Case Note & Summary
The State of Maharashtra, through the Department of Women and Child Development, filed a commercial appeal against an order dated 15th June 2018 passed in Arbitration Petition No. 619 of 2018. The order recorded a statement by the learned AGP for the State, on instructions from Mr. Girase, that pending arbitration proceedings, the State would issue a bank guarantee of a nationalized bank in favour of the Prothonotary and Senior Master of the Court in the sum of Rs. 12,03,12,937/-. The Court accepted the statement and directed the bank guarantee to be issued within two weeks and to remain in force for 12 weeks. The State appealed against this order. The High Court admitted the appeal and heard it finally by consent. The Court noted that the statement was made on instructions and was binding on the State. The Court upheld the order and directed that the bank guarantee shall continue to be in force for a period of 12 weeks from the date of the order. The appeal was disposed of accordingly.
Headnote
A) Arbitration - Interim Measures - Bank Guarantee - Section 9 of the Arbitration and Conciliation Act, 1996 - The State challenged an order directing it to furnish a bank guarantee of Rs. 12,03,12,937/- pending arbitration. The Court held that the statement made by the State's counsel accepting the direction was binding and the bank guarantee must continue for 12 weeks from the date of the order. (Paras 1-3)
Issue of Consideration
Whether the order passed in the arbitration petition directing the State to issue a bank guarantee pending arbitration proceedings was correct and should be sustained.
Final Decision
The appeal is disposed of with the direction that the bank guarantee shall continue to be in force for a period of 12 weeks from the date of the order.
Law Points
- Arbitration
- Interim Measures
- Bank Guarantee
- Section 9 of the Arbitration and Conciliation Act
- 1996
Case Details
2018 LawText (BOM) (09) 141
Commercial Appeal(L)No. 340 of 2018
S. C. Dharmadhikari, B. P. Colabawalla
Mr. A. Y. Sakhare, Senior Advocate, Special Counsel a/w Mr. Kiran Bapat, Ms. Jyoti Chavan, AGP, for the Appellant State. Mr. Zal Andhyarujina a/w Mr. Sanjay Kadam, Ms. Apeksha Sharma, Mr. Sanjeel Kadam, Ms. Sayali Rajpurkar i/b Kadam and Co, for the Respondent.
Department of Women and Child Development, Belapur, Navi Mumbai
Jaina Marketing and Associates
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Nature of Litigation
Commercial appeal against an order in an arbitration petition directing the State to furnish a bank guarantee pending arbitration.
Remedy Sought
The State sought to challenge the order directing it to issue a bank guarantee.
Filing Reason
The State was aggrieved by the order dated 15th June 2018 in Arbitration Petition No. 619 of 2018.
Previous Decisions
The arbitration petition resulted in an order directing the State to issue a bank guarantee of Rs. 12,03,12,937/-.
Issues
Whether the order directing the State to furnish a bank guarantee pending arbitration was correct.
Submissions/Arguments
The State argued against the order, but the Court found the statement made by the State's counsel was binding.
Ratio Decidendi
A statement made by counsel on instructions is binding on the party, and the court can direct compliance with such statement.
Judgment Excerpts
The learned AGP for the Respondent, on instructions from Mr. Girase, states that pending the arbitration proceedings, the Respondent shall issue a bank guarantee of a nationalized bank in favour of the Prothonotary and Senior Master of this Court in the sum of Rs. 12,03,12,937/-.
The bank guarantee as agreed, shall be issued within two weeks from today.
The bank guarantee shall continue to be in force/effect for a period of 12 weeks from the date of the order.
Procedural History
The State filed Arbitration Petition No. 619 of 2018. On 15th June 2018, the Court passed an order directing the State to furnish a bank guarantee. The State appealed against that order via Commercial Appeal(L)No. 340 of 2018. The appeal was admitted and heard finally by consent on 7th September 2018.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 9
