BASIC TELE SERVICES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE plaintiff has sued for declaration that the invocation dated 30th October, 1996 by the Ministry of Communications Department of Telecommunications of the defendant No.1 Union of India of the bank guarantee issued by the defendant No.2 Bank at the instance of the plaintiff in favour of the defendant No.1 is contrary to the terms of the guarantee and that the defendant No.1 is not entitled to invoke the said guarantee and for permanent injunction restraining the defendant No.2 from making payment under the guarantee and also for mandatory injunction directing the defendant No.1 to negotiate in good faith the terms and conditions of the licence and the interconnect agreement for which the bid of the plaintiff to the defendant No.1 had been accepted by the defendant No.1. Vide interim order dated 1st November, 1996 after issuance

(2.) OF notice to the defendants and finding that the defendant No.1 had already invoked the bank guarantee, the defendant No.2 bank was restrained from remitting the proceeds of the bank guarantee to the defendant No.1. The plaintiff was, however, asked to keep the bank On 28th August, 1998 on an application of the guarantee alive. plaintiff for exemption from extension of bank guarantee it was held that there was no need for formal extension of bank guarantees and non -extension of the bank guarantee will not affect the rights of the defendant No.1 to get the remittance from the defendant No.2 bank in the event of the matter being decided finally in favour of the defendant No.1 on the basis of invocation made earlier during the term of validity of the bank guarantee. The defendant No.1 preferred FAO(OS) 217/1998 against the said order; on the concession of the counsel for the plaintiff and the counsel for the defendant No.2 bank, in the said appeal on 31st August, 1998, it was ordered that in the event of the plaintiff failing in the suit and the defendant No.1 succeeding therein, neither the plaintiff nor the defendant No.2 bank would object to payment of the bank guarantee amount being made to the defendant No.1 notwithstanding the non - extension of the validity of the bank guarantee. The counsel for the bank also stated that the defendant No.2 bank would not deny payment of the bank guarantee impugned, to the defendant No.1 on the ground that the bank guarantee had not been extended.

(3.) ON the pleadings of the parties in the suit, the following issues were framed on 7th September, 2001. "1. Whether the present suit is liable to fail for want of legal notice contemplated under Section 80 of the Code of Civil Procedure? 2. Whether the plaint does not disclose a cause of action? 3. Whether there was no concluded contract between the plaintiff and the defendant No.1? 4. Whether the plaintiff is entitled to the relief for declaration and injunction as prayed?