int) 12 => 'about 78',
		(int) 13 => 'one',
		(int) 14 => 'two',
		(int) 15 => '38.50',
		(int) 16 => '25.0',
		(int) 17 => '8.50',
		(int) 18 => '13.50',
		(int) 19 => '5.00',
		(int) 20 => '14.0',
		(int) 21 => '19-8-98',
		(int) 22 => '5.0',
		(int) 23 => '19.0',
		(int) 24 => '1998.(iv',
		(int) 25 => '1',
		(int) 26 => '19.0',
		(int) 27 => 'two',
		(int) 28 => '16.0',
		(int) 29 => '3.0',
		(int) 30 => '16.0',
		(int) 31 => '3.0',
		(int) 32 => '17',
		(int) 33 => '26.0',
		(int) 34 => '12-6',
		(int) 35 => '20th/21st',
		(int) 36 => '39.0',
		(int) 37 => '17-12-98',
		(int) 38 => 'two',
		(int) 39 => 'two',
		(int) 40 => '39',
		(int) 41 => '12',
		(int) 42 => '16.12.98',
		(int) 43 => 'Thirty Nine',
		(int) 44 => 'two',
		(int) 45 => '39',
		(int) 46 => 'two',
		(int) 47 => '293',
		(int) 48 => '1988]1SCR1124',
		(int) 49 => '345',
		(int) 50 => '1981]3SCR300',
		(int) 51 => '1990(1',
		(int) 52 => '200',
		(int) 53 => '1990(1',
		(int) 54 => 'two',
		(int) 55 => 'two',
		(int) 56 => 'two',
		(int) 57 => 'two',
		(int) 58 => 'one',
		(int) 59 => 'two',
		(int) 60 => '26',
		(int) 61 => '39',
		(int) 62 => 'two',
		(int) 63 => 'two',
		(int) 64 => '38.50',
		(int) 65 => '38.50',
		(int) 66 => '25',
		(int) 67 => '14',
		(int) 68 => '38.50',
		(int) 69 => 'about 78',
		(int) 70 => '78',
		(int) 71 => 'two',
		(int) 72 => 'two',
		(int) 73 => 'two',
		(int) 74 => 'two',
		(int) 75 => 'two',
		(int) 76 => 'two',
		(int) 77 => 'two',
		(int) 78 => 'two',
		(int) 79 => '1990(1',
		(int) 80 => '200',
		(int) 81 => 'two'
	),
	'ORG' => array(
		(int) 0 => 'the Arbitration and Conciliation Act',
		(int) 1 => 'Bank Guarantee No',
		(int) 2 => 'the Bank of India',
		(int) 3 => 'Indiana Conveyors Pvt. Ltd.',
		(int) 4 => 'the Bank of India',
		(int) 5 => 'Bank Guarantee No',
		(int) 6 => 'Reliance Petroleum Ltd.',
		(int) 7 => 'FMC',
		(int) 8 => 'Hon'ble Court',
		(int) 9 => 'Bank Guarantees',
		(int) 10 => 'Bank',
		(int) 11 => 'Messers Modern India Construction Company',
		(int) 12 => 'Reliance Petroleum Ltd.',
		(int) 13 => 'Coke Handling Plant at Janmagar',
		(int) 14 => 'the Slate of Gujarat',
		(int) 15 => 'multi-national Company',
		(int) 16 => 'Turnkey Contract',
		(int) 17 => 'Reliance Petroleum Ltd.',
		(int) 18 => 'Structural Steel',
		(int) 19 => 'Reliance Pelroteum Ltd.',
		(int) 20 => 'the Work Order',
		(int) 21 => 'Bank Guarantee',
		(int) 22 => 'The Work Order',
		(int) 23 => 'Bank',
		(int) 24 => 'the Bank of India',
		(int) 25 => 'MICCO',
		(int) 26 => 'MT',
		(int) 27 => 'MICCO',
		(int) 28 => 'the Security Deposit Bank Guarantee No',
		(int) 29 => 'MICCO',
		(int) 30 => 'Security Deposit Guarantee',
		(int) 31 => 'Bank',
		(int) 32 => 'MICCO',
		(int) 33 => 'MICCO',
		(int) 34 => 'Performance Bank Guarantee',
		(int) 35 => 'MICCO',
		(int) 36 => 'the Bank of India',
		(int) 37 => 'IndiaCalcutta Industrial Finance Brahch5',
		(int) 38 => 'GIS Limited',
		(int) 39 => 'Modern India Construction Co.',
		(int) 40 => 'Advance Bank Guarantee',
		(int) 41 => 'bank Guarantee',
		(int) 42 => 'Purchase',
		(int) 43 => 'Bank Guarantee',
		(int) 44 => 'the Bank Guarantee',
		(int) 45 => 'Indiana Conveyors Ltd.',
		(int) 46 => 'Indiana Conveyors Ltd.',
		(int) 47 => 'Inoperative',
		(int) 48 => 'Bank of India',
		(int) 49 => 'the Supreme Court',
		(int) 50 => 'AIR 1995 SC',
		(int) 51 => 'AIR 1997',
		(int) 52 => 'SC',
		(int) 53 => 'the Bank at the Instance of the petitioner',
		(int) 54 => 'Agreement',
		(int) 55 => 'Various Supreme Court',
		(int) 56 => 'Injunctions',
		(int) 57 => 'the Judgment of the Division Bench',
		(int) 58 => 'Jurisdiction',
		(int) 59 => 'Tribunal',
		(int) 60 => 'Invoke',
		(int) 61 => 'Order',
		(int) 62 => 'xerox'
	),
	'DATE' => array(
		(int) 0 => '1996',
		(int) 1 => '17th December 1997',
		(int) 2 => '17th December, 1997',
		(int) 3 => '12th May, 1908',
		(int) 4 => '1998',
		(int) 5 => '15th June, 1998',
		(int) 6 => ''5',
		(int) 7 => 'one month',
		(int) 8 => 'six months',
		(int) 9 => '19th and 20th August, 1998',
		(int) 10 => '19th and 20th August 1998',
		(int) 11 => '20th August, 1998',
		(int) 12 => '21st August 1998.2',
		(int) 13 => '18th August',
		(int) 14 => '1998',
		(int) 15 => 'Monday',
		(int) 16 => ''98',
		(int) 17 => '10th of September',
		(int) 18 => '24th August, 1998',
		(int) 19 => '24th September, 1998.(v',
		(int) 20 => '10 days',
		(int) 21 => '15 days',
		(int) 22 => 'August '98',
		(int) 23 => 'August 1998',
		(int) 24 => 'November, 1998',
		(int) 25 => '16th December '98',
		(int) 26 => '16th March',
		(int) 27 => '1999',
		(int) 28 => '21st November, 1998',
		(int) 29 => 'Nov. 1998The',
		(int) 30 => '18.03.99',
		(int) 31 => '19lh and 20th August '98',
		(int) 32 => '19th-20th August '98',
		(int) 33 => '19th and 20th August, 1998',
		(int) 34 => '10 days',
		(int) 35 => '15 days',
		(int) 36 => '26th August',
		(int) 37 => '1998',
		(int) 38 => '18th August',
		(int) 39 => '1998',
		(int) 40 => '24th August, 1998',
		(int) 41 => '10th September 1998',
		(int) 42 => '20th August, 1998',
		(int) 43 => 'August 1998',
		(int) 44 => '19th and 20th August',
		(int) 45 => '1998',
		(int) 46 => '12th May 1998',
		(int) 47 => '12th May 1998',
		(int) 48 => '19th/20th August 1998',
		(int) 49 => 'May 1998',
		(int) 50 => '19/20th August 1998'
	),
	'PERSON' => array(
		(int) 0 => 'Invoking',
		(int) 1 => 'Sodepur',
		(int) 2 => 'Coke Handling Plant',
		(int) 3 => 'Schedule',
		(int) 4 => 'B.T.M. Sarant',
		(int) 5 => 'Malik',
		(int) 6 => 'Malik',
		(int) 7 => 'Malik',
		(int) 8 => 'Jayanta Mltra',
		(int) 9 => 'Mltra',
		(int) 10 => 'Bill',
		(int) 11 => 'Invoking',
		(int) 12 => 'Mallick',
		(int) 13 => 'Registrar'
	),
	'FAC' => array(
		(int) 0 => 'the Instance of your petitioner;(b'
	),
	'GPE' => array(
		(int) 0 => 'U.S.',
		(int) 1 => 'Multi',
		(int) 2 => 'the State of West Bengal',
		(int) 3 => 'U.S.',
		(int) 4 => 'Jamnagar',
		(int) 5 => 'Gujarat',
		(int) 6 => 'M.T.',
		(int) 7 => 'M.T.',
		(int) 8 => 'Meetings',
		(int) 9 => 'Indiana',
		(int) 10 => 'Indiana',
		(int) 11 => 'Indiana',
		(int) 12 => 'Indiana',
		(int) 13 => 'Indiana',
		(int) 14 => 'Indiana',
		(int) 15 => 'Indiana',
		(int) 16 => 'Indiana',
		(int) 17 => 'Indiana',
		(int) 18 => 'Indiana',
		(int) 19 => 'Clause',
		(int) 20 => 'Mumbai',
		(int) 21 => 'Meetings'
	),
	'ORDINAL' => array(
		(int) 0 => 'first',
		(int) 1 => 'first',
		(int) 2 => 'first',
		(int) 3 => 'first',
		(int) 4 => '26th',
		(int) 5 => 'first'
	),
	'PERCENT' => array(
		(int) 0 => '15%',
		(int) 1 => '75%',
		(int) 2 => '10%',
		(int) 3 => '10%',
		(int) 4 => '15%',
		(int) 5 => '10%',
		(int) 6 => '15%',
		(int) 7 => '10%',
		(int) 8 => '10%'
	),
	'PRODUCT' => array(
		(int) 0 => 'Calcutta',
		(int) 1 => 'Para-2'
	),
	'WORK_OF_ART' => array(
		(int) 0 => 'Minutes'
	),
	'NORP' => array(
		(int) 0 => 'Items'
	),
	'LOC' => array(
		(int) 0 => 'petitioner.15'
	)
)
$desc = array(
	'Judgement' => array(
		'id' => '862384',
		'acts' => ' <a href="/act/51725/arbitration-and-conciliation-act-1996-complete-act">Arbitration and Conciliation Act, 1996</a> - Section 9',
		'appealno' => 'Ordinary Original Civil Jurisdiction, A.P. Nos. 13 and 14 of 1999',
		'appellant' => 'Gis Ltd.',
		'authreffered' => '',
		'casename' => 'Gis Ltd. Vs. Indiana Conveyors Ltd.',
		'casenote' => ' - ',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => ''To                                                                                21st Nov.  1998

 The Assistant General Manager
 Bank of India
 Calcutta Industrial Finance Brahch
 5, B.T.M. Sarant (Brabourne Road)
 Calcutta 700 001.

