S.Narayan, J. - (1.) - In a suit for declaration and injunction, being T.S. No.244, of 1994 of the court of 4th Munsiff at Howrah, the petitioner-company, being the plaintiff, challenged the right of the O.P.-company/defendant No.1 to invoke and/or enforce payment of as many as 4 Bank Guarantees issued by the O.P. Bank Guarantee of the Punjab National Bank (O.P./Defendant No.2). There was an order of status quo granted in favour of the petitioner but, ultimately, the prayer for temporary injunction was refused by the order dated 25.7.96 of the learned trial court as against which the petitioner preferred an appeal being Miscellaneous appeal No.145 of 1996. By the impugned order dated 8.1.98, the miscellaneous appeal was dismissed and the order of refusal passed by the trial court was affirmed. This led to the filing of the instant revisional petition.
(2.) Be it recorded at the very outset that by way of repeated decisions, the apex court has restricted grant of stay or restraint order in the matter of enforcement of Bank Guarantee at the instance of a party to a mercantile deal at whose instance such Guarantee has been issued by a Bank. The apex court has rather depricated a routine order of stay against enforcement of a Bank Guarantee more so when it is irrevocable Bank Guarantee. A legal proposition as such was necessitated because such step at the instance of a litigating party leads to a grinding halt of a merchantile transaction affecting the credibility is also the normal course of the business. The apex court was, therefore, of the view that in the normal course of event, a court of law ought not to grant injunction in the matter of invoking Bank Guarantee unless and untill there was a prima facie case of established fraud and there was a special equity because of the irretrievable injustice likely to be caused in the event the Bank Guarantee is allowed to be encashed. Out of several authoritative decisions, I may just refer two of those decisions of the apex court, readily available, which are 1994(1) SCC 502 (Handlesbanken v. M/s Indian Charge Chrome) and AIR 1996 SC 334 (Larsen Tubro Ltd. v. Maharastra Electricity Board).
(3.) At this juncture, I may refer to the factual score of the matter in some more details. The plaintiff-company entered into a contract to work as "conversion agent" for Rolling Billets (Iron Ingots) into Tor Steel as per certain terms and conditions settled between them. The defendant-company as per terms used to deliver billets for rolling the same. For the said rolling programme the Punjab National Bank, Liluah Branch, O.P.-defendant No.2, stood as guaranter as per 4 Guarantee Notes for a total sum of Rs. 70 lacs. The Bank Guarantees were renewed from time-to-time and as such while those were lastly extended up to 30th June, 1994, the defendant-company, by a letter dated 27th June, 1994, enforced those Bank Guarantees so as to arrange payment of Rs. 66,61,568. 82 being due on behalf of the plaintiff-company. It was at this point of time that the plaintiff-company instituted the suit and prayed for an order of temporary injunction.;