Ivrcl Ltd v. Rail Vikash Nigam Limited & Ors & Ors

NAVIN CHAWLA, J DECEMBER 22, 2017/Nk

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + OMP(I) (COMM) 271/2017 Reserved on: 13TH December, 2017 Date of decision: 22nd December, 2017 IVRCL LTD. ..... Petitioner Through: Mr.Sumesh Dhawan, Ms.Vatsala Kak, Ms.Jasvin Dhama, Advs. versus RAIL VIKASH NIGAM LIMITED & ORS ..... Respondents Through: Mr.Rajesh Kr.Gautam, Adv. for R-3 Mr.Udit Seth and Mr.Dilip, Advs. for R-1 Mr.Satish Bhati, proxy counsel for R-2 CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. The Petitioner has filed the present petition inter alia praying for the following relief: "a) grant an injunction by restraining the Respondents, their agents, servants or any other persons claiming through or under them from invoking or en-cashing the bank guarantee Performance Bank Guarantee ("PBG") for a sum of Rs.9,55,69,925/- (Rupees Nine Crores Fifty Five Lakhs Sixty Nine Thousand Nine Hundred and Twenty Five Only), Material Advance Guarantee for a total sum of Rs. 2,15,00,000/-(Rupees Two Crore Fifteen Lakh only) and Mobilization Advance Bank Guarantees for a total sum of Rs.2,91,71,655/- (Rupees Two Crore Ninety One Lakhs Seventy One Thousand Six Hundred and Fifty Five Only), issued by Respondent No. 2 & 3 till the issues being Page 2 resolved under the Arbitration and Conciliation Act, 1996, and b) restrain the Respondents No. 2 & 3 banks from honoring en-cashing the schedule bank guarantees; c) Pass any such or further orders as may be deemed". 2. The Petitioner was appointed as a contractor for the construction of Road Bed, Major and Minor bridges, and Track Linking (excluding supply of rails, sleepers and thick Webs Witches) S&T General Electrical Works in Abu Road, Sarotra Road (24.35 kms) in Ajmer Division of North Western Railway in Rajasthan and Gujarat State, India. The total value of the said contract was Rs. 70,71,91,602/-(Rupees Seventy Crores Seventy One Lacs Ninety One thousand Six Hundred and two only). The term of the Contract was 30 months. The said Contract, in addition to General Conditions of the Contract ("GCC"), was further supplemented by Special Conditions of Contract ("SCC") and a contract agreement dated 19th December, 2011 was executed between the parties. 3. In terms of the agreement, the Petitioner submitted to the Respondent, a Performance Bank Guarantee, Mobilization Advance Bank Guarantee and Material Advance Guarantee. 4. The Petitioner submitted running bills amounting to Rs. 33,71,78,838 and a final bill of Rs. 5,63,72,022 to the Respondent No. 1. It is the case of the Petitioner that the final bill remains outstanding till date. It is the case of the Petitioner that due to various hindrances at the Page 3 site, which were attributable solely to Respondent No. 1, there was a delay in execution of the work under the above agreement. It is submitted that the Respondent No. 1 acknowledged such delays and it is for that reason that vide its letter dated 22nd June, 2015, Respondent No.1 granted the extension of Date of Completion of the contract from 6th June, 2015 to 5th June, 2016 with PVC and without levying any Liquidated Damages. It is submitted that though such defaults on the part of the Respondent No. 1 continued, the Respondent No. 1 issued a "Notice To Correct" dated 9th May, 2016 to the Petitioner under clause 15.1 of the General Conditions of Contract (GCC); the Petitioner responded to the above notice under cover of its letter dated 21st May, 2016 giving status of the work and calling upon the Respondent No. 1 to withdraw its notice and extend the period of completion up to December, 2016. It is submitted that without considering the above reply and in a mechanical manner, the Respondent issued the Notice of Termination of the contract under Clause 15.2 of the GCC. The Petitioner protested against the same vide letter dated 14th June, 2016, however, later submitted the final bill, as mentioned above, on 6th August, 2016 to the Respondent No. 1. 5. The Petitioner, apprehending, that the Respondent would invoke the bank guar