CATHOLIC SYRIAN BANK LTD Vs. JAGANNATHA CONSTRUCTION LTD

JUDGEMENT

(1.) These appeals arise out of the common order passed by the Subordinate Judge, Jangaon, Warangal District in/I.A.45/1995 in O.S.20/1994, I.A.197/ 1995 in O.S.19/1995 and I.A.46/1995 in O.S.4/1995 rejecting the petitioner's applications for grant of an order under Order XXXVIII Rule 5 C.P.C. seeking attachment of the amounts due and payable to the respondents/defendants by the South Central Railway and to issue an order prohibiting the Railway from making payment to the defendants pending disposal of the suits.

(2.) For the purpose of executing the contract work awarded by the South Central Railway, the respondents approached the appellant-bank for furnishing deferred payment bank guarantee to Vijaya Bank Limited which, in turn, furnished a bank guarantee to the company which sold the equipment namely, three tippers and one excavator. The said equipment was hypothecated to the appellant-bank. It is not in dispute that the respondents defaulted in the payment of the amounts due in instalments towards the equipment purchased as a result of which the appellant-bank had to make good the payment of instalment money to Vijaya Bank. As the respondents failed to pay the said amounts to the appellant-bank despite the fact that the appellant-bank paid it to Vijaya Bank, the appellant-bank after protracted correspondence instituted three suits in the Sub-Court, Jangaon. The total value of the three suits is Rs. 24.22 lakhs. It is stated that with the addition of interest from the dates of filing the suits upto date, the suit claim goes upto rupees forty lakhs approximately.

(3.) It is seen from the copies of correspondence filed before us which were also marked before the trial court in the I.A.S., that the respondents were promising to discharge the liability soon after the amount is received from the South Central Railway in the pending arbitration case. An ex parte prohibitory order was issued on 13-2-1995. However, in spite of that order, it appears that the respondents received payment of about rupees forty six lakhs in tentative acceptance of their claim in arbitration case and a substantial amount has been received towards the running bills. Out of this, only a sum of rupees five lakhs and odd was paid to the appellant-bank towards the subsequent instalments which are, of course, unrelated to the suit claims.