ESSAR STEEL Vs. PUNJAB AND SIND BANK

JUDGEMENT

(1.) This is a civil revision filed by M/s. Essar Steel Limited and has been directed against the order dated 28.2.2000 passed by Addl. District Judge, Patiala, who allowed the appeal filed by the Punjab and Sind Bank by setting aside the order dated 20.1.2000 passed by Civil Judge (Jr. Division), Rajpura, who allowed the application of plaintiff (M/s. Surindra Engineering Company Limited) by modifying the order dated 12.1.1999 and the defendants were directed to furnish security to the tune of Rs. 2 crore on furnishing of which defendant No. 3 (Punjab & Sind Bank) was ordered to release the payment to defendant Nos. 1 and 2.

(2.) The brief facts of the case are that M/s. Surindra Engg. Company Ltd. (plaintiff in the trial Court) purchased H.R. coils from the defendant Nos. 1 and 2 i.e. the present petitioner and respondent No. 3 Shri P.M. Deshmukh vide separate purchase order. As per the purchase orders Letter of Credit was opened with defendant Punjab & Sind Bank, but no coils were supplied as per the purchase orders. In these circumstances, the plaintiff firm was not liable to make payment against the purchase orders. As per the purchase orders, the tolerance of the coils thickness was to be stated to negative, positive up to 0.1 mm but the tolerance of thickness of the material supplied was 0.4 to 0.7 mm. As such a complaint was lodged with the suppliers on 26.4.1999. A representative of the seller visited the premises of the plaintiff firm and checked the coils but no action was taken by the defendant Nos. 1 and 2. On 1.6.1999 joint inspection was got done and the suppliers agreed that the material was not as per the specifications of the purchase orders and defendant Nos. 1 and 2 accordingly agreed to give rebate on the total supplied material on ex-works price and freight and period for making the payment was extended by 30 days. With these allegations the plaintiff firm prayed that declaration be issued in its favour that defendant Nos. 1 and 2 are not entitled for the amount of Rs. 1.5 crore for the material supplied by them which was not as per the terms and conditions of the purchase orders.

(3.) Along with the suit the plaintiff also filed an application under Order 39 Rules 1 and 2 CPC that during the pendency of the suit defendant Nos. 1 and 2 may not collect the amount from defendant No. 3.