IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 20.02.2017 CORAM:
THE HONOURABLE MR. JUSTICE D.KRISHNAKUMAR W.P.No.1514 of 2011 and M.P.Nos.1 and 2 of 2011 M/s.Meena Advertisers, rep.by its proprietor Mr.V.Krishnamurthy, New No.66 (Old No.142) Eldams Road, Teynampet, Chennai – 600018. .. Petitioner vs.
1. Union of India, rep.by its General Manager, Western Railways, Churchgate, Mumbai – 400 020.
2. The Divisional Manager (Commercial), Commercial Department, Mumbai Central, Mumbai – 400008.
3. The Chief Manager, Indian Bank, Abhiramapuram Branch, Chennai – 600 018. .. Respondents Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Mandamus forbearing the respondents 1 and 2, their men or subordinates or any person claiming under them from invoking and realizing the Bank Guarantee No.6/2010 dated 19.5.2010 given by the third respondent on behalf of the petitioner and the matured amounts available in Re-investment Plan Deposit TDR No.TF/BTDG 522779 dated 7.5.2005.
For petitioner : Mr.S.Thiruvenkataswamy For respondents 1 and 2 : Mr.M.Vellaisamy, Standing Counsel For 3rd respondent : Mr.M.Balachandar
ORDER
The petitioner has filed the present Writ Petition for the relief stated above.
2. According to the petitioner, the respondent's Railway administration awarded the contract of Leasing out Bulk advertising rights of Dadar Station at Mumbai vide letter dated 2.5.2005 bearing No.CA/11/51/Bulk-DDR to the petitioner by accepting the quotation of the petitioner for a sum of Rs.1,02,09,999 per annum. The contract period was for 3 years subject to the petitioner paying the annual escalation of 15% for 2nd and 3rd year. In line with the communication of the respondent's railway administration dated 2.5.2005, an agreement dated 11.5.2005 was also entered between the petitioner and the first respondent incorporating all usual terms and conditions. The petitioner also provided the necessary security deposit under the fixed deposit receipt issued by the third respondent for a sum of Rs.9,54,000 on 7.5.2005. Thereafter, the respondent's railway administration leased out the said bulk advertisement rights to the petitioner extending the said privilege for 3 months periodically and the petitioner has been paying the monthly Licence fee amount to the respondents' railway administration without any default. The respondent also provided a necessary Bank Guarantee No.6 of 2010 dated 19.5.2010 valid upto 31.3.2011 in favour of the railway administration. After the expiry of 3 year period mentioned in the agreement dated 11.5.2005 and during the time of the subsequent periodical extension of the contract, the respondent's railway has been allowing the petitioner to enjoy the benefits of the rights given to the petitioner after receiving the monthly rent from the petitioner. The petitioner has also been remitting the monthly lincence fee amount towards the Bulk advertisement contract for Dadar Railway Station, Mumbai, after the contract period mentioned in the agreement dated 11.5.2005. The respondent also received the licence fee payments on monthly basis without any objection. As such, the petitioner has also paid the necessary monthly licence fee upto 15.2.2011. The 2nd respondent admitted the receipt of licence fee amount from the petitioner by its communication dated 18.1.2011. While so, the respondents 1 and 2 invoked the bank guarantee No.6/2010 and claimed fixed deposit amount without issuing notice to the petitioner, arbitrarily. Hence, the action of the respondents is in violation of the principle of natural justice. Hence, the petitioner has filed the present Writ Petition for the relief stated above.
3. The learned counsel for the petitioner submitted that the action of the respondents 1 and 2 invoking the Bank Guarantee No.6/2010 and claiming the fixed deposit amount from the third respondent Bank without notice to the petitioner is arbitrary and illegal. When the respondent has accepted the monthly payment upto 15.2.2011, it is not open to the respondents' railway to invoke the bank guarantee behind the back of the petitioner without disclosing proper reason to invoke the bank guarantee.
4. Today, the petitioner filed an affidavit wherein it is stated as follows:-
“3. I respectfully submit that, this Hon'ble Court was pleased to pass an Order of interim injunction dated 22.1.2011 in the said matter and the said order is still in force. I respectfully submit that, however, circumventing the injunction order, the 3rd respondent bank, by communication dated 29.2.2012, claiming to pay from its own resources settled the 1st and 2nd respondent's claim. The communication, further went on to state that, it is without prejudice to Bank's rights and contentions in any legal proceedings.
4. I respectfully submit that, in the mean while, the petitioner initiated arbitration proceedings against the 1st and 2nd respondent Railways, as the said money released above was wrongfully adjusted for another contract in respect of Dadar Station in Mumbai, among other claims. The claims and counter claims were adjudicated against the petitioner, which culminated in Arbitration Petition 736/2016 and Appeal 233/206 before the Bombay High Court, against which orders, the petitioner has approached the Hon'ble Supreme Court in S.L.P.No.20371/2016 wherein the operation of Bombay High Court Judgment has been stayed subject to certain conditions by Order dated 1.8.2016.
5. I respectfully submit that the dispute between the petitioner and the 1st and 2nd respondents are pending before the Hon'ble Supreme Court. In the meanwhile, though the railway presently have no claims in respect of the present Writ Petition, if the 3rd respondent proceeds against the petitioner, in lieu of the payment made by it to the railways, which itself is legally questionable, serious prejudice will be caused to the petitioner.
* * * In case the petitioner fails to succeed in the above said S.L.P. or the 3rd respondent has any claim consequent to that, the petitioner undertakes to pay subject to the orders in the above said S.L.P.No.20371/2016 pending before the Hon'ble Supreme Court.”
5. The learned counsel for the third respondent/bank submitted that the third respondent is not a party to the proceedings before the Hon'ble Supreme Court in SLP No.20371/2016. Therefore, this Court may give a suitable direction to the first and second respondents to communicate if any order is passed by the Hon'ble Supreme Court, and the same shall be communicated to the 3rd respondent within a stipulated time.
6. In view of the averments made in the aforesaid affidavit and considering the aforesaid submissions made by the learned counsel for the third respondent bank, the first and second respondents are directed to communicate to the third respondent/bank, if any further order is passed by the Hon'ble Supreme Court in SLP No.20371/2016 within a period of four weeks from the date of receipt of a copy of this order. The third respondent would initiate further action, if necessary. In the meantime, “status quo” as on today will continue until further orders are passed by the Hon'ble Supreme Court.
7. The Writ Petition is disposed of, with the above direction.
Connected Miscellaneous Petitions are closed. No costs.
20.02.2017 Index : Yes / no Internet: yes /no asvm To
1. The General Manager, Western Railways, Churchgate, Mumbai – 400 020.
2. The Divisional Manager (Commercial), Commercial Department, Mumbai Central, Mumbai – 400008.
3. The Chief Manager, Indian Bank, Abhiramapuram Branch, Chennai – 600 018.
D.KRISHNAKUMAR, J (asvm) W.P.No.1514 of 2011 and M.P.Nos.1 and 2 of 2011 20.02.2017 http://www.judis.nic.in