Madhya Pradesh Electricity Board, Shakthi Bhavan, Rampur-Jabalpur v. Messrs. Klen and Marshalls, Manufacturers and Exports Limited
1997-12-12
S.S.SUBRAMANI
body1997
DigiLaw.ai
Judgment :- 1. This revision is by the second respondent in I.A.No.1296 of 1997 in C.M.A. No.205 of 1997, on the file of 6th Additional Judge - In charge of Vllth Additional Judge, City Civil Court, Madras. 2. Plaintiff who is the first respondent herein, filed a suit for a permanent prohibitory injunction to restrain the 1st defendant, its agents, employees, representatives or any other person claiming through or under it from making payment against the Bank guarantees bearing Nos.LG/612/448, LG/612/449 and LG/612/ 450, all dated 14.9.1996, to the petitioner herein (D-2 in the suit) or to any other person, and for a permanent injunction against the 1st defendant, its agents, employees, representatives or any other person claiming through or under it from making payment against the Bank guarantees bearing Nos.LG/612/281, LG/ 612/282 and LG/612/283, all dated 16.7.1996 and amended on 26.10.1996, to the second defendant, or to any other person; and for costs of the suit, and also for such other reliefs as this Court may deem fit and proper in the circumstances of the case. 3. Under the World Bank Scheme, The Madhya Pradesh Electricity Board, i.e., petitioner herein, invited tenders for supply of certain conductors to draw transmission lines. First respondent (plaintiff) claiming itself to be agent of five companies (which formed themselves into a consortium), received supply orders from the Board, and the Board placed orders with it. The Board also paid nearly Rs.4 1/2 crores for the said purpose to the petitioner. As per the terms of the contract, first respondent was to execute performance guarantee. In terms thereof, unconditional irrevocable bank guarantees were furnished. 4. Plaintiff, first respondent herein, failed to execute the order, and consequently the petitioner herein invoked the bank guarantees. First defendant-Bank did not readily pay the amount, and during the interval, the present suit was filed, and an ad-interim injunction was obtained. The Bank Guarantee is valid only upto 31.12.1997. 5. On getting notice of order of injunction, petitioner immediately rushed before the trial court and filed a counter-affidavit and wanted the interim injunction to be vacated. It also took the contention that the Court at Madras has not territorial jurisdiction and the present suit was filed without any bona fides and the suit is a test suit.
5. On getting notice of order of injunction, petitioner immediately rushed before the trial court and filed a counter-affidavit and wanted the interim injunction to be vacated. It also took the contention that the Court at Madras has not territorial jurisdiction and the present suit was filed without any bona fides and the suit is a test suit. It is the case of the petitioner herein that no part of the cause of action has arisen within the jurisdiction of Madras, and, even as per the contract which is relied on by the plaintiff, only the Courts at Jabalpur have jurisdiction. It was further contended that in the case of Bank Guarantee, the court should be very slow in preventing the beneficiary from getting the benefits of the guarantee, and in cases where there is fraud or irretrievable injury, the court can interfere. It is the case of the petitioner herein that being an unconditional guarantee, and so long as there is no case of fraud or irretrievable injury, injunction should not be granted, and the ad-interim injunction is also liable to be vacated. 6. The trial court, as per order dated 25.9.1997, vacated the interim injunction. At the same time, it did not enter a finding as to territorial jurisdiction since according to it, this is a matter which requires further investigation. 7. Aggrieved by the order, plaintiff preferred C.M.A.No.205 of 1997, before the lower appellate court. Thereupon, the lower appellate court passed an order of status quo, and the same was being extended from time to time. In the C.M.A., the first defendant in the suit, i.e., the Bank, was not made a party, and even after hearing the entire Appeal, the lower appellate court did not pass any order. It directed the appellant before it to implead the Bank also as party, for effective disposal of the appeal, and in the meanwhile, extended the order of status quo also, i.e., it effectively prevented the petitioner from enforcing the Bank Guarantees, which were to expire on 31.12.1997, The repeated extension of the order of statui quo is the grievance of the petitioner herein, and that is why the petitioner has filed this revision under Art.227 of the Constitution of India. 8. When the matter came for admission, after hearing learned counsel for petitioner, I passed an order of interim stay of operation of the impugned order till 8.12.1997.
