Atlanta Infrastructure Ltd. (Rechristened As Atlanta Ltd.) vs Delta Marine Company and Others

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2876 OF 2021 [Arising out of SLP (C) No. 14979 of 2020]

ATLANTA INFRASTRUCTURE LTD. ……APPELLANT (RECHRISTENED AS ATLANTA LTD.)

VERSUS

DELTA MARINE COMPANY & ORS. ….RESPONDENTS

JUDGMENT

SANJAY KISHAN KAUL, J.

1. Leave granted. Learned counsel for the respondent accepts notice.

2. Heard learned counsel for the parties.

3. The fate of a suit against encashment of bank guarantee still hangs in

balance after almost two decades! It is only as a result of the push given by

this court that the suit culminated in a dismissal order on 8.11.2019. Signature Not Verified Digitally signed by Dr. Mukesh Nasa Date: 2021.07.23 18:14:26 IST Reason:

4. Respondent No.1, the original plaintiff, preferred an appeal before the

learned Addl. District Judge, Khurda. On 18.11.2019, the appellate court

1 passed an interim order restraining the release of payment of bank

guarantee, which order was confirmed on 19.11.2020. On 6.1.2020, this

court passed an order in SLP(C) No.6394/2017 directing disposal of the

appeal within a period of three months from the next date i.e. 24.1.2020.

Meanwhile, respondent No.1 moved an application under Order 41 Rule 27 of

the CPC seeking admission of copy of the report of expert opinion dated

4.12.2019 under Section 45 of the Evidence Act. They sought to place on

record some documents of the appellant with an objective of signature

comparison. Such a request was rejected by the learned ADJ, Khurda vide

order 18.02.2020. Respondent No.1 then filed an appeal CMP 285/2020 on

12.3.2020 against the said order and in terms of order dated 16.03.2020,

notice was issued and further proceedings pending before learned ADJ were

stayed.

5. The aforesaid fact was brought to the notice of this court on

27.10.2020. Noticing the mockery made out of the proceedings, for stay of

encashment of bank guarantee, a report was called. On 2.11.2020, the High

Court vacated the stay observing that the order of this court dated 6.1.2020

was not brought to the knowledge of the High Court. In terms of the

impugned judgment dated 4.11.2020, the order dated 18.2.2020 of learned

ADJ was set aside and the matter was remitted back to learned ADJ to

consider the application under Order 41 Rule 27 CPC afresh at the time of

hearing of the appeal.

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6. On conspectus of the arguments of learned counsel for the parties, we

find the impugned order unsustainable. The suit had been filed for a decree

of permanent injunction restraining the appellant from encashment of bank

guarantee and to the bank from making payment. A further prayer was also

made for a decree of declaration of the agreement dated 16.2.2001 including

the arbitration clause, null and void and unenforceable. The application

under Order 41 Rule 27 CPC preferred by the respondent was predicated on a

reasoning that some interrogatory had been put to the appellant which

would show that a fraud was sought to be played on the Court. And that is

the reason the opinion of the handwriting expert was sought for comparison

of signatures on admitted documents marked as exhibits with the signatures

made on the reply to the interrogatories and the vakalatnama. The report

had been received only on 4.12.2019.

7. In our view, the argument of the respondent No.1 is fallacious. It is trite

to say that as a bank guarantee is an independent contact, there is a limited

scope for interference in case of encashment of bank guarantee as

enunciated by various courts including this Court from time to time. One of

the reason for interference could be egregious fraud. The fraud must be

relatable to the bank guarantee. Learned counsel for the respondent No.1

admits that what he was trying to show is that the signatures of the officers

of the appellant on documents do not match with the vakalatnama or some

other documents which would in turn show that the appellants had been

acting fraudulently in a different matter. However, this has nothing to do

3 with the issue relating to the signatures of the representatives of the

appellant, which they do not deny. We perceive this to be another

endeavour on part of the respondent No.1 to unnecessarily keep prolonging

the issue and somehow prevent encashment of the bank guarantee.

8. In view of the aforesaid, we set aside the impugned order and dismiss

the appeal filed by respondent No.1 before the High Court against the order

of the first appellate court rejecting their application for production of

additional documents. The appeal is, accordingly, allowed leaving the

parties to bear their own costs.

……..……………………………….J. [SANJAY KISHAN KAUL]

……..……………………………….J. [HEMANT GUPTA]

NEW DELHI.

JULY 19, 2021

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