Partly allowed

M/S. Kerala State Electronics Development Cororation Ltd. through Its Managing Director, Represente v. M/S. Energy Efficiency Services Limited ( a Jv Company of Psus of Ministry of Power, Govt of India)

Delhi HC2 May 2019O.M.P.(I) (COMM.)/41/2019

Case brief

AI extract

What is this about?

The single judge order granted a stay on the encashment of a bank guarantee by the respondent but dismissed a prayer for specific performance or continuation of injunction, citing Section 41(e) of the Specific Relief Act, 1963.

What did the court decide?

The respondent was restrained from encashing the bank guarantee; prayers for specific performance and continuation of injunction were dismissed.

M/S. Kerala State Electronics Development… — Contract and Commercial Disputes | Delhi HC (2019)

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$~2

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

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O.M.P.(I) (COMM.) 41/2019 M/S. KERALA STATE ELECTRONICS DEVELOPMENT CORORATION LTD. ..... Petitioner Through: Mr. Wills Mathews, Advocate with Mr. Paul John Edison, Advocate (M. No.9810068631).

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Versus

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M/S. ENERGY EFFICIENCY SERVICES LIMITED & ORS.

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..... Respondents Through: Mr. Samdarshi, Advocate for respondent Nos.1 and 2 (M. No.9811585062). Mr. Rajiv Kapur, Advocate with Mr. Khushboo Kapur, Advocate for SBI.

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CORAM: HON'BLE MR. JUSTICE VALMIKI J. MEHTA O R D E R % 08.02.2019

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I.A. Nos.2023-25/2019(exemption)

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Exemption allowed subject to just exceptions.

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I.A.s stand disposed of.

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+O.M.P.(I)(COMM) No.41/2019 and I.A. No.2022/2019(stay)

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On behalf of the petitioner, it is argued that supply of the Light Controls CCMS boxes for installed LED street lights at Agartala Municipal Corporation in terms of the contract awarded to the petitioner by the respondent no.2 was subject to the respondent no.2 making the necessary provision for earthing requirements. It is argued that this is categorically mentioned by the petitioner in its proposal dated 25.5.2015 and contract therefore effectively would only be performed on the respondent no.2 providing the proper earthing and power stabilization systems and in this regard the respondent no.2 has clearly failed. It is argued that contract of installation came to an end way back in November, 2016 and the petitioner has already obtained a completion certificate of completion of work on 11.11.2016 from the respondent no.2, and that presently only the maintenance period is going on and maintenance though is subject to providing of proper earthing etc by the respondent no.2, yet as a goodwill measure because petitioner is also doing other contracts for the respondent no.2, therefore the petitioner has sought to import certain parts for removing the problems with respect to the Light Controls CCMS boxes. It is argued that if the bank guarantee in question is encahsed by the respondent no.2,

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then, there will be egregious fraud upon the petitioner because the respondent no.2 itself being ex facie guilty of breach of contract for its faults of failing to provide earthing etc the equipments, yet it is seeking to encash the bank guarantee without any fault of the petitioner.

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In view of the arguments urged on behalf of the petitioner, till further orders unless varied by the Court, respondent no.2 is restrained from in any manner encashing the bank guarantee no.0435015B0000108 dated 12.10.2015 for a sum of Rs.43.79 lacs.

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So far as the prayer (ii) is concerned, the same cannot be granted because it would amount to granting specific performance of a contract, and which contract cannot be got specifically enforced in view of various sub-sections of Section 14 of the Specific Relief Act, 1963 and once specific performance cannot be granted, then, injunction cannot be granted because grant of injunction will amount to granting of specific performance, and this is therefore prohibited by Section 41(e) of the Specific Relief Act.

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