STATE OF JHARKHAND Vs. BANK OF BARODA

JUDGEMENT

(1.) DEFENDANT No. 2 entered into two several contracts with the then State of Bihar to execute civil works at Palamu. At the request of the Defendant No. 2 the Defendant No. 1 furnished 18 several Bank guarantees in favour of the State of Bihar. Disputes and differences arose between the Defendant No. 2 and the State of Bihar with regard to the execution of the aforesaid two contracts. The validity of the 18 several Bank guarantees were to expire on October 31, 1992. Prior to the expiry of the validity of such Bank guarantees the State of Bihar called upon the Defendant No. 1 to extend the Bank guarantees and failing such extension requested encashment thereof.

(2.) ACCORDING to the plaintiffs the Defendant No. 1 extended the validity period of the 18 several Bank guarantees to October 31, 1993. According to the plaintiffs by suppressing the factum of extension, the Defendant No. 2 filed a writ petition being Matter No. 1163 of 1993 before this Hon'ble Court and prayed that the Defendant No. 1 ought not to renew the Bank guarantees. Several interim orders were passed in Matter No. 1163 of 1993.

(3.) ACCORDING to the plaintiffs the first writ petition of the Defendant No. 1 being Matter No. 1163 of 1993 was dismissed for default and all interim orders passed therein was vacated on November 15, 1994.