The Madras High Court held it as valid, in the eye of law, the invocation of bank guarantee by the Chennai Metro Rail Ltd (CMRL) against the Transtonnelstroy-Afcons JV (applicant) – comprising Russian company Transtonnelstroy Ltd and Mumbai-based Afcons Infrastructure Ltd – for delay in commissioning work for the projects awarded to the joint venture (JV) company.
Justice N Sathish Kumar dismissed a petition filed by the applicant to restrain Chennai Metro Rail (respondent) from invoking the bank guarantees.
Applications were filed by the JV company for injunctions to restrain CMRL from invoking and receiving the amounts from bank guarantee issued by Union Bank of India for ₹25.77 crore and bank guarantee issued by IDBI Bank Ltd for ₹117.51 crore pending disposal of arbitration proceedings.
The CMRL awarded the work of design and construction of underground stations to the applicant at Shenoy Nagar, Anna Nagar East, Anna Nagar Tower, Thirumangalam and associated tunnels – for a contract price of ₹1,030 core in 2010.
Similarly, the applicants were awarded another work of design and construction of underground stations at Washermenpet, Mannadi, High Court, Chennai Central and Egmore and associated tunnels for a contract price of ₹1,566 crore in 2010.
The applicant alleged CMRL delayed commencing work in both the projects. However, this was denied by CMRL in its counter affidavits.
This Court is of the opinion that the applicant has not made out a prima facie case for grant of injunction and even the balance of convenience is not in their favour. Further the applicant suffering irreparable injury is also very remote. Hence, this Court is of the view that the injunctions as prayed for by the applicant in these applications cannot be granted.
As a result, these applications are dismissed, the order issued on Friday said.
After the orders were pronounced, the Senior Counsel appearing for the applicant sought one week time to enable them to file an appeal before the Division Bench. The Court instructed the Senior Counsel for the respondents/bank to maintain the status quo till August 21. If the appeal is not filed within that time, it is open for the respondents/bank to encash the amount, the Order said.