- (1.) The respondent was a construction company. They entered into a contract for purchase of TMT bars from the appellant on credit basis. Ensuring payment of the dues, the respondent furnished bank guarantees in favour of the appellant through their banker. The respondent No. 2 Canara Bank issued the guarantees in favour of the appellant. The present controversy would relate to invocation of the bank guarantees.
(2.) The respondent filed a suit against the appellants inter-alia, claiming for an order of restraint against invocation of the bank guarantees dated March 6, 2009 and March 25, 2009.
(3.) The facts would depict, there had been diverse supplies from time to time followed by part payments. The appellant invoked the guarantee dated March 2, 2009 for Rs.1.8 Crores on the plea of recovery of the outstanding. The respondent paid a sum of Rs.60 lakhs on July 30, 2009 vide letter of the said date. The contents would be as follows: "As discussed and agreed please find enclosed herewith Cheque No. 030739 dated 30.07.2009 drawn on Axis Bank, CRPF Square Branch, Bhubaneswar for an amount of Rs.60 lacs (Rupees Si9xty Lakhs only) towards payment of our dues against your supply of steel materials." The appellant withdrew the invocation vide letter dated July 31, 2009 inter-alia communicating the bank as follows: "Kindly refer to our above letter for invocation dated 30.07.09 against BG No. 090047 dated 24.03.09 for Rs.1,80,00,000/- issued on behalf of M/s Unit Construction Company Private Limited. The party has cleared the Outstanding Amounts due to us subsequent to our letter. Hence you are requested to kindly treat our invocation letter for above BG as WITHDRAWN.";