BESCO LTD Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) Though the plaintiff seeks an extension of the subsisting interim order in this application, all three interlocutory applications in the suit can be disposed of. Accordingly, G.A. No. 3568 of 2008 and GA No. 3594 of 2008 are taken on board by consent of the appearing parties.

(2.) The plaintiff caused a bank guarantee to be furnished by the first defendant in favour of the second defendant. The bank guarantee of July 18, 2007, in its material terms, provided as follows:

(3.) It was an unconditional bank guarantee in the sense that the bank could not question any demand that was made by the beneficiary thereunder. However, the bank's obligation to pay was subject to the beneficiary asserting that default had been committed by the plaintiff in performing any of the terms and conditions of the tender or in payment of any money payable to the beneficiary. The beneficiary was also required to assess the extent to which the plaintiff was in default. In addition, the liability under the guarantee was limited to Rs. 45,32,250/- and it was valid till March 31, 2008. The guarantee stipulated that the bank was liable to pay the amount thereunder "only and only if the beneficiary served the bank a written claim or demand on or before March 31, 2008.