Hemant Gupta, J. - (1.) The challenge in the present revision-petition is to the order passed by the learned Trial Court on 16-7-2005 and the order in appeal dated 23.7.2005 passed by the learned First Appellate Court affirming the order passed by the learned Trial Court on an application filed by the petitioner under Order XXXIX, Rules 1 and 2 of the Code of Civil Procedure, 1908 (hereinafter to be referred as "the Code") restraining the respondents from encashing the bank guarantee to the extent of Rs. 2,41,57,500/-.
(2.) The petitioner is a recognized export house. The petitioner entered into an agreement with M/s. Grain Board of Iraq for the supply of 35000 M.T. of wheat on 15-11-2000. The said contract could not be executed till its revalidation by the World Food Programme on March 10, 2004. The petitioner discussed the matter with different Ministries and approached the Food Corporation of India (hereinafter to be referred as "the Corporation") for the purposes of export of said wheat under the aforesaid contract. The petitioner was allocated the entire quantity for the purpose of export of wheat to the foreign buyer in May, 2004. In order to secure fulfilment of export obligation in respect of the aforesaid allocation, the petitioner issued a bank guarantee for a sum of Rs. 4,76,56,250/-. The petitioner was to produce necessary export documents including H Form within the stipulated period in support of export of wheat. The Corporation issued various release orders and in July and August, a total quantity of 34,910 M.T. of wheat was lifted by the petitioner against cash payment. The first consignment of 18375 M.T. of wheat was exported by the petitioner to M/s. Grain Board of Iraq but the balance quantity of 18400 M.T. of wheat was rejected by the surveyors of the foreign buyers at Kandla Port on the ground that there were spots of fungus (Karnal bunt) on some grains of wheat.
(3.) It is the case of the petitioner that the matter was discussed with the officers of the Corporation and the petitoner was permitted to find out an alternative buyer and wheat was sold at much lesser price to a buyer at Singapore. It is, thus, contended that since the entire wheat allocated to the petitioner has been exported out of the country, therefore, the bank guarantee cannot be encashed to the extent of the wheat exported to Singapore. It is the case of the petitioner that letter dated 30.6.2005 for encashment of the bank guarantee to the extent of Rs. 2,41,57,500/- is liable to be set aside as not a single condition for invocation of the bank guarantee has been complied with by the Corporation. It is alleged that a well calculated fruad has been played by the Corporation.;