Decided on February 18,2003



Harihar P. Chaturvedi, Presiding Officer (J.) - (1.)THE case is taken up for passing order in IA 524/1997 in T.A. 300 of 1997.
(2.)By this application the petitioner/applicant Bank has sought prayer for direction against the defendant Bank (Syndicate Bank) to pay the admitted amount of guarantee as, admitted by them in the Plant in O.S. No. 7153 of 1993 on the file of City Civil Court; Bangalore which is now transferred to and pending before the Debts Recovery Tribunal, Bangalore as OA No. 703 of 1996 and has also prayed for subsequent interest thereon till the date of final realisation.
The petitioner applicant Bank has taken this plea for passing this order by this Tribunal under Rule 12(5) of the Debts Recovery Tribunal (Procedure) Rules. It is the contention of the petitioner/Bank that the defendant has filed the suit for recovery of a sum of Rs. 5,76,71,501/- from all the defendants jointly and severally including the first defendant i.e. Syndicate Bank. As this first defendant Syndicate Bank has guaranteed the due payment of lease rentals by the third defendant. The first defendant's guarantee was irrevocable and unconditional. The first defendant undertook to honour any demur, protest or reference to 3rd defendant irrespective of pendency of any dispute between the 2nd defendant and the 3rd defendant. It is the further contention of the petitioner Bank by stating the fact of the present TA that the 2nd defendant M/s. Dhanalakshmi Consolidates Industries Limited, Chennai availed Refinance facilities from the applicant Bank to the tune of Rs. 3.75 crores payable with interest in order to purchase Dl-Ammonium Phosphate Plant. The 2nd defendant/respondent (M/s. Dhanalakshmi Consolidates Industries Limited, Chennai) is the principal borrower of the plaintiff Bank and he accepted all sanctions and stipulations of the plaintiff Bank. Further, in order to evidence and secure the due repayment of the refinance availed from the plaintiff Bank/petitioner Bank, the 2nd defendant endorsed and delivered to the plaintiff all 60 Bills of Exchange drawn on the 3rd defendant (M/s. Mangalore Chemicals and Fertilizers Limited, Bangalore) was accepted by the 3rd defendant. The 2nd defendant also assigned all the benefits under the Bank Guarantee executed by the first defendant in favour of the plaintiff Bank i.e. the Allahabad Bank. A Notice of such assignment was given to the first defendant who acknowledged and accepted such assignment. The plaintiff Bank/petitioner Bank is entitled to claim the payment under the bills as holder in due course and in case of dishonour entitled to revoke the Bank guarantee and have benefits of claiming payment thereunder. Thus it is contended by the plaintiff/ petitioner Bank that the prime cause of action is against the 2nd defendant i.e. M/s. Dhanalakshmi Consolidates Industries Limited, Chennai who is the principal borrower and has remedies against the first defendant (Syndicate Bank) and the 3rd defendant (M/s. Mangalore Chemicals and Fertilizers Limited, Bangalore).

(3.)IT is the further contention of the plaintiff/petitioner Bank that the plaintiff Bank officially used to present bills of exchange on their respective due dates to the 3rd defendant and used to receive payment and appropriate it to the loan account of the 2nd defendant after making certain payment to one Bank of America. However, it is the further submitted that on 5.11.1990 the 3rd defendants M/s. Mangalore Chemicals and Fertilizers Limited, Bangalore dishonoured the bill present to them for payment on certain extraneous grounds, therefore, the plaintiff by letter dated 9.11.1991 invoked the Bank guarantee issued by the first defendant (i.e. the Syndicate Bank). However, instead of paying the entire monies due under the guarantee, the first defendant (Syndicate Bank) paid only a sum of Rs. 12.75 lakhs and thereafter was making several such payments terming them as lease rentals. The plaintiff/petitioner Bank pointed out that the first defendant was liable to pay the entire amount due under the unpaid bills of exchange and not part payments. But the first defendant Bank after making several such payments discontinued the payments altogether on flimsy reasons.

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