SANGHI INDUSTRIES LIMITED versus RAVIN CABLES LTD., AND ANR

Citation: [2022] 4 S.C.R. 850 · Decided: 30-09-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 4 S.C.R.
SANGHI INDUSTRIES LIMITED
v.
RAVIN CABLES LTD., AND ANR.
(Civil Appeal No. 6908 of 2022)
SEPTEMBER 30, 2022
[M. R. SHAH AND KRISHNA MURARI, JJ.]
Arbitration and Conciliation Act, 1996 – s.9 – Code of Civil
Procedure, 1908 – Or.XXXVIII, r.5 – Application u/s.9 – Power of
Commercial Court – Appellant invoked performance bank
guarantees issued by respondent no.1 – Thereafter, it invoked
arbitration – Respondent No.1 filed application u/s.9 before
Commercial Court regarding the bank guarantees, pending which
the bank realized the payments under the bank guarantees invoked
by the appellant – Commercial Court passed order u/s.9(ii)(e) to
secure the amount in dispute and directed the appellant to deposit
the amount of bank guarantees – Order confirmed by High Court –
Held: Bank guarantees were already invoked and the amounts
thereunder were already paid by the bank much prior to the
Commercial Court passed the order u/s.9 – Unless and until the
pre-conditions u/Or.XXXVIII, r.5, CPC were satisfied and unless there
were specific allegations with cogent material and prima-facie the
Court was satisfied that the appellant was likely to defeat the decree/
award that may be passed by the arbitrator by disposing of the
properties and/or in any other manner, the Commercial Court could
not have passed such an order in exercise of powers u/s.9 – Order
passed by the Commercial Court in an application u/s.9 is mainly
by way of interim measure – In a given case if all the conditions of
Or.XXXVIII, r.5, CPC are satisfied and the Commercial Court is
satisfied as aforesaid, it may pass an appropriate order including
the restrain order and/or any other appropriate order to secure the
interest of the parties – Further, in the present case even otherwise
there are serious disputes on the amount claimed by the parties –
Impugned order passed by the High Court and the order of the
Commercial Court, set aside – Commercial Courts Act, 2015.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6908
of 2022.
[2022] 4 S.C.R. 850
850
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From the Judgment and Order dated 11.02.2022 of the High Court
of Gujarat at Ahmedabad in R/First Appeal No. 3253 of 2021.
Vivek Chib, Sr. Adv., Anirudh Wadhwa, Shaishir Divatia, Vipul
Kumar, Abhishek Kumar, Bikram Dwivedi, Shivendra Singh, Advs. for
the Appellant.
K. V. Viswanathan, Sr. Adv., Ms. Malvika Kapila, Arvind Raj,
Ms. Tanwangi Shukla, Krishan Kumar, Atul Sheopuri, Nitin Pal, Kartik
Sarsoonia, Swikiritimala Dubey, Swati Jindal Garg, Advs. for the
Respondents.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 11.02.2022 passed by the High Court of Gujarat at
Ahmedabad in Regular First Appeal No. 3253 of 2021, by which, the
High Court has dismissed the said appeal confirming the order passed
by the Commercial Court in an application under Section 9 of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as the
Arbitration Act, 1996), by which the Commercial Court directed the
appellant herein – original opponent/respondent No. 1 to deposit the
amount of performance bank guarantees pertaining to purchase order
Nos. 01, 02 and 03 invoked by it, the original opponent/respondent No. 1
has preferred the present appeal.
2. We have heard Shri Vivek Chib, learned Senior Advocate
appearing on behalf of the appellant and Shri K.V. Viswanathan, learned
Senior Advocate appearing on behalf of respondent No. 1 herein – the
main contesting party.
3. At the outset it is required to be noted that in the present case
the dispute is with respect to three purchase orders, namely, purchase
order Nos. 01, 02 and 03. It appears that the appellant served a notice
upon respondent No. 1 vide notice dated 11.06.2021 claiming a loss of
INR 29.31 crores (approximately) owing to the defective quality of the
cables supplied. The said notice was replied by respondent No. 1 vide
reply dated 19.06.2021. That thereafter, respondent No. 1 served a legal
notice dated 13.07.2021 on the appellant claiming for outstanding payment
of INR 1.30 crores (approximately). That the appellant vide
communication/letter dated 21.07.2021 invoked the bank guarantees
issued by respondent No. 1 herein, which according to respondent No. 1
SANGHI INDUSTRIES LIMITED v. RAVIN CABLES LTD., AND
ANR.
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[2022] 4 S.C.R.
were by way of performance bank guarantees. T

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