ATUL MEDICAL Vs. CADILA HEALTHCARE PVT LTD

JUDGEMENT

(1.) Rule. By consent taken up for final hearing.

(2.) The petitioner is the original plaintiff. The petitioner filed Special Civil suit No. 263 of 1998 for declaration and permanent injunction challenging the acts of defendant 1 in invoking bank guarantee of Rs. 8 lacs given by defendant 2 for and on behalf of the plaintiff to defendant 1 as illegal, bad in law and void. Shortly stated in the plaint, it is alleged that the plaintiff firm commenced business as superstockists on 7/2/1997 and as per the terms and conditions of the agreement, the plaintiff gave a bank guarantee amounting to Rs. 8 lacs to defendant 1. As per the request of the plaintiff, defendant 2 issued a bank guarantee. As the business was slack, the plaintiff could not pay defendant 1's bills promptly. According to defendant 1, the outstanding bills of the plaintiff are Rs. 5,65,709.21. The plaintiff disputed the amount. Defendant 1 threatened to invoke the bank guarantee and, hence, the suit came to be filed.

(3.) It appears that during the pendency of the suit, an application for temporary injunction was made which was rejected. An appeal from order was preferred by the petitioner in this Court which was dismissed. On 3/5/ 1999, the Letters Patent Appeal filed by the petitioner was admitted by this court and the civil application for stay came to be disposed of with a direction that the petitioner should deposit an amount of Rs. 6 lacs in this Court and out of the said amount, defendant 1 was allowed to withdraw a sum of Rs. 4 lacs and the balance amount of Rs. 2 lacs was directed by this Court to be invested in the nationalised bank.