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TMI Blog2020 (3) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, manufacture, assembly, etc., for 1 x 660 MW Supercritical Ennore Thermal Power Station Expansion Project along with insurance, forwarding on FOB Shanghai Sea port delivery basis including loading on vessel of main equipment and mandatory spares, supervision of erection and commissioning of BFP. The above project was awarded to corporate debtor by way of an Engineering Procurement and Construction Contract (EPC) by TANGEDCO. (2) As per the terms of agreement, corporate debtor agreed to pay the applicant the contract price of USD 5, 100, 000 under the agreement. (3) Further as per the agreement, payment terms were also agreed upon and corporate debtor was required to furnish performance bank guarantee (PBG) for 10 per cent. of the contract price, unconditional Advance Bank Guarantee (ABG) for 10 per cent. of the total contract price and other documents. (4) It is averred that under the contract agreement, supply and delivery schedule was also laid down for supply of the Boiler Feed Pump (BFP) package. (5) It is averred on May 22, 2015 the applicant provided the corporate debtor with a PBG equivalent to 10 per cent. of the contract price amounting to USD 510, 000 which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofessional on July 20, 2018 the claim submit ted by the applicant was rejected and the reasons given for such rejection was though the materials were ready, there was no actual delivery of mate rial at site and no invoice was raised which establishes a liability on part of corporate debtor. (12) It is the case of applicant that on August 7, 2018 it received a notice from Bank of China, informing that the corporate debtor has initiated action for invoking the PBG for the value of USD 510, 000. It is further case of applicant that it was only due to failure of corporate debtor to abide by the terms of agreement for opening a LC, the materials were put in the storage who was incurring warehousing costs. (13) It is the case of applicant that there was no occasion for the RP/ corporate debtor to invoke the bank guarantee and that corporate debtor failed to abide by the terms of the agreement and failed to take delivery of the pumps though it was ready by April, 2017. 3. Reply is filed by resolution professional : (1) That the applicant submitted a claim for an amount of RMB 21, 244, 884.52 equivalent to INR 20, 96, 83, 439 and after evaluation resolution professional found it to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per formed and other amount due to the applicant are complex questions of facts and law which would require evidence and detailed consideration and it cannot be determined in the summary jurisdiction of this Tribunal. (7) The resolution professional further relied on the order dated July 19, 2018 of this Tribunal in the matter of Rama Road Lines v. Sirpur Paper Mills Ltd. [2018] 4 Comp Cas-OL 546 (NCLT) which held that determination of the claim of an operational creditor is a mixed question of law and fact which would require evidence. (8) The resolution professional further relied on the hon'ble National Company Law Appellate Tribunal order in Innoventive Industries Ltd. v. ICICI Bank [2017] 205 Comp Cas 23 (NCLAT) ; [2017] SCC Online NCLAT 70 ; in the matter of Dr. B. V. S. Lakshmi v. Geometrix Laser Solutions P. Ltd. [2018] 3 Comp Cas-OL 47 (NCLT) and National Company Law Tribunal, Chandigarh in ANC Knit Kraft v. Foremost International P. Ltd., which again held that while exercising summary jurisdiction under the Code, the Tribunal cannot possibly dwell upon these complicated disputes of fact. 4. Rejoinder is filed by the applicant reiterating the averments made in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction contract (EPC). The contract value is USD 510, 000. 7. The advance of the 10 per cent. of the contract to be furnished by way of BG by the corporate debtor. Similarly, applicant to furnish bank guarantee which is equivalent to the 10 per cent. of the contract work. The terms of payment are also included in the contract. The case of applicant that corporate debtor to furnish letter of credit (LC) and that corporate debtor failed to furnish LC. The further case of applicant that the LC submitted by corporate debtor was again asked to be extended and that corporate debtor failed to extend the LC. 8. It is also the case of applicant it has lodged its claim with the resolution professional for Rs. 20, 96, 83, 439 and the same was rejected. On the other hand, the corporate debtor through resolution professional is trying to invoke PBG. Hence, injunction is sought against resolution professional not to invoke CPBG. The contention of the resolution professional that applicant failed to extend the PBG. Further, it is the case of resolution professional that the applicant has refused to extend the bank guarantee on account of public announcement of CIRP in 2017. 9. The case of reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not have been invoked. If the guarantee was rightly invoked, there was no question of directing refund as has been done by the High Court." 11. Further learned counsel for the liquidator relied on the decision of the hon'ble apex court in Himadri Chemicals Industries Ltd. v. Coal Tar Refining Co. [2007] 139 Comp Cas 706 (SC) ; [2007] 8 SCC 110, wherein it was held that (page 715 of 139 Comp Cas) : "From the discussions made hereinabove relating to the principles for grant or refusal to grant of injunction to restrain enforcement of a bank guarantee or a letter of credit, we find that the following principles should be noted in the matter of injunction to restrain the encashment of a bank guarantee or a letter of credit : (i) While dealing with an application for injunction in the course of commercial dealings, and when an unconditional bank guarantee or letter of credit is given or accepted, the beneficiary is entitled to realize such a bank guarantee or a letter of credit in terms thereof irrespective of any pending disputes relating to the terms of the contract. (ii) The bank giving such guarantee is bound to honour it as per its terms irrespective of any dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antee. It is true any disputed question of fact cannot be decided in a summary way. It is the case of applicant that it has not committed any breach of the performance of the obligations covered by the contract. However, the resolution professional/liquidator disputed the same, in other words that it is the case of resolution professional/ liquidator that the applicant committed breach of the terms of contract. So dispute of this nature cannot be decided in a summary fashion. Therefore, injunction cannot be granted in favour of the applicant from invoking the bank guarantee by the corporate debtor in the circumstances of the case. 15. Thus, it is clear, no material before the Adjudicating Authority that invocation of bank guarantee by corporate debtor in the present case is a fraudulent action and that the applicant will sustain irreparable injury. The only grievance of the applicant that it has completed the contract work assigned to it. The question whether applicant failed to perform its part of the contract or not, is a question to be determined by way of evidence. The said dispute cannot be resolved by summary procedure, if bank guarantee is in terms of guarantee, then the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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