 Dear Sir,
     
     Sub:   Advance Bank Guarantee No : G16/87 dated 17-  12-97
            for Rs. 39,00,000/-fssued by you on behalf of GIS Limited,
            Unit: Modern India Construction Co.;                                                                             Yours faithfully,
                                                                             For Indiana Conveyors Ltd.
                                                                             Sd/-Illiglble.
                                                                             Authorised Signatory.'',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Kolkata',
		'court_type' => 'HC',
		'decidedon' => '1999-03-12',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'Vinod Kumar Gupta, J.',
		'judgement' => '<p style="text-align: justify;">The Court</p><p style="text-align: justify;">1. These are two applications under section 9 of the <a href="/act/51725/arbitration-and-conciliation-act-1996-complete-act">Arbitration and Conciliation Act, 1996</a> filed by one of the contracting parties to a contract agreement The petitioner has asked for the following reliefs from the court :</p><p style="text-align: justify;">'(a) Injunction restraining the respondent company. Its agents servants and assigns from Invoking the said Bank Guarantee No. G16/67 dated 17th December 1997 for Rs. 26,00,000/-Issued by the Bank of India in favour of Indiana Conveyors Pvt. Ltd., at the Instance of your petitioner;</p><p style="text-align: justify;">(b) Injunction restraining the respondent company, its servants, agents and assigns from receiving any payment from the Bank of India against the said Bank Guarantee No. G 16/67 dated 17th December, 1997; for Rs. 26,00,000/-;</p><p style="text-align: justify;">(c) Injunction restraining the respondent company, its agents, servantsand assigns to receive any payment from Reliance Petroleum Ltd.,and/or its project partners FMC--a U.S. based Multi-nationalwithout leaving a sum of Rs. 79,61,162.52 p. on account of yourpetitioner to secure its claim;</p><p style="text-align: justify;">(d) Ad interim order in terms of prayers (a), (b) and (c) above;</p><p style="text-align: justify;">(e) Costs of an incidental to this application be paid by the respondent;</p><p style="text-align: justify;">(f) Such further order or orders be passed as this Hon'ble Court may deem fit and proper.'</p><p style="text-align: justify;">2. At first sight, and on first impression this case also appeared to be yet another in the long series of cases coming up in the courts from time to time relating to the restraint orders against the invocation or enacash-ment of unconditional Bank Guarantees executed by a Bank in favour of the beneficiary. After the arguments however have been concluded, I am convinced that this is not one of those usual cases where a party to a contract has come to court seeking a restraint order against the encashment/invocation of the bank guarantees. This case, both on facts as well as in law stands on an entirely different footing. Brief facts first :</p><p style="text-align: justify;">The petitioner claims to be the owner of a unit known as Messers Modern India Construction Company which has its workshop at Sodepur in the State of West Bengal. It claims to carry on the business of fabrication of structural steel material. It appears that Reliance Petroleum Ltd., a company which is not party to the present petition (nor was it required to be so) awarded a turnkey contract work to the respondent for Coke Handling Plant at Janmagar in the Slate of Gujarat which the respondent undertook to execute along with its project partner, a U.S. based multi-national Company. By way of the allotment of a sub-contract in the course of execution of the aforesaid main Turnkey Contract, the respondent wanted the petitioner to carry out the work of fabrication and manufacture of steel structural to be supplied by the petitioner to the respondent for errection/use in the aforesaid Coke Handling Plant of Reliance Petroleum Ltd. at Jamnagar, Gujarat. A Work Order accordingly was issued by the respondent in favour of the petitioner on 12th May, 1908 which was for the supply of Structural Steel, fabrication, sand blasting and painting as per the specifications of Reliance Pelroteum Ltd. Since the Work Order dated I2th May, 1998 constitutes the foundation of the regulating terms and conditions of contract between the parties, it shall be worthwhile and desirable to refer to these terms and conditions in extenso.</p><p style="text-align: justify;">3. The scope of the work has been defined in Clause 1 of the Work Order. It Includes the work of the supply of structural Steel and fabrication as per the fabrication drawings to be given by the respondent to the petitioner. It also Includes the work of sand blasting and painting of structurals as per the technical specifications to be given to the petitioner by the respondents. The quantum of work appproximately has been mentioned at 700 M.T. and in the price column it is mentioned that Rs. 26,000/- per M.T. would be the rate/price charged by the petitioner from the respondents. The delivery period has been mentioned as 15th June, 1998. The clause relating to payment terms, being very Important for our purposes is reproduced verbatim hereinbelow. It reads as under :</p><p style="text-align: justify;">'5. Payment Terms</p><p style="text-align: justify;">(a) 15% of the contract price as Interest free advance on submission of Bank Guarantee of equivalent amount in our proforma valid for six month.</p><p style="text-align: justify;">(b) 75% of the progressive payment on pro-rate basis against despatch documents.</p><p style="text-align: justify;">(c) 10% final payment within one month from completion of total supply on submission of performance bank guarantee of equivalent amount on our proforma valid till warranty period.</p><p style="text-align: justify;">(d) You will also submit 10% valued of the contract price bank guarantee Immediately and before claiming the first advance as security deposit valid till completion of the work.'</p><p style="text-align: justify;">4. The Work Order also Includes an arbitration clause which reads as hereunder :</p><p style="text-align: justify;">'8. Arbitration</p><p style="text-align: justify;">In all cases of disputes which can not be settled by mutual negotiations the matter shall be referred for arbitration in accordance with the provision of Indian Arbitration Act 1940 and rules thereunder to be read together with all statutory amendments and modifications of the work for the said act.</p><p style="text-align: justify;">The venue of such arbitration shall be at Calcutta.'</p><p style="text-align: justify;">5. As will be noticed, 15% of the total contract amount was to be lent as advance by the respondent to the petitioner on Interest free basis on the condition of the petitioner submitting a Bank guarantee of this amount which was to remain valid for six months. The petitioner was also to submit another bank guarantee of an amount equivalent to the value of 10% of the total contract price as security deposit and for due performance till the completion of the contract work. It is the undisputed case of the parties that these two bank guarantees, one for Rs. 39 lacs in respect of an covering the 15% interest free advance, and the other for Rs.26 lacs covering the 10% equivalent value of the contract price for and by way of security deposit and for due performance of contract were in fact executed and furnished by the Bank of India to the respondent at the instance of the petitioner. It appears that during the execution of the contract certain disputes and differences, normal in any such execution of a contract work appeared and cropped up between the parties. It also appears that the parties came around to a negotiated settlement, in their efforts to strive for a compromise and accordingly meetings were held between the parties on 19th and 20th August, 1998 in which such disputes and differences which might have cropped up or might have occurred in the past were settled between the parties amicably, and the terms of such settlement was reduced into writing, as would be apparent from a record of the Minutes of these two meetings. Since such terms of settlement, as were recorded in the Minutes of the two Meetings held on 19th and 20th August 1998 are very relevant for our purposes, it shall be desirable to re-produce the entire document purporting to be a record of such Minutes. The documents reads as under:</p><p style="text-align: justify;">'The following has been agreed by and between M/s. Indiana and GIS/ MICCO:</p><p style="text-align: justify;">As discussed earlier, MICCO has agreed to despatch all the balance of about 78 MT fabricated items against the above orders by 20th August, 1998 on Indiana's transport. If materials for one or two trucks is left over, these will be despatched on 21st August 1998.</p><p style="text-align: justify;">2. Payment Schedule by Indiana :</p><p style="text-align: justify;">(i) As on 18th August, 1998 the outstanding payment from Indiana against above Job is approx. Rs. 38.50 lacs.</p><p style="text-align: justify;">(ii) Indiana confirmed that out of above amount, Rs. 25.0 lacs approx. will be paid to MICCO latest by Monday the 24th Aug '98. The excess amount of advance approx. Rs. 8.50 lacs will be adjusted from the balance amount of Rs. 13.50 lacs, thereby the balance will be approx. Rs. 5.00 lacs.</p><p style="text-align: justify;">(iii) Further bill of approx. Rs. 14.0 lacs have been submitted to Indiana on 19-8-98 & 20-8-98. This amount alongwith balance Rs. 5.0 lacs, total Rs. 19.0 lacs will be paid within 10th of September, 1998.</p><p style="text-align: justify;">(iv) After despatch of the balance materials as mentioned in clause 1 above, the bill to be submitted to Indiana on 24th August, 1998 will be amounting to Rs. 19.0 lacs approx. In two parts i.e. Rs. 16.0 lacs and Rs. 3.0 lacs, Rs. 16.0 lacs to be released by 24th September, 1998.</p><p style="text-align: justify;">(v) The last progress bill of approx. Rs. 3.0 lacs as said above will be submitted to Indiana after reconciliation of the despatched quantities with drawings by both the parties within 10 days from the date of last despatch and Indiana will release the payment and the Security Deposit Bank Guarantee No.G16/68 dated 17-12-97 for Rs. 26.0 lacs and its amendment dated 12-6-98 within 15 days time thereafter. MICCO has agreed to this as a special case although Security Deposit Guarantee has to be released on completion of work/despatches as per terms of the order.</p><p style="text-align: justify;">3. Since all the materials will be delivered by 20th/21st August '98 and after the full advance of Rs. 39.0 lacs getting adjusted as mentioned above, the advance Bank guarantee No. G16/67 dated. 17-12-98 will be returned by Indiana to MICCO latest by 26th August 1998 for cancellation.</p><p style="text-align: justify;">4. The final 10% payment will be released to MICCO by Indiana on submission of Performance Bank Guarantee by MICCO as per provision of the above order.'</p><p style="text-align: justify;">6. It is the case of the petitioner in this petition under section 9 of the Act that despite having agreed to return the two bank guarantees, as would be clear in Clause (v) of Para-2 and Para-3 of the aforesaid Minutes, the respondent did not return the two bank guarantees to the petitioner and Instead, sent a communication dated. 21st November, 1998 to the Bank of India calling upon the bank to either renew the bank guarantee of Rs. 39 lacs upto 16th December '98 with the claim period extended upto 16th March, 1999 or Instead, if the same was not to be done, to treat the aforesaid communication as their claim for the amount of the bank guarantee and to arrange to send the same by a demand draft. The communication dated 21st November, 1998 reads as under :</p><p style="text-align: justify;">'To 21st Nov. 1998The Assistant General ManagerBank of IndiaCalcutta Industrial Finance Brahch5, B.T.M. Sarant (Brabourne Road)Calcutta 700 001.Dear Sir,Sub: Advance Bank Guarantee No : G16/87 dated 17- 12-97for Rs. 39,00,000/-fssued by you on behalf of GIS Limited,Unit: Modern India Construction Co.With reference to the above Advance Bank Guarantee, we hereby request you to arrange for an extension of the above mentioned bank Guarantee upto 16.12.98 with a claim period upto 18.03.99, as the party has not completed the work as per the Purchase Order terms and conditions.</p><p style="text-align: justify;">In case the party is not willing to extend the above Bank Guarantee, please treat this as our claim for the amount of the Bank Guarantee and arrange to send us a Demand Draft in favour of 'Indiana Conveyors Ltd. for Rs. 39,00.000.00 (Rupees Thirty Nine lacs only) payable at Mumbai and oblige.</p><p style="text-align: justify;">Thanking you, Yours faithfully,For Indiana Conveyors Ltd.Sd/-Illiglble.Authorised Signatory.'</p><p style="text-align: justify;">7. With regard to the other bank guarantee also, it is the case of the respondent that it is entitled to invoke the same.</p><p style="text-align: justify;">8. The case of the petitioner in short is that the respondent is liable to return both the bank guarantees to the petitioner because the respondent, in the meetings held on 19lh and 20th August '98 had agreed to do so. Based on the aforesaid agreement of the respondent to return the two bank guarantees, the bank guarantees have become Inoperative and unenforceable. Having agreed to return the bank guarantees, it is not open to the respondent to invoke them since that would be contrary to the express terms of the agreement having been arrived at between the parties on 19th-20th August '98. The further case of the petitioner is that. In any event since the amount of loan of Rs. 39 lacs had already been adjusted in the sale price of the materials supplied by the petitioner to the respondent, and further since the respondent admittedly owed to the petitioner huge sums of money, the bank guarantees had become Irrelevant and it was on the basis of these pending claims of the petitioner and the fact that nothing remained to be paid by the petitioner to the respondent that the respondent had agreed to return the bank guarantees to the petitioner.</p><p style="text-align: justify;">9. Mr. Malik, learned senior Advocate appearing for the respondent objected to the maintainability of this petition and submitted that this court should not pass any order of injunction restraining the invocation/ encashment of the two bank guarantees. Various submissions were made by Mr. Malik with regard to the absence of Bank of India as a party-respondent in this case and the non-maintainability of the petition on that ground. Various Judgments of the Supreme Court were relied upon by both the parties, for and against the proposition about the powers of the court in issuing Interim injuctlon with regard to the encashment/Invocation of the bank guarantees. Notable among these decisions of the apex court are the cases reported in :--</p><p style="text-align: justify;"> : AIR1994SC853 ; : AIR1996SC334 ; AIR 1995 SC 293 : : [1988]1SCR1124 ; AIR 1997 SC 345; : [1981]3SCR300 : : AIR1994SC626 ; : AIR1996SC2268 ; : (1996)5SCC450 and : AIR1997SC2477 .</p><p style="text-align: justify;">10. Mr. Malik also very strongly relied upon a Division Bench Judgment of this court reported in 1990(1) Cal LT 200 to putforth his point that bank guarantee being a separate contract, independent of the original main contract between the parties, any dispute with regard to the invocation or the encashment of the bank guarantees could not form the subject matter of the arbitration agreement existing between the parties and therefore, since the Arbitrator had no Jurisdiction in any dispute relating to the bank guarantees, this court under section 9 of the Act should not exercise its jurisdiction to issue any injunction in respect of any such bank guarantees which formed a separate and independent contract, distinct from original parent contract between the parties.</p><p style="text-align: justify;">11. Mr. Jayanta Mltra, learned senior advocate appearing for the petitioner on the other hand contended that in this particular case neither the Division Bench Judgment of this court reported in 1990(1) Cal LT 200 was applicable nor was this court required to apply any of the guiding factors, as laid down by the apex court from time to time with regard to grant or refusal of Injunctions relating to the encashment/invocation of the bank guarantees. According to Mr. Mltra this case stands on an entirely different footing. In this case the respondent has entered into an agreement with the petitioner whereby he has agreed to return the two bank guarantees which were earlier executed in his favour by the Bank at the Instance of the petitioner, in accordance with the terms and conditions of the Agreement which was originally entered into between the parties.</p><p style="text-align: justify;">12. Various Supreme Court Judgments cited by the learned counsel for the parties undoubtedly have taken a consistent view that the courts should be very slow in granting injunctions against the encashment/ invocation of the bank guarantees. The general view of the apex court clearly points to the principle that in all cases relating to bank guarantees, grant of injunction is only an exception, based on two broad principles, refusal being almost a Rule, The two broad principles, rather two broad parameters which the courts have to consider in favour of granting Injunctions against encashment of bank guarantees relate to the question of fraud and irretrievable injustice, or as some call it special equities.</p><p style="text-align: justify;">13. If one looks to the facts of the present case one will have no hesitation in saying that the case of the petitioner can be said to be covered by both the aforesaid parameters of fraud and Irretrievable injustice, bordering on special equities. When a parry to a contract admittedly has no claim against the other, its act of invoking or encashing a bank guarantee admittedly having been furnished in support of the aforesaid claim may amount topractising fraud against that party in a given set of circumstances and if the party practising fraud is allowed to encash the bank guarantee, the other party does suffer Irretrievable injustice. When the very claim for which or in support whereof the bank guarantee was furnished, has already been satisfied or stands extinguished, that party invoking the bank guarantee surely cannnot be permitted to do so because special equities having in the mean time been created in favour of the other party would Immediately come in the way of the first party in being allowed to encash the bank guarantee. Even though these factors exist, in the present case however we are not strictly concerned with these guiding factors because this case stands on an altogether different footing as the bank guarantees have actually ceased to remain operative. These two guiding factors therefore need not be pressed in aid of the petitioner.</p><p style="text-align: justify;">14. The petitioner's entire case is based on the Minutes of the meetings held on 19th and 20th August, 1998. It clearly transpires from a reference to these Minutes that the respondent has agreed to release/return the bank guarantee of Rs. 26 lacs within 10 days from the date of despatch of the last quantities immediately on the submission of the last progress Bill or within or 15 days time thereafter. With regard to the bank guarantees for Rs. 39 lacs the respondent had agreed that it would be returned by the respondent to the petitioner latest by 26th August, 1998 for cancellation. These two commitments made by the respondent about the return of the two bank guarantees was based on the agreed assertions by the parties that as on 18th August, 1998 the respondent owed to the petitioner, against the petitioner having performed the Job, an amount of Rs. 38.50 lacs and that the respondent having confirmed that out of the aforesaid outstanding amount of Rs. 38.50 lacs, 25 lacs would be paid to the petitioner by the respondent latest by 24th August, 1998. Actually the Minutes also record that a further bill of Rs. 14 lacs, over and above the aforesaid admitted outstanding liability of Rs. 38.50 lacs has already been received by the respondent and that the amount covered by this bill would also be paid by 10th September 1998. In the very opening para of the Minutes, the parties have agreed that the petitioner shall despatch the balance of about 78 MTs. of fabricated Items latest by 20th August, 1998. When the parties talked of the balance of 78 Mts.. and when the parties were clear about the past liabilities and the mode and manner of clearing them, there was no doubt that the materials received by the respondent prior to 19th/20th August 1998 had been realised by them and that no outstanding unsettled dispute remained to be sorted out. It was in this background that the respondent had agreed to return the two bank guarantees to the petitioner.</p><p style="text-align: justify;">15. The agreement arrived at between the parties, as reflected in the Minutes of the Meetings held on 19th and 20th August. 1998 is supplemental to the agreement (Work Order dated 12th May 1998). It is an extension of the same primary, parent agreement. If in the primary/parent/ main agreement of 12th May 1998 there was a provision whereby the petitioner was to furnish two bank guarantees, in the supplemental agreement arrived at in the meeting held on 19th/20th August 1998 the respondent had agreed to return these two bank guarantees, their purpose admittedly having been served. The return of the two bank guarantees therefore and the refusal on the part of the respondent not to do so is adispute having arisen between the parties to the agreement dated 12th May 1998. Whether the respondent is under a contractual obligation to return the two bank guarantees to the petitioner, as it undertook to do in the agreement arrived at in the meetings held on 19/20th August 1998 and, whether the petitioner is entitled to ask the respondent to return these two bank guarantees to It, and in the meanwhile not to take any action which would amount to Invoking or encashing the bank guarantees, or disputes squarely covered by the arbitration agreement between these two parties. These are not the disputes in the traditional sense relating to the encashment/invocation of the two bank guarantees. These disputes have noting to do whatsoever with the terms and conditions of the bank guarantee. In that view of the matter therefore neither the bank has anything to do with the matter nor is the Judgment of the Division Bench of this court in 1990(1) Cal LT 200 is applicable to the facts of the case.</p><p style="text-align: justify;">16. If the arbitrator has to decide the dispute with regard to the respondent's obligation to return the bank guarantees, this court cannot remain oblivious or shirk its responsibility of looking to the prlma facie nature of the petitioner's case to find out whether the merits of the case warrant the grant of any interim Injunction under section 9 of the Act or not.</p><p style="text-align: justify;">17. From what I have narrated the inescapable conclusion which emerges is that the petitioner has a strong prima facie case in its favour and that the situation warrants that this court should, while exercising its Jurisdiction under section 9 of the Act restrain the respondent from invoking/encashing the aforesaid bank guarantees, to enable the parties to have the adjudication of this dispute through arbitration.</p><p style="text-align: justify;">18. The petitions accordingly are allowed. It is directed that pending the adjudication of disputes by arbitration and until the award is finally passed by the arbitral Tribunal, the respondent shall not Invoke/encash the two bank guarantees in question.</p><p style="text-align: justify;">No order as to costs.</p><p style="text-align: justify;">Later : After the Judgment was pronounced, Mr. Mallick appearing for the respondent made an oral prayer for staying the operation of this Order. On consideration the prayer is rejected.</p><p style="text-align: justify;">Let a xerox singed copy of this Judgment be given to the parties, duly countersigned by the Assistant Registrar of this court, upon their undertaking to apply for and obtain certified copy of the same upon usual undertaking.</p><p style="text-align: justify;">19. Petitions allowed<p style="text-align: justify;"></p><p style="text-align: justify;">',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => '(1999)2CALLT78(HC)',
		'ratiodecidendi' => '',
		'respondent' => 'Indiana Conveyors Ltd.',
		'sub' => 'Arbitration',
		'link' => null,
		'circuit' => null
	)
)
$args = array(
	(int) 0 => '862384'
)
$pattern = '/\(((0[1-9]|[12][0-9]|3[01])[.](0[1-9]|1[012])[.](17|18|19|20)[0-9]{2}).*\)/'
include - APP/View/Case/meta.ctp, line 36
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::render() - CORE/Cake/View/View.php, line 473
Controller::render() - CORE/Cake/Controller/Controller.php, line 963
Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200
Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167
[main] - APP/webroot/index.php, line 109

