JUDGMENT
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 revision it 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 (Handleshanken v. M/s indian Charge Chrome) and (Lorsen 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.
4. The contextual facts as noticed in the preceeding paragraph is not at all in dispute. The plaintiff-company, has, however, set up a case seeking an order of injunction restraining the defend ant-company to enforce Bank guarantees on the simple plea that the defendant company had raised an invoice dated 17.3.94 with respect to the finished goods purporting to have been sold to the plaintiff and, in this view of the matter, even if there were some dues to be paid by the plaintiff-company, the position of the defendant-company was not better than that of an un-paid seller, which should be dealt with as an independent transaction. It was urged on behalf of the plaintiff-company that since the fresh transaction of sale of the finished goods in favour of the plaintiff-company had nothing to do with the earlier supply of Rolling Billets by the defendant-company, no question arised of invoking the Bank Guarantees in question with regard thereto.
5. I do find an invoice dated 17.3.94, raised by the defendant-company with respect to a sum of Rs. 66 lacs and odd equivalent to the amount which is claimed by way of invoking Bank Guarantees but there was nothing on the record to connect this invoice with the original agreement between the two companies which was strictly restricted to the work of conversion and supply made by the defendant-company. The relevant agreement of conversion nowhere speaks of any such transaction which may be have had in between the two companies necessitating a transaction of re-sell in favour of the plaintiff-company. Be that as it may, even assuming that there did occur any such transaction as per the invoice referred to above, I could not be convinced with any streach of imagination that the defendant-company had granted any relaxation or had given a go-by to the obligations existing under the original agreement then existing with regard to the conversion
agency. The Bank Guarantees enforced were irrevocable and the Bank was liable to pay on demand in writing.
6. Now, coming to the Bank Guarantees, I feel tempted to point out certain features thereof, which cut at the very root of the plea raised on behalf of the plaintiff-company seeking an order of temporary injunction. The Bank Guarantees were issued for the security of the materials despatched/delivered to the conversion agent, that is, the plain tiff-company and, it was enforceable against the Bank in the event of failure of the plaintiff-company to convert the materials within the stipulated period or its failure to deliver the converted materials against the delivery order and, in the event of any breach of any of the terms of agreement, the Bank had undertaken to pay the defendant company the amounts covered under the Guarantees on demand in writing. The Bank has also promised that it shall not be relieved of the liability by reason of any variation or modification or concession granted to the conversion agent. The bank in no uncertain terms, undertook not to revoke the guarantee except with the previous consent of the defendant-company in writing. With these particular specifications in the Guarantee, I am confident that it was not open for the defendant-Bank to come forward with any plea to advocate the case of the plaintiff-company, which it has done through a letter of invocation of the Bank Guarantees by the defendant-company. It would not be out of place to mention here that as to the extent of the claim by the defendant-company, the relevant guarantee-papers clearly indicated that in the event of any such dispute between the parties to the original agreement, it was the defendant-company, that is, the supplier whose Judgment would be final on the point whether the conversion agent, that is, the plaintiff-company has committed any breach of the terms and conditions of the original agreement. A Bank had no licence to raise any such point with reference to the undertaking in the Guarantee,
7. Before I come to a conclusion, it may be observed that here was a case in which admittedly no plea of fraud much less of established fraud was raised. In the given facts and circumstance of the case, have been very much convinced to note that there was no special equity as well in favour of the plaintiff-company and, obviously, there was no question of irretrievable injustice to be caused to the plaintiff-company. If the Bank Guarantees in question were enforced for payment. Therefore, while agreeing with the opinion expressed by both the courts below, I do not find any merit in the instant revisional petition and, accordingly, the same is dismissed. There shall be, however, no order as to costs. It may be added that the O.P. company has not used any affidavit here in this matter but the allegations in the revisional petition are not admitted.
8. Petition dismissed