Single Judge’s Direction Restraining Appellant from Invoking Guarantee Overturned as he wasn’t Aware of Prior Encashment | HC
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- Last Updated on 2 August, 2023
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Case Details: Power Grid Corporation of India Ltd. v. EMC Ltd. - [2023] 152 taxmann.com 358 (HC-Calcutta)
Judiciary and Counsel Details
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- Prakash Shrivastava, CJ. & Rajarshi Bharadwaj, J.
- S.N. Mookherjee, AG, Anirban Ray, GP, Aritra Basu, Debabrata Das, Saptarishi Mukherjee & Tirthankar Nandi, Advs. for the Appellant.
- Joy Saha, Sr. Adv., Deepan Sarkar, Pratik Mukhopadhya, Anirban Pramanick & Ms Subhasree Dey, Advs. for the Respondent.
Facts of the Case
In the instant case, the corporate debtor entered into contracts with the appellant company relating to the supply and construction of power transmission lines. The corporate debtor furnished a performance guarantee/bank guarantee to the appellant. The corporate debtor entered into the CIRP and a moratorium was imposed.
The work was completed by the corporate debtor but the appellant instead of returning the bank guarantee invoked and encashed it. A writ petition was filed by the corporate debtor wherein a Single Judge passed the impugned order restraining the appellant from invoking the bank guarantee of the corporate debtor, noting that the corporate debtor had entered into the CIRP.
The High Court observed that since the bank guarantee was encashed prior to the impugned order, and the same was not brought to the notice of the Single Judge, the impugned direction could not survive.
High Court Held
The High Court held that since conclusions drawn in the impugned order for deciding prayer for interim relief were before the exchange of affidavits, the same was to be held tentative in nature.
Further, the appellant was to be permitted to file an affidavit in the pending writ petition, which was to be decided on its own merits. Accordingly, the appeal was disposed of.
List of Cases Referred to
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- EMC Ltd. v. Power Grid Corporation of India Ltd. [WPA 14603 of 2022, dated 10-8-2022] (para 1).
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