Allegations of misrepresentation do not substantiate grounds to restrain the invocation of a bank guarantee unless accompanied by egregious fraud or irretrievable injustice.

JUDGMENT

[Hearing held through videoconferencing]

Vibhu Bakhru, J. (ORAL)

I.A. No. 7508/2021

1. Exemption is allowed, subject to all just exceptions.

2. The application is disposed of.

O.M.P.(I) (COMM.) 184/2021

3. The petitioner has filed the present petition seeking interim measures of protection under Section 9 of the Arbitration and Conciliation Act, 1996 (hereafter the `A&C Act').

4. The petitioner prays that respondent no.1 (hereafter `GAIL') be restrained from acting in furtherance of a letter dated 08.06.2021 whereby GAIL had invoked Clause 29 of the General Conditions of the Contract (GCC) and had terminated the contract awarded to the petitioner for the work of Horizontal Directional Drilling works for Haridwar-Rishikesh-Dehradun Pipeline Project (Part B). The petitioner further prays that the respondent nos. 1 and 2 be restrained from invoking the Performance Bank Guarantee furnished by the petitioner in furtherance of the decision to terminate the contract in question.

5. Respondent no.2 (TEPL) had issued a notice inviting tender on behalf of GAIL for Horizontal Directional Drilling works for Haridwar- Rishikesh-Dehradun Pipeline Project. The petitioner had bid for the said works and by a letter dated 21.07.2020, TEPL confirmed the acceptance of the petitioner's offer. Thereafter, on 07.08.2020, TEPL issued a Fax of Acceptance (FOA) confirming acceptance of the petitioner's offer for Part B of the contract in question at a value of Rs.9,89,88,817.92/- plus 18% GST. The FOA of the petitioner's offer for Part A was also issued on the same date. It is stated that the Kick-Off Meeting (KOM) was held on 14.08.2020. Subsequently, on 20.08.2020, separate Detailed Letters of Acceptance (DLOA) were issued by GAIL accepting the petitioner's offer in respect of Part A and Part B of the works in question.

6. The petitioner submitted the profile drawings in respect of the works and by an email dated 18.08.2020, the petitioner requested TEPL to approve the same. The petitioner claims that on 22.08.2020, it submitted revised profile drawings to TEPL as the profile drawings submitted by it earlier were rejected.

7. On 03.10.2020, TEPL sent an email calling upon the petitioner not to exceed the SOR rates and requested the petitioner to re-plan the length of the pipelines. The petitioner, on the other hand, requested TEPL to revise the SOR rates as according to the petitioner, the same was necessary on account of alteration in the specifications of the pipelines. However, the petitioner's request was rejected. On 14.12.2020, TEPL sent a letter to the petitioner stating that the petitioner's progress regarding the works (both Part A and Part B) were poor and there was a risk that the works would not be completed within the stipulated time. TEPL further highlighted that the Contract Performance Bank Guarantee (CPBG) had not been submitted in time; the petitioner had not complied with the Minimum Construction Equipment Deployment Scheme as per the tender conditions; it had delayed submission of design calculations and profile; it had delayed critical items for execution; the conditions of HDD rigs at site were in poor condition; and the construction management at site was poor.

8. In view of the policy of the Government, to offer certain reliefs to Contractors, GAIL by its letter dated 19.12.2020 amended the condition of submitting CPBG equivalent to 10% of the contract value to submitting CPBG equivalent to 3% of the contract value.

9. In view of the alleged defaults on the part of the petitione