UNIQUE ALLIANCE INDUSTRIES GOA Vs. ANUPAMA AGENCIES TRICHUR

JUDGEMENT

(1.) The first defendant in O.S. No. 333of 1991 on the file of the Subordinate Judge's Court, Trichur is the appellant in this Civil Miscellaneous Appeal. This appeal is against an order allowing the petition filed under O.39 R.1 of the Code of Civil Procedure for a temporary injunction by the first respondent - plaintiff. By the said order the second respondent (second defendant) has been injuncted from paying and the appellant from receiving Rs. 1,67,427.16 demanded by the appellant out of the guaranteed amount as per the letter of guarantee dated 20-4-1990 executed by the second respondent till the disposal of the suit.

(2.) The facts necessary for the disposal of this appeal are these: The appellant is a firm known as 'Unique Alliance Industries, Goa' engaged in the manufacture of confectionery items. The first respondent M/s. Anupama Agencies, Trichur was appointed as the wholesale distributor for the supply of confectionery items in the districts of Trichur, Malappuram, Palghat, Calicut and Kannur. As per the terms of the agreement dated 22-3-1990 (Ext. A1) the appellant had agreed to give credit facilities of 33 days and the first respondent had to furnish Bank guarantee in favour of the appellant to cover up the supplies. The first respondent thereafter requested the second respondent, Bank of Baroda, to furnish necessary Bank guarantee on the production of sufficient security. Accordingly second respondent, after satisfying the security furnished by the first respondent, issued bank guarantee to the appellant for an amount of Rs. 2 lakhs. The validity of the Bank guarantee was for a period of one year from 20-4-1990 to 19-4-1991. The first respondent thus became the wholesale distributor and orders for supply of confectionery items were taken. In the meanwhile M/s. Sreevilas Agencies, Trichur made a complaint to All Kerala Distributors Association, where the first respondent is also a member, that they are the dealers appointed by the appellant and already functioning for Trichur district. According to the first respondent, appellant had suppressed the facts that it had earlier appointed M/s. Sreevilas Agencies as their dealer for Trichur district and that therefore appellant had actually played fraud. In the meantime one lorry load of confectionery items was despatched to the first respondent by the appellant in January 1991. When the goods reached Trichur the first respondent refused to unload and take delivery of the goods. However, pursuant to a specific request made by the appellant, the first respondent had kept the consignment temporarily in its godown. The case of the first respondent is that the appellant requested the first respondent to effect supply as and when the orders were received from the representative of the appellant and the first respondent would be paid commission at the rate of 10%. Thereafter the first respondent supplied the goods as per four orders. The cheques for the value of the goods so supplied were presented to the bank for payment, but three cheques were returned unpaid for want of sufficient money. According to the first respondent, consignment received on 5-1-1991 was for Rs. 1,25,384.86 and the lorry load was not against any specific order of the first respondent and hence no responsibility could be attributed to it in any manner. The second respondent has informed the first respondent that the appellant had demanded Rs. 1,47,423.16 out of the amount covered by Bank guarantee. According to the first respondent, the appellant is making all attempts to misuse the Bank guarantee given as security. It was under that situation the present suit was filed for a decree of permanent injunction restraining the Bank of Baroda (second respondent) from effecting payment of an amount of Rs. 1,67,427.16 out of the guaranteed amount. The suit was filed on 15-3-1991. The suit claim was opposed by the appellant. After filing the suit first respondent applied for temporary injunction against the appellant. That application was opposed by the appellant and a detailed counter affidavit was also filed. After finally hearing the application for temporary injunction, the court below came to the conclusion that prima facie the first respondent had a 'debatable and arguable' case. In that view, of the matter the court below made ex parte injunction already issued, absolute till the disposal of the suit. The said order of the court below is under challenge in this Civil Miscellaneous Appeal.

(3.) Sri K.P. Sreekumar, learned counsel for the appellant submitted before us that the court below grossly erred in exercising the jurisdiction under O.39 R.1 C.P.C. in favour of the first respondent. His argument is, the first respondent has no prima facie case or balance of convenience justifying the grant of temporary injunction in his favour. His further point is that the court below has committed a grievous error of law in issuing injunction against the second respondent bank from encashing the Bank guarantee. The question of law erred by the Trial Court to observe, according to counsel, is that the Bank guarantee is an autonomous and independent contract and so it cannot be interfered with except in cases of fraud or in case of genuine apprehension of irretrievable injustice.