Warning (2): Invalid argument supplied for foreach() [APP/View/Case/meta.ctp, line 39]
Code Context
//$shops = $shops['entities'];

foreach ($shops2 as $key => $val) {
$viewFile = '/home/legalcrystal/app/View/Case/meta.ctp'
$dataForView = array(
	'title_for_layout' => 'Gis Ltd. Vs. Indiana Conveyors Ltd. Semantic Analysis',
	'shops' => array(
		'LAW' => array(
			(int) 0 => 'section 9',
			(int) 1 => 'Indian Arbitration Act',
			(int) 2 => 'section 9',
			(int) 3 => 'section 9',
			(int) 4 => 'section 9',
			(int) 5 => 'section 9'
		),
		'CARDINAL' => array(
			(int) 0 => 'two',
			(int) 1 => 'one',
			(int) 2 => '26,00,000/-Issued',
			(int) 3 => '16/67',
			(int) 4 => '700',
			(int) 5 => '26,000/-',
			(int) 6 => 'six',
			(int) 7 => '8',
			(int) 8 => 'two',
			(int) 9 => '39',
			(int) 10 => 'two',
			(int) 11 => 'two',
			(int) 12 => 'about 78',
			(int) 13 => 'one',
			(int) 14 => 'two',
			(int) 15 => '38.50',
			(int) 16 => '25.0',
			(int) 17 => '8.50',
			(int) 18 => '13.50',
			(int) 19 => '5.00',
			(int) 20 => '14.0',
			(int) 21 => '19-8-98',
			(int) 22 => '5.0',
			(int) 23 => '19.0',
			(int) 24 => '1998.(iv',
			(int) 25 => '1',
			(int) 26 => '19.0',
			(int) 27 => 'two',
			(int) 28 => '16.0',
			(int) 29 => '3.0',
			(int) 30 => '16.0',
			(int) 31 => '3.0',
			(int) 32 => '17',
			(int) 33 => '26.0',
			(int) 34 => '12-6',
			(int) 35 => '20th/21st',
			(int) 36 => '39.0',
			(int) 37 => '17-12-98',
			(int) 38 => 'two',
			(int) 39 => 'two',
			(int) 40 => '39',
			(int) 41 => '12',
			(int) 42 => '16.12.98',
			(int) 43 => 'Thirty Nine',
			(int) 44 => 'two',
			(int) 45 => '39',
			(int) 46 => 'two',
			(int) 47 => '293',
			(int) 48 => '1988]1SCR1124',
			(int) 49 => '345',
			(int) 50 => '1981]3SCR300',
			(int) 51 => '1990(1',
			(int) 52 => '200',
			(int) 53 => '1990(1',
			(int) 54 => 'two',
			(int) 55 => 'two',
			(int) 56 => 'two',
			(int) 57 => 'two',
			(int) 58 => 'one',
			(int) 59 => 'two',
			(int) 60 => '26',
			(int) 61 => '39',
			(int) 62 => 'two',
			(int) 63 => 'two',
			(int) 64 => '38.50',
			(int) 65 => '38.50',
			(int) 66 => '25',
			(int) 67 => '14',
			(int) 68 => '38.50',
			(int) 69 => 'about 78',
			(int) 70 => '78',
			(int) 71 => 'two',
			(int) 72 => 'two',
			(int) 73 => 'two',
			(int) 74 => 'two',
			(int) 75 => 'two',
			(int) 76 => 'two',
			(int) 77 => 'two',
			(int) 78 => 'two',
			(int) 79 => '1990(1',
			(int) 80 => '200',
			(int) 81 => 'two'
		),
		'ORG' => array(
			(int) 0 => 'the Arbitration and Conciliation Act',
			(int) 1 => 'Bank Guarantee No',
			(int) 2 => 'the Bank of India',
			(int) 3 => 'Indiana Conveyors Pvt. Ltd.',
			(int) 4 => 'the Bank of India',
			(int) 5 => 'Bank Guarantee No',
			(int) 6 => 'Reliance Petroleum Ltd.',
			(int) 7 => 'FMC',
			(int) 8 => 'Hon'ble Court',
			(int) 9 => 'Bank Guarantees',
			(int) 10 => 'Bank',
			(int) 11 => 'Messers Modern India Construction Company',
			(int) 12 => 'Reliance Petroleum Ltd.',
			(int) 13 => 'Coke Handling Plant at Janmagar',
			(int) 14 => 'the Slate of Gujarat',
			(int) 15 => 'multi-national Company',
			(int) 16 => 'Turnkey Contract',
			(int) 17 => 'Reliance Petroleum Ltd.',
			(int) 18 => 'Structural Steel',
			(int) 19 => 'Reliance Pelroteum Ltd.',
			(int) 20 => 'the Work Order',
			(int) 21 => 'Bank Guarantee',
			(int) 22 => 'The Work Order',
			(int) 23 => 'Bank',
			(int) 24 => 'the Bank of India',
			(int) 25 => 'MICCO',
			(int) 26 => 'MT',
			(int) 27 => 'MICCO',
			(int) 28 => 'the Security Deposit Bank Guarantee No',
			(int) 29 => 'MICCO',
			(int) 30 => 'Security Deposit Guarantee',
			(int) 31 => 'Bank',
			(int) 32 => 'MICCO',
			(int) 33 => 'MICCO',
			(int) 34 => 'Performance Bank Guarantee',
			(int) 35 => 'MICCO',
			(int) 36 => 'the Bank of India',
			(int) 37 => 'IndiaCalcutta Industrial Finance Brahch5',
			(int) 38 => 'GIS Limited',
			(int) 39 => 'Modern India Construction Co.',
			(int) 40 => 'Advance Bank Guarantee',
			(int) 41 => 'bank Guarantee',
			(int) 42 => 'Purchase',
			(int) 43 => 'Bank Guarantee',
			(int) 44 => 'the Bank Guarantee',
			(int) 45 => 'Indiana Conveyors Ltd.',
			(int) 46 => 'Indiana Conveyors Ltd.',
			(int) 47 => 'Inoperative',
			(int) 48 => 'Bank of India',
			(int) 49 => 'the Supreme Court',
			(int) 50 => 'AIR 1995 SC',
			(int) 51 => 'AIR 1997',
			(int) 52 => 'SC',
			(int) 53 => 'the Bank at the Instance of the petitioner',
			(int) 54 => 'Agreement',
			(int) 55 => 'Various Supreme Court',
			(int) 56 => 'Injunctions',
			(int) 57 => 'the Judgment of the Division Bench',
			(int) 58 => 'Jurisdiction',
			(int) 59 => 'Tribunal',
			(int) 60 => 'Invoke',
			(int) 61 => 'Order',
			(int) 62 => 'xerox'
		),
		'DATE' => array(
			(int) 0 => '1996',
			(int) 1 => '17th December 1997',
			(int) 2 => '17th December, 1997',
			(int) 3 => '12th May, 1908',
			(int) 4 => '1998',
			(int) 5 => '15th June, 1998',
			(int) 6 => ''5',
			(int) 7 => 'one month',
			(int) 8 => 'six months',
			(int) 9 => '19th and 20th August, 1998',
			(int) 10 => '19th and 20th August 1998',
			(int) 11 => '20th August, 1998',
			(int) 12 => '21st August 1998.2',
			(int) 13 => '18th August',
			(int) 14 => '1998',
			(int) 15 => 'Monday',
			(int) 16 => ''98',
			(int) 17 => '10th of September',
			(int) 18 => '24th August, 1998',
			(int) 19 => '24th September, 1998.(v',
			(int) 20 => '10 days',
			(int) 21 => '15 days',
			(int) 22 => 'August '98',
			(int) 23 => 'August 1998',
			(int) 24 => 'November, 1998',
			(int) 25 => '16th December '98',
			(int) 26 => '16th March',
			(int) 27 => '1999',
			(int) 28 => '21st November, 1998',
			(int) 29 => 'Nov. 1998The',
			(int) 30 => '18.03.99',
			(int) 31 => '19lh and 20th August '98',
			(int) 32 => '19th-20th August '98',
			(int) 33 => '19th and 20th August, 1998',
			(int) 34 => '10 days',
			(int) 35 => '15 days',
			(int) 36 => '26th August',
			(int) 37 => '1998',
			(int) 38 => '18th August',
			(int) 39 => '1998',
			(int) 40 => '24th August, 1998',
			(int) 41 => '10th September 1998',
			(int) 42 => '20th August, 1998',
			(int) 43 => 'August 1998',
			(int) 44 => '19th and 20th August',
			(int) 45 => '1998',
			(int) 46 => '12th May 1998',
			(int) 47 => '12th May 1998',
			(int) 48 => '19th/20th August 1998',
			(int) 49 => 'May 1998',
			(int) 50 => '19/20th August 1998'
		),
		'PERSON' => array(
			(int) 0 => 'Invoking',
			(int) 1 => 'Sodepur',
			(int) 2 => 'Coke Handling Plant',
			(int) 3 => 'Schedule',
			(int) 4 => 'B.T.M. Sarant',
			(int) 5 => 'Malik',
			(int) 6 => 'Malik',
			(int) 7 => 'Malik',
			(int) 8 => 'Jayanta Mltra',
			(int) 9 => 'Mltra',
			(int) 10 => 'Bill',
			(int) 11 => 'Invoking',
			(int) 12 => 'Mallick',
			(int) 13 => 'Registrar'
		),
		'FAC' => array(
			(int) 0 => 'the Instance of your petitioner;(b'
		),
		'GPE' => array(
			(int) 0 => 'U.S.',
			(int) 1 => 'Multi',
			(int) 2 => 'the State of West Bengal',
			(int) 3 => 'U.S.',
			(int) 4 => 'Jamnagar',
			(int) 5 => 'Gujarat',
			(int) 6 => 'M.T.',
			(int) 7 => 'M.T.',
			(int) 8 => 'Meetings',
			(int) 9 => 'Indiana',
			(int) 10 => 'Indiana',
			(int) 11 => 'Indiana',
			(int) 12 => 'Indiana',
			(int) 13 => 'Indiana',
			(int) 14 => 'Indiana',
			(int) 15 => 'Indiana',
			(int) 16 => 'Indiana',
			(int) 17 => 'Indiana',
			(int) 18 => 'Indiana',
			(int) 19 => 'Clause',
			(int) 20 => 'Mumbai',
			(int) 21 => 'Meetings'
		),
		'ORDINAL' => array(
			(int) 0 => 'first',
			(int) 1 => 'first',
			(int) 2 => 'first',
			(int) 3 => 'first',
			(int) 4 => '26th',
			(int) 5 => 'first'
		),
		'PERCENT' => array(
			(int) 0 => '15%',
			(int) 1 => '75%',
			(int) 2 => '10%',
			(int) 3 => '10%',
			(int) 4 => '15%',
			(int) 5 => '10%',
			(int) 6 => '15%',
			(int) 7 => '10%',
			(int) 8 => '10%'
		),
		'PRODUCT' => array(
			(int) 0 => 'Calcutta',
			(int) 1 => 'Para-2'
		),
		'WORK_OF_ART' => array(
			(int) 0 => 'Minutes'
		),
		'NORP' => array(
			(int) 0 => 'Items'
		),
		'LOC' => array(
			(int) 0 => 'petitioner.15'
		)
	),
	'desc' => array(
		'Judgement' => array(
			'id' => '862384',
			'acts' => ' <a href="/act/51725/arbitration-and-conciliation-act-1996-complete-act">Arbitration and Conciliation Act, 1996</a> - Section 9',
			'appealno' => 'Ordinary Original Civil Jurisdiction, A.P. Nos. 13 and 14 of 1999',
			'appellant' => 'Gis Ltd.',
			'authreffered' => '',
			'casename' => 'Gis Ltd. Vs. Indiana Conveyors Ltd.',
			'casenote' => ' - ',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => ''To                                                                                21st Nov.  1998

