Back
2019 Supreme(Del) 1120
IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Sahai Endlaw, J.
Liberty House Group Pvt. Ltd. – Appellant
Versus
State Bank of India & Ors. – Respondent
Civil Suit (Comm) No. 1246 of 2018, Interlocutory Application No. 16056 of 2018, 16060 of 2018, 16061 of 2018, 16065 of 2018
Decided On : 22-02-2019
A.S. Chandhiok, Adv., Krishendu Datta, Adv., Sweta Kabra, Adv., Aly Mirza, Adv., Priya Agarwal, Adv., Sandeep Sethi, Adv., Sanjay Bhatt, Adv., Sumit Nagpal, Adv., Abhinav Vasisht, Adv., Misha, Adv., Vaijayant Paliwal, Adv., Charu Bansal, Adv.
Headnote:
Civil Procedure Code, 1908 - Order 39 Rule 1 & 2, Order 2 Rule 2 - Contract Act, 1872 - Section 74 - Contract - Bank Guarantee - Encashment of - BG at the insistence of the plaintiff was furnished, is the offer of the plaintiff to restructure Castex and ARGL Limited with respect to both of which CIR Process was under way under the Code - There is not a whisper in the plaint of any fraud having been committed in inviting resolution applicants for Castex and ARGL Limited - Pleas of fraud in the matter of invocation of the BG do not constitute a ground to interfere with payment under the BG - Loss caused by such conduct of the plaintiff is mammoth, having adverse consequences on all the creditors and shareholders - Loss likely to be caused by the conduct of the plaintiff is to the country as a whole - Amount of the BBGs which the plaintiff was required to furnish to ensure that the plaintiff, after furnishing resolution plan does not withdraw, as the plaintiff has done-Plaintiff is not entitled to a restraint against encashment under the BG - Court has been found to be not having subject jurisdiction to entertain the suits - Plaintiff by instituting the suits has delayed the receipt of payment under the BBG by nearly over three months - Plaintiff is not directed to reimburse SBI with interest on the amounts of the BGs - Plaintiff is directed to pay the costs to SBI within four weeks of today.
Rajiv Sahai Endlaw, J.
The application of the plaintiff in both the suits, for interim injunction restraining encashment of Bank Guarantees (BGs) and the objection of the defendants to the subject jurisdiction of this Court to entertain these suits, are for consideration.
2. CS(Comm) No.1246/2018 has been filed against (a) State Bank of India (SBI); (b) Barclays Bank PLC (Barclays), Nehru Place; (c) Barclays Bank PLC, United Kingdom; and, (d) Mr. Dinkar T. Venkatasubramanian, for (a) permanent injunction restraining (i) SBI from invoking and/or encashing and/or seeking remittance under BG No.BARCBG2018145 dated 10th May, 2018 for Rs. 40,00,00,000/- issued by Barclays in favour of SBI on instructions of the plaintiff; (ii) Barclays from remitting the amounts under the said BG and from transmitting the amount under the Counter Guarantee; and, (b) declaration that the notice of Demand/Invocation dated 20th November, 2018 addressed by SBI to Barclays is invalid, illegal and band in law, pleading:-
(i) Castex Technologies Limited (Castex) is a part of Amtek Group of Companies. Castex was unable to meet its financial obligations and Corporate Insolvency Resolution Process (CIR Process) of Castex was put into motion by the SBI under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code). The National Company Law Tribunal (NCLT) Chandigarh, on 20th December, 2017 admitted the said application and the defendant no.4 Mr. Dinkar T. Venkatasubramanian was confirmed by the Committee of Creditors (CoC) as the Resolution Professional (RP) of Castex.
(ii) The RP prepared and floated a Process Memorandum dated 30th March, 2018 for consideration and selection of resolution plans from prospective resolution applicants.
(iii) The Process Memorandum required the prospective resolution applicants to submit a Bid Bond Guarantee (BBG) and the plaintiff, in accordance therewith submitted the BBG of Rs. 40,00,00,000/- in favour of SBI, by furnishing a Counter Guarantee in favour of Barclays.
(iv) The resolution plan submitted by the plaintiff was accepted by the CoC on 30th August, 2018 and a Letter of Intent (LoI) of the said date was issued in favour of the plaintiff and which was accepted by the plaintiff vide its letter dated 3rd September, 2018 to the RP.
(v) The RP filed an application under Section 30(6) read with Sections 31 and 60 (5) of the Code for approval by the NCLT of the said resolution plan submitted by the plaintiff and approved by the CoC.
(vi) The plaintiff, as per the terms of the LoI, was required to within ten days thereof submit a Performance Bank Guarantee (PBG) of the value of Rs. 100,00,00,000/- and the RP, vide its letter dated 10th September, 2018 asked the plaintiff to submit the PBG by 17th September, 2018. The plaintiff, vide its letter dated 15th September, 2018 offered conversion of the existing BBG for Rs. 40,00,00,000/- into a PBG and creating an Overseas Escrow Account of Rs. 60,00,00,000/-. The RP, vide its letter dated 21st September, 2018 communicated to the plaintiff rejection by the CoC of the said offer and requested PBG of the entire Rs. 100 crores in the form of a BG from a scheduled commercial bank in India.
(vii) While negotiations between the plaintiff and the RP with respect to PBG were still under way, the RP vide its e-mail dated 4th October, 2018 called upon the plaintiff to extend the BBG up to 15th January, 2019 and which was done by the plaintiff.
(viii) The SBI, vide its letter dated 21st November, 2018 invoked the BBG; such invocation was not in terms thereof.
(ix) The plaintiff is the resolution applicant not only of Amtek but also of ARGL Limited, another company in the Amtek Group of Companies.
3. CS(Comm) No.1247/2018 has been filed against (i) SBI; (ii) ARGL Limited, through its RP Mr. Dinkar T. Venkatasubramanian; (iii) Bank of Baroda (BoB), for (a) permanent injunction (i) restraining SBI and RP from invoking and/or encashing and/or seeking remittance under BG No.2910IGPER033218 dat
