HYDRAULIC AND GENERAL ENGINEERING LTD Vs. UCO BANK

JUDGEMENT

(1.) ADMIT . Ms.Rajani Iyer waives service on behalf of the respondents. By consent, appeal heard forthwith. Heard parties.

(2.) THE plaintiffs, UCO Bank, took out Summons for Judgment in Summary Suit No.3075 of 1995 filed by the Bank to enforce the counter guarantee executed by the defendants no.1 and 2 to cover the payment which is required to be made to U.P. Jal Nigam by the plaintiffs under the guarantee executed by the Bank in favour of U.P. Jal Nigam. The Summons was resisted by the defendants no.1 and 2, firstly, on the ground that the invocation of the guarantee by U.P. Jal Nigam was not in terms of the guarantee executed by the plaintiff-Bank and, as such, the Plaintiff-Bank ought not to have paid the amount under the guarantee. The learned Judge, however, was impressed by the other submission on behalf of the defendants no.1 and 2, viz., that the claim towards interest as made by way of exh.'BB' to the plaint could not have been included in a Summary Suit. The learned counsel appearing for the plaintiffs before the learned Judge, on instructions, stated that in case the order of conditional deposit is passed and non-compliance therewith entitles the plaintiffs to get the suit set down at ex parte decree, then in that event, the plaintiffs shall restrict their claim only to the amount of Rs.44,91,631.94 and seek decree only in the sum of Rs.44,91,631.94 which is the amount of the guarantee and seek decree only for the said sum. The learned Judge accepted the statement and recorded the same. The learned Judge further observed that counter guarantee executed unconditionally covers the payment likely to be made which, in fact, is made by the Bank under a guarantee dated 24th February 1998 executed by the Bank in favour of U.P. Jal Nigam. Prima facie, observed the learned Judge, he saw no defence except the technical interpretation to some of the clauses sought to be put up by the counsel for the defendants no.1 and 2. Consequently, the learned Judge granted the defendants leave to defend the suit on deposit of Rs.25 lakhs within ten weeks from the date of the order and also passed usual consequential order. The aforesaid order is challenged by way of this appeal.

(3.) IN that behalf, Mr.Kapadia brought to our notice the decision of a single Judge of the Calcutta High Court reported in A.I.R. 1986 Calcutta 374 as also the decision of a Division Bench of the Delhi High Court reported in A.I.R. 1980 Delhi 174.