( 1 ) THE appellant original plaintiff has filed this Appeal From Order challenging the order passed by the learned City Civil Judge, below notice of motion Exh. 7 in Civil Suit No. 2461 of 2008 on 11. 02. 2009. While dismissing the Notice of motion application, the learned City Civil Judge has observed in the order that the Bank Guarantee in question is unconditional and the Bank has acted upon the words stated in the Bank Guarantee. Therefore, as per settled law, in such cases, Bank Guarantee cannot be stayed unless pure case of fraud has been established by the plaintiff. The contention of the fraud has no force at all and the plaintiff has not established any prima facie case nor any balance of convenience can be said to be in favour of the plaintiff. Since the plaintiff has failed to prove his case in his favour, the stay initially granted during the pendency of the notice of motion application is required to be vacated.

( 2 ) THE learned City Civil Judge has extended the ad-interim relief so as to enable the plaintiff to approach this Court and this Court vide its order dated 24. 02. 2009 further extended the interim relief without prejudice to the rights of the parties and without entering into merits of the case.

( 3 ) IT is the case of the appellant plaintiff that Indian Oil Corporation Limited (IOCL) awarded the contract for Balance Offsite and Utilities and Interconnection with Panipat Refinery / Marketing Terminal (EPCC Package 9) for Panipat Napttha Cracker Project of M/s. IOCL in the State of Haryana to Naftogaz India Private Limited. The respondent No. 2 defendant No. 2 has been awarded the said contract by Naftogaz. The respondent No. 2 invited the appellant to submit its offer for undertaking the work of designing, construction and commissioning of the water treatment plant forming part of the scope of the contract of the respondent No. 2 on 100% back to back basis.

( 4 ) IT is also the case of the appellant that the respondent No. 2 at all material points of time represented to the appellant that it was competent to award the contract on a back to back basis. If the appellant had known that it was not a turnkey contract, but was in essence a labour contract, the appellant would not have submitted its offer. On the basis of the representation made by the respondent No. 2 before the appellant, the appellant had entered into a contract with the respondent No. 2 for installation, execution and maintenance of water treatment plant on 100% back to back basis. The contract was valued at Rs. 33 Crores and the respondent No. 2 gave an amount of Rs. 3. 10 Crores by way of mobilisation advances and a Bank Guarantee of equal amount was given by the appellant as security towards the said advance.

( 5 ) IT is also the case of the appellant that having regard to the representation made by the respondent No. 2 to the effect that the contract was to be on a back to back basis and in terms of the agreements entered into, the appellant on the basis of its reputation and goodwill entered into the negotiations with the vendor and finalised the major orders for commissioning of the water treatment plant. The appellant also purchased the requisite materials, namely, cement, steel, equipments, plants etc. Thus, the appellant mobilised the requisite resources and commenced the acquisition of the contract as agreed.

( 6 ) IT is also the case of the appellant that when the bills were submitted by the appellant and not cleared by the respondent No. 2, upon inquiry, it was learnt from the respondent No. 2 that in fact, IOCL had not permitted the respondent No. 2 to execute the work in question on 100% back to back / turnkey / EPC basis and the bills would not be cleared as sent. The respondent No. 2 suggested an amendment to the agreement by which the agreement in essence became a labour contract. The appellant had already mobilised its resources, invested capital, men power and provided a Bank Guarantee. Under threat of invocation of Ba

Click Here to Read the rest of this document