ALLAHABAD BANK Vs. SYNDICATE BANK

JUDGEMENT

(1.) THE case is taken up for passing order in IA 524/1997 in T.A. 300 of 1997.

(2.) By this application the petitioner/applicant Bank has sought prayer for direction against the defendant Bank (Syndicate Bank) to pay the admitted amount of guarantee as, admitted by them in the Plant in O.S. No. 7153 of 1993 on the file of City Civil Court; Bangalore which is now transferred to and pending before the Debts Recovery Tribunal, Bangalore as OA No. 703 of 1996 and has also prayed for subsequent interest thereon till the date of final realisation.

(3.) IT is the further contention of the plaintiff/petitioner Bank that the plaintiff Bank officially used to present bills of exchange on their respective due dates to the 3rd defendant and used to receive payment and appropriate it to the loan account of the 2nd defendant after making certain payment to one Bank of America. However, it is the further submitted that on 5.11.1990 the 3rd defendants M/s. Mangalore Chemicals and Fertilizers Limited, Bangalore dishonoured the bill present to them for payment on certain extraneous grounds, therefore, the plaintiff by letter dated 9.11.1991 invoked the Bank guarantee issued by the first defendant (i.e. the Syndicate Bank). However, instead of paying the entire monies due under the guarantee, the first defendant (Syndicate Bank) paid only a sum of Rs. 12.75 lakhs and thereafter was making several such payments terming them as lease rentals. The plaintiff/petitioner Bank pointed out that the first defendant was liable to pay the entire amount due under the unpaid bills of exchange and not part payments. But the first defendant Bank after making several such payments discontinued the payments altogether on flimsy reasons.