BANK OF BARODA Vs. SIMPLEX PROJECTS LIMITED

JUDGEMENT

(1.) The appeal is at the instance of a bank issuing a bank guarantee. The appeal is directed against the Order dated September 27, 2019 passed in the interlocutory application filed at the behest of the plaintiff. By the impugned Order dated September 27, 2019, the learned Judge restrained invocation of a bank guarantee issued by the appellant bank in favour of another bank.

(2.) Learned Senior Advocate appearing on behalf of the appellant submits that, the appellant issued a bank guarantee in favour of Gulf Bank which is the third defendant in the suit in respect of a contract which was entered into between the respondent no. 1/plaintiff and the respondent no. 2/defendant no. 1. He submits, relying upon 2007 Volume 8 Supreme Court Case page 110 (Himadri Chemicals Industries Ltd. v. Coal Tar Refining Co.) that, there does not exist any special equity for the learned Judge to pass the impugned order of injunction restraining invocation of the bank guarantee. The guarantee existing between the appellant and Gulf Bank is an unconditional one. There is no pleading of fraud. There is no material to grant an order of injunction. He submits that, in the event the impugned order is allowed to continue, then, the image of the appellant will suffer internationally.

(3.) Learned Senior Advocate appearing on behalf of the plaintiff/respondent no. 1 submits that, the bank guarantee was invoked by a writing dated September 10, 2019. Thereafter, Gulf Bank wrote to the appellant to hold the demand by a writing dated September 23, 2010. In such writing, Gulf Bank informed the appellant that, the plaintiff/respondent no. 1 and the defendant no. 1/respondent no. 2 were negotiating for restructuring the agreement. He draws the attention of the Court to the contract between the plaintiff and the defendant no. 1. He submits that, the plaintiff was to execute certain building projects for the defendant no. 1. He refers to the completion certificate issued by the defendant no. 1 and submits that, the plaintiff executed all the work to the satisfaction of the defendant no. 1. According to him, in the event, the impugned order is interfered with, the plaintiff will suffer irreparable loss and prejudice.