OMP (I) (COMM) 366/2021

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$~25

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IN THE HIGH COURT OF DELHI AT NEW DELHI

%

+

O.M.P.(I) (COMM.) 366/2021

ZEE ENTERTAINMENT ENTERPRISES

LTD & ANR.

..... Petitioner

Through: Mr Gopal Jain, Senior Advocate with

Mr Kunal Tandon, Mr Kumar Shashank

Shekhar, Advocates.

versus

RAILTEL CORPORATION OF INDIA

LTD & ANR.

..... Respondents

Through Mr Chetan Sharma, learned ASG with

Mr J.K. Singh Mr Ashish, Advocates.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

[Hearing held through video conferencing]

VIBHU BAKHRU, J. (ORAL)

1.

The petitioners have filed the present petition under Section 9 of

the Arbitration and Conciliation Act, 1996 (hereafter ‘the A&C Act’),

inter alia, praying as under:-

“a) Pass an order in the nature of an ex-parte ad-

interim/interim nature restraining the Respondent

No.1 from invoking the Bank Guarantee bearing

BG No~240GT02201040006 dated 09.04.2020

for a BG amount of Rs.37.17 Crores issued by

Respondent No.2 Bank (pursuant to the letter of

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OMP (I) (COMM) 366/2021

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termination

dated

11.11.2021),

issued

by

Petitioner No.1 for and on behalf of Petitioner

No.2;

(b) Pass an order in the nature of an ex-parte ad-

interim/interim nature staying the operation and

effect of the termination letter dated 11.11.2021;

(c) Pass an order in the nature of an ex-

parte/interim nature restraining the Respondent

No.1 from issuing the press release for and in

respect

of

the

Termination

Letter

dated

11.11.2021 and if issued, to direct the

Respondent to withdraw the said Press Release.”

2.

The respondent (hereafter ‘RailTel’) had issued a Request for

Proposal (RFP) for “Selection of Digital Entertainment Service

Build Own Operate (BOO) model for Indian Railways”. It is stated that

petitioner no. 2 (Margo Networks Pvt. Ltd. –hereinafter ‘Margo’) had

submitted its bid pursuant to the RFP and was declared successful.

Thereafter, RailTel issued a Letter of Award (LoA) dated 14.01.2020

awarding the contract to Margo.

3.

In terms of the RFP, it was agreed that the contract to provide

COD Services would be for a term of ten years. The contract was on

revenue sharing basis whereby Margo had agreed to share revenue from

the COD Services subject to payment of an Annual Minimum

Guarantee amount (hereafter ‘MG’). The MG for the first year was

agreed at ₹63 crores. In terms of the RFP, Margo was also required to

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furnish a Performance Bank Guarantee equivalent of a value of 50% of

the quoted MG within a period of thirty days of issue of the LoA. The

parties agreed that for the second year, the MG amount would be

increased to the revenue shared during the last applicable financial year

if the same was higher than 50% of the MG.

4.

Petitioner no.1 (hereafter ‘ZEEL’) is the holding company of

Margo and had furnished the subject Bank Guarantee bearing BG No-

240GT02201040006 dated 09.04.2020 issued by respondent no.2

(HDFC Bank) for an amount of ₹37.17 Crores (hereafter referred to as

‘the BG in question’).

5.

Margo states that after issuance of the BG in question, it had sent

several emails to the Northern Railways with regard to implementation

of the contract to provide COD Services in various trains.

6.

Margo states that it had also exchanged correspondence with

RailTel in regard to the Performance Bank Guarantee from March, 2020

onwards. The petitioners (ZEEL and Margo) contend that their

resources were severely constrained in view of the nationwide

lockdown imposed with effect from 23.03.2020, on account of Covid-

19 pandemic. Margo also claims that there were significant delays on

the pa