- (1.) THIS appeal arises out of an order passed by Sabyasachi mukherji, J. on the 10th of March 1977 in an interlocutory proceeding in the suit. The plaintiff-appellant entered into a contract with defendant respondent no. 1 for supplying various articles, the respondent No. 1 agreed to make advance payment to the appellant in respect to the supplies to be made under the contract and a Bank Guarantee was executed for securing the advances to be made by the respondent No. 1 to the appellant. The Chartered Bank gave the guarantee and on the 28th of April 1975 an agreement of guarantee befwesn the respondent No. 1 and the Chartered bank, respondent No. 2 was duly executed. The said guarantee bond contains the following provisions: "2. The Bank undertakes to indemnify the purchaser and keep the purcheser indemnified to the extent of a sum of Rs. 10,38,440/- (Rupees Ten Lakhs thirtyeight thousand four hundred and forty only) from and against ail such losses, damages, cost's charges or expenses that may be caused to or suffered by the Purchaser in relation to the advance payment to be made by the Purchaser to the Contractor as aforesaid by reasons of any default or defaults on the part of the Contractor in repayment of the said advance as aforesaid and the bank hereby undertakes to pay to the purchaser forthwith on demand and without any demur any sum or sums not exceeding in total the said sum of Rs. 10,38,440/- (Rupees Ten Lakhs Thirty eight thousand four hundred and forty only) as may be claimed by the Purchaser to be due from the Contractor to the Purchaser by way of refund or such advance or any portion thereof by reasons of such default or defaults on the part of the contractor in repayment as aforesaid. " 3. The Bank doth hereby agree that the decision of the Purchaser as to whether the. Contractor has made any default or defaults in repayment of the said advance thereof shall be binding on the Bank. The Bank shall not be entitled to raise any dispute on the decision of the Purchaser in this regard but shall on demand pay the sum of money due forthwith without any objection or demur. 4. This guarantee shall come into force immediately with effect from the date of payment of the said advance sum of Rs. 10,38,440/- (Rupees ten lakhs thirty-eight Thousand four hundred and forty only) by the Purchaser to the contractor and shall remain valid up to 24th April, 1976 and shall not be revoked by the Bank at any time during its currency without the previous consent in writing of the Purchaser;"
(2.) THE respondent No. 1 had duly paid to the appellant the said sum of rs. 10,38,440/- as and by way of advance against supplies to be made. On the 12th april 1976 the respondent No. 1 rescinded the said contract and thereafter on the 16th April 1976 respondent No. 1 called upon the Bank, the respondent no. 2 to pay to the respondent No. 1 the said sum of Rs. 10,38,440/- in terms of the said guarantee. The appellant filed this suit on the 27th September 1976 and the reliefs asked for in the suit are- (a) A Decree directing the defendant No. 1 to deliver up the letter of the guarantee undertaking dated 28th April, 1975, so that the same may be cancelled and or discharged. (b) Declaration that the defendant no. 1 is not entitled to make any claim for or to receive any money under the bank Guarantee and or Undetaking dated 28th April 1975 ; (c) Perpetual injunction restraining the defendant No. 1 from claiming or receiving or realising and restraining the defendant No. 1 from making any payment to defedant No. 1 in respect of or under or in relation to the said letter of guarantee /undertaking dated 28th April 1975. After the institution of the suit the appellant made an application to this court in the said suit for an interim order of injunction restraining the bank from making any payment to the respondent no. 1 under or in respect of the Guarantee and for an injunction restraining the respodent No. 1 and its servants and agents from receiving or realising or claiming any amount under or in respect of the said Guarantee. On the said application the learned trial Judge passed an order which is set out at page 210 of the Paper Book and which is in the following terms no order on this application. Interim order vacated. Stay of operation of this order for a week. " Aggrieved by the said order of the learned trial Judge refusing to make any order of injunction, this appeal has been preferred by the plaintiff in the suit.
(3.) MR. Ginwalla, learned counsel appearing on behalf of the appellant has raised three principal contentions before us, The first and main contention urged by Mr. Ginwalla is that in the facts and circumstances of the case the guarantee Bond has not become enforceable and the Bank cannot make any payment in terms of the said Guarantee and the respondent No. 1 is not entitled to enforce the said Guarantee or to receive any payment in terms thereof. The second contention urged by Mr. Ginwalla is that there is no consideration for the said Guarantee and the said guarantee is therefore unenforceable. The third contention raised by Mr. Ginwalla is that refusal to. pass any interim order of injunction virtually amounted to dismissal of the suit before the same had been properly tried.;