DELTECH ENGINEERING PRIVATE LIMITED MADRAS Vs. RISHI CARBONICS PRIVATE LIMITED HARIYANA STATE BANK OF INDIA SIB DIVISION GUINDY MADRAS

JUDGEMENT

(1.) APPLICATION is filed under O. 39, Rules 1 and 2 of Civil Procedure Code read with 6.12, R. 8 of the Original Side Rules, seeking the interim injunction restraining the first respondent from enforcing the Bank Guarantee dated 28-5-1990 and the second respondent from paying the amount covered by the aforesaid Bank Guarantee, pending disposal of the above suit.

(2.) THE affidavit filed in support of the petition and the plaint discloses the following case which are briefly stated as follows: THE applicant is the plaintiff in the suit which was filed for permanent injunction restraining the first respondent/1st defendant from invoking the Bank Guarantee till the dispute between the petitioner/plaintiff and the first respondent/first defendant is resolved by an arbitration and also the second respondent/second defendant from paying the amount under the Bank Guarantee.

(3.) THE first respondent who is a party to the Agreement dated 6-11-1989 with whom the applicant has entered into the said Agreement, has filed a counter affidavit and in which, he contended inter alia that the application seeking the relief of interim injunction as well as the suit against him and the bank, viz., the second respondent restraining from invoking the bank guarantee is not at all maintainable in view of the various case laws decided by the various High Courts and the Apex Court of our country that there cannot be any injunction against the invoking of the bank guarantee since it was a document within the purview of the Negotiable Instruments Act and once bank guarantee was given and accepted, Which is an unconditional one on demand, the amount guaranteed should be paid by the bank and that under the circumstances, and, as such the application is not maintainable and that further it was contended that though the applicant plaintiff has supplied and erected the plants and machineries as per the specifications and conditions stipulated in the agreement dated 6-11-1989 there was unnecessary delay in completing that contract and that even so, the erection of the machinaries and plants were completed, the erection work was not completed in full as agreed and that above all, there were serious defects in the machineries and they are not functioning as per the specifications stipulated in the agreement and that further the performances of the machineries supplied and erected by the applicant was totally defective and the resultant position was that the first respondent was not able to have the full production and incurred heavy loss and that in spite of several letters and communications to rectify and said defects, it was not done sy by the applicant, with the result, that the first respondent had intended to invoke the Bank Guarantee given by second respondent on behalf of the applicant. Thus, in short, the first respondent formulates his defence on the basis that the application as well as the suit which are for the relief of injunction by the court of law against the invoking ? of the bank guarantee itself are not maintainable in view of the specific findings as per the judgments given by the various High Courts and apex court of our country and that even so, the machineries and plants supplied and erected by the applicant was totally defective and the consequent performance of the same were not upto the specifications agreed upon between the parties herein and that inasmuch as the plaintiff applicant failed to rectify and defects pointed out, committed a breach of the performance of the contract, the first respondent is duly entitled to invoke the Bank Guarantee and that therefore, the first respondent is well within the legal submits to invoke the same to the extent of 3.1 lakhs which was followed upto 27-5-1991 and that under the circumstances, the interim order granted by this Court is not correct and as such, the first respondent prayes that the said interim order has to be cancelled and the above application filed by the plaintiff is to be dismissed.