Bank guarantees are independent of the main contract, and the court does not grant a stay for restraining the encashment of bank guarantees in the absence of egregious fraud or special equities.

JUDGMENT

[VIA HYBRID MODE]

Sanjeev Narula, J. (Oral)--By way of present petitions under Section 9 of the Arbitration and Conciliation Act, 1996, the Petitioner - TRF Ltd. [hereinafter, `TRF'] seeks a stay order against invocation and encashment of bank guarantees furnished in favour of Respondent No. 1 - The Indure Private Limited [hereinafter, `Indure']. The background facts and the relief sought being nearly identical, it is considered apposite to decide and dispose of all the petitions by way of a common order.

BRIEF FACTS

2. TRF is a company engaged in the business of manufacturing, erection and commissioning of bulk material handling equipment. Indure is engaged in the business of procuring such equipment for installation in thermal power plants for its clients/Principle Employers, which, in the instant cases, are Rajasthan Rajya Vidyut Utpadan Nigam Limited [hereinafter, `RRVUNL'] [In O.M.P.(I) (COMM.) 371/2021] and National Thermal Power Corporation [hereinafter, `NTPC'] [In O.M.P.(I) (COMM.) 372/2021, O.M.P.(I) (COMM.) 373/2021 and O.M.P.(I) (COMM.) 374/2021]. The Banks that have issued the bank guarantees are arrayed as Co-Respondents. [Bank of Baroda in O.M.P.(I) (COMM.) 371/2021, Central Bank in O.M.P.(I) (COMM.) 372/2021 and O.M.P.(I) (COMM.) 373/2021, and Indian Bank in O.M.P.(I) (COMM.) 372/2021 and O.M.P.(I) (COMM.) 374/2021.]

3. Indure issued certain Work Orders and Purchase Orders on TRF for supply of equipment for several projects at different sites. The details of the equipment, Work Orders and Purchase and bank guarantees are different in each petition, however, the background, circumstances and grounds urged for seeking restrain orders is common. Thus, for the sake of convenience, the factual details in respect of O.M.P. (I) (COMM.) 371/2021 are being noted in detail, and the differentiating details of other cases, to the extent found relevant, are noted separately.

FACTS IN O.M.P.(I) (COMM.) 371/2021 & 372/2021

4. In respect of a project at the Chabra site in Kota, Rajasthan, belonging to RRVUNL, TRF was issued two Purchase Orders dated 31st October, 2009, for supply of `Boom Hydraulic Drive Stacker Reclaimer with all its Accessories' and `Wagon Tippler/SAC/Apron Feeder/Ring Granulator/Grizzy Feeder with all its Accessories'; and two Work Orders both dated 31st October, 2009, for `Erection, Testing, Commissioning and Installation'. Under the terms of the afore-noted agreements, TRF issued Advance Bank Guarantees [hereinafter, `ABG'] and Performance Bank Guarantees [hereinafter, `PBG'], details whereof are set out in the prayer clause.

5. TRF claims that the equipment under the Purchase Orders has been supplied entirely. Moreover, the advance amounts for which the ABGs were issued also stand adjusted by Indure. After the supply of equipment, their erection, commissioning, and testing has also been done; even the Performance Guarantee Test stands conducted.

6. TRF thus claims that it has fulfilled all its contractual obligations to the satisfaction of Indure, and despite that, it was constrained to renew the bank guarantees, under threat of invocation relating to other ongoing contracts between the parties.

FACTS IN O.M.P.(I) (COMM.) 373/2021

7. In respect of Purchase Orders and Work Orders pertaining to a project at Kanti in Muzaffarpur, Bihar, material for the value of Rs.70,99,36,922/- stands supplied against total value of Rs.28.10 crores. However, corresponding payments were not released. Advance of Rs.1,79,93,692/- towards supply of materials has been adjusted from the bills; only an amount of Rs.1,05,16,308/- remains unadjusted. Since payments were not made, TRF was compelled to stop the supplies. Reliance is placed upon a letter dated 16th August, 2018 issued by TRF, requesting Indure to reduce the value of Advance Bank Guarantee to the extent of the amount adjusted against advance.

8. Despite substantial supply against the advance paid by Indure, ABG has not been reduced, and Indure has compelled