2001 (8) TMI 1449 - SC - Indian Laws

Summary

Issues:
1. Disputes over a contract for widening and strengthening a highway.
2. Disagreement on bank guarantee encashment and machinery seizure during arbitration proceedings.
3. Decision on bank guarantee encashment and seized machinery sale.
4. Vacancy in the office of an arbitrator to be filled by the Central Government.

Detailed Analysis:
1. The Respondent was awarded a contract for highway work, facing disputes with its partner and seeking rate revision. The Appellant terminated the contract, leading to legal actions. The High Court restrained bank guarantee encashment and machinery removal. The delay in arbitration proceedings was noted, emphasizing the need for a prompt conclusion.

2. The Appellant sought permission to encash the bank guarantee and sell seized machinery during arbitration. The Supreme Court granted a stay on the High Court's order and later restrained encashment. The order to prevent bank guarantee encashment was made absolute until arbitration concludes. The seized machinery was allowed to be sold in an open auction, with proceeds to be deposited in the trial court.

3. Addressing the vacancy in the arbitrator's office, the Central Government was urged to fill the position promptly. The judgment concluded with the disposal of the appeal, emphasizing no cost implications. The decision aimed to facilitate the arbitration process and ensure fairness in dealing with the bank guarantee and seized machinery.