 The Assistant General Manager
 Bank of India
 Calcutta Industrial Finance Brahch
 5, B.T.M. Sarant (Brabourne Road)
 Calcutta 700 001.

 Dear Sir,
     
     Sub:   Advance Bank Guarantee No : G16/87 dated 17-  12-97
            for Rs. 39,00,000/-fssued by you on behalf of GIS Limited,
            Unit: Modern India Construction Co.;                                                                             Yours faithfully,
                                                                             For Indiana Conveyors Ltd.
                                                                             Sd/-Illiglble.
                                                                             Authorised Signatory.'',
			'counselplain' => '',
			'counseldef' => '',
			'court' => 'Kolkata',
			'court_type' => 'HC',
			'decidedon' => '1999-03-12',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => 'Vinod Kumar Gupta, J.',
			'judgement' => '<p style="text-align: justify;">The Court</p><p style="text-align: justify;">1. These are two applications under section 9 of the <a href="/act/51725/arbitration-and-conciliation-act-1996-complete-act">Arbitration and Conciliation Act, 1996</a> filed by one of the contracting parties to a contract agreement The petitioner has asked for the following reliefs from the court :</p><p style="text-align: justify;">'(a) Injunction restraining the respondent company. Its agents servants and assigns from Invoking the said Bank Guarantee No. G16/67 dated 17th December 1997 for Rs. 26,00,000/-Issued by the Bank of India in favour of Indiana Conveyors Pvt. Ltd., at the Instance of your petitioner;</p><p style="text-align: justify;">(b) Injunction restraining the respondent company, its servants, agents and assigns from receiving any payment from the Bank of India against the said Bank Guarantee No. G 16/67 dated 17th December, 1997; for Rs. 26,00,000/-;</p><p style="text-align: justify;">(c) Injunction restraining the respondent company, its agents, servantsand assigns to receive any payment from Reliance Petroleum Ltd.,and/or its project partners FMC--a U.S. based Multi-nationalwithout leaving a sum of Rs. 79,61,162.52 p. on account of yourpetitioner to secure its claim;</p><p style="text-align: justify;">(d) Ad interim order in terms of prayers (a), (b) and (c) above;</p><p style="text-align: justify;">(e) Costs of an incidental to this application be paid by the respondent;</p><p style="text-align: justify;">(f) Such further order or orders be passed as this Hon'ble Court may deem fit and proper.'</p><p style="text-align: justify;">2. At first sight, and on first impression this case also appeared to be yet another in the long series of cases coming up in the courts from time to time relating to the restraint orders against the invocation or enacash-ment of unconditional Bank Guarantees executed by a Bank in favour of the beneficiary. After the arguments however have been concluded, I am convinced that this is not one of those usual cases where a party to a contract has come to court seeking a restraint order against the encashment/invocation of the bank guarantees. This case, both on facts as well as in law stands on an entirely different footing. Brief facts first :</p><p style="text-align: justify;">The petitioner claims to be the owner of a unit known as Messers Modern India Construction Company which has its workshop at Sodepur in the State of West Bengal. It claims to carry on the business of fabrication of structural steel material. It appears that Reliance Petroleum Ltd., a company which is not party to the present petition (nor was it required to be so) awarded a turnkey contract work to the respondent for Coke Handling Plant at Janmagar in the Slate of Gujarat which the respondent undertook to execute along with its project partner, a U.S. based multi-national Company. By way of the allotment of a sub-contract in the course of execution of the aforesaid main Turnkey Contract, the respondent wanted the petitioner to carry out the work of fabrication and manufacture of steel structural to be supplied by the petitioner to the respondent for errection/use in the aforesaid Coke Handling Plant of Reliance Petroleum Ltd. at Jamnagar, Gujarat. A Work Order accordingly was issued by the respondent in favour of the petitioner on 12th May, 1908 which was for the supply of Structural Steel, fabrication, sand blasting and painting as per the specifications of Reliance Pelroteum Ltd. Since the Work Order dated I2th May, 1998 constitutes the foundation of the regulating terms and conditions of contract between the parties, it shall be worthwhile and desirable to refer to these terms and conditions in extenso.</p><p style="text-align: justify;">3. The scope of the work has been defined in Clause 1 of the Work Order. It Includes the work of the supply of structural Steel and fabrication as per the fabrication drawings to be given by the respondent to the petitioner. It also Includes the work of sand blasting and painting of structurals as per the technical specifications to be given to the petitioner by the respondents. The quantum of work appproximately has been mentioned at 700 M.T. and in the price column it is mentioned that Rs. 26,000/- per M.T. would be the rate/price charged by the petitioner from the respondents. The delivery period has been mentioned as 15th June, 1998. The clause relating to payment terms, being very Important for our purposes is reproduced verbatim hereinbelow. It reads as under :</p><p style="text-align: justify;">'5. Payment Terms</p><p style="text-align: justify;">(a) 15% of the contract price as Interest free advance on submission of Bank Guarantee of equivalent amount in our proforma valid for six month.</p><p style="text-align: justify;">(b) 75% of the progressive payment on pro-rate basis against despatch documents.</p><p style="text-align: justify;">(c) 10% final payment within one month from completion of total supply on submission of performance bank guarantee of equivalent amount on our proforma valid till warranty period.</p><p style="text-align: justify;">(d) You will also submit 10% valued of the contract price bank guarantee Immediately and before claiming the first advance as security deposit valid till completion of the work.'</p><p style="text-align: justify;">4. The Work Order also Includes an arbitration clause which reads as hereunder :</p><p style="text-align: justify;">'8. Arbitration</p><p style="text-align: justify;">In all cases of disputes which can not be settled by mutual negotiations the matter shall be referred for arbitration in accordance with the provision of Indian Arbitration Act 1940 and rules thereunder to be read together with all statutory amendments and modifications of the work for the said act.</p><p style="text-align: justify;">The venue of such arbitration shall be at Calcutta.'</p><p style="text-align: justify;">5. As will be noticed, 15% of the total contract amount was to be lent as advance by the respondent to the petitioner on Interest free basis on the condition of the petitioner submitting a Bank guarantee of this amount which was to remain valid for six months. The petitioner was also to submit another bank guarantee of an amount equivalent to the value of 10% of the total contract price as security deposit and for due performance till the completion of the contract work. It is the undisputed case of the parties that these two bank guarantees, one for Rs. 39 lacs in respect of an covering the 15% interest free advance, and the other for Rs.26 lacs covering the 10% equivalent value of the contract price for and by way of security deposit and for due performance of contract were in fact executed and furnished by the Bank of India to the respondent at the instance of the petitioner. It appears that during the execution of the contract certain disputes and differences, normal in any such execution of a contract work appeared and cropped up between the parties. It also appears that the parties came around to a negotiated settlement, in their efforts to strive for a compromise and accordingly meetings were held between the parties on 19th and 20th August, 1998 in which such disputes and differences which might have cropped up or might have occurred in the past were settled between the parties amicably, and the terms of such settlement was reduced into writing, as would be apparent from a record of the Minutes of these two meetings. Since such terms of settlement, as were recorded in the Minutes of the two Meetings held on 19th and 20th August 1998 are very relevant for our purposes, it shall be desirable to re-produce the entire document purporting to be a record of such Minutes. The documents reads as under:</p><p style="text-align: justify;">'The following has been agreed by and between M/s. Indiana and GIS/ MICCO:</p><p style="text-align: justify;">As discussed earlier, MICCO has agreed to despatch all the balance of about 78 MT fabricated items against the above orders by 20th August, 1998 on Indiana's transport. If materials for one or two trucks is left over, these will be despatched on 21st August 1998.</p><p style="text-align: justify;">2. Payment Schedule by Indiana :</p><p style="text-align: justify;">(i) As on 18th August, 1998 the outstanding payment from Indiana against above Job is approx. Rs. 38.50 lacs.</p><p style="text-align: justify;">(ii) Indiana confirmed that out of above amount, Rs. 25.0 lacs approx. will be paid to MICCO latest by Monday the 24th Aug '98. The excess amount of advance approx. Rs. 8.50 lacs will be adjusted from the balance amount of Rs. 13.50 lacs, thereby the balance will be approx. Rs. 5.00 lacs.</p><p style="text-align: justify;">(iii) Further bill of approx. Rs. 14.0 lacs have been submitted to Indiana on 19-8-98 & 20-8-98. This amount alongwith balance Rs. 5.0 lacs, total Rs. 19.0 lacs will be paid within 10th of September, 1998.</p><p style="text-align: justify;">(iv) After despatch of the balance materials as mentioned in clause 1 above, the bill to be submitted to Indiana on 24th August, 1998 will be amounting to Rs. 19.0 lacs approx. In two parts i.e. Rs. 16.0 lacs and Rs. 3.0 lacs, Rs. 16.0 lacs to be released by 24th September, 1998.</p><p style="text-align: justify;">(v) The last progress bill of approx. Rs. 3.0 lacs as said above will be submitted to Indiana after reconciliation of the despatched quantities with drawings by both the parties within 10 days from the date of last despatch and Indiana will release the payment and the Security Deposit Bank Guarantee No.G16/68 dated 17-12-97 for Rs. 26.0 lacs and its amendment dated 12-6-98 within 15 days time thereafter. MICCO has agreed to this as a special case although Security Deposit Guarantee has to be released on completion of work/despatches as per terms of the order.</p><p style="text-align: justify;">3. Since all the materials will be delivered by 20th/21st August '98 and after the full advance of Rs. 39.0 lacs getting adjusted as mentioned above, the advance Bank guarantee No. G16/67 dated. 17-12-98 will be returned by Indiana to MICCO latest by 26th August 1998 for cancellation.</p><p style="text-align: justify;">4. The final 10% payment will be released to MICCO by Indiana on submission of Performance Bank Guarantee by MICCO as per provision of the above order.'</p><p style="text-align: justify;">6. It is the case of the petitioner in this petition under section 9 of the Act that despite having agreed to return the two bank guarantees, as would be clear in Clause (v) of Para-2 and Para-3 of the aforesaid Minutes, the respondent did not return the two bank guarantees to the petitioner and Instead, sent a communication dated. 21st November, 1998 to the Bank of India calling upon the bank to either renew the bank guarantee of Rs. 39 lacs upto 16th December '98 with the claim period extended upto 16th March, 1999 or Instead, if the same was not to be done, to treat the aforesaid communication as their claim for the amount of the bank guarantee and to arrange to send the same by a demand draft. The communication dated 21st November, 1998 reads as under :</p><p style="text-align: justify;">'To 21st Nov. 1998The Assistant General ManagerBank of IndiaCalcutta Industrial Finance Brahch5, B.T.M. Sarant (Brabourne Road)Calcutta 700 001.Dear Sir,Sub: Advance Bank Guarantee No : G16/87 dated 17- 12-97for Rs. 39,00,000/-fssued by you on behalf of GIS Limited,Unit: Modern India Construction Co.With reference to the above Advance Bank Guarantee, we hereby request you to arrange for an extension of the above mentioned bank Guarantee upto 16.12.98 with a claim period upto 18.03.99, as the party has not completed the work as per the Purchase Order terms and conditions.</p><p style="text-align: justify;">In case the party is not willing to extend the above Bank Guarantee, please treat this as our claim for the amount of the Bank Guarantee and arrange to send us a Demand Draft in favour of 'Indiana Conveyors Ltd. for Rs. 39,00.000.00 (Rupees Thirty Nine lacs only) payable at Mumbai and oblige.</p><p style="text-align: justify;">Thanking you, Yours faithfully,For Indiana Conveyors Ltd.Sd/-Illiglble.Authorised Signatory.'</p><p style="text-align: justify;">7. With regard to the other bank guarantee also, it is the case of the respondent that it is entitled to invoke the same.</p><p style="text-align: justify;">8. The case of the petitioner in short is that the respondent is liable to return both the bank guarantees to the petitioner because the respondent, in the meetings held on 19lh and 20th August '98 had agreed to do so. Based on the aforesaid agreement of the respondent to return the two bank guarantees, the bank guarantees have become Inoperative and unenforceable. Having agreed to return the bank guarantees, it is not open to the respondent to invoke them since that would be contrary to the express terms of the agreement having been arrived at between the parties on 19th-20th August '98. The further case of the petitioner is that. In any event since the amount of loan of Rs. 39 lacs had already been adjusted in the sale price of the materials supplied by the petitioner to the respondent, and further since the respondent admittedly owed to the petitioner huge sums of money, the bank guarantees had become Irrelevant and it was on the basis of these pending claims of the petitioner and the fact that nothing remained to be paid by the petitioner to the respondent that the respondent had agreed to return the bank guarantees to the petitioner.</p><p style="text-align: justify;">9. Mr. Malik, learned senior Advocate appearing for the respondent objected to the maintainability of this petition and submitted that this court should not pass any order of injunction restraining the invocation/ encashment of the two bank guarantees. Various submissions were made by Mr. Malik with regard to the absence of Bank of India as a party-respondent in this case and the non-maintainability of the petition on that ground. Various Judgments of the Supreme Court were relied upon by both the parties, for and against the proposition about the powers of the court in issuing Interim injuctlon with regard to the encashment/Invocation of the bank guarantees. Notable among these decisions of the apex court are the cases reported in :--</p><p style="text-align: justify;"> : AIR1994SC853 ; : AIR1996SC334 ; AIR 1995 SC 293 : : [1988]1SCR1124 ; AIR 1997 SC 345; : [1981]3SCR300 : : AIR1994SC626 ; : AIR1996SC2268 ; : (1996)5SCC450 and : AIR1997SC2477 .</p><p style="text-align: justify;">10. Mr. Malik also very strongly relied upon a Division Bench Judgment of this court reported in 1990(1) Cal LT 200 to putforth his point that bank guarantee being a separate contract, independent of the original main contract between the parties, any dispute with regard to the invocation or the encashment of the bank guarantees could not form the subject matter of the arbitration agreement existing between the parties and therefore, since the Arbitrator had no Jurisdiction in any dispute relating to the bank guarantees, this court under section 9 of the Act should not exercise its jurisdiction to issue any injunction in respect of any such bank guarantees which formed a separate and independent contract, distinct from original parent contract between the parties.