CENTRALBANK OF INDIA Vs. PARKAR SECURITIES LTD

JUDGEMENT

(1.) CENTRAL Bank of India has come up with these Letters Patent Appeals against interim order passed by the learned single judge in Special Civil Application No. 2791 of 2009 on 9-4-2009 and against the order passed in Civil Application No. 4137 of 2009 staying the proceedings in O. A. No. 177 of 2003 pending before the Debt Recovery Tribunal, Ahmedabad (for short 'd. R. T. ' ). Special Civil Application No. 2791 of 2009 was preferred by the respondents herein for staying further proceedings in O. A. No. 177 of 2003 pending before the D. R. T. till final disposal of the Summary Civil Suit no. 3233 of 2002 pending before the City Civil Court at Ahmedabad and also for other consequential reliefs. When these Letters Patent Appeals came up for hearing, on consent of the parties, we called for Special Civil Application No. 2791 of 2009 as well for final disposal.

(2.) CENTRAL Bank of India (for short 'bank') granted credit facility by way of Bank Guarantee limit of Rs. 25 lakhs to the first respondent company for its business activities of share and securities against the security by way of mortgage of immovable properties belonging to second and third respondents and personal guarantees of Directors and issued Bank Guarantee 90/100 dated 16-5-1998 favouring National Securities Clearing Corporation Ltd. (for short 'the N. S. C. C. L. ' ). First respondent was clearing member of said N. S. C. C. L. initially for a period of 12 months i. e. upto 15-5-1999 which was later extended upto 15-5-2001. One of the conditions of the Bank Guarantee which is of importance is extracted hereunder for easy reference.

(3.) FIRST respondent later received a letter dated 7-8-2001 from N. S. C. C. L. requesting to either submit fresh Bank Guarantee or renew existing Bank guarantee for a further period of one year on or before 10-8-2001, failing which it was informed that the Bank Guarantee would be invoked. First respondent then filed Special Civil Application No. 6491 of 2001 before this Court against the National Stock Exchange of India Ltd. and the Bank and this Court on 10-8-2001 passed an order restraining them from invoking Bank Guarantee. Consequently, N. S. C. C. L. vide letter dated 14-8-2001 informed the Bank that the letter be treated as an invocation letter and the intention for invocation of bank Guarantee and the Bank was requested to pay the amount upon vacating the injunction order granted by this Court. Special Civil Application No. 6496 of 2001 was disposed of as withdrawn vide order dated 27-12-2001. Consequently, interim order was also vacated.