Damodar Valley Corporation vs Reliance Infrastructure ltd.

The Court : This is an appeal from an order dated 28th July, 2020 passed by a learned Single Judge of this Court directing that the subject bank

guarantees shall not be invoked without the leave of this Court.

The arbitral award dated 21st December, 2019 is the subject matter of challenge in this Court, under Section 34 of the Arbitration and Conciliation

Act, 1996. As noted by the learned Single Judge, there is no stay on the execution of the award.

In paragraph 43 of the award, the arbitral tribunal has directed return of the bank guarantees.

The appellant was threatening to encash the bank guarantees. That is why the application on which the impugned order was passed was made by the

respondent.

We are of the opinion that the learned Judge has rightly directed that the bank guarantees should not be invoked without the leave of the Court, in the

special circumstances where, prima facie, the appellant was acting in derogation of the award.

However, Mr. Anindya Kumar Mitra, learned senior advocate for the appellant submits that the subject bank guarantees are expiring in August this

year. In such circumstances, the order under appeal is modified by directing that the respondent shall renew each bank guarantee for one year at least

seven days before its expiry and notify the appellant about such renewal. In default, the appellant will be entitled to encash the bank guarantees.

It is submitted that the application, upon completion of the affidavits, is ready to be heard by the learned Single Judge. Let it be so heard.

As the point involved in this appeal was very short, we have treated the appeal as on the day's list and dispose of the same by the above order

dispensing with all formalities.

The appeal (APOT No.26 of 2020) and the connected General Applications (GA No.982 of 2020 and GA No.983 of 2020) are disposed of by this

order.