Bank guarantees can only be interdicted in exceptional cases of fraud, irretrievable injustice, or special equities, and the existence of any dispute between the parties to the contract is not a ground for issuing an injunction to restrain the enforcement of bank guarantees.

JUDGMENT

Manoj Kumar Ohri, J. (Oral)--The matter is received by way of `Supplementary Cause List' on account of urgent mentioning.

2. The instant petition has been filed by the appellants under Section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the `A&C Act') thereby seeking ex-parte ad interim injunction restraining respondent No.1 (hereinafter referred to as `NHIDC') from invoking and encashing the Performance Security Bank Guarantee No. 0910318BG0000055 dated 12.01.2018 in the sum of Rs.11,49,30,000/- issued by respondent No.2 (hereinafter referred to as `SBI').

3. Briefly, the facts in a nutshell are that on 11.01.2016 NHIDC issued `Notice Inviting Bid' for construction of a major bridge over middle strait creek connecting South Andaman and Baratang Islands in the Union Territory of Andaman & Nicobar Islands on EPC basis. The petitioner No.1, claiming itself to be a joint venture formed by petitioner Nos. 2 and 3 (hereinafter referred to as `Contractor'), submitted its bid and was awarded a letter of Award by NHIDC on 18.12.2017. Subsequently, an Engineering, Procurement and Construction Agreement was entered into between the parties on 02.01.2018 (hereinafter referred to as the `Contract').

The petitioners initially filed a petition bearing W.P.(C) 9111/2023. The same was withdrawn with liberty to file the present petition.

4. Mr. Amarjit Singh Chandhiok, learned Senior Counsel for the petitioners contends that the Performance Security Bank Guarantee was conditional and the terms of the Contract being inbuilt in the bank guarantee, the merits of the dispute need to be looked into. As per Clause 23.6.2 of the Contract, on termination of the Contract, NHIDC is required to return the performance security etc. He submits that the petitioner No.1 was prevented from meeting its contractual obligations on account of non-availability of stone aggregate as a result of the order dated 15.06.2020 passed by the National Green Tribunal (hereinafter referred to as `NGT'), Principal Bench, New Delhi in O.A. No. 33/2019 (EZ). It is submitted that vide aforesaid order, NGT had directed the Andaman & Nicobar Island Pollution Control Committee to ensure that no stone mining be allowed till the time a study report by an expert institute is carried out on the aspect of potentiality of stone availability and amount to be expected. Learned Senior Counsel contended that the aforesaid directions by the NGT amounted to a Force Majure event in terms of Clause 21.1(d) of Article 21 of the Contract. As the study report is still awaited, the Contractor could not fulfil its contractual obligations. It is further contended that aforesaid order amounted to change in law in terms of Clauses 19.17 and 21.4 (a) of the Contract.

5. Learned Senior Counsel also referred the letters dated 11.12.2019, 12.12.2019 and 13.12.2019 issued by NHIDC to submit that on account of stone scarcity, discussions were held to procure stone aggregate from the mainland to accelerate the project, and it was decided that financial implications of procurement from the mainland should not exceed 5% of the contract value/revised contract value.

6. In nutshell, it was contended on behalf of the Contractor that the delay in execution of work on its part was entirely attributable to the order passed by the NGT which prevented it from procuring the stone aggregates, and thus a case of special equity is made out.

7. Mr. Debal Kumar Banerji, learned Senior Counsel for respondent No. 1 appearing on advance notice, on instructions, states that the said bank guarantee has already been invoked today. Copy of the invocation letter dated 12.07.2023 has been handed over in Court today and is taken on record.

8. Learned Senior Counsel, while negating the petitioners' submissions that passing of the order by NGT amounted to a Force Majure event, contended that the said order was confined only to stone mining whereas in terms of the Contract, the Contractor had th