{"id":196281,"date":"2011-05-05T00:00:00","date_gmt":"2011-05-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/cisc-srsc-joint-venture-vs-central-coalfields-limited-o-on-5-may-2011"},"modified":"2019-03-22T10:21:36","modified_gmt":"2019-03-22T04:51:36","slug":"cisc-srsc-joint-venture-vs-central-coalfields-limited-o-on-5-may-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/cisc-srsc-joint-venture-vs-central-coalfields-limited-o-on-5-may-2011","title":{"rendered":"Cisc-Srsc Joint Venture vs Central Coalfields Limited &amp; O on 5 May, 2011"},"content":{"rendered":"<div class=\"docsource_main\">Jharkhand High Court<\/div>\n<div class=\"doc_title\">Cisc-Srsc Joint Venture vs Central Coalfields Limited &amp; O on 5 May, 2011<\/div>\n<pre>IN THE HIGH COURT OF JHARKHAND AT RANCHI\n          W.P.(C) No. 5167 of 2010\n                      --------\n<\/pre>\n<pre>CISC-SRSC Joint Venture, Kolkata                ...           Petitioner\n                           Versus\nCentral Coalfields Limited &amp; ors.                ...         Respondents\n                           --------\nCORAM:              HON'BLE MR. JUSTICE D.N.PATEL\n                           --------\nFor the petitioner         :        Mr. Prashant Vidyarthy, Advocate\nFor the C.C.L.             :        Mr. Anoop Kr. Mehta, Advocate\n                           --------\nOrder No. 03: Dated 5th May, 2011\nPer D.N.Patel, J.\n\n<\/pre>\n<p>1.     The present writ petition has been preferred mainly for the reasons that for<br \/>\nno justifiable reason, the petitioner has to continue and keep alive the bank<br \/>\nguarantee, worth Rs.55 Lacs.\n<\/p>\n<p>2.     Learned counsel for the petitioner submitted that initially contract was<br \/>\ngiven to the petitioner for a period running from 1st February, 2003 to 31st January,<br \/>\n2004 for transportation of the coal and the contract is now over and the work has<br \/>\nbeen done. As per the learned counsel for the petitioner, at the relevant time the<br \/>\nbank guarantee was to be given and, therefore, during the pendency of the<br \/>\ncontract, the aforesaid bank guarantee worth Rs.55 Lacs was given towards the<br \/>\nsatisfactory performance of the contract. Learned counsel for the petitioner further<br \/>\nsubmitted that after completion of the contract, some dispute arose for payment of<br \/>\nmoney and ultimately, an arbitrator was appointed and the petitioner made a claim<br \/>\nfor Rs.4 Crores before the arbitrator and the respondents also filed a counter claim<br \/>\nfor Rs.42 Crores. The petitioner was compelled to keep the bank guarantee alive<br \/>\nfor years together, without any justifiable reasons. Learned counsel for the<br \/>\npetitioner also submitted that the arbitrator passed an award and decided that the<br \/>\npetitioner is entitled for a sum of Rs.262 Lacs and the counter claim, made by<br \/>\nrespondent no.1 was totally rejected. It is further submitted by the learned counsel<br \/>\nfor the petitioner that respondent no.1 preferred an application under Section 34 of<br \/>\nthe Arbitration Act, 1996 before the Sub Judge-V, Ranchi. The same is also<br \/>\npending since years. This application was preferred in the year, 2008. For no<br \/>\nreasons, again petitioner was compelled to keep the bank guarantee worth Rs.55<br \/>\nLacs alive. Learned counsel for the petitioner submitted that basically the bank<br \/>\nguarantee was given for satisfactory performance of the contract for the period,<br \/>\nrunning from 1st February, 2003 to 31st January, 2004. The work is over but the<br \/>\ndispute is going on and there is no clause that during the period of dispute also,<br \/>\n<span class=\"hidden_text\">                                   2.<\/span><br \/>\nthe bank guarantee will be kept alive. However, the petitioner being a bonafide<br \/>\ncompany has continued the bank guarantee, but, enough is enough and now the<br \/>\nrespondents are not proceeding with their application under Section 34 of the<br \/>\nArbitration Act, 1996 before the Sub Judge-V, Ranchi (now pending before the<br \/>\nSub Judge-IV, Ranchi). It is further submitted by the learned counsel for the<br \/>\npetitioner that the respondents have no claim at all as per the arbitration award<br \/>\nand, therefore, the present petition has been preferred. Further prayer has been<br \/>\nmade by the learned counsel for the petitioner that renewal of the bank guarantee<br \/>\nmay not be insisted upon and the petitioner is ready and willing to give an<br \/>\nundertaking that in case any amount is found payable by the petitioner, the same<br \/>\nwill be paid forthwith and such undertaking will be filed separately before this<br \/>\nCourt within a period of one week from the date of the order of this Court by the<br \/>\nManaging Director\/Partners of the petitioner-company.\n<\/p>\n<p>3.    