SEPCO ELECTRIC POWER vs STATE BANK OF INDIA

Sl.No.,Bank of Guarantee Number,Amount under Guarantee,Amount invoked & encashed (In USD)

1,0686113FG0006959,"USD 24,344,829","24,344,829

2,0686113FG0006960,"USD 11,290,763","11,290,763

3,0686113FG0006961,"USD 47,037,248","47,037,248

4,0686111FG0006001,"USD 20,611,788.60","11,688,378.24

,,Total,"94,361,218.24

based on the counter guarantees issued by Chinese Banks. Nonetheless, the fact remains that, the Chinese Court has suspended payment upon",,,

invocation of counter guarantees. In the circumstances, SBI is fully justified in filing Original Application before the DRT, seeking recovery of the",,,

value of the Bank Guarantees. The petitioner has no tangible asset in the Country. The petitioner has also failed to respond to an application filed,,,

by the Bank to disclose it''s assets.,,,

Refuting Mr.Sondhi''s contentions that the reasons recorded by the DRT are in favour of the petitioner, Shri Raghavan, submitted that, the",,,

DRT has categorically recorded a finding in paragraph No.32 of it''s order that the Bank has made out a clear case for allowing the main,,,

application even at the threshold stage.,,,

Shri Raghavan, further argued that the petitioner, who has entered into contract with GMRKEL, has not made any efforts to resolve the inter",,,

se dispute with its principal.,,,

We have carefully considered the submissions made by the learned Senior Counsel appearing for the parties and perused the records.,,,

In the conspectus of the facts of this case, the question that falls for our consideration is:",,,

Whether the order of injunction passed by the DRT restraining the petitioner from dealing with it''s assets or transferring trade receivable out of",,,

India, calls for interference?""",,,

At the outset, we may record that though the petitioner has invoked the jurisdiction of this Court under Articles 226 and 227 of the",,,

Constitution of India, this petition can be examined only under Article 227, the supervisory jurisdiction over Tribunals. The scope and ambit of",,,

interference in a certiorari proceeding of this nature is limited to examination of the order impugned in a very narrow compass. Unless, the order is",,,

demonstrably perverse to an extent that no reasonable person can come to a conclusion arrived at by the Tribunals below, there can be no",,,

interference by this Court.,,,

Indubitably, GMRKEL has invoked Bank guarantees and SBI has honoured them. Payment by the Chinese Bank to the SBI has been",,,

injuncted by the Shandong High People''s Court, China.",,,

The DRT, while considering the application for vacating the injunction has recorded as follows:-",,,

32) No doubt, the applicant bank has acted in all fairness with maximum honesty and integrity with utmost bonafides under the situation that is",,,

expected of a bank of international repute, in making the payment under the guarantees as promised by it and thereby set a sterling example of",,,

what is genuine and reliable banking is all about. Unfortunately, the Chinese banks which are under similar obligations have not reciprocated with",,,

such qualities. The applicant bank has also undoubtedly made out a clear open and shut case for allowing the main application even at the threshold,,,

stage and clearly made out a prima facie case against the defendant for an injunction as prayed for in IA No 1609/2017.""",,,

(Emphasis supplied),,,

The sheet anchor of Shri Sondhi''s submission is that, the findings recorded by the DRT are not in consonance with the final order. To",,,

substantiate his contention, he has relied upon paragraph 34 of DRT''s order. The relevant portion of the order reads as follows:-",,,

