The Gujarat High Court Tuesday reserved its verdict in an appeal filed by the Surat Diamond Bourse (SDB) challenging a commercial court’s order earlier this month directing it to furnish a bank guarantee of Rs 125 crore in a case of alleged non-payment of dues worth Rs 631.32 crore. SDB had moved a first appeal before the High Court on March 18 after a Surat commercial court had ruled partially in favour of PSP Projects Limited on March 11 in a commercial suit alleging that the bourse has withheld payments despite completing the project on the ground that the company failed to adhere to contractual obligations. After a lengthy hearing before the bench of Chief Justice Sunita Agarwal and Justice Aniruddha Mayee during which the bench verbally indicated that it was not inclined to interfere with the commercial court’s order, the bench reserved its verdict Tuesday. SDB, through its counsel senior advocate Kamal Trivedi, submitted before the HC bench that it has already paid nearly Rs 2,087 crore against Rs 2,073 crore claimed in 45 recurrent bills raised by the company. SDB submitted that PSP Projects had then raised two final bills — one worth Rs 2,247 crore on December 21, 2022 and another of Rs 2,286 crore on June 12, 2023. The company also raised an additional claim of Rs 538 crore, for which PSP Projects then moved a commercial court in December 2023 seeking payment along with interest that comes to the tune of Rs 631 crore. On the other hand, PSP Projects submitted that SDB had issued them a virtual completion certificate on October 21, 2022, despite which the retention money continues to be with the bourse that should otherwise have been returned to the construction company upon completion. PSP Projects also argued that SDB, being a non-profit making company, is running into losses. Hence, if the amount as claimed by PSP Projects is awarded in its favour by the arbitral tribunal then at that time, SDB may not be in a position to pay the said amount.
