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2017 Supreme(AP) 467

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
RAMESH RANGANATHAN, T. RAJANI, JJ.
N.C.C. Limited - Appellant
Vs.
Sembcorp Gayatri Power Limited and another - Respondents
Civil Miscellaneous Appeal Nos. 359 to 362 of 2017
Decided On : 24-10-2017

Advocates:
Advocate Appeared:
For the Appellant : Sri D. Prakash Reddy, Sri Avinash Desai
For the Respondents: Sri C.V. Monan Reddy, Sri Thoom Srinivas

Headnote:

Arbitration and Conciliation Act, 1996 – Section 37 – Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 – Section 13 –Appellant filed four C.O.Ps. under Section 9 of the 1996 Act requesting the Commercial Court to grant an injunction restraining the 1st respondent, its agents, servants, or any other persons claiming through or under it, from taking coercive action pursuant to the letter dated 23.02.2017 or otherwise, including but not limited to, restraining it from invoking or encashing the schedule bank guarantees issued by the 2nd respondent; and to further restrain the 2nd respondent from honouring/encashing the schedule bank guarantees at the request of the 1st respondent – Held, Suppression of facts by the party against the beneficiary, and prima facie evidence to show that there is truth in these allegations, would not entitle the party to seek injunction restraining invocation of the bank guarantee. (Synthetic Foams Ltd. and Satluj Jal Nigam Ltd.; State Trading Corporation of India Ltd.). While the ex facie false plea, of having already achieved provisional acceptance, in the Section 9 petition filed by the appellant, would have, by itself, necessitated denying them any relief, and in non-suiting them on this short ground, we have examined their claim on merits, including that the invocation of the bank guarantee is fraudulent and special equities are in their favour, as the increase in the number of cases seeking injunction, restraining invocation of bank guarantees, under the 2015 Act, made us feel the need to reiterate the law declared by the Supreme Court on these aspects – Appeal dismissed

JUDGMENT :

Ramesh Ranganathan, J.

C.M.A. No.359 of 2017 is filed by the appellant (petitioner in C.O.P. No.63 of 2017) under Section 13 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter called the 2015 Act) r/w. Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter called the 1996 Act) aggrieved by the order passed by the XXIV Additional Chief Judge-cum-Commercial Court, City Civil Court, Hyderabad, in C.O.P. No.63 of 2017 dated 18.04.2017. Parties shall, hereinafter, be referred to as they are arrayed in these appeals.

2. The appellant filed four C.O.Ps. under Section 9 of the 1996 Act requesting the Commercial Court to grant an injunction restraining the 1st respondent, its agents, servants, or any other persons claiming through or under it, from taking coercive action pursuant to the letter dated 23.02.2017 or otherwise, including but not limited to, restraining it from invoking or encashing the schedule bank guarantees issued by the 2nd respondent; and to further restrain the 2nd respondent from honouring/encashing the schedule bank guarantees at the request of the 1st respondent.

3. In the petition filed by them under Section 9 of the 1996 Act, the appellant had stated that they had entered into various contracts in respect of the design, engineering, procurement, supply, assembly, construction, erection, mechanical completion, pre-commissioning, commissioning and full performance testing of a pulverized coal fired power plant consisting of 2 x 660 MW supercritical boiler based plant with NCC Power Projects Limited, and a consortium of China National Technical I & E Corporation and Tianjin Electric Power Construction Company (CTC for short); the equity stake of the first respondent-NCC Power Projects Limited was acquired by Semb-Corp Utilities Pvt. Ltd, consequent to which its name was changed to Sembcorp Gayatri Power Limited; the 1st respondent was the owner of the project, the petitioner had to execute the work, and CTC had to supply the material to be used for execution of the project; seven independent contracts, in EPC mode, were entered into between the petitioner and the 1st respondent to facilitate the aforementioned project along with their amendments; the scope of the co-ordination agreement, entered into between the parties, was to co-ordinate and administer all the other six contracts; the supply contract agreement (FOB) was entered into between the parties thereto, as the 1st respondent wanted CTC to supply the material; the appellant was required to execute the work using the supplies made by CTC which was approved as the supplier by the 1st respondent; the appellant was not given the choice to change the supplier, even though there were delays in supplies; the 1st respondent and the appellant had entered into an On-Shore Service Contract dated 10.04.2011 to provide certain construction works for the purpose of the projects; the scheduled completion date of Unit-1 and Unit-2 had to be achieved, ordinarily, within 42 months and 45 months, from the date of issuance of notice to proceed, respectively; under the co- ordination agreement, ordinarily, the provisional acceptance test, for Unit-1 and Unit-2, should have been achieved, and duly completed, by 10.11.2015 (inclusive of a 3 month grace period from 10.08.2015) and 10.02.2016 (inclusive of a 3 month grace period from 10.11.2015), respectively; all these time-lines were necessarily subject to the equipment being supplied on time by the approved supplier; provisional acceptance was achieved for Unit-1 on 26.05.2016, and for Unit-2 on 18.02.2017; the reason, behind the delay in achieving provisional acceptance, was attributable to the 1st respondent and CTC; some of the delays, in achieving provisional acceptance, were not only due to the delays in supply by CTC, but also because design coal was not provided by the 1st respondent itself; even till date, the 1st respondent has not






















































































































































































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