</p><p style="text-align: justify;">11. Mr. Jayanta Mltra, learned senior advocate appearing for the petitioner on the other hand contended that in this particular case neither the Division Bench Judgment of this court reported in 1990(1) Cal LT 200 was applicable nor was this court required to apply any of the guiding factors, as laid down by the apex court from time to time with regard to grant or refusal of Injunctions relating to the encashment/invocation of the bank guarantees. According to Mr. Mltra this case stands on an entirely different footing. In this case the respondent has entered into an agreement with the petitioner whereby he has agreed to return the two bank guarantees which were earlier executed in his favour by the Bank at the Instance of the petitioner, in accordance with the terms and conditions of the Agreement which was originally entered into between the parties.</p><p style="text-align: justify;">12. Various Supreme Court Judgments cited by the learned counsel for the parties undoubtedly have taken a consistent view that the courts should be very slow in granting injunctions against the encashment/ invocation of the bank guarantees. The general view of the apex court clearly points to the principle that in all cases relating to bank guarantees, grant of injunction is only an exception, based on two broad principles, refusal being almost a Rule, The two broad principles, rather two broad parameters which the courts have to consider in favour of granting Injunctions against encashment of bank guarantees relate to the question of fraud and irretrievable injustice, or as some call it special equities.</p><p style="text-align: justify;">13. If one looks to the facts of the present case one will have no hesitation in saying that the case of the petitioner can be said to be covered by both the aforesaid parameters of fraud and Irretrievable injustice, bordering on special equities. When a parry to a contract admittedly has no claim against the other, its act of invoking or encashing a bank guarantee admittedly having been furnished in support of the aforesaid claim may amount topractising fraud against that party in a given set of circumstances and if the party practising fraud is allowed to encash the bank guarantee, the other party does suffer Irretrievable injustice. When the very claim for which or in support whereof the bank guarantee was furnished, has already been satisfied or stands extinguished, that party invoking the bank guarantee surely cannnot be permitted to do so because special equities having in the mean time been created in favour of the other party would Immediately come in the way of the first party in being allowed to encash the bank guarantee. Even though these factors exist, in the present case however we are not strictly concerned with these guiding factors because this case stands on an altogether different footing as the bank guarantees have actually ceased to remain operative. These two guiding factors therefore need not be pressed in aid of the petitioner.</p><p style="text-align: justify;">14. The petitioner's entire case is based on the Minutes of the meetings held on 19th and 20th August, 1998. It clearly transpires from a reference to these Minutes that the respondent has agreed to release/return the bank guarantee of Rs. 26 lacs within 10 days from the date of despatch of the last quantities immediately on the submission of the last progress Bill or within or 15 days time thereafter. With regard to the bank guarantees for Rs. 39 lacs the respondent had agreed that it would be returned by the respondent to the petitioner latest by 26th August, 1998 for cancellation. These two commitments made by the respondent about the return of the two bank guarantees was based on the agreed assertions by the parties that as on 18th August, 1998 the respondent owed to the petitioner, against the petitioner having performed the Job, an amount of Rs. 38.50 lacs and that the respondent having confirmed that out of the aforesaid outstanding amount of Rs. 38.50 lacs, 25 lacs would be paid to the petitioner by the respondent latest by 24th August, 1998. Actually the Minutes also record that a further bill of Rs. 14 lacs, over and above the aforesaid admitted outstanding liability of Rs. 38.50 lacs has already been received by the respondent and that the amount covered by this bill would also be paid by 10th September 1998. In the very opening para of the Minutes, the parties have agreed that the petitioner shall despatch the balance of about 78 MTs. of fabricated Items latest by 20th August, 1998. When the parties talked of the balance of 78 Mts.. and when the parties were clear about the past liabilities and the mode and manner of clearing them, there was no doubt that the materials received by the respondent prior to 19th/20th August 1998 had been realised by them and that no outstanding unsettled dispute remained to be sorted out. It was in this background that the respondent had agreed to return the two bank guarantees to the petitioner.</p><p style="text-align: justify;">15. The agreement arrived at between the parties, as reflected in the Minutes of the Meetings held on 19th and 20th August. 1998 is supplemental to the agreement (Work Order dated 12th May 1998). It is an extension of the same primary, parent agreement. If in the primary/parent/ main agreement of 12th May 1998 there was a provision whereby the petitioner was to furnish two bank guarantees, in the supplemental agreement arrived at in the meeting held on 19th/20th August 1998 the respondent had agreed to return these two bank guarantees, their purpose admittedly having been served. The return of the two bank guarantees therefore and the refusal on the part of the respondent not to do so is adispute having arisen between the parties to the agreement dated 12th May 1998. Whether the respondent is under a contractual obligation to return the two bank guarantees to the petitioner, as it undertook to do in the agreement arrived at in the meetings held on 19/20th August 1998 and, whether the petitioner is entitled to ask the respondent to return these two bank guarantees to It, and in the meanwhile not to take any action which would amount to Invoking or encashing the bank guarantees, or disputes squarely covered by the arbitration agreement between these two parties. These are not the disputes in the traditional sense relating to the encashment/invocation of the two bank guarantees. These disputes have noting to do whatsoever with the terms and conditions of the bank guarantee. In that view of the matter therefore neither the bank has anything to do with the matter nor is the Judgment of the Division Bench of this court in 1990(1) Cal LT 200 is applicable to the facts of the case.</p><p style="text-align: justify;">16. If the arbitrator has to decide the dispute with regard to the respondent's obligation to return the bank guarantees, this court cannot remain oblivious or shirk its responsibility of looking to the prlma facie nature of the petitioner's case to find out whether the merits of the case warrant the grant of any interim Injunction under section 9 of the Act or not.</p><p style="text-align: justify;">17. From what I have narrated the inescapable conclusion which emerges is that the petitioner has a strong prima facie case in its favour and that the situation warrants that this court should, while exercising its Jurisdiction under section 9 of the Act restrain the respondent from invoking/encashing the aforesaid bank guarantees, to enable the parties to have the adjudication of this dispute through arbitration.</p><p style="text-align: justify;">18. The petitions accordingly are allowed. It is directed that pending the adjudication of disputes by arbitration and until the award is finally passed by the arbitral Tribunal, the respondent shall not Invoke/encash the two bank guarantees in question.</p><p style="text-align: justify;">No order as to costs.</p><p style="text-align: justify;">Later : After the Judgment was pronounced, Mr. Mallick appearing for the respondent made an oral prayer for staying the operation of this Order. On consideration the prayer is rejected.</p><p style="text-align: justify;">Let a xerox singed copy of this Judgment be given to the parties, duly countersigned by the Assistant Registrar of this court, upon their undertaking to apply for and obtain certified copy of the same upon usual undertaking.</p><p style="text-align: justify;">19. Petitions allowed<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '(1999)2CALLT78(HC)',
			'ratiodecidendi' => '',
			'respondent' => 'Indiana Conveyors Ltd.',
			'sub' => 'Arbitration',
			'link' => null,
			'circuit' => null
		)
	),
	'args' => array(
		(int) 0 => '862384'
	)
)
$title_for_layout = 'Gis Ltd. Vs. Indiana Conveyors Ltd. Semantic Analysis'
$shops = array(
	'LAW' => array(
		(int) 0 => 'section 9',
		(int) 1 => 'Indian Arbitration Act',
		(int) 2 => 'section 9',
		(int) 3 => 'section 9',
		(int) 4 => 'section 9',
		(int) 5 => 'section 9'
	),
	'CARDINAL' => array(
		(int) 0 => 'two',
		(int) 1 => 'one',
		(int) 2 => '26,00,000/-Issued',
		(int) 3 => '16/67',
		(int) 4 => '700',
		(int) 5 => '26,000/-',
		(int) 6 => 'six',
		(int) 7 => '8',
		(int) 8 => 'two',
		(int) 9 => '39',
		(int) 10 => 'two',
		(int) 11 => 'two',
		(int) 12 => 'about 78',
		(int) 13 => 'one',
		(int) 14 => 'two',
		(int) 15 => '38.50',
		(int) 16 => '25.0',
		(int) 17 => '8.50',
		(int) 18 => '13.50',
		(int) 19 => '5.00',
		(int) 20 => '14.0',
		(int) 21 => '19-8-98',
		(int) 22 => '5.0',
		(int) 23 => '19.0',
		(int) 24 => '1998.(iv',
		(int) 25 => '1',
		(int) 26 => '19.0',
		(int) 27 => 'two',
		(int) 28 => '16.0',
		(int) 29 => '3.0',
		(int) 30 => '16.0',
		(int) 31 => '3.0',
		(int) 32 => '17',
		(int) 33 => '26.0',
		(int) 34 => '12-6',
		(int) 35 => '20th/21st',
		(int) 36 => '39.0',
		(int) 37 => '17-12-98',
		(int) 38 => 'two',
		(int) 39 => 'two',
		(int) 40 => '39',
		(int) 41 => '12',
		(int) 42 => '16.12.98',
		(int) 43 => 'Thirty Nine',
		(int) 44 => 'two',
		(int) 45 => '39',
		(int) 46 => 'two',
		(int) 47 => '293',
		(int) 48 => '1988]1SCR1124',
		(int) 49 => '345',
		(int) 50 => '1981]3SCR300',
		(int) 51 => '1990(1',
		(int) 52 => '200',
		(int) 53 => '1990(1',
		(int) 54 => 'two',
		(int) 55 => 'two',
		(int) 56 => 'two',
		(int) 57 => 'two',
		(int) 58 => 'one',
		(int) 59 => 'two',
		(int) 60 => '26',
		(int) 61 => '39',
		(int) 62 => 'two',
		(int) 63 => 'two',
		(int) 64 => '38.50',
		(int) 65 => '38.50',
		(int) 66 => '25',
		(int) 67 => '14',
		(int) 68 => '38.50',
		(int) 69 => 'about 78',
		(int) 70 => '78',
		(int) 71 => 'two',
		(int) 72 => 'two',
		(int) 73 => 'two',
		(int) 74 => 'two',
		(int) 75 => 'two',
		(int) 76 => 'two',
		(int) 77 => 'two',
		(int) 78 => 'two',
		(int) 79 => '1990(1',
		(int) 80 => '200',
		(int) 81 => 'two'
	),
	'ORG' => array(
		(int) 0 => 'the Arbitration and Conciliation Act',
		(int) 1 => 'Bank Guarantee No',
		(int) 2 => 'the Bank of India',
		(int) 3 => 'Indiana Conveyors Pvt. Ltd.',
		(int) 4 => 'the Bank of India',
		(int) 5 => 'Bank Guarantee No',
		(int) 6 => 'Reliance Petroleum Ltd.',
		(int) 7 => 'FMC',
		(int) 8 => 'Hon'ble Court',
		(int) 9 => 'Bank Guarantees',
		(int) 10 => 'Bank',
		(int) 11 => 'Messers Modern India Construction Company',
		(int) 12 => 'Reliance Petroleum Ltd.',
		(int) 13 => 'Coke Handling Plant at Janmagar',
		(int) 14 => 'the Slate of Gujarat',
		(int) 15 => 'multi-national Company',
		(int) 16 => 'Turnkey Contract',
		(int) 17 => 'Reliance Petroleum Ltd.',
		(int) 18 => 'Structural Steel',
		(int) 19 => 'Reliance Pelroteum Ltd.',
		(int) 20 => 'the Work Order',
		(int) 21 => 'Bank Guarantee',
		(int) 22 => 'The Work Order',
		(int) 23 => 'Bank',
		(int) 24 => 'the Bank of India',
		(int) 25 => 'MICCO',
		(int) 26 => 'MT',
		(int) 27 => 'MICCO',
		(int) 28 => 'the Security Deposit Bank Guarantee No',
		(int) 29 => 'MICCO',
		(int) 30 => 'Security Deposit Guarantee',
		(int) 31 => 'Bank',
		(int) 32 => 'MICCO',
		(int) 33 => 'MICCO',
		(int) 34 => 'Performance Bank Guarantee',
		(int) 35 => 'MICCO',
		(int) 36 => 'the Bank of India',
		(int) 37 => 'IndiaCalcutta Industrial Finance Brahch5',
		(int) 38 => 'GIS Limited',
		(int) 39 => 'Modern India Construction Co.',
		(int) 40 => 'Advance Bank Guarantee',
		(int) 41 => 'bank Guarantee',
		(int) 42 => 'Purchase',
		(int) 43 => 'Bank Guarantee',
		(int) 44 => 'the Bank Guarantee',
		(int) 45 => 'Indiana Conveyors Ltd.',
		(int) 46 => 'Indiana Conveyors Ltd.',
		(int) 47 => 'Inoperative',
		(int) 48 => 'Bank of India',
		(int) 49 => 'the Supreme Court',
		(int) 50 => 'AIR 1995 SC',
		(int) 51 => 'AIR 1997',
		(int) 52 => 'SC',
		(int) 53 => 'the Bank at the Instance of the petitioner',
		(int) 54 => 'Agreement',
		(int) 55 => 'Various Supreme Court',
		(int) 56 => 'Injunctions',
		(int) 57 => 'the Judgment of the Division Bench',
		(int) 58 => 'Jurisdiction',
		(int) 59 => 'Tribunal',
		(int) 60 => 'Invoke',
		(int) 61 => 'Order',
		(int) 62 => 'xerox'
	),
	'DATE' => array(
		(int) 0 => '1996',
		(int) 1 => '17th December 1997',
		(int) 2 => '17th December, 1997',
		(int) 3 => '12th May, 1908',
		(int) 4 => '1998',
		(int) 5 => '15th June, 1998',
		(int) 6 => ''5',
		(int) 7 => 'one month',
		(int) 8 => 'six months',
		(int) 9 => '19th and 20th August, 1998',
		(int) 10 => '19th and 20th August 1998',
		(int) 11 => '20th August, 1998',
		(int) 12 => '21st August 1998.2',
		(int) 13 => '18th August',
		(int) 14 => '1998',
		(int) 15 => 'Monday',
		(int) 16 => ''98',
		(int) 17 => '10th of September',
		(int) 18 => '24th August, 1998',
		(int) 19 => '24th September, 1998.(v',
		(int) 20 => '10 days',
		(int) 21 => '15 days',
		(int) 22 => 'August '98',
		(int) 23 => 'August 1998',
		(int) 24 => 'November, 1998',
		(int) 25 => '16th December '98',
		(int) 26 => '16th March',
		(int) 27 => '1999',
		(int) 28 => '21st November, 1998',
		(int) 29 => 'Nov. 1998The',
		(int) 30 => '18.03.99',
		(int) 31 => '19lh and 20th August '98',
		(int) 32 => '19th-20th August '98',
		(int) 33 => '19th and 20th August, 1998',
		(int) 34 => '10 days',
		(int) 35 => '15 days',
		(int) 36 => '26th August',
		(int) 37 => '1998',
		(int) 38 => '18th August',
		(int) 39 => '1998',
		(int) 40 => '24th August, 1998',
		(int) 41 => '10th September 1998',
		(int) 42 => '20th August, 1998',
		(int) 43 => 'August 1998',
		(int) 44 => '19th and 20th August',
		(int) 45 => '1998',
		(int) 46 => '12th May 1998',
		(int) 47 => '12th May 1998',
		(int) 48 => '19th/20th August 1998',
		(int) 49 => 'May 1998',
		(int) 50 => '19/20th August 1998'
	),
	'PERSON' => array(
		(int) 0 => 'Invoking',
		(int) 1 => 'Sodepur',
		(int) 2 => 'Coke Handling Plant',
		(int) 3 => 'Schedule',
		(int) 4 => 'B.T.M. Sarant',
		(int) 5 => 'Malik',
		(int) 6 => 'Malik',
		(int) 7 => 'Malik',
		(int) 8 => 'Jayanta Mltra',
		(int) 9 => 'Mltra',
		(int) 10 => 'Bill',
		(int) 11 => 'Invoking',
		(int) 12 => 'Mallick',
		(int) 13 => 'Registrar'
	),
	'FAC' => array(
		(int) 0 => 'the Instance of your petitioner;(b'
	),
	'GPE' => array(
		(int) 0 => 'U.S.',
		(int) 1 => 'Multi',
		(int) 2 => 'the State of West Bengal',
		(int) 3 => 'U.S.',
		(int) 4 => 'Jamnagar',
		(int) 5 => 'Gujarat',
		(int) 6 => 'M.T.',
		(int) 7 => 'M.T.',
		(int) 8 => 'Meetings',
		(int) 9 => 'Indiana',
		(int) 10 => 'Indiana',
		(int) 11 => 'Indiana',
		(int) 12 => 'Indiana',
		(int) 13 => 'Indiana',
		(int) 14 => 'Indiana',
		(int) 15 => 'Indiana',
		(int) 16 => 'Indiana',
		(int) 17 => 'Indiana',
		(int) 18 => 'Indiana',
		(int) 19 => 'Clause',
		(int) 20 => 'Mumbai',
		(int) 21 => 'Meetings'
	),
	'ORDINAL' => array(
		(int) 0 => 'first',
		(int) 1 => 'first',
		(int) 2 => 'first',
		(int) 3 => 'first',
		(int) 4 => '26th',
		(int) 5 => 'first'
	),
	'PERCENT' => array(
		(int) 0 => '15%',
		(int) 1 => '75%',
		(int) 2 => '10%',
		(int) 3 => '10%',
		(int) 4 => '15%',
		(int) 5 => '10%',
		(int) 6 => '15%',
		(int) 7 => '10%',
		(int) 8 => '10%'
	),
	'PRODUCT' => array(
		(int) 0 => 'Calcutta',
		(int) 1 => 'Para-2'
	),
	'WORK_OF_ART' => array(
		(int) 0 => 'Minutes'
	),
	'NORP' => array(
		(int) 0 => 'Items'
	),
	'LOC' => array(
		(int) 0 => 'petitioner.15'
	)
)
$desc = array(
	'Judgement' => array(
		'id' => '862384',
		'acts' => ' <a href="/act/51725/arbitration-and-conciliation-act-1996-complete-act">Arbitration and Conciliation Act, 1996</a> - Section 9',
		'appealno' => 'Ordinary Original Civil Jurisdiction, A.P. Nos. 13 and 14 of 1999',
		'appellant' => 'Gis Ltd.',
		'authreffered' => '',
		'casename' => 'Gis Ltd. Vs. Indiana Conveyors Ltd.',
		'casenote' => ' - ',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => ''To                                                                                21st Nov.  1998

