644 , 1996 (Suppl. 2 )ARBLR476 (SC ), I (1997 )BC286 (SC ), I (1997 )BC286 (SC ), 1996 (4 ) CCC 262 (SC ), [1997 ]89 CompCas179 (SC ), (1997 )4 CompLJ38 (SC ), 1996 INSC 1433 , JT1996 (10 )SC 709 , 1996 (8 )SCALE676 , (1997 )1 SCC568 , [1996 ]Supp9 SCR511 , ,MANU/SC/0380/1997
M.M. Punchhi#S.V. Manohar#2392SC3390Judgment/OrderAD#AIR#ArbLR#BC#BC#CCC#CompCas#CompLJ#INSC#JT#MANU#SCALE#SCC#SCR(Supp)S.V. Manohar,Sugar#SugarSUPREME COURT OF INDIA2012-9-24Bank Guarantee,Temporary Injunction,Bank Guarantee,Temporary Injunction,Bank Guarantee,Temporary Injunction,Illustrative List,Interim Measures by Court,Arbitration Agreement,Illustrative List,Interim Measures by Court,Arbitration Agreement,Law of Arbitration, Conciliation and Mediation,Law of Injunction86917,86942,27202,27203,27204,27209,27216 -->
MANU/SC/0380/1997
True Court CopyTM English
IN THE SUPREME COURT OF INDIA
Civil Appeal No. 15357 of 1996 (Arising out of SLP (C) No. 9866 of 1996)
Decided On: 04.12.1996
Appellants: U.P. State Sugar Corporation Vs. Respondent: Sumac International Ltd.
Hon'ble Judges/Coram:
M.M. Punchhi and S.V. Manohar JUDGMENT
S.V. Manohar, J.
1. Leave granted. The Appellant, U.P. State Sugar Corporation entered into an agreement dated 2nd of August, 1989 with the Respondent, M/s. Sumac International Pvt. Ltd. under which the Respondent agreed to design, to prepare an engineering lay-out and to manufacture or procure and supply to the Appellant the machinery and equipment for a complete sugar plant for extension and modernisation of the Appellant's existing sugar plant at Rohana Kalan, District Muzaffarnagar, U.P. The Respondent was required to set up a new plant of 2500 TCD at a new site or an adjoining site close to the existing sugar plant of the Appellant. The total contract price was fixed under Clause 2.1 of the contract at Rs. 1780 lacs.
2. Under the terms of the agreement the Respondent was required to set up the plant and make it ready for commercial production by 30th November, 1990. The agreement stated that in this regard time was of the essence of the contract and if the Respondent failed to do so the consequences were also spelt out in the contract. Under Clause 3 of the contract a month-wise progressive delivery report was to be submitted by the Respondent and a PERT/CPM chart had to be submitted and adhered to. Clause 4 which dealt with delivery required the Respondent to complete all supplies by 15th of November, 1990 so that the plant could be commissioned by 30-11-1990. Under Clause 11.1 the Respondent-seller was entitled to a reasonable extension of time as decided by the purchaser if the purchase order was expressly suspended for no fault of the seller.
3. Under Clause 15 the Respondent-seller was required to furnish to the Appellant five bank guarantees as specified therein. These were:
(1) A bank guarantee for timely delivery of plant and machinery as provided in Clause 14.1 representing five per cent of the contract price referred to in Clause 2.1. This was required to be furnished within 3 1/2 months of the signing of the agreement.
(2) The seller was required to furnish a bank guarantee in respect of guaranteed performance of the plant and machinery for an amount representing 5% of the contract price. This