RASHEED MOHD. AND OTHERS Vs. BANK OF INDIA

JUDGEMENT

(1.) This appeal is directed against the judgment and decree dated 8.5.1998 in Civil Appeal No. 51-A/95, by District Judge, Sidhi, decreeing the suit of the plaintiff/respondent, and reversing the judgment and decree dated 5.7.1995 in Civil Suit No. 8-D/94 by 1st Civil Judge, Class-II, Sehore.

(2.) The plaintiff/respondent filed a suit claiming the balance of amount paid by it towards Bank Guarantee furnished by it for the appellants, to the Irrigation Department of Govt, of M.P.. Undisputably, the Bank Guarantee (Ex. P/1) dated 4.8.1987 was furnished by the plaintiff/respondent for and on behalf of defendants/appellants. The said Bank Guarantee was extended for a further period of another one year by document Ex. P/2. It is also not in dispute that the amount of Bank Guarantee was paid by respondent-Bank to the Irrigation Department on 22.4.1992 and the suit was brought on 23.9.1992.

(3.) Learned Counsel for the appellant has mainly urged that the Bank Guarantee (Ex. P/1) was to last till 4.8.1986 by virtue of Clause (1) thereof and as it was extended by document (Ex. P/2), it should have expired on 4.8.1989. Therefore, die plaintiff/respondent could not legally pay the amount of Bank Guarantee much later on 22.4.1992, to the Irrigation Department for and on behalf of defendants/appellants. Therefore, the plaintiff/ respondent could not succeed in the suit, for recovery of the balance amount paid towards the Bank Guarantee as the payment was beyond the terms of agreement contained in Clause (4) of the Bank Guarantee (Ex. P/1). It was further urged that the suit was brought after the expiry of three years from the extended term of Bank Guarantee i.e. 4.8.1989 and was therefore barred by limitation.