BIBA CHEM PRIVATE LIMITED Vs. HI TECH CARBON

JUDGEMENT

(1.) This order will dispose of the application under Order 39 Rule 1 and 2 filed by the plaintiff for an injunction restraining defendant No.1 from enforcing bank guarantee No.4/90 and No.1/91 for Rs. 10,00,000.00 and Rs.5,00,000.00 respectively and defendant No.2 bank from acting thereupon as also the application of defendant No.1 under Order 39 rule 4 for vacating the ex-parte stay granted in favour of the plaintiff on 4th January, 1993, whereby defendant No.1 was restrained from enforcing the aforesaid two guarantees.

(2.) In short, the facts of this case are that vide letter dated 29th June, 1988, the plaintiff was appointed the sales agent of defendant No.1 on the terms and conditions as contained in the said agreement. The designation as mentioned in the said letter for the plaintiff was "Consignment Agent". Under the terms of the agreement, the plaintiff was to sell the products of defendant No. 1 and it was to be paid commission at the rates agreed between the parties. In terms of the agreement, the plaintiff was to let defendant No. 1 know the estimated monthly quantity that the plaintiff was expected to sell in the succeeding month and defendant No. 1 was to consign its products to the plaintiff in such quantities as might be available with them at the relevant time. The plaintiff was to promptly and quickly take delivery of the products consigned and despatched by defendant No.1. Defendant No.1 had also reserved its rights to sell its products, during the continuance of the agreement, to any other party and to appoint any other distributor, stockists, etc. and such appointment would not have given any right to the plaintiff to claim any commission or consideration whatsoever. The plain- tiff was also required to furnish guarantee interms of the said agreement. It will be useful to quote clause 12 of the said agreement which requires the furnishing of guarantee as the entire case is based upon the said guarantees which were furnished under clause 12: -

(3.) In the first instance, the agency agreement was for a period of one year and was to continue upto 30th June, 1989 after which it could have been extended by mutual agreement between the parties.