IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF FEBRUARY 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NO.52420 OF 2018(GM-RES) BETWEEN:
M/S NAVAYUGA ENGINEERING CO. LTD., A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AND HAVING ITS REGISTERED OFFICE AT 48-9-17 DWARAKANAGAR, VISHAKHAPATNAM – 530 016 REPRESENTED BY ITS DY.GENERAL MANAGER (CONTRACTS) MR.A.S.R. MURTHY (By Mr.DHYAN CHINNAPPA SENIOR ADV. A/W MR.K.S.PONNAPPA ADV. FOR MR.SUNDARA RAMAN M.V., ADV.) AND:
… PETITIONER 1. BANGALORE METRO RAIL CORPORATION LTD., B.M.T.C. COMPLEX, 3RD FLOOR K.H.ROAD, SHANTHINAGAR REPRESENTED BY ITS MANAGING DIRECTOR 2. STATE BANK OF INDIA COMMERCIAL BRANCH BANK STREET HYDERABAD – 95 REPRESENTED BY ITS MANAGER.
… RESPONDENTS (By Mr.S.SRIRANGA ADV. FOR R1 MR.CHINTAN CHINNAPPA ADV. FOR R2 (ABSENT)) - - -
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE LETTER DATED 26.10.2018 ISSUED BY THE R1 (ANNEXURE-A) TO THE PETITIONER.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER Mr.Dhyan Chinnappa a/w Mr.K.S.Ponnappa for Mr.Sundararaman M.V., learned counsel for the petitioner.
Mr.S.Sriranga, learned counsel for respondent No.1.
2. The writ petition is admitted for hearing.
With consent of the parties, the same is heard finally.
3. In this petition, the petitioner inter alia seeks a writ of certiorari for quashment of the communication dated 26.10.2018 by which the petitioner has been requested by the respondent to extend the validity of the performance security bank guarantee for a sum of Rs.7,42,16,784/-.
4. Learned Senior Counsel for the petitioner submitted that the arbitral tribunal has passed an award dated 16.08.2018 directing the respondent to return the bank guarantees furnished by the petitioner and has awarded a Sum of Rs.122 Crores to the petitioner. The aforesaid award has been challenged by the respondent in the proceeding under Section 34 of the Arbitration and Conciliation Act, 1996 and the petitioner is under no legal obligation to extend the bank guarantee furnished by it and the respondent is at liberty to make appropriate application in the proceeding under Section 34 of the Act. On the other hand, learned counsel for the respondent submitted that the bank guarantee is the subject matter of the proceeding under Section 34 of the Act and the petitioner had filed a caveat in the proceeding under Section 34 of the Act and sought an adjournment on 28.11.2018 as well as 23.01.2019 and the matter is now fixed for 27.02.2019 for consideration of prayer for interim relief and till then the petitioner should be directed to keep the bank guarantee alive.
5. I have considered the submissions made by learned counsel for the parties and have perused the record. Under the provisions of the Act the court dealing with the challenge to the award passed by the arbitral tribunal has ample powers to protect the interest of the respondent and the court can issue suitable directions to the petitioner herein. The petitioner before this court has not furnished any undertaking that it would keep the bank guarantee alive till disposal of the application filed by the respondent seeking impugned relief in the proceeding under Section 34 of the Act. The petitioner is not under any legal obligation to keep the bank guarantee alive. Therefore, in the considered opinion of this court in the fact situation of the case no such direction as prayed for by the respondent can be issued. The respondent shall be entitled to make an appropriate prayer before the Court before which the proceeding under the Act are pending. Needless to state that in case such a prayer is made, the Court shall deal with the same in accordance with law expeditiously.
Accordingly, the petition is disposed of.
Sd/- JUDGE SS