VINOD K.SHARMA, J. - (1.) THIS regular second appeal has been filed against the judgments and decrees passed by the learned Courts below vide which suit for declaration and mandatory injunction with consequential relief of permanent injunction, filed by the plaintiff-respondent was ordered to be decreed.
(2.) THE plaintiff-respondent had received an export order from the appellant- defendant No. 2 for supply of 10,500 M.T. +/- 5% of Indian Non-Basmati parboiled rice to Mongla Port by part transfer of letter of credit No. JBD/175/95 dated 20.7.1995 of Janta Bank, Dhaka, Bangladesh. After obtaining the aforesaid export order, defendant No. 1, State Bank of India, (SBI) main Branch, Karnal executed the performance guarantee (PG) No. 41/20 dated 9.11.1995 for value of Rs. 50 lacs in favour of the appellant on behalf of the plaintiff firm and the plaintiff company executed the export order successfully by loading rice in two vessels. It was also the case of the plaintiff-respondent that relevant documents as per the terms and conditions of the letter of credit duly passed by Custom Authorities were submitted by the plaintiff company to SBI for negotiations in order to obtain the payment against the said export order and SBI Karnal accordingly submitted the documents to letter of credit opening bank i.e. Janta Bank, Dhaka, Bangladesh and as per the reimbursement clause, defendant No. 1, SBI Karnal received all the payments from the reimbursing Bank i.e. Bank of Tokyo, Calcutta. SBI has also remitted the necessary service charges and commission to STC as per the contract. The plaintiff vide its letter dated 9.2.1996 requested the defendant No. 1, SBI to treat the performance guarantee dated 9.11.1995 as cancelled. As the export contract has been executed satisfactorily by the plaintiff and all the payments have duly been received by defendant No. 1. The appellant- defendant thereafter issued a letter dated 8.3.1996 and also a fax message calling upon the bank to extend the validity of performance of guarantee and in the alternative they also desired to encash the said performance guarantee. The said letter was claimed to be arbitrary, null and void and is not binding on the right of the plaintiff on the ground that the defendant bank was not authorised to extend the period of performance guarantee or encashing the same. It was further claimed that in spite of letter of cancellation having been issued to the bank the margin money was not credited by the plaintiff bank and it refused to admit their claim. The suit was contested by the defendant by filing separate written statement. It was claimed that suit was not maintainable in the present form; and the suit was bad for non-joinder of necessary parties and the plaintiff was estopped from filing the present suit by his own act and conduct and the plaintiff had not come to the Court with clean hands.
(3.) ON merits, it was admitted that plaintiff deals in the export of rice. It was also admitted that the order was placed with the plaintiff by the State Trading Corporation of India for the export of rice to Bangladesh. It was also admitted that defendant issued a bank guarantee on the request of the plaintiff in favour of the State Trading Corporation on 9.11.1995, which was valid upto 18.2.1996 for a sum of Rs. 50 lacs. The successful execution of the contract was denied for want of knowledge. It was claimed that it was to be confirmed by the State Trading Corporation. The appellant through its letter dated 13.2.1996 has alleged that plaintiff company had not fulfilled and discharged all their obligations under their back to back contract with STC as well as export contract. It was claimed that plaintiff company defaulted in the matter and, therefore, it cannot be said that the plaintiff company successfully executed the export order. The negotiation of documents was admitted. It was further claimed that bank guarantee was extended upto 18.3.1996 as per the request of the State Transport Corporation and the last date for lodging the claim was fixed as 28.3.1996. The plea of estoppel was also taken against the plaintiff respondent.;