- (1.) The present regular second appeal has been filed by the defendant-bank which is aggrieved against the judgments of the Courts below directing it to pay a sum of Rs. 20,47,342.47 alongwith 12% interest per annum on the principal amount from the date of filing of the suit till realization of the entire decretal amount. The suit for recovery was based on the basis of three bank guarantees dated 15.04.1998 for Rs. 5 lacs, 06.05.1988 for Rs. 5 lacs and 08.07.1988 for Rs. 10 lacs.
(2.) The plaintiff had filed the suit for recovery on the strength of the said bank guarantees which were furnished by the supplier M/s. Dany Dairy & Food Engineers Ltd., Dehradun Road, Saharanpur through the defendantBank. The said bank guarantees were extended till 31.03.1990 and due to the violation of the terms of the contract, the plaintiff had demanded encashment of bank guarantees vide letter dated 12.02.1990, telegrams dated 26.02.1990, 27.02.1990 and 28.02.1990. The said demand of encashment was acknowledged by the bank to its Branch Manager on 06.03.1990 and the bank offered to pay by 15.03.1990. The plaintiff also raised demand on 21.03.1990 and the Chairman and Managing Director of the Bank was also requested vide letter dated 28.03.1990 and telax dated 29.03.1990 was also sent for the payment of the bank guarantees, but in vain. A notice dated 28.03.1990 was also served upon the defendants. Accordingly, the plaintiff has claimed interest @ 18% p.a. from 12.02.1990 to 31.03.1990 which comes to Rs. 47,342.47. The defendant-bank raised several pleas regarding jurisdiction and non-joinder of necessary parties including the fact that the terms of the agreement had not been complied with by the plaintiff and there was a breach on his behalf and a sum of Rs. 6,81,000 was recoverable from the plaintiff-company by the supplier.
(3.) The Trial Court, after taking into consideration the agreement between the parties, noticed the clauses of the bank guarantee and came to a conclusion that a demand had been made upon the bank and keeping in view the judgment of the Hon'ble Supreme Court of India rendered in Hindustan Steel Works Constructions Ltd. vs. Tarapore and Co. and another, 1996 AIR(SC) 2268, held that it being an independent contract between the bank and the beneficiary, the bank could not withhold the payment. It was also noticed that no particulars of fraud had been given in the written statement and it was settled proposition of law that in the absence of fraud, the bank was not entitled to deny the benefit to the beneficiary.;