 The Assistant General Manager
 Bank of India
 Calcutta Industrial Finance Brahch
 5, B.T.M. Sarant (Brabourne Road)
 Calcutta 700 001.

 Dear Sir,
     
     Sub:   Advance Bank Guarantee No : G16/87 dated 17-  12-97
            for Rs. 39,00,000/-fssued by you on behalf of GIS Limited,
            Unit: Modern India Construction Co.;                                                                             Yours faithfully,
                                                                             For Indiana Conveyors Ltd.
                                                                             Sd/-Illiglble.
                                                                             Authorised Signatory.'',
		'counselplain' => '',
		'counseldef' => '',
		'court' => 'Kolkata',
		'court_type' => 'HC',
		'decidedon' => '1999-03-12',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => 'Vinod Kumar Gupta, J.',
		'judgement' => '<p style="text-align: justify;">The Court</p><p style="text-align: justify;">1. These are two applications under section 9 of the <a href="/act/51725/arbitration-and-conciliation-act-1996-complete-act">Arbitration and Conciliation Act, 1996</a> filed by one of the contracting parties to a contract agreement The petitioner has asked for the following reliefs from the court :</p><p style="text-align: justify;">'(a) Injunction restraining the respondent company. Its agents servants and assigns from Invoking the said Bank Guarantee No. G16/67 dated 17th December 1997 for Rs. 26,00,000/-Issued by the Bank of India in favour of Indiana Conveyors Pvt. Ltd., at the Instance of your petitioner;</p><p style="text-align: justify;">(b) Injunction restraining the respondent company, its servants, agents and assigns from receiving any payment from the Bank of India against the said Bank Guarantee No. G 16/67 dated 17th December, 1997; for Rs. 26,00,000/-;</p><p style="text-align: justify;">(c) Injunction restraining the respondent company, its agents, servantsand assigns to receive any payment from Reliance Petroleum Ltd.,and/or its project partners FMC--a U.S. based Multi-nationalwithout leaving a sum of Rs. 79,61,162.52 p. on account of yourpetitioner to secure its claim;</p><p style="text-align: justify;">(d) Ad interim order in terms of prayers (a), (b) and (c) above;</p><p style="text-align: justify;">(e) Costs of an incidental to this application be paid by the respondent;</p><p style="text-align: justify;">(f) Such further order or orders be passed as this Hon'ble Court may deem fit and proper.'</p><p style="text-align: justify;">2. At first sight, and on first impression this case also appeared to be yet another in the long series of cases coming up in the courts from time to time relating to the restraint orders against the invocation or enacash-ment of unconditional Bank Guarantees executed by a Bank in favour of the beneficiary. After the arguments however have been concluded, I am convinced that this is not one of those usual cases where a party to a contract has come to court seeking a restraint order against the encashment/invocation of the bank guarantees. This case, both on facts as well as in law stands on an entirely different footing. Brief facts first :</p><p style="text-align: justify;">The petitioner claims to be the owner of a unit known as Messers Modern India Construction Company which has its workshop at Sodepur in the State of West Bengal. It claims to carry on the business of fabrication of structural steel material. It appears that Reliance Petroleum Ltd., a company which is not party to the present petition (nor was it required to be so) awarded a turnkey contract work to the respondent for Coke Handling Plant at Janmagar in the Slate of Gujarat which the respondent undertook to execute along with its project partner, a U.S. based multi-national Company. By way of the allotment of a sub-contract in the course of execution of the aforesaid main Turnkey Contract, the respondent wanted the petitioner to carry out the work of fabrication and manufacture of steel structural to be supplied by the petitioner to the respondent for errection/use in the aforesaid Coke Handling Plant of Reliance Petroleum Ltd. at Jamnagar, Gujarat. A Work Order accordingly was issued by the respondent in favour of the petitioner on 12th May, 1908 which was for the supply of Structural Steel, fabrication, sand blasting and painting as per the specifications of Reliance Pelroteum Ltd. Since the Work Order dated I2th May, 1998 constitutes the foundation of the regulating terms and conditions of contract between the parties, it shall be worthwhile and desirable to refer to these terms and conditions in extenso.</p><p style="text-align: justify;">3. The scope of the work has been defined in Clause 1 of the Work Order. It Includes the work of the supply of structural Steel and fabrication as per the fabrication drawings to be given by the respondent to the petitioner. It also Includes the work of sand blasting and painting of structurals as per the technical specifications to be given to the petitioner by the respondents. The quantum of work appproximately has been mentioned at 700 M.T. and in the price column it is mentioned that Rs. 26,000/- per M.T. would be the rate/price charged by the petitioner from the respondents. The delivery period has been mentioned as 15th June, 1998. The clause relating to payment terms, being very Important for our purposes is reproduced verbatim hereinbelow. It reads as under :</p><p style="text-align: justify;">'5. Payment Terms</p><p style="text-align: justify;">(a) 15% of the contract price as Interest free advance on submission of Bank Guarantee of equivalent amount in our proforma valid for six month.</p><p style="text-align: justify;">(b) 75% of the progressive payment on pro-rate basis against despatch documents.</p><p style="text-align: justify;">(c) 10% final payment within one month from completion of total supply on submission of performance bank guarantee of equivalent amount on our proforma valid till warranty period.</p><p style="text-align: justify;">(d) You will also submit 10% valued of the contract price bank guarantee Immediately and before claiming the first advance as security deposit valid till completion of the work.'</p><p style="text-align: justify;">4. The Work Order also Includes an arbitration clause which reads as hereunder :</p><p style="text-align: justify;">'8. Arbitration</p><p style="text-align: justify;">In all cases of disputes which can not be settled by mutual negotiations the matter shall be referred for arbitration in accordance with the provision of Indian Arbitration Act 1940 and rules thereunder to be read together with all statutory amendments and modifications of the work for the said act.</p><p style="text-align: justify;">The venue of such arbitration shall be at Calcutta.'</p><p style="text-align: justify;">5. As will be noticed, 15% of the total contract amount was to be lent as advance by the respondent to the petitioner on Interest free basis on the condition of the petitioner submitting a Bank guarantee of this amount which was to remain valid for six months. The petitioner was also to submit another bank guarantee of an amount equivalent to the value of 10% of the total contract price as security deposit and for due performance till the completion of the contract work. It is the undisputed case of the parties that these two bank guarantees, one for Rs. 39 lacs in respect of an covering the 15% interest free advance, and the other for Rs.26 lacs covering the 10% equivalent value of the contract price for and by way of security deposit and for due performance of contract were in fact executed and furnished by the Bank of India to the respondent at the instance of the petitioner. It appears that during the execution of the contract certain disputes and differences, normal in any such execution of a contract work appeared and cropped up between the parties. It also appears that the parties came around to a negotiated settlement, in their efforts to strive for a compromise and accordingly meetings were held between the parties on 19th and 20th August, 1998 in which such disputes and differences which might have cropped up or might have occurred in the past were settled between the parties amicably, and the terms of such settlement was reduced into writing, as would be apparent from a record of the Minutes of these two meetings. Since such terms of settlement, as were recorded in the Minutes of the two Meetings held on 19th and 20th August 1998 are very relevant for our purposes, it shall be desirable to re-produce the entire document purporting to be a record of such Minutes. The documents reads as under:</p><p style="text-align: justify;">'The following has been agreed by and between M/s. Indiana and GIS/ MICCO:</p><p style="text-align: justify;">As discussed earlier, MICCO has agreed to despatch all the balance of about 78 MT fabricated items against the above orders by 20th August, 1998 on Indiana's transport. If materials for one or two trucks is left over, these will be despatched on 21st August 1998.</p><p style="text-align: justify;">2. Payment Schedule by Indiana :</p><p style="text-align: justify;">(i) As on 18th August, 1998 the outstanding payment from Indiana against above Job is approx. Rs. 38.50 lacs.</p><p style="text-align: justify;">(ii) Indiana confirmed that out of above amount, Rs. 25.0 lacs approx. will be paid to MICCO latest by Monday the 24th Aug '98. The excess amount of advance approx. Rs. 8.50 lacs will be adjusted from the balance amount of Rs. 13.50 lacs, thereby the balance will be approx. Rs. 5.00 lacs.</p><p style="text-align: justify;">(iii) Further bill of approx. Rs. 14.0 lacs have been submitted to Indiana on 19-8-98 & 20-8-98. This amount alongwith balance Rs. 5.0 lacs, total Rs. 19.0 lacs will be paid within 10th of September, 1998.</p><p style="text-align: justify;">(iv) After despatch of the balance materials as mentioned in clause 1 above, the bill to be submitted to Indiana on 24th August, 1998 will be amounting to Rs. 19.0 lacs approx. In two parts i.e. Rs. 16.0 lacs and Rs. 3.0 lacs, Rs. 16.0 lacs to be released by 24th September, 1998.</p><p style="text-align: justify;">(v) The last progress bill of approx. Rs. 3.0 lacs as said above will be submitted to Indiana after reconciliation of the despatched quantities with drawings by both the parties within 10 days from the date of last despatch and Indiana will release the payment and the Security Deposit Bank Guarantee No.G16/68 dated 17-12-97 for Rs. 26.0 lacs and its amendment dated 12-6-98 within 15 days time thereafter. MICCO has agreed to this as a special case although Security Deposit Guarantee has to be released on completion of work/despatches as per terms of the order.</p><p style="text-align: justify;">3. Since all the materials will be delivered by 20th/21st August '98 and after the full advance of Rs. 39.0 lacs getting adjusted as mentioned above, the advance Bank guarantee No. G16/67 dated. 17-12-98 will be returned by Indiana to MICCO latest by 26th August 1998 for cancellation.</p><p style="text-align: justify;">4. The final 10% payment will be released to MICCO by Indiana on submission of Performance Bank Guarantee by MICCO as per provision of the above order.'</p><p style="text-align: justify;">6. It is the case of the petitioner in this petition under section 9 of the Act that despite having agreed to return the two bank guarantees, as would be clear in Clause (v) of Para-2 and Para-3 of the aforesaid Minutes, the respondent did not return the two bank guarantees to the petitioner and Instead, sent a communication dated. 21st November, 1998 to the Bank of India calling upon the bank to either renew the bank guarantee of Rs. 39 lacs upto 16th December '98 with the claim period extended upto 16th March, 1999 or Instead, if the same was not to be done, to treat the aforesaid communication as their claim for the amount of the bank guarantee and to arrange to send the same by a demand draft. The communication dated 21st November, 1998 reads as under :</p><p style="text-align: justify;">'To 21st Nov. 1998The Assistant General ManagerBank of IndiaCalcutta Industrial Finance Brahch5, B.T.M. Sarant (Brabourne Road)Calcutta 700 001.Dear Sir,Sub: Advance Bank Guarantee No : G16/87 dated 17- 12-97for Rs. 39,00,000/-fssued by you on behalf of GIS Limited,Unit: Modern India Construction Co.With reference to the above Advance Bank Guarantee, we hereby request you to arrange for an extension of the above mentioned bank Guarantee upto 16.12.98 with a claim period upto 18.03.99, as the party has not completed the work as per the Purchase Order terms and conditions.