LexYOGRAJ INFRAS. LTD. versus SSANG YONG ENG. & CONSTRN. CO. LTD. & ANR.
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A B [2012] 1 S.C.R. 456 YOGRAJ INFRAS. LTD. v. SSANG YONG ENG. & CONSTRN. CO. LTD. & ANR. (Special Leave Petition (C) No. 24746 of 2010) JANUARY 31, 2012 [ALTAMAS KABIR AND JASTI CHELAMESWAR, JJ.] BANK GUARANTEE: c Construction contract - Dispute between parties- Invocation of bank guarantees - Held: Since the petitioner's application uls 9 of Arbitration and Conciliation Act to restrain the respondent from invoking the bank guarantees was based mainly on a/legations of fraud, whicf] have been rejected, and 0 further the partial award has been made by arbitral tribunal, which has not been questioned by the petitioner, the plea relating to special equities, cannot be accepted - Arbitration and Conciliation Act, 1996-s.9. Pursuant to a construction contract, the petitioner E furnished Bank guarantees whereby the bank undertook to pay to respondent no.1 on its first written demand any sum or sums within the limits of the respective bank guarantees. Dispute arose between the parties relating to the performance of the petitioner in completing the work. F Respondent no.1 terminated the contract and invoked the bank guarantees. The petitioner made a prayer in an application filed uls 9 of the Arbitration and Conciliation Act 1996 before the District Judge seeking injunction against the respondent invoking the Bank guarantees. G The application was dismissed. The appeal therefrom was also dismissed by the High Court. Aggrieved, the petitioner filed the instant special leave petition alleging fraud on the part of respondent no. 1. Supreme Court stayed invocation of the Bank Guarantees. The petitioner H 456 YOGRAJ INFRAS. LTD. v. SSA~G YONG ENG & 457 CONSTRN. CO. LTD. & ANR. also filed a criminal complain,t against respondent no. 1 A making the same allegations w~ich were made in the Special Leave Petition. The complaint was quashed by the High Court. The Special Leave Petition of the petitioner was also dismissed by the Supreme Court. Consequently, respondent No. 1 filed an application for B early hearing and disposal of the instant Special Leave Petition. Disposing of the matters, the Court HELD: Since the Petitioner's application u/s 9 of the C Arbitration and Conciliation Act, 1996, was based mainly on. allegations of fraud, which have been rejected, there was no foundation for the stay order passed in these proceedings to continue. Both in the criminal proceedings as also in the proceedings u/s 9 of the Act, D the petitioner proved to be unsuccessful, at least up to the High Court stage. In the criminal proceedings, the petitioner was unsuccessful right up to this Court. In the circumstances, the plea urged on behalf of the petitioner relating to special equities cannot be accepted, E particularly, in view of the fact that such a point had not been raised earlier. Besides, partial Award has been made by the Arbitral Tribunal which has not been questioned or challenged by the petitioner and respondent No.1 is entitled to the amount awarded in the F partial Award. [Para 10-11] [462-G-H; 463-A-C] CIVIL APP~LLATE JURISDICTION : SLP (Civil) No. 24746 of 2010. From the Judgment & Order dated 20.08.2010 of the High G Court of Madhya Pradesh, Principal Seat at Jabalpur in Abribtration Appeal No. 8 of 2010. Gagan Gupta for the Petitioner. H 458 SUPREME COURT REPORTS [2012] 1 S.C.R. A Meenakshi Arora for the Respondents. The Judgment of the Court was delivered by ALTAMAS KABIR, J. 1. The Special Leave Petition and the application filed on behalf of the Respondents for early 8 hearing and disposal of the Special Leave Petition were taken up together for consideration. The facts on which the Special Leave Petition is based, are set out hereinbelow. 2. By its letter of acceptance No.NHAl/PH 11/NHDP/ADB/ C GM-11/NS1/746 dated 30th December, 2005, the National Highways Authority of India, hereinafter referred to as 'NHAI', awarded a contract to the Respondent, SSANG YONG Engineering & Construction Co. Ltd., for the National Highways Sector II Project, Package-ADB-11/C-8, which involved the four D laning of Jhansi-Lakhadon sector KM 297 to KM 351 of National Highway 26 in the State of Madhya Pradesh. The total contract amount for the aforesaid project was more than 750 crores. An agreement was entered into by the NHAI with the Petitioner on 13th August, 2006. Clause 27 of the Agreement E incorporated an arbitration clause stipulating that
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