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Judgment
21 paragraphs · 399 wordsSanjeev Sachdeva, J
By this petition, under Section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as ‘the Act’), the petitioner seeks a
direction to the respondent to restitute/refund the amount of Rs.6,83,16,562/- recovered by the respondent by invoking/encashing the bank guarantee
No.1303910BG0001940 dated 01.12.2005.
It is contended that an Award was passed on 31.05.2017 in favour of the respondent and prior to the time for filing of a petition under Section 34 of
the Act, objecting to the Award, expired, an invocation letter dated 03.06.2017 was issued.
Learned senior counsel for the petitioner submits that a petition under Section 34 of the Act has been filed and notice has already been issued in the
same. He submits that the invocation letter dated 03.06.2017 specifically stated that in case the bank guarantee was extended by a period of one year,
the encashment was not to be acted upon.
It is submitted that though the bank guarantee was extended, the Bank still encashed the bank guarantee and remitted the amount to the respondent.
Learned senior counsel for the respondent submits that the condition of the invocation letter was that the extended bank guarantee had to reach the
respondents and since the same was not transmitted to the respondent, the bank guarantee was liable to be encashed and has rightly been encashed.
Without prejudice to the rights and contentions, in view of the fact that the invocation was conditional and invocation letter stated that if the Bank
guarantee was extended it was not to be encashed, it would be in the interest of justice, if the said amount of Rs.6,83,16,562/- received by the
respondent by encashing of the bank guarantee is secured, pending the decision in the Section 34 petition.
Accordingly, this petition is disposed of directing the respondents to deposit the said amount, i.e. Rs.6,83,16,562/- in a fixed deposit in the name of
the Registrar General of this Court and deposit the Fixed Deposit Receipt with the Registrar General of this Court. This is subject to further orders to
be passed in the petition under Section 34 of the Act filed by the petitioner being OMP(I)(COMM.) No.262/2017.
The Fixed Deposit be created and the receipt deposited within a period of two weeks from today.
The petition stands disposed of.
Order Dasti under signatures of the Court Master.