- (1.) Petitioner is the plaintiff in O.S. 163 of 1982 on the file of the Sub Court, Gobichettipalayam. It filed the suit against respondents herein, for grant of a permanent injunction restraining them from recovering the sum of Rs. 85,639-89 from the State Bank of India, Gobichettipalayam branch till they establish their claim against the plaintiff in a court of law. Pending disposal of the suit, in I.A. 737 of 1982, it sought for grant of a temporary injunction under O.9 R.1 and S.151 C.P.C. restraining respondents from realising the said amount by enforcing the bank guarantee till the disposal of the suit. Courts below having rejected the relief, this civil revision petition is preferred.
(2.) The plaintiff claimed as follows. The first defendant manufactures Nitrogenous and other chemical fertilisers. The plaintiff was appointed as a dealer under Ex. B 25 dt. 25-9-1980 for the sale and distribution of its products in certain territories of Tamil Nadu. As and when plaintiff informs second defendant specifying the requirements, allocation would be made by issue of delivery notes to the concerned warehouse and thereafter, plaintiff will receive the supply. Second defendant issues invoices, whereupon plaintiff makes payments. In order to assure prompt payment of invoices, plaintiff was directed to furnish bank guarantee, and, it had furnished two bank guarantees totalling Rs.1 lakh under Exs. B13 and B14 dt.17-10-1979 for Rs. 50,000 each issued by State Bank of India, Gobichettipalayam. Though plaintiff was prompt in payment of invoices, it understands that some of the officials of second defendant supplied products to retailers and other parties closely known to them, and to avoid detection for record purposes they bring those transactions under any one of the recognised dealers in a clandestine manner, and so long as payments are received within time from such clandestine purchasers, there was no trouble. But when it finds, the officials in order to exculpate, themselves demand payments from authorised dealers, and that was how, a demand for Rs.1,29,183-69 was made on the plaintiff by letter dt.17-7-1982 (Ex.A.4) Defendants having threatened to invoke the bank guarantee in default of payment of the amount so claimed, it 'sent a reply on 3-8-1982 (Ex.A.5) requesting for details to be furnished. But second defendant had not chosen to give any reply so far. Out of the claim made, plaintiff admits liability only for Rs.43,543-50 and has already paid a sum of Rs.20,735 on 29-7-1982, and is prepared to pay the balance at any time. It disputes liability only for Rs. 85,639-89. In para 7 of the plaint, it refers to certain communications, to show how the demand made by the second defendant was fraudulent. When the product was not actually supplied, the bank, as the surety, is also not liable to pay the amount as per the terms in Exts. B. 13 and B. 14, Bank guarantees have been invoked only to save the skin of the officers of the defendants, who have committed fraud, and hence, the suit had been filed.
(3.) Second defendant in the written statement had repudiated this claim, stating that, when irrevocable bank guarantees had been furnished, a demand having been made by letter dt. 1-10-1982 for payment of a sum of Rs.1,29,183-69, plaintiff had unjustly intercepted it by filing the suit. The Bank had violated the terms of the bank guarantee. It is due to inability to pay debts, in spite of taking delivery of goods, the suit had been filed on false grounds. After referring to the procedure adopted in selling goods, the allegations made in paras 6 to 9 of the plaint have been denied. In the light of a decision in United Commercial Bank v. Bank of India, AIR 1981 SC 1426 the Bank has no other option than to honour the bank guarantee.;