ACCESS MARITIME CORPORATION Vs. SYNDICATE BANK

JUDGEMENT

(1.) This petition has been filed for issuance of a writ of mandamus against respondent no.1 to encash the unconditional Bank Guarantee No.009100197 dated 15th July, 1997 in favour of the petitioner and for an Order declaring the decision of the respondent Bank contained in its letter dated 18th November, 1997 as illegal.

(2.) The petitioner is vessel owner engaged in the business of carriage by sea. Its principal place of business is at 34, Possidonos Avenue, 174 55 Alimos, Athens, Greece. The petitioner entered into a Charter Party Agreement with M/s Lucky Exports, respondent no.2 herein, for the purpose of transporting rice from Visakhapatnam Port in India to Novorrissk, a Port in Russia, abroad "DANUBE TRADER", a vessel belonging to the petitioner herein. As per the terms of the Charter Parly Agreement M/s Lucky Exports were to furnish the petitioner with an irrevocable Bank Guarantee. Pursuant to the said agreement the Syndicate Bank executed an irrevocable and unconditional Bank Guarantee numbering 009100197 for the sum of US $ 52,500 in favour of the petitioner. The said Bank Guarantee was to be paid on tender of first demand along with an invoice towards demurrage, a copy of the notice of readiness, statement of facts giving lay time and time sheet calculations duly authenticated by the bankers of the petitioner. The said Bank Guarantee as extended was valid upto 15th October, 1997. On 25th September, 1997 the petitioner submitted to the Charterers a demurrage invoice for a sum of US $ 53,265.63 on the basis of the time sheet calculations. This was contested by M/s Lucky Exports, respondent no.2 who vide their letter dated 27th September, 1997 contended that as per their calculations the vessel had only incurred demurrage for a period of 4 days, 9 hours and 52 minutes. On failure of respondent no.2 to pay the demurrage the petitioner were constrained to invoke the Bank Guarantee vide letter dated 6th October, 1997 for the entire amount of US $ 52,500 in terms of the guarantee itself read with the terms of the Charier Party Agreement. The petitioner approached the respondent Bank and vide letter dated 6th October, 1997 asked for invocation of the Bank Guarantee. The respondent Bank addressed a letter to the petitioner dated 8th October, 1997 which reads as follows:-

(3.) The respondent Bank, however, did not pay any money to the petitioner nor acceded to the request for invocation of the Bank Guarantee. In the meanwhile respondent no.2, the Charterer filed a suit being Suit No.2262/97 against the petitioner and the respondent Bank praying for a decree for perpetual injunction restraining the petitioner from encashing the Bank Guarantee and restraining the respondent Bank from releasing the payment. Respondent no.2 also moved interim application being I.A.No.10449/97 for grant of ad-interim injunction restraining the respondent Bank from releasing payment. The matter came up for hearing before D.K.Jain,J. on the Original Side who vide detailed judgment dated 4th November, 1997 rejected the pleas of respondent no.2 and dismissed the interim application. It may be relevant to reproduce the operative part of the judgment as below:- " From the above it is evident that what is accepted by the agent of the plaintiff is that the vessel had arrived at the discharge port on 20 August 1997. at a particular time and was ready to load - discharge cargo as per charter party and nothing more. Once the notice of readiness is accepted without protest, it is axiomatic that it relates back to the date when the vessei's readiness is intimated and the date of so calico acceptance loses its significance. Obviously, the date of acceptance would be material if the readiness of the vessel is doubted and a note to that effect is appended by the party accepting it. Therefore, prima facie, the submission of learned counsel for the plaintiff that the lay time/free time has to commence from the date of acceptance is devoid of substance. Having critically examined the clause pertaining to the determination of lay time, there appears to be not much force in the argument that for determining the total period for which the demurrage is payable, the lay period of 13 days and 12 hours as stipulated in the agreement, has to be excluded from the total period from the date of readiness to the dale of sailing of the vessel, irrespective of the fact whether 'here has been delay in berthing/discharge on account of port congestion or bad weather or for some other reason. I say no more lest it may cause prejudice to either of the parties in, the final trial of the suit or in adjudicaion proceedings before the arbitrator. Same would be the position on the question whether the delay in berthing or discharge was on account of port congestion or bad weather, as alleged by the plaintiff. All these are triable issues. Having regard to the material placed on record by the plaintiff, I have no hesitation in coming to the conclusion that the plaintiff has failed to make out even a prima facie case that the invocation of bank guarantee in question is vitiated by any fraud - much less an established fraud, warranting interference by this Court in its encashment. The decision of the Supreme Court in Larsen & Toubro's case (supra), relied upon by learned counsel for the plaintiff is clearly distinguishable on facts and is not applicable to the facts of the present case. In that case one of the bank guarantees, the encashment whereof was interdicted by the Court, was a conditional guarantee and was to be good for payment till successful completion of trial operations