These appeals are filed against the judgment and order dated 14.1.2011 passed in A.A.Nos.6/2010 and 7/2010 by the District Judge, Dakshina Kannada, Mangalore.

2. The facts in brief are as under:-

Appellant is a company incorporated under the laws of Germany and was formerly known as MAN Ferrostaal AG. It has its Principal Office at Hohenzollernstrabe, Germany. The appellant is engaged in project development, project management, etc., in particular, it is acting as a General Contractor and is responsible for construction of special-purpose ships at shipyards.

3. Respondent No.1 is a company incorporated under the Companies Act, 1956, having its registered office at No.302, Wakefield House, Sprott Road, Ballard Estate, Mumbai, having its Branch Office and Shipyard at Thaneer Bhavi, Mangalore. Respondent No.1 is a privately operated shipyard and is engaged in the business of construction of vessels.

4. Respondent No.2 is State Bank of India, having its industrial finance Branch at World Trade Centre, Colaba, Mumbai.

5. The appellant and respondent No.1 entered into two shipbuilding contracts dated 16.2.2007 for construction of vessels, Builders Hull Nos.379 and 380. Contracts were executed at Essen, Germany. These appeals concern both the shipbuilding contracts under which respondent No.1 agreed to build and deliver to the appellant, the vessels. Contracts were subsequently amended by Addendum Nos.1 to 3, dated 16.2.2007, 30.3.2007 and 29.11.2007 respectively. The date of presenting the vessels for delivery and acceptance in Singapore was 15.1.2010. However, the date of presenting the vessels for delivery was further extended to 14.7.2010.

6. In the month of December, 2008, it was agreed by the parties, after discussions, that the vessels would be fabricated and constructed in the shipyard at Mangalore. Finally, a memorandum of understanding dated 18.6.2010 was entered into by the parties and the date of delivery of vessels is extended finally to 30.6.2011. The appellant herein paid a sum of Euros 42,75,400 as the first instalment to the first respondent herein and prior to receipt of the said amount, respondent No.1 furnished the refund bank guarantee drawn on 2nd Respondent bank, dated 26.5.2007 for the aforementioned amount of the second respondent-bank. The bank guarantee, dated 26.5.2007 was extended from time to time till 30.6.2011. In the month of August, 2008, another sum of Euros 16,62,000 was paid to the first respondent by the appellant as second instalment. Consequently, the first respondent furnished a refund bank guarantee, dated 12.8.2008 for the above said amount and the validity of the second bank guarantee was extended from time to time till 30.6.2011. In the month of October, 2008, another sum of Euros 44,53,550 was paid by the appellant to the first respondent as 3rd instalment and consequently, the first respondent furnished refund bank guarantee dated 17.10.2008, which was extended from time to time till 30.6.2011. In the month of December, 2009, the appellant herein paid further sum of Euros 22,27,275 to respondent No.1 as 4th instalment and the first respondent furnished refund bank guarantee dated 14.12.2009 which was extended till 30.6.2011.

7. Subsequently, the disputes have arisen between the appellant and the first respondent. The first respondent received a letter dated 25.10.2010 addressed by the appellant, wherein the appellant terminated the contract pursuant to Clause 1(d) of Article IV of the Contracts and called upon the first respondent to repay a sum of Euros 1,40,97,075,20. The appellant also called upon the first respondent to hand over all the drawings, data sheets, diagrams, specifications, calculations, models test reports, etc. The first respondent gave reply on 4.11.2010 to the appellant and stated the reasons for the delay attributable to the appellant. When the facts stood thus, the appellant herein addressed a letter to the second respondent herein seeking encashment