Mr.P.T.Ramkumar, learned Standing Counsel takes notice for the respondents. By consent of the parties, the main writ petition itself is taken up for final disposal.
2. The petitioner is aggrieved against the demand raised by the 4th respondent dated 30.11.2017 calling upon the petitioner to furnish the security in the form of Bank guarantee/ fixed deposit for an amount of Rs.13,47,749/- on or before 31.12.2017, failing which, to terminate the contract with effect from 31.12.2017.
3. Heard both sides.
4. The grievance of the petitioner is that without allotting the additional space, the respondents are not justified in calling upon the petitioner to furnish bank guarantee or fixed deposit for the sum representing such additional space. It is not in dispute that the issue with regard to the allotment of additional space is to be agitated by way of arbitral proceedings as stipulated in the terms of agreement entered into between the parties. Therefore, it is contended by the learned counsel for the respondents that the petitioner has to agitate the matter only before the Arbitrator to be appointed by the 3rd respondent.
5. On the other hand, the learned counsel for the petitioner submitted that when the subject matter of dispute in the arbitration itself is with regard to the allotment of additional space, the respondents are not justified in making the impugned demand, in the meantime.
6. Though the above contention was raised by the learned counsel for the respondents, he is fair enough to submit that the bank guarantee, if submitted by the petitioner, will not be invoked till a final award is passed by the Arbitrator. Therefore, he submitted that only in order to protect the interest of the respondents, the petitioner should be directed to furnish the bank guarantee.
7. Upon considering the above stated facts and circumstances and in view of the fact that the respondents are going to appoint an Arbitrator to decide the dispute, in the interest of justice, the writ petition is disposed of, in the following terms.
(a) The petitioner shall furnish a Bank guarantee for a sum of Rs.13,47,749/- (Rupees Thirteen lakhs forty seven thousand seven hundred and forty nine only) on or before 22.01.2018.
(b) The 3rd respondent shall appoint an Arbitrator within a period of two weeks from the date of receipt of a copy of this order.
(c) The Bank guarantee, so furnished by the petitioner, shall be kept alive till the disposal of the arbitral proceedings.
(d) The respondents shall not invoke the Bank guarantee so furnished till the disposal of the arbitral proceedings.
(e) If the petitioner fails to comply with the 1st clause of this order, namely Clause (a), it is open to the respondents to terminate the arbitral proceedings without reference to the order passed by this Court.
(f) Since this Court has extended the time for furnishing such Bank guarantee till 22.01.2018, the respondents shall not terminate the contract in the mean time. No costs. Consequently, connected miscellaneous petition is closed.
22.12.2017 Speaking/Non-speaking order Index : Yes / No vsi Note: Issue order copy on or before 28.12.2017 To
1. The Secretary, Union of India, Ministry of Railways, New Delhi.
2. The Chairman, Railway Board, Rail Bhawan, New Delhi.
3. Chief Commercial Manager, Southern Railway Head Quarters, Park Town, Chennai 600 003.
4. The Senior Divisional Commercial Manager, Office of the Divisional Railway Manager, Commercial Branch, Park Town, Chennai 600 003.
K.RAVICHANDRABAABU,J.
vsi W.P.No.33775 of 2017 22.12.2017