BIRD AND CO Vs. TRIPURA JUTE MILLS

JUDGEMENT

(1.) THIS appeal arises out of an order passed by Sabyasachi mukherji, J. on the 10th of March 1977 in an interlocutory proceeding in the suit. The plaintiff-appellant entered into a contract with defendant respondent no. 1 for supplying various articles, the respondent No. 1 agreed to make advance payment to the appellant in respect to the supplies to be made under the contract and a Bank Guarantee was executed for securing the advances to be made by the respondent No. 1 to the appellant. The Chartered Bank gave the guarantee and on the 28th of April 1975 an agreement of guarantee befwesn the respondent No. 1 and the Chartered bank, respondent No. 2 was duly executed. The said guarantee bond contains the following provisions:

(2.) THE respondent No. 1 had duly paid to the appellant the said sum of rs. 10,38,440/- as and by way of advance against supplies to be made. On the 12th april 1976 the respondent No. 1 rescinded the said contract and thereafter on the 16th April 1976 respondent No. 1 called upon the Bank, the respondent no. 2 to pay to the respondent No. 1 the said sum of Rs. 10,38,440/- in terms of the said guarantee. The appellant filed this suit on the 27th September 1976 and the reliefs asked for in the suit are-

(3.) MR. Ginwalla, learned counsel appearing on behalf of the appellant has raised three principal contentions before us, The first and main contention urged by Mr. Ginwalla is that in the facts and circumstances of the case the guarantee Bond has not become enforceable and the Bank cannot make any payment in terms of the said Guarantee and the respondent No. 1 is not entitled to enforce the said Guarantee or to receive any payment in terms thereof. The second contention urged by Mr. Ginwalla is that there is no consideration for the said Guarantee and the said guarantee is therefore unenforceable. The third contention raised by Mr. Ginwalla is that refusal to. pass any interim order of injunction virtually amounted to dismissal of the suit before the same had been properly tried.