Learned counsel for the respondents submitted that the contract for<br \/>\ntransportation of coal was given to the petitioner for the period, running from 1 st<br \/>\nFebruary, 2003 to 31st January, 2004 i.e. for one year and the aforesaid bank<br \/>\nguarantee was taken for satisfactory performance of contract. Now the contract is<br \/>\nalready over, but, the dispute for the amount payable is going on, initially before<br \/>\nthe arbitrator and now before the Sub Judge-IV, Ranchi under Section 34 of the<br \/>\nArbitration Act, 1966 and, therefore, the bank guarantee must be kept alive, so<br \/>\nthat the amount can be realized from the petitioner, without any loss of time.\n<\/p>\n<p>4.    Having heard learned counsel for both the sides and looking to the facts<br \/>\nand circumstances of the case, it appears that there is no reason for the petitioner<br \/>\nto continue with the bank guarantee, worth Rs.55 Lacs, or to keep alive the bank<br \/>\nguarantee, worth Rs.55 Lacs, mainly for the reason that the contract given to the<br \/>\npetitioner for transportation of the coal was for a period of one year i.e. from 1st<br \/>\nFebruary, 2003 to 31st January, 2004. The bank guarantee was to be given for<br \/>\nsatisfactory performance of contract. Once the contract is over, the liability to<br \/>\nkeep alive the bank guarantee comes to an end. Moreover, the arbitration award<br \/>\nhas also been decided in favour of the petitioner. Thus, on the contrary, the bank<br \/>\nguarantee for Rs.262 Lacs ought to have been given by the respondents for the<br \/>\nawarded amount, which is yet to be paid by the respondents to the petitioner, as<br \/>\nper the arbitration award. High and tall claim was made as a counter claim by<br \/>\nrespondent no.1 for Rs.42 Crores, but, nothing was proved before the arbitrator<br \/>\nand hence the whole claim of the respondents was rejected\/dismissed. Therefore,<br \/>\nunder Section 34 of the Arbitration Act, 1996, an application has been preferred<br \/>\n<span class=\"hidden_text\">                                                3.<\/span><br \/>\n             for quashing and setting aside the award, passed by the arbitrator. This application<br \/>\n             has been preferred by respondent no.1 and is still pending.\n<\/p>\n<p>             5.    Be that as it may, the fact remains that the purpose, for which the bank<br \/>\n             guarantee was given i.e. the contract must be performed satisfactorily, is already<br \/>\n             over in the year, 2004. Merely because the dispute is going on, that cannot be a<br \/>\n             reason for keeping the bank guarantee alive by the petitioner and, as stated herein<br \/>\n             above, the award has been decided in favour of the petitioner and the amount<br \/>\n             payable by respondent no.1 to the petitioner, worth Rs.262 Lacs, has not yet been<br \/>\n             paid and, therefore, there is, on the contrary, a reason to give a bank guarantee by<br \/>\n             the respondents, but, as the respondent is a Government company, this is also not<br \/>\n             required. But the fact remains that receiver of the money has not to give a bank<br \/>\n             guarantee. Petitioner has to receive a sizable amount from respondents.\n<\/p>\n<p>             6.    In view of the aforesaid facts, the bank guarantee is not required to be<br \/>\n             continued by the petitioner. Nonetheless, as the application under Section 34 of<br \/>\n             the Arbitration Act, 1996 is pending, an undertaking will be given by all the<br \/>\n             partners of the petitioner-company within 15 days from today, to this Court as<br \/>\n             well as to respondent no.1 and also before the Sub Judge-IV, Ranchi, to the effect<br \/>\n             that if the case is decided against the petitioner by the Sub Judge-IV, Ranchi, the<br \/>\n             amount, legally payable by the petitioner to the respondents, will be paid<br \/>\n             forthwith.\n<\/p>\n<p>             7.    This writ petition is, accordingly, allowed and disposed of, with the<br \/>\n             aforesaid observations.\n<\/p>\n<p>                                                             ( D.N. Patel, J. )<br \/>\nA.K.Verma\/\n <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jharkhand High Court Cisc-Srsc Joint Venture vs Central Coalfields Limited &amp; O on 5 May, 2011 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 5167 of 2010 &#8212;&#8212;&#8211; CISC-SRSC Joint Venture, Kolkata &#8230; Petitioner Versus Central Coalfields Limited &amp; ors. &#8230; Respondents &#8212;&#8212;&#8211; CORAM: HON&#8217;BLE MR. JUSTICE D.N.PATEL &#8212;&#8212;&#8211; For the petitioner : [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,18],"tags":[],"class_list":["post-196281","post","type-post","status-publish","format-standard","hentry","category-high-court","category-jharkhand-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Cisc-Srsc Joint Venture vs Central Coalfields Limited &amp; O on 5 May, 2011 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/cisc-srsc-joint-venture-vs-central-coalfields-limited-o-on-5-may-2011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cisc-Srsc Joint Venture vs Central Coalfields Limited &amp; 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