Point of Law: fraud or misrepresentation against the 2nd respondent, the question of interfering in the present Writ Petition directing the respondents not to invoke the bank guarantees provided by the petitioner in favour of the 2nd respondent would not arise.

ORDER :

1. This Writ Petition is filed seeking a Writ of Mandamus declaring the action of the 2nd respondent in issuing the requisition letter to the 1st respondent-Bank for invocation of the four Bank Guarantees for the amount of Rs. 4,40,00,000/- vide Reference No. F&A/MKTG/BGINVOCATION/TIPIL/20-2021/22 dated 13-11-2020 and trying to invocation of the bank guarantees by the 1st respondent as illegal, arbitrary, violation of Clause 4 of the Agreement between the petitioner and the 2nd respondent and also against the violation of Covid-19 Regulatory Package Guidelines issued by the Reserve Bank of India (RBI) dated 27-03-2020 and also violation of Article 21 of the Constitution of India and consequently set aside the same.

2. Heard Sri. Y. Balaji, learned counsel for the petitioner-company and Sri. S. Ravi, learned counsel for the respondents.

3. It has been contended by the petitioner that it is a registered company and it had entered into an agreement with the 2nd respondent on 11-09-2017 for providing financial assistance for procurement of various equipments, materials from different sources for installation, erection, commissioning at different projects awarded to the petitioner by various authorities. In pursuance to the above said agreement, the petitioner was to provide bank guarantees in favour of the 2nd respondent and accordingly, the petitioner had furnished bank guarantee to a tune of Rs. 4,40,00,000/- in favour of the 2nd respondent from the 1st respondent-bank and the said bank guarantees are subsisting. The grievance of the petitioner is that due to Covid-19 pandemic, the petitioner could not pay to the 2nd respondent for the purchases made for the financial assistance provided by the 2nd respondent for procurement of various articles by the petitioner-company and the petitioner has addressed the letters to the 2nd respondent vide letters dated 16-07-2020, 21-08-2020 and 17-11-2020 requesting the 2nd respondent to grant time for payment till 31-12-2020.

4. Learned counsel for the petitioner has further contended that the RBI in Covid-19 Regulatory Package Guidelines dated 27-03-2020 and as per the aid package, directed to grant moratorium of three months for payment of instalments and the RBI has also issued Master Circular Guarantees and Co-acceptances on 22-08-2003 and directed all the banks to follow procedure prescribed under the Master Circular for issuing and maintaining the bank guarantees. But the 2nd respondent, without following the guidelines issued by the RBI, as stated supra, has straight away written a letter to the 1st respondent on 13-11-2020 for invocation of bank guarantees in its favour. In those set of circumstances, the present Writ Petition is filed and this Court was pleased to grant interim stay on 19-11-2020.

5. Learned counsel for the petitioner had contended that as per the agreement entered between the petitioner and the 2nd respondent dated 11-09-2017, the 2nd respondent must give time of minimum of 180 days for clearing the amounts in favour of the 2nd respondent, but without following any of the terms, the 2nd respondent has straight away issued a requisition to the 1st respondent for invocation of bank guarantee. Therefore, the action of 2nd respondent invoking the bank guarantees, without following the procedures prescribed in the agreement entered by the petitioner, is arbitrary and illegal. He further contended that appropriate orders be passed in the Writ Petition directing the respondents not to invoke bank guarantees as the 2nd respondent has not followed the procedure as prescribed in the agreement entered with the petitioner.

6. Per contra, learned counsel for the respondents had contended that the 2nd respondent has provided financial assistance to the petitioner and cleared all the bills for the materials purchased by the petitioner in pursuance to the agreement entered with the petitioner and invoices were also furnished to the petitioner on 28-08-2020 and that the 2nd respo