I.A. Nos. 3182/2017 (under Order XXXIX Rule 1 and 2 CPC), 5090/2017 (under Order VII Rule 10 and 11 by Defendant No. 2) and 7263/2017 (under Order XXXIX Rule 4 CPC r/w Order VII Rule 10 and 11 by Defendant No.3)

1. Before dealing with the applications individually it would be appropriate to first set out the facts in the plaint. Plaintiff Bharat Heavy Electricals Limited (in short ‘BHEL’) has filed the present suit impleading Electricity Generation Incorporation (in short ‘EGI’) having its office at Ankara, Turkey as defendant No.1, AKBank T.A.S. (in short ‘AKBank’) at Istanbul, Turkey as defendant No.2 and Bank of Baroda (in short ‘BoB’) having its branch office at Sansad Mark, New Delhi as defendant No.3. The three main prayers in the suit besides the costs are:

“(a) Pass a decree of declaration, declaring that the alleged invocation of the Performance Bank Guarantee bearing No.0834INC15CG00075 for an amount of EUR EUR 3,831,589.69 i.e. INR 28,35,37,637.06 valid till 1st July, 2024 by Defendant No.1 to Defendant No.2 and consequently of the Counter Guarantee of Defendant No.3 to Defendant No.2 bearing No. 2158FGPER000215 is fraudulent and hence void; and

(b) pass a decree of permanent injunction restraining Defendant No.3 from making any payment whatsoever to Defendant No.2 in terms of the fraudulent invocation by Defendant No.1 of the Performance Bank Guarantee in turn invoking the Counter Guarantee baring number 2158FGPER000215 dated 20th April, 2015 for an amount of EUR 3,831,589.69 i.e. INR 28,35,37,637.06; and

(c) pass a decree of permanent injunction restraining Defendant No.2 from making any payment whatsoever to Defendant No.1 in terms of the fraudulent invocation dated 21st April, 2015 by Defendant No.1 of the Performance Bank Guarantee baring No. 0834INC15CG00075 for an amount of EUR 3,831,589.69 i.e. INR 28,35,37,637.06 valid till 1st July, 2024”

2. Claim of BHEL is that it is a public sector undertaking of the Government of India and EGI is a State owned company duly incorporated under the laws of Turkey engaged in the business of power generation and transmission having its office at Ankara, Turkey. AKBank is a privately owned commercial bank in Adana and is a banking company carrying on banking activities at Istanbul, Turkey. BoB is yet another International State Banking and financial service company with its headquarter at Vadodara, Gujarat and its branch office at Sansad Marg, New Delhi.

3. EGI issued a contract for rehabilitation of eight units of Keban Hydroelectric Power Plant for which BHEL was engaged as a contractor. On 21st April, 2015 a contract to this effect was entered into between BHEL and EGI valued at Euro 63,859,828.24 (Eur Sixty Three Million Eight Fifty Nine Thousand Eight and Twenty Four Cents only) approximately INR 472,56,27,289.76 (Rupees four hundred seventy two crores fifty six lakhs twenty seven thousand two hundred eighty nine and seventy six paise only).

4. As per Article 11 of the contract between BHEL and EGI a Performance Bank Guarantee had to be furnished. Accordingly, BHEL got issued a Counter Guarantee in favour of AKBank bearing No. 2158FGPER000215 dated 20th April, 2015 for an amount of EUR 3,831,589.69 that is INR 28,35,37,637.06 valid till 16th July, 2024 through BoB.

5. On the basis of the Counter Guarantee AKBank issued a Performance Bank Guarantee to EGI bearing No. 0834INC15CG00075 for an amount of EUR 3,831,589.69 i.e. INR 28,35,37,637.06 valid till 1st July, 2024 in favour of EGI. The relevant terms of Performance Bank Guarantee read as under:

“Performance Bond to Elektrik Uretim A.S. Genel Mudurlugu (EUAS) date as the firm Messers Bharat Heavy Electricals Limited being the contractor has entered into engagement Keban Hesin 8 Sekiz Unitesinin Rehabilitasyonu as a result of the tender concluded by your administration and since AKBANK T.A.S. Guarantees the amount of EUR 3,831,589.69 being the value of the performance bond which has to be submitted by the said contract