</p><p style="text-align: justify;">In case the party is not willing to extend the above Bank Guarantee, please treat this as our claim for the amount of the Bank Guarantee and arrange to send us a Demand Draft in favour of 'Indiana Conveyors Ltd. for Rs. 39,00.000.00 (Rupees Thirty Nine lacs only) payable at Mumbai and oblige.</p><p style="text-align: justify;">Thanking you, Yours faithfully,For Indiana Conveyors Ltd.Sd/-Illiglble.Authorised Signatory.'</p><p style="text-align: justify;">7. With regard to the other bank guarantee also, it is the case of the respondent that it is entitled to invoke the same.</p><p style="text-align: justify;">8. The case of the petitioner in short is that the respondent is liable to return both the bank guarantees to the petitioner because the respondent, in the meetings held on 19lh and 20th August '98 had agreed to do so. Based on the aforesaid agreement of the respondent to return the two bank guarantees, the bank guarantees have become Inoperative and unenforceable. Having agreed to return the bank guarantees, it is not open to the respondent to invoke them since that would be contrary to the express terms of the agreement having been arrived at between the parties on 19th-20th August '98. The further case of the petitioner is that. In any event since the amount of loan of Rs. 39 lacs had already been adjusted in the sale price of the materials supplied by the petitioner to the respondent, and further since the respondent admittedly owed to the petitioner huge sums of money, the bank guarantees had become Irrelevant and it was on the basis of these pending claims of the petitioner and the fact that nothing remained to be paid by the petitioner to the respondent that the respondent had agreed to return the bank guarantees to the petitioner.</p><p style="text-align: justify;">9. Mr. Malik, learned senior Advocate appearing for the respondent objected to the maintainability of this petition and submitted that this court should not pass any order of injunction restraining the invocation/ encashment of the two bank guarantees. Various submissions were made by Mr. Malik with regard to the absence of Bank of India as a party-respondent in this case and the non-maintainability of the petition on that ground. Various Judgments of the Supreme Court were relied upon by both the parties, for and against the proposition about the powers of the court in issuing Interim injuctlon with regard to the encashment/Invocation of the bank guarantees. Notable among these decisions of the apex court are the cases reported in :--</p><p style="text-align: justify;"> : AIR1994SC853 ; : AIR1996SC334 ; AIR 1995 SC 293 : : [1988]1SCR1124 ; AIR 1997 SC 345; : [1981]3SCR300 : : AIR1994SC626 ; : AIR1996SC2268 ; : (1996)5SCC450 and : AIR1997SC2477 .</p><p style="text-align: justify;">10. Mr. Malik also very strongly relied upon a Division Bench Judgment of this court reported in 1990(1) Cal LT 200 to putforth his point that bank guarantee being a separate contract, independent of the original main contract between the parties, any dispute with regard to the invocation or the encashment of the bank guarantees could not form the subject matter of the arbitration agreement existing between the parties and therefore, since the Arbitrator had no Jurisdiction in any dispute relating to the bank guarantees, this court under section 9 of the Act should not exercise its jurisdiction to issue any injunction in respect of any such bank guarantees which formed a separate and independent contract, distinct from original parent contract between the parties.</p><p style="text-align: justify;">11. Mr. Jayanta Mltra, learned senior advocate appearing for the petitioner on the other hand contended that in this particular case neither the Division Bench Judgment of this court reported in 1990(1) Cal LT 200 was applicable nor was this court required to apply any of the guiding factors, as laid down by the apex court from time to time with regard to grant or refusal of Injunctions relating to the encashment/invocation of the bank guarantees. According to Mr. Mltra this case stands on an entirely different footing. In this case the respondent has entered into an agreement with the petitioner whereby he has agreed to return the two bank guarantees which were earlier executed in his favour by the Bank at the Instance of the petitioner, in accordance with the terms and conditions of the Agreement which was originally entered into between the parties.</p><p style="text-align: justify;">12. Various Supreme Court Judgments cited by the learned counsel for the parties undoubtedly have taken a consistent view that the courts should be very slow in granting injunctions against the encashment/ invocation of the bank guarantees. The general view of the apex court clearly points to the principle that in all cases relating to bank guarantees, grant of injunction is only an exception, based on two broad principles, refusal being almost a Rule, The two broad principles, rather two broad parameters which the courts have to consider in favour of granting Injunctions against encashment of bank guarantees relate to the question of fraud and irretrievable injustice, or as some call it special equities.</p><p style="text-align: justify;">13. If one looks to the facts of the present case one will have no hesitation in saying that the case of the petitioner can be said to be covered by both the aforesaid parameters of fraud and Irretrievable injustice, bordering on special equities. When a parry to a contract admittedly has no claim against the other, its act of invoking or encashing a bank guarantee admittedly having been furnished in support of the aforesaid claim may amount topractising fraud against that party in a given set of circumstances and if the party practising fraud is allowed to encash the bank guarantee, the other party does suffer Irretrievable injustice. When the very claim for which or in support whereof the bank guarantee was furnished, has already been satisfied or stands extinguished, that party invoking the bank guarantee surely cannnot be permitted to do so because special equities having in the mean time been created in favour of the other party would Immediately come in the way of the first party in being allowed to encash the bank guarantee. Even though these factors exist, in the present case however we are not strictly concerned with these guiding factors because this case stands on an altogether different footing as the bank guarantees have actually ceased to remain operative. These two guiding factors therefore need not be pressed in aid of the petitioner.</p><p style="text-align: justify;">14. The petitioner's entire case is based on the Minutes of the meetings held on 19th and 20th August, 1998. It clearly transpires from a reference to these Minutes that the respondent has agreed to release/return the bank guarantee of Rs. 26 lacs within 10 days from the date of despatch of the last quantities immediately on the submission of the last progress Bill or within or 15 days time thereafter. With regard to the bank guarantees for Rs. 39 lacs the respondent had agreed that it would be returned by the respondent to the petitioner latest by 26th August, 1998 for cancellation. These two commitments made by the respondent about the return of the two bank guarantees was based on the agreed assertions by the parties that as on 18th August, 1998 the respondent owed to the petitioner, against the petitioner having performed the Job, an amount of Rs. 38.50 lacs and that the respondent having confirmed that out of the aforesaid outstanding amount of Rs. 38.50 lacs, 25 lacs would be paid to the petitioner by the respondent latest by 24th August, 1998. Actually the Minutes also record that a further bill of Rs. 14 lacs, over and above the aforesaid admitted outstanding liability of Rs. 38.50 lacs has already been received by the respondent and that the amount covered by this bill would also be paid by 10th September 1998. In the very opening para of the Minutes, the parties have agreed that the petitioner shall despatch the balance of about 78 MTs. of fabricated Items latest by 20th August, 1998. When the parties talked of the balance of 78 Mts.. and when the parties were clear about the past liabilities and the mode and manner of clearing them, there was no doubt that the materials received by the respondent prior to 19th/20th August 1998 had been realised by them and that no outstanding unsettled dispute remained to be sorted out. It was in this background that the respondent had agreed to return the two bank guarantees to the petitioner.</p><p style="text-align: justify;">15. The agreement arrived at between the parties, as reflected in the Minutes of the Meetings held on 19th and 20th August. 1998 is supplemental to the agreement (Work Order dated 12th May 1998). It is an extension of the same primary, parent agreement. If in the primary/parent/ main agreement of 12th May 1998 there was a provision whereby the petitioner was to furnish two bank guarantees, in the supplemental agreement arrived at in the meeting held on 19th/20th August 1998 the respondent had agreed to return these two bank guarantees, their purpose admittedly having been served. The return of the two bank guarantees therefore and the refusal on the part of the respondent not to do so is adispute having arisen between the parties to the agreement dated 12th May 1998. Whether the respondent is under a contractual obligation to return the two bank guarantees to the petitioner, as it undertook to do in the agreement arrived at in the meetings held on 19/20th August 1998 and, whether the petitioner is entitled to ask the respondent to return these two bank guarantees to It, and in the meanwhile not to take any action which would amount to Invoking or encashing the bank guarantees, or disputes squarely covered by the arbitration agreement between these two parties. These are not the disputes in the traditional sense relating to the encashment/invocation of the two bank guarantees. These disputes have noting to do whatsoever with the terms and conditions of the bank guarantee. In that view of the matter therefore neither the bank has anything to do with the matter nor is the Judgment of the Division Bench of this court in 1990(1) Cal LT 200 is applicable to the facts of the case.</p><p style="text-align: justify;">16. If the arbitrator has to decide the dispute with regard to the respondent's obligation to return the bank guarantees, this court cannot remain oblivious or shirk its responsibility of looking to the prlma facie nature of the petitioner's case to find out whether the merits of the case warrant the grant of any interim Injunction under section 9 of the Act or not.</p><p style="text-align: justify;">17. From what I have narrated the inescapable conclusion which emerges is that the petitioner has a strong prima facie case in its favour and that the situation warrants that this court should, while exercising its Jurisdiction under section 9 of the Act restrain the respondent from invoking/encashing the aforesaid bank guarantees, to enable the parties to have the adjudication of this dispute through arbitration.</p><p style="text-align: justify;">18. The petitions accordingly are allowed. It is directed that pending the adjudication of disputes by arbitration and until the award is finally passed by the arbitral Tribunal, the respondent shall not Invoke/encash the two bank guarantees in question.</p><p style="text-align: justify;">No order as to costs.</p><p style="text-align: justify;">Later : After the Judgment was pronounced, Mr. Mallick appearing for the respondent made an oral prayer for staying the operation of this Order. On consideration the prayer is rejected.</p><p style="text-align: justify;">Let a xerox singed copy of this Judgment be given to the parties, duly countersigned by the Assistant Registrar of this court, upon their undertaking to apply for and obtain certified copy of the same upon usual undertaking.</p><p style="text-align: justify;">19. Petitions allowed<p style="text-align: justify;"></p><p style="text-align: justify;">',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => '(1999)2CALLT78(HC)',
		'ratiodecidendi' => '',
		'respondent' => 'Indiana Conveyors Ltd.',
		'sub' => 'Arbitration',
		'link' => null,
		'circuit' => null
	)
)
$args = array(
	(int) 0 => '862384'
)
$pattern = '/\(((0[1-9]|[12][0-9]|3[01])[.](0[1-9]|1[012])[.](17|18|19|20)[0-9]{2}).*\)/'
$shops2 = null
include - APP/View/Case/meta.ctp, line 39
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::render() - CORE/Cake/View/View.php, line 473
Controller::render() - CORE/Cake/Controller/Controller.php, line 963
Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200
Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167
[main] - APP/webroot/index.php, line 109

