The encashment of a bank guarantee, even if wrongful, may not entitle the plaintiff to an injunction against encashment. The right to claim refund of wrongfully realized monies exists but does not warrant an injunction against encashment.

IA No.383/2016 (under Order XXXIX Rule 1&2 CPC)

1. Vide ex parte ad-interim order dated 11th January, 2016, this Court was pleased to restrain the encashment of bank guarantee subject to plaintiff keeping the same alive.

2. However it appears that the bank guarantee was encashed on 25th January, 2016 and which resulted in filing of Contempt Cas (C) No.93/2016 and vide order dated 2nd February, 2016 wherein the defendant no.1 National Highways Authority of India (NHAI) was directed to deposit the amount in this Court subject to further orders in this suit.

3. In the order dated 28th April, 2016 a doubt was expressed as to whether the suit has become infructuous since the bank guarantee had been encashed but in my view, since there was an injunction in force and the bank guarantee was encashed in violation thereof and the amount has been directed to be deposited in this Court, it cannot be said that the suit has become infructuous.

4. The application of the plaintiff for interim relief and on which ex parte relief was granted has to be considered.

5. The counsel for the plaintiff however, instead of arguing the injunction application, states that the amount lying deposited in this Court pursuant to the order aforesaid be released to the plaintiff. He contends that since the bench deciding the contempt petition had stated that the plaintiff can apply to this Court therefor, that amount should be released to the plaintiff.

6. The question of releasing such amount to the plaintiff would not arise if the injunction application were to be ultimately dismissed and which the counsel for the plaintiff is not choosing to argue.

7. The contention of the counsel for the defendant no.1 NHAI that the suit has indeed become infructuous cannot be accepted as for whatsoever reason the encashment of the bank guarantee was in violation of the order of the Court.

8. The counsel for the plaintiff has been heard on the application for interim relief.

9. The plaintiff has instituted the suit i) for declaration that the defendant no.1 NHAI has not suffered any damages or costs beyond the pre-bid processing charges of Rs.77,000/- and is not entitled to forfeit the bid security amount in the form of bank guarantee deposited by the plaintiff as punitive costs; ii) for declaration that the order dated 17th November, 2015 of the defendant no.1 NHAI is unlawful, illegal and non enforceable as the defendant no.1 NHAI has not quantified the actual damage/loss suffered due to plaintiff’s participation in the pre-bidding of the contract; and, iii) for permanent injunction to restrain the defendant no.1 NHAI and the defendant no. 2 Bank from encashing the bank guarantee.

10. The suit came up first before this Court on 11th January, 2016 when vide ex parte ad-interim order, the defendant no.1 NHAI was restrained from encashing the bank guarantee No.00291GPER08215 dated 17th July, 2015 for a sum of Rs.8.14 crores.

11. As aforesaid, the bank guarantee was encashed, according to the counsel for the defendant no.1 NHAI for the reason of the plaintiff having not complied with Order XXXIX Rule 3 of the CPC, and the amount of Rs.8.14 crores received by the defendant no.1 thereunder. Again as aforesaid, pursuant to order dated 2nd February, 2016 in Contempt Cas (C) No.93/2016 filed by the plaintiff, the said amount was ordered to be deposited by the defendant no.1 NHAI in this Court and is reported to have been so deposited.

12. It is the case of the plaintiff in the plaint (i) that in pursuance of a tender floated by the defendant no.1 NHAI on 10th June, 2015, the plaintiff had submitted a bid and in accordance with the tender conditions also submitted a bank guarantee of Rs.8.14 crores issued by the defendant no.2 Bank of Baroda (BoB) in favour of defendant no.1 NHAI; (ii) that in pursuance to the opening of the bids on 21st July, 2015, the plaintiff on 23rd July, 2015 was intimated to come for an oral discussion in relation to certain clarifications; (iii) clarifications w