(July 17, 2001) 2001 (TLS)125339

2001-DLT-93-713 :: 2001-AD (Del)-6-240

GOA TELECOMMUNICATIONS AND SYSTEMS LIMITED Vs. Union of India

J. D. Kapoor

( 1 ) THIS is an application under Order 39 Rules 1 and 2 for interlocutory injunction by way of restraining the defendants, their servants, agents, officers, representatives from and in any manner encashing or attempting to encash or acting further to demands dated 18/1/2000 issued for encashment of bank guarantees issued by Syndicate Bank, Panaji,goa, defendant No. 4 and also for restraining defendant No. 4 from acting on the demand of defendants 1-3 and from disbursing or paying any money to the said defendants.

( 2 ) THE facts relevant for the,aforesaid application are in brief as under: the plaintiff was one of the successful bidders to a tender floated by the defendant No. 1 and 2 for supply of optical fibre line terminating equipment in the year 1995 and the defendants placed an advance purchase Order (APO) on the plaintiff for supply of two items as referred in para 3 of the plaint for a total contract value of Rs. 9,17,56,000. 00.

( 3 ) IN terms of Clause 1 of the said advance purchase Order, the plaintiff furnished a Bank Guarantee (No. 24/95) of the Syndicate. Bank, Panaji, Goa in the sum of Rs. 30,36,000. 00. A detailed and final Purchase Order was placed by the plaintiff on 31/1/1996 which was a consolidated purchase order for supply of both the aforesaid items. In respect of one item the defendants rejected the plaintiff s sample. In the meanwhile the bank guarantee which was furnished by the plaintiff in response to the advance Purchase Order expired on 30/4/1999.

( 4 ) IN order to maintain cordial relations with the defendants, the plaintiff, by letter dated 13/7/1999, agreed to replace the said expired guarantee by a fresh guarantee subject to the condition that replaced guarantee shall be for a value calculated as a percentage of the value of the purchase order dated 30/1/1996 in accordance with Clause 4. 1 of the General (Commercial) Conditions of the contract. The plaintiff furnished the fresh guarantee for rs. 22,62,103. 00 as against the sum of Rs. 30,36,000. 00.

( 5 ) THERE was no response to the plaintiff s proposal and in fact by letter dated 20/10/1999 the defendants 1 to 3 made a demand on the plaintiff for payment of Rs. 30,36,000. 00 the amount cohered by the said bank guarantee, interalia, on the ground that the plaintiff has not performed its contractual duties/obligations under the purchase order dated 31/1/1996 and has, therefore, purportedly committed breach of the contract.

( 6 ) HOWEVER, the plaintiff while making its position clear sent a letter dated 2/12/1999 to the defendants informing that even if the said bank guarantee had been alive, it was not encashable for the full amount as it was far in excess of the amount contractually required to be secured and also that in any event since one of the two items have already been supplied in full, the defendants mere not entitled to recover the entire secured amount. Inspite of this defendant No. 2 threatened to encash both the bank guarantees furnished by the plaintiff as security in two other contracts to recover the said amount of rs. 30,36,000. 00 and revealed its entitlement to do so for the first time under the "set-off" clause in conditions governing the purchase order dated 31/1/96. At the same time defendants 1-3 also issued two demands claiming a total sum of Rs. 27,36,160. 00 being the balance after adjusting the payment of Rs. 2,99,840. 00 issued by the defendants addressed to the Syndicate Bank, Panaji, Goa for encashment furnished by the plaintiff in two other purchase orders/contracts which Mere not related to the purchase order dated 31/1/1996.

( 7 ) IT is averred that the aforesaid Purchase Orders against which the two impugned bank guarantees were furnished by the plaintiff Mere fully executed and supplies thereunder concluded and the defendants 1 and 2 have also issue