LAW: section 9, Indian Arbitration Act, section 9, section 9, section 9, section 9

CARDINAL: two, one, 26,00,000/-Issued, 16/67, 700, 26,000/-, six, 8, two, 39, two, two, about 78, one, two, 38.50, 25.0, 8.50, 13.50, 5.00, 14.0, 19-8-98, 5.0, 19.0, 1998.(iv, 1, 19.0, two, 16.0, 3.0, 16.0, 3.0, 17, 26.0, 12-6, 20th/21st, 39.0, 17-12-98, two, two, 39, 12, 16.12.98, Thirty Nine, two, 39, two, 293, 1988]1SCR1124, 345, 1981]3SCR300, 1990(1, 200, 1990(1, two, two, two, two, one, two, 26, 39, two, two, 38.50, 38.50, 25, 14, 38.50, about 78, 78, two, two, two, two, two, two, two, two, 1990(1, 200, two

ORG: the Arbitration and Conciliation Act, Bank Guarantee No, the Bank of India, Indiana Conveyors Pvt. Ltd., the Bank of India, Bank Guarantee No, Reliance Petroleum Ltd., FMC, Hon'ble Court, Bank Guarantees, Bank, Messers Modern India Construction Company, Reliance Petroleum Ltd., Coke Handling Plant at Janmagar, the Slate of Gujarat, multi-national Company, Turnkey Contract, Reliance Petroleum Ltd., Structural Steel, Reliance Pelroteum Ltd., the Work Order, Bank Guarantee, The Work Order, Bank, the Bank of India, MICCO, MT, MICCO, the Security Deposit Bank Guarantee No, MICCO, Security Deposit Guarantee, Bank, MICCO, MICCO, Performance Bank Guarantee, MICCO, the Bank of India, IndiaCalcutta Industrial Finance Brahch5, GIS Limited, Modern India Construction Co., Advance Bank Guarantee, bank Guarantee, Purchase, Bank Guarantee, the Bank Guarantee, Indiana Conveyors Ltd., Indiana Conveyors Ltd., Inoperative, Bank of India, the Supreme Court, AIR 1995 SC, AIR 1997, SC, the Bank at the Instance of the petitioner, Agreement, Various Supreme Court, Injunctions, the Judgment of the Division Bench, Jurisdiction, Tribunal, Invoke, Order, xerox

DATE: 1996, 17th December 1997, 17th December, 1997, 12th May, 1908, 1998, 15th June, 1998, '5, one month, six months, 19th and 20th August, 1998, 19th and 20th August 1998, 20th August, 1998, 21st August 1998.2, 18th August, 1998, Monday, '98, 10th of September, 24th August, 1998, 24th September, 1998.(v, 10 days, 15 days, August '98, August 1998, November, 1998, 16th December '98, 16th March, 1999, 21st November, 1998, Nov. 1998The, 18.03.99, 19lh and 20th August '98, 19th-20th August '98, 19th and 20th August, 1998, 10 days, 15 days, 26th August, 1998, 18th August, 1998, 24th August, 1998, 10th September 1998, 20th August, 1998, August 1998, 19th and 20th August, 1998, 12th May 1998, 12th May 1998, 19th/20th August 1998, May 1998, 19/20th August 1998

PERSON: Invoking, Sodepur, Coke Handling Plant, Schedule, B.T.M. Sarant, Malik, Malik, Malik, Jayanta Mltra, Mltra, Bill, Invoking, Mallick, Registrar

FAC: the Instance of your petitioner;(b

GPE: U.S., Multi, the State of West Bengal, U.S., Jamnagar, Gujarat, M.T., M.T., Meetings, Indiana, Indiana, Indiana, Indiana, Indiana, Indiana, Indiana, Indiana, Indiana, Indiana, Clause, Mumbai, Meetings

ORDINAL: first, first, first, first, 26th, first

PERCENT: 15%, 75%, 10%, 10%, 15%, 10%, 15%, 10%, 10%

PRODUCT: Calcutta, Para-2

WORK_OF_ART: Minutes

NORP: Items

LOC: petitioner.15