2019 (7) TMI 1979 - HC - Indian Laws

Court restrains bank guarantee invocation, directs document filing. Balance contract terms, performance, clarity.

The court restrained the respondents from invoking bank guarantees while directing them to file a counter affidavit and produce relevant documents within ... Seeking release of Bank Guarantee - petitioner’s claims that the release of the bank guarantees is being withheld contrary to the terms of the contract between the parties, in order to pressurise the petitioner in respect of certain disputes in relation to other contracts, which are pending adjudication before the Arbitral Tribunal. HELD THAT:- Let a counter affidavit be filed within a period of two weeks. Rejoinder, if any, be filed within a period of two weeks, thereafter - List on 04.11.2019. Issues:1. Petition to quash an email for release of bank guarantees.2. Completion of contract and satisfactory performance by petitioner.3. Allegation of withholding bank guarantees to pressurize petitioner.4. Claim of specific clause in contract allowing invocation of bank guarantee for other contracts.5. Request for time to produce relevant documents.6. Restraining respondents from invoking bank guarantees.Analysis:The petitioner filed a petition seeking the quashing of an email dated 14.05.2019 issued by the respondent regarding the release of specific bank guarantees. The court issued notice, and it was acknowledged that the contract related to the bank guarantees had been completed satisfactorily, with the petitioner claiming to have received full consideration. The petitioner alleged that the bank guarantees were being withheld to pressure them in ongoing disputes related to other contracts pending before an Arbitral Tribunal.The respondent's counsel mentioned instructions about a specific clause in the contract allowing the invocation of the bank guarantee for amounts due in other contracts. However, the counsel sought time to provide the specific clause from the contract and produce supporting documents. The court directed the respondent to file a counter affidavit within two weeks and allowed for a rejoinder within the subsequent two weeks.During this period, the court restrained the respondents from invoking the bank guarantees as long as the petitioner maintained them. The case was scheduled for listing on 04.11.2019, indicating a further hearing on the matter. The judgment reflects a balanced approach, considering the completion of the contract, satisfactory performance by the petitioner, allegations of undue pressure, and the need for clarifications regarding the contract terms allowing invocation of bank guarantees for other contracts.