Important Point—Person in whose favour guarantee is furnished by bank cannot be prevented by way of an injunction in enforcing guarantee.

Suresh Kumar Kait, J.

1. Vide the present appeal, the appellant has challenged the order dated 11th February 2015 passed in O.P.No.2602 of 2013 by the II Additional Chief Judge, City Civil Court, Hyderabad, thereby 2nd respondent-Bank is restrained from making any payment under the two unconditional bank guarantees both dated 10th May 2011 for Rs.10,45,00,125/- and Rs.9,18,24,577/- respectively, which were issued in favour of the appellant.

2. Brief facts of the case are that, vide the Memorandum of Understanding dated 22nd April 2008 the appellant and the 1st respondent entered into an agreement. Accordingly, in terms and conditions contained in the letter dated 11th August 2009 issued by the appellant to the 1st respondent, they proceeded to participate in various tenders of Power Grid Corporation of India Limited. On 22nd January 2010, Power Grid Corporation of India Limited issued advertisements inviting bids from interested parties, inter alia, for Tower packages P219-TW07, P219-TW08, P219-TW09 and P219-TW10 for 765 KV Satna-Gwalior (Ckt-I & II) Transmission. Accordingly, the appellant and 1st respondent participated in two several tenders for P219-TW09 and P219-TW10 in accordance with the terms and conditions contained in the letter dated 11th August 2009.

3. On 30th and 31st of December 2010, Power Grid Corporation of India Limited issued two separate letters notifying respectively that the supply and service of the aforesaid contracts had been awarded in favour of the joint venture of the appellant and the 1st respondent. On 10th May 2011, 1st respondent furnished two several bank guarantees for Rs.10.45 Crores and Rs.9.18 Crores in favour of appellant in respect of the aforesaid two several contracts both valid upto 31st of May 2013, which were subsequently extended/renewed for a further period of Six months. Vide letter dated 18th May 2011, the appellant requested the 2nd respondent-Bank to confirm the issuance of bank guarantees, accordingly, the 2nd respondent confirmed the same. Both the communications mentioned above are annexed at Pages 244 and 245 respectively. Thereafter, on 19th May 2011 and 20th May 2011, appellant released advance payment of Rs.10.45 Crores and 9.18 Crores to the 1st respondent-ICOMM Tele Limited for supply of materials. However, the 1st respondent supplied negligible portion of materials in respect of two contracts (value of Rs.27,04,511/- towards the BG of Rs.10.45 Crores and Rs.19,03,370/- towards the BG of Rs.9.18 Crores). The aforesaid fact is evident from pages 106 and 107 of the counter filed in O.P.No.2602 of 2013 in paragraph XXXV at pages 248 and 249.

4. However, because of the delay in supplying the balance quantity of materials the 1st respondent, vide communication dated 29th September 2011 and 10th October 2011, agreed to give its consent to the appellant to purchase the balance materials from 3rd parties and to return the advance money paid by the appellant to the 1st respondent.

5. Learned counsel appearing on behalf of the appellant submitted that the 1st respondent is bound and obliged to repay the sum of Rs.12,21,64,692/- and Rs.10,77,50,963/- to the appellant. Vide communication dated 31st May 2013, the 2nd respondent-bank had informed the appellant about extending the bank guarantees. Thereafter, on 24th of August 2013, the appellant had issued letter to the 1st respondent regarding completion of 400 KV D/C (Quad) Agra-Sikar Line Part-I & II due to inordinate delay of supply of Tower parts. Whereas, on 26th August 2013, the 1st respondent issued letter to the 2nd respondent-bank regarding submission of original bank guarantees. Learned Counsel argued that in the said letter, the 2nd respondent-bank was informed by the 1st respondent that the appellant has returned the two original bank guarantees for cancellation and hence requested by the 1st respondent to cancel the same. This letter came to the knowledge of the appellant only from Section 9 petition filed by the