Invocation of bank guarantees must strictly adhere to specified terms; any invocation beyond stipulated timelines is impermissible, regardless of contract extension claims.

JUDGMENT

V. Kameswar Rao, J.

CM No. 22060/2021

This is an application filed by respondent No.2 for placing on record additional documents, i.e., (i) copy of Written Statement in Civil Suit No. 212/2018 and, (ii) copy of the order dated January 03, 2020, passed in Civil Suit No. 212/2018.

For the reasons stated in the application same is allowed and the additional documents are taken on record.

Application stands disposed of.

RFA No. 238/2020

1. This appeal has been filed by the appellant/plaintiff with the following prayers:

"In View of the aforesaid facts and circumstances, the appellant most humbly pray that this Hon`ble Court may graciously be pleased to:

A. Allow the present appeal and thereby set-aside the Impugned Order and judgment dated 17.02.2020; and

B. Decree the Suit bearing CS No.9829/2016 filed by the Appellant/Plaintiff in its favour and against the Respondents and grant the reliefs prayed for in the Plaint of the Suit; and

C. Release the amount of Rs.1,07,11,050/- deposited by the Appellant with the Registrar General vide Serial No. 408 and converted into TD No.15530310059128 in its favour; and

D. Call for the trial court record in CS No.9829/2016; and

E. Pass such other and further order[s] as this Hon`ble Court may deem fit and proper in the facts and the circumstances of the present case and in the interest of Justice."

2. It is the case of the appellant/plaintiff, known for its work in construction, fabrication, and erection that it had been approached and requested by respondent No.2/M/s Hindustan Steel Works Construction Ltd. (hereinafter, `HSCL`) for help and collaboration in order to enable the respondent No.2/HSCL to successfully bid for a tender floated by National Thermal Power Corporation Ltd. (hereinafter, `NTPC`) for civil and structural works in Kahalgaon, Bihar. It is stated that because of the appellant/plaintiff collaboration, respondent No.2/HSCL had been awarded the main contracts vide Letters of Award (hereinafter, `LOA') dated July 31, 2003, and February 03, 2004, by NTPC and duly approved the sub-contracting of certain fabrication and erection of structural steelwork to be done by the appellant/plaintiff.

3. Thereafter, respondent No.2/HSCL had bifurcated the entire work into civil works contract and structural works contract and awarded two sub-contracts of structural works in favour of the appellant/plaintiff vide letters dated March 03, 2004, and April 06, 2004.

4. On request of respondent No.2/HSCL, the appellant/plaintiff had approached its bank i.e., respondent No.1/Punjab & Sind Bank which issued two Bank Guarantees (hereinafter, `BG`) No. 96/2005 and 97/2005 for Rs.58 lakhs and Rs.47 lakhs respectively, both dated January 13, 2006, in favour of the respondent No.2/HSCL as per the terms and conditions stated in the said documents. It is stated by Dr. Amit George, learned counsel appearing on behalf of the appellant/plaintiff that both the BGs had similar Clauses, therefore, the relevant Clauses of the BG No. 97/2005 relied upon by Dr. George are reproduced as under:

"1............We, the Punjab & Sind Bank (hereinafter referred to as "the said bank" and having our registered office at 21, Rajender Place, New Delhi do hereby undertake and agree to indemnify and keep indemnified the owner from time to time to the extent of Rs.47,00,000/- (Rs. Forty Seven lakhs only) against any loss or damage, cos