ALFA THERM LIMITED Vs. CANARA BANK

JUDGEMENT

(1.) ISSUE No. 3, of the issues framed on 13th February, 2009 and ordered to be treated as a preliminary issue, as to the territorial jurisdiction of this court to entertain the suit, is for consideration.

(2.) THE plaintiff has instituted this suit for declaration and permanent injunction vis-a-vis a bank guarantee, issued at the instance of the plaintiff by the defendant No. 1 bank in favour of the Government of Assam (Defendant no. 2 ).

(3.) THE defendant No. 2 Government of Assam had on 7th April, 2007 invited bids for supply of equipment installation, commissioning etc. all at Assam. The plaintiff company, stated to be having its registered office at Delhi was one of the bidders. The bank guarantee with respect whereto the suit has been instituted is a bank guarantee for EMD (bid security)issued by the defendant No. 1 bank having its branch at New Delhi and for the benefit of the Defendant No. 2 Government of Assam. The defendants No. 1 bank under the said guarantee bound itself to pay to the defendant No. 2 the sum of rs. 6 lacs in the event of the plaintiff withdrawing its bid during the period of bid validity and/or if the plaintiff after having been notified of the acceptance of its bid by the defendant No. 2 during the period of the bid validity fails or refuses to execute contract form or fails or refuses to furnish the performance security in accordance with the clauses of tender. The defendant No. 2 invoked the said bank guarantee; according to the plaintiff wrongfully. The plaintiff instituted the suit for the relief of declaration that the plaintiff is not at fault in executing/signing the proposed agreement/contract as sent by the defendant No. 2 and as a consequence to the said declaration seeks permanent injunction restraining the defendant No. 1 from honouring and/or encashing and/or remitting Rs. 6 lacs covered by the said bank guarantee.