THE HON’BLE THE CHIEF JUSTICE ALOK ARADHE AND THE HON’BLE SHRI JUSTICE ANIL KUMAR JUKANTI JUDGMENT: (per the Hon’ble the Chief Justice Alok Aradhe)

Mr. G. Kalyan Chakravarthy, learned counsel appears for the appellant.

Ms. Aahana Madhyala, learned counsel appears for respondent No.1.

2. With the consent of the parties, the matter is heard finally.

3. This appeal under Section 13 of the Commercial Courts Act, 2015 has been filed against an order dated 28.09.2022 by which the Principal Special Court in the Cadre of District Judge for Trial and Disposal of Commercial Disputes, City Civil Court at Hyderabad (hereinafter referred to as ‘the Commercial Court’) has rejected C.O.P.No.30 of 2022 preferred by the appellant under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the

1996 Act’).

4. Facts giving rise to filing of this appeal briefly stated are that sometime in July, 2017, the Municipal Corporation of Karnal had floated a tender for construction and maintenance of 20 & 8 MLD Sewerage Treatment Plant (STP) for sewerage systems. Respondent No.1, a joint venture company, participated in the bidding process and was awarded the tender. Letter of Acceptance was communicated to respondent No.1 on 24.10.2017. As per the work order, respondent No.1 was required to furnish security deposit and performance bank guarantee to the Municipal Corporation, Karnal.

5. Respondent No.1, a joint venture company, in turn sub-contracted the work by work order dated 30.01.2018 to respondent No.3, namely, M/s Hydro Magus Private Limited. The scope of the work was design, engineering, manufacturing, inspection, transportation, erection, installation, testing and commissioning of 20 & 8 MLD STP for sewerage systems. The aforesaid work was to be completed within a period of 22 months. A fresh work order dated

10.07.2020 was issued by respondent No.1 to the appellant.

6. As per the terms and conditions of the aforesaid work order, the appellant was required to furnish an unconditional bank guarantee. Thereupon, an unconditional bank guarantee was furnished on 23.12.2021 which was valid up to 30.03.2023. A dispute between the parties arose on account of delay in execution of the project.

7. Respondent No.1, a joint venture company, filed Commercial Suit No.2 of 2022 under Section 9 of the 1996 Act before the District and Sessions Court, Karnal, in which, an injunction was sought against the principal employer, namely, Municipal Corporation of Karnal, restraining them from invoking and encashment of the bank guarantee. The learned Additional District and Sessions Judge by an order dated 31.03.2022 directed the parties to maintain status quo with regard to invocation of the bank guarantee. Respondent No.1 thereafter on 09.04.2022 issued a letter to the appellant pointing out various defects in execution of the work and however a period of 20 days was granted to the appellant to complete the work. Thereafter, on 12.04.2022, the appellant submitted an explanation. Respondent No.1, a joint venture company, by an order dated 22.04.2022 suspended the work awarded to the appellant.

8. The appellant thereupon filed C.O.P.No.30 of 2022 under Section 9 of the 1996 Act restraining respondent Nos.1 and 2 from invoking the bank guarantee. The Commercial Court by an order dated 28.09.2022 dismissed the aforesaid C.O.P. In the aforesaid factual background, this appeal has been filed.

9. Learned counsel for the appellant submitted that the contract awarded to the appellant was terminated in an illegal manner. It is further submitted that 90% of the work has been completed by the appellant and the vouchers are pending for payment. It is further submitted that the trial Court grossly erred in rejecting C.O.P.No.30 of 2022 preferred by the appellant on the ground that the appellant has failed to make out the case of fraud or irretrievable prejudice.

10. On the other hand, learned counsel for respondent No.1 has supported the order passed by the learn