YAMUNA ENGINEERING CO Vs. BANK OF BARODA

JUDGEMENT

(1.) The petitioner instituted a Split No. 274 of 1976 in the Court of the learned Civil Judge (Senior Division) Baroda for an injunction to restrain Jyoti Limited from demanding payment from the Bank of Baroda under a guarantee given by the plaintiff in respect of the transactions in question. Briefly stated the facts are as under.

(2.) The plaintiff and Messs Jyoti Limited entered into a contract dated 9/05/1974 for the manufacture and supply of valves suitable for electrical operations on the terms and conditions set out therein. Under the terms of the contract Measure Jyoti Limited agreed to pay 25 per cent of the price as evince payment amounting to Rs. 4 47 680 for which the plaintiff give a bank guarantee The terms of the bank guarantee are Bank hereby agrees unequivocally and unconditionally to pay within 48 hours on demand in writing from lacers Jyoti Limited and sum upto and not exceeding the amount mentioned on the strength of this bank guarantee advance payment was made by Jyoti Limited as per the details contained in the letters produced at S. Nos. 1 to 8 of list Exhibit 22. the plaintiff failed to supply the goods of the specification ordered by Jyoti Limited whereupon the latter served notice dated 19/03/1976 calling upon the Bank to discharge its obligation under the guarantee letters amounting to Rs. 4 47 680 To restrain the Bank of Baroda from paying the amount to Jyoti Limited on the strength of the letters of guarantee executed by the plaintiff the suit in question was filed seeking an injunction restraining Jyoti Limited from demanding the payment and the Bank of Baroda from pay in. the same. The suit was valued at Rs. 100.00 and a fixed court-fee of Rs 30/- came to be paid on the premise that the suit fell within the ambit of clause (i) of Article 23 in Schedule II to the Bombay Court Fees Act 1959 here in after called the Act). on behalf of the defendants a preliminary contention was raised that proper court-fee had not been paid since the suit was to obtain a relief which could be valued in terms of money since what was sought to beach over was to prevent the payment of money by the Bank of Baroda to Jyoti Limited under the letters of guarantee executed by the plaintiff. It was therefore contended that the suit fell within the ambit of Article 7 in Schedule I of the Act a contention which has found favour with the Court below. I thick the view of the learned trial Judge must be upheld.

(3.) Article 7 in Schedule I of the Act refers to any plaint application or petition (including memorandum of appeal) to obtain substantive relief capable of being valued in tireless of monetary gain or prevention of monetary loss. The court-fee required to be paid on such a plaintiff application or petition or memorandum of appeal is to be calculated on the amount of the monetary gain or loss to be prevented according to the scale prescribed under Article I in the said Schedule. In the background of facts stated above there can be no doubt that the purpose of the suit was to avoid the payment of Rs. 4 47 680 in respect of which the plaintiff had given a banal guarantee. Ordinarily on the terms of the letters of guarantee the Bank of Baroda would be under an obligation to pay the said amount to Jyoti Limited Old demand since according to Jyoti Limited the plaintiff had failed to perform its part of the contract. By seeking an injunction restraining Jyoti Limited from recovering and Bank of Baroda from paying said amount what the plaintiff desires is to prevent a monetary loss likely to be occasioned to it. Unless an injunction is grained of the type sought the Bank of Baroda would undoubtedly pay the amount to Jyoti Limited under the terms of the letters of guarantee executed by the plaintiff. What does the plaintiff seek when he seeks and junction to restrain Jyoti Limited from demeaning and Bank of Baroda from paying the said amount on the strength of the letters of guarantee executed by it ? Obviously the plaintiff seeks to avoid the payment of Rs. 4 47 680 to Jyoti Limited which under the letters of guarantee the Bank of Baroda is obliged to pay on demand. There is therefore no doubt whatsoever that the under in idea in or a suit and seeking an injunction of the type sought is to prevent monetary loss likely to be occasioned on the Bank Baroda discharging its obligation under the terms of the guarantee. I am therefore of the opinion that the view taken by the learned trial Judge is Correct.