34) ......... There is no idea as to what will happen if the order is continued and who all will take advantage of the order to make or break the",,,

projects. The bank has also not stated as to how the garnishees will not be prejudiced in any way by the order. Further, it is also not possible to",,,

permit only deposits by garnishees with out permitting the defendant company to withdraw monies for its legitimate day to day payments for,,,

completing its present projects as the projects are said to be nearing completion and no scheme or suggestion or practical solution is put in place,,,

by the bank for monitoring it. The applicant bank has not come forwarded with any workable solution in this regard except to seek a blanket order,,,

rd against garnishees. No 3 party should be affected by the order. The ld. Senior Counsel Shri.Raghavan appearing for the applicant bank stressed,,,

his point very much on the protection of public money. While none, and certainly not this Tribunal, can have any second opinion about protecting",,,

and preserving the public money which means the money belonging to the entire People of this Country and thus stands/placed on a higher pedestal,,,

than the rest in terms of protection, preservation and recovery as Country''s economy also, to a certain extent, depends on it, it is equally important",,,

to see that the projects which are meant for the same public good are not delayed and/or affected. Smooth continuation of public projects said to,,,

be worth Rs.60,000/- Crores (not denied by the Bank) are more important than applicant bank''s dues of Rs.600 Crores, just in comparison,",,,

though protecting, preserving and recovering this amount is also by no means less important from any point of view. As stated above, the applicant",,,

bank has got a cast iron case for an order of Injunction/final decree. But this garnishee application is not the answer for it. The bank is protected by,,,

the guarantees of the Chinese banks which the applicant bank itself had accepted as good enough and safe and proper security for its exposure,,,

and is further protected by the guarantee of the Chinese Insurance company as well. Whereas no one knows as to what will happen to the projects,,,

of Garnishees in India in executing its power projects for Indian public, if the order is continued. In fact, the Ld.Senior Counsel Shri.Raghavan has",,,

not met this point which was repeatedly raised by the ld.Senior Counsels Shri.Sondhi and Shri.Sajjan Poovaiah, during the course of arguments.",,,

Under the circumstances, I am of the considered view that it is not proper to continue the Garnishee order in its present form and on the basis of",,,

present prayer that lacks in details. The applicant bank may renew its application with details of the projects and by stating as to how such orders,,,

will not prejudice the Indian projects and as to how to monitor the outgoings for completion of the projects.""",,,

(Emphasis supplied),,,

The emphasized portion of the above extracted order clearly shows that the findings recorded in paragraph No.34 are in two folds. The first,,,

with regard to confirmation of injunction order and the second with regard to vacating the Garnishee order.,,,

In paragraph No.32 of it''s order, the DRT has recorded a categorical finding that the SBI has made out a prima facie case for grant of",,,

injunction. This finding is again reiterated in paragraph No.34.,,,

With regard to Garnishee Order, the DRT, for the reasons recorded, has held that it is not necessary to continue the same and accordingly",,,

vacated it.,,,

The DRAT on re-consideration of the material on record, has not dislodged the findings recorded by the DRT. On the other hand, it has held",,,

that both prima facie case and balance of convenience lie in favour of SBI.,,,

Thus, both the original and the first appellate Tribunals are at one with each other with regard to continuance of injunction and dis-continuance",,,

of Garnishee order .,,,

On careful perusal of the orders passed by both DRT and DRAT, we are of considered view that, both the Tribunals have bestowed their",,,

attention and recorded cogent reasons while arriving at their respective conclusions.,,,

Therefore, the principal ground urged in support of this petition, namely, that the order passed by the DRT is not in consonance with the",,,

reasons recorded, must fail.",,,

The DRAT, has examined the matter in a statutory appeal provided under Section 20 of the Recovery of Debts & Bankruptcy Act, 1993.",,,

Such an appeal is ''an appeal on principle'' and the appellate Court is vested with power and jurisdiction to dislodge a finding recorded by the,,,

Court of first instance. But, in the case on hand, the appellate Tribunal has concurred with the view taken by the Tribunal at first instance.",,,

It is settled that the High Court shall not ordinarily interfere, exercising it''s power under Article 227 of the Constitution of India, unless, the",,,

order impugned is either without jurisdiction or so perverse that, no man of ordinary prudence can pass such order. We find neither contingencies",,,

in place, calling for interference by this Court.",,,

In the circumstances, we see no legal infirmity in the impugned order passed by the DRAT confirming DRT''s order. Resultantly, this writ",,,

petition fails and is accordingly dismissed.,,,

Petition dismissed.,,,

We make no order as to costs.,,,