CAPITAL METERS Vs. CIMMCO INTERNATIONAL

JUDGEMENT

(1.) The plaintiff filed the present suit seeking for a decree of permanent injunction restraining defendant No.3, State Bank of Patiala from making any payment of any amount from the bank guarantees dated 13th December, 1995, 15th December, 1995 , 23rd December, 1995 and 10th May, 1996 furnished by the said bank to defendants 1 and/or 2. Along with the suit the plaintiff also filed an application under Order 39 Rules 1 and 2 which was argued before me and by this order I propose to dispose of the same.

(2.) The plaintiff in pursuance of the contract and purchase order placed by the defendant No.1 on the plaintiff to purchase a specified quantity of single/three phase kwh. meters supplied to the defendant such meters. It was a condition of the purchase order that the plaintiff was to submit performance bank guarantee of the amount of 10% of the purchase order. In terms of the aforesaid contract and purchase order, the plaintiff supplied the meters but the said supply made by the plaintiff was found to be damaged by the buyer and accordingly the defendant No. 1 the buyer sought to invoke the bank guarantees given by the defendant No.3 on behalf of the plaintiff and hence the present suit. In the injunction application, the plaintiff has sought for issuance of order of temporary injunction restraining encashment of the bank guarantee.

(3.) Mr.Singh appearing for the plaintiff submitted that the goods were to be manufactured, packed and sent by the plaintiff on F.O.R.basis to Bombay for onward transmission by defendant No.1 and its agents to their principal in Ghana and thus the responsibility of the plaintiff under the purchase order as also under the contract extinguished when the goods were delivered to defendant No.1 and received by defendant No.1 at Bombay without any demur and / or objection. He further submitted that in pursuance of the requirement of the purchase order the goods manufactured by the plaintiff were also inspected by S.G.S.India Limited on various dates and being satisfied with the quantify, quality , packing and marking on the goods gave their reports approving the said goods and certifying that the same conformed to the conditions of the purchase order and such inspection having been done in presence of the representatives of defendant No.1, the action taken by the defendant 1 in invoking the bank guarantee is without jurisdiction. It was also submitted that the aforesaid meters , on the face of the facts and circumstances of the case, got damaged because of the sea water having entered into the consignment which was due to the negligence of shipping company by which the goods had been shipped by defendant No.1 to Ghana for which, the defendant 1 had also sought to recover the damage suffered by them also from the insurance company and , therefore, there is no liability so far the plaintiff is concerned. It was also submitted that the letter written by defendant No.1 to the State Bank of Patiala is not in conformity with the terms of the bank guarantees furnished by the said company and thus neither the plaintiff nor the State Bank of Patiala has any obligation or any right to pay the amount of the bank guarantees or any part thereof to defendant No.1. He further submitted that a fraud has been committed by the defendant No.1 by suppression of material fact that meters became defective after taking the delivery by the defendant no.1 at Bombay from the plaintiff and as such the plaintiff is entitled to an interim injunction as sought for in the injunction application. The counsel further submitted that if the defendant No.1 is allowed to invoke the bank guarantees as sought to be done by them , it would be a case of undue enrichment. In support of his submission, the learned counsel relied upon the decisions of this court in Harprashad & Co. Ltd. vs. Sudarshan Steel Mills and Others reported in AIR 1980 Delhi 174, Synthetic Foams Ltd. vs. Simplex Concrete Piles (India) Ltd. reported in AIR 1988 Delhi 207 and Larsen and Toubro Limited vs. Maharashtra State Electricity Board and Others reported in 1995 (6) SCC 68. He also submitted that since the insurance claim has also been lodged by the defendant No. 1 it is also admitted position even by the said defendants that the loss caused was during the transit of the goods in the ship and, therefore , the plaintiff is not liable for the damage caused to the aforesaid goods.