8. When the matter came for admission, after hearing learned counsel for petitioner, I passed an order of interim stay of operation of the impugned order till 8.12.1997. On that day, learned counsel for respondent/plaintiff also appeared and he wanted time to argue the matter till 10.12.1997. On 10.12.1997, the matter was not posted, and the case was taken up on 11.12.1997. 9. I heard learned counsel for the petitioner already. Learned counsel for first respondent (plaintiff) also argued for more than 1 1/2 hours. Petitioners counsel had completed the arguments even at the time when the matter came up for admission. So, he was not heard on 11.12.1998. 10. After having heard learned counsel on both sides, I feel that this is a fit case where the first respondent (plaintiff) has filed the suit as a test suit and without any bona fides. Before further proceeding with the matter, it is better to extract that portion of the Bank Guarantee which is relevant for our purpose (This portion is common in all the Bank Guarantees): “In accordance with the provision of the special conditions of contract, sub-clause 11.0 (”Advice Payment“) of the above mentioned contract, Klen & Marshalls MFRS. & Exp. Ltd., 12 Neelakantan Mahta Street, T.Nagar,Madras- 600 017 (hereinafter called” the contractor“) shall deposit with Madhya Pradesh Electricity Board a Bank Guarantee to guarantee his proper and faithful performance under the said clause of the contract in an amount of USD 5,70,810 (USD Five seventy thousand eight hundred and ten only). We the Bank of Tokyo Mitsubhshi Ltd. as instructed by the contractor, agree unconditionally and irrevocably to guarantee as primary obligator and not as Surety merely, the payment to Madhya Pradesh Electricity Board on his first demand without whatsoever right of objection on our part and without his first claim to the contractor, in the amount not exceeding USD 5,70, 810 (USD Five lakh seventy thousand eight hundred and ten only).
We further agree that no change or addition to or other modification of the terms of the contract or of works to be performed thereunder or of any of the contract documents which may be made between Madhya Pradesh Electricity Board and the contractor shall in any way release us from any liability under this is guarantee and we hereby waive notice of any such change, addition or modification.” (All the Bank Guarantee are similarly worded and, they are not, therefore, repeated). 11. In view of the terms of the bank guarantee, there cannot be any question of injunction restraining the petitioner herein from encashing the same, nor is the Bank entitled to contend that it will pay the amount when a demand is made. The relief prayed for in the suit is in such a way that the Bank is prevented from discharging its contractual obligations. It is settled law that in cases of granting injunction restraining a party from encashing bank guarantee, the beneficiary is the sole Judge as to whether there was a breach of contract or not, and in such cases, if the beneficiary demands the Bank to make the payment, the Bank, under law, cannot avoid payment. In a very recent decision of the Supreme Court reported in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engg. Works (P) Ltd. Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engg. Works (P) Ltd. Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engg. Works (P) Ltd. , A.I.R. 1997 S.C. 2477 their Lordships have extracted the earlier decisions of the court and reiterated the principle thus: “Numerous decisions of this Court rendered over a span of nearly two decades have laid down and reiterated the principles which the courts must apply while considering the question whether to grant an injunction which has the effect of restraining the encashment of a bank guarantee. We do not think it necessary to burden this judgment by referring to all of them.
We do not think it necessary to burden this judgment by referring to all of them. Some of the more recent pronouncements on this point where the earlier decisions have been considered and reiterated are Svenska Handelshanken v. Indian Charge Chrome Svenska Handelshanken v. Indian Charge Chrome Svenska Handelshanken v. Indian Charge Chrome , A.I.R. 1993 S.C. W. 4002: (1994)1 S.C.C. 502 , Larsen & Toubro Ltd. and U.P.State Sugar Corporation v. Somac International Ltd. U.P.State Sugar Corporation v. Somac International Ltd. U.P.State Sugar Corporation v. Somac International Ltd. , A.I.R. 1997 S.C. W. 694: (1997)1 S.C.C. 568 . The general principle which has been laid down by this Court has been summarised in the case of as follows (at p.697 of A.I.R. S.C.W.) “The law relating to invocation of such bank guarantee is by now well settled. When in the course of commercial dealings an unconditional bank guarantee is given or accepted, the beneficiary is entitled to realise such a bank guarantee in terms thereof irrespective of any pending disputes. The bank giving such a guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. The very purpose of giving such a bank guarantee would otherwise be defeated. The court should, therefore, be slow in granting an injunction to restrain the realisation of such a bank guarantee. The courts have carved out only two exceptions. A fraud in connection with such a bank guarantee would vitiate the very foundation of such a bank guarantee. Hence if there is such a fraud of which the beneficiary seeks to take the advantage, he can be restrained from doing so. The second exception relates to cases where allowing the encashment of an unconditional bank guarantee would result in irretrievable harm of injustice to one of the parties concerned. Since in most cases payment of money under such a bank guarantee would adversely affect the bank and its customer at whose instance the guarantee is given, the harm or injustice contemplated under the head must be of such an exceptional and irretrievable nature as would override the terms of the guarantee and the adverse effect of such an injunction on commercial dealings in the country.” Dealing with the question of fraud it has been held that fraud has to be an established fraud.
The following observations of Sir John Donaldson, M.R. in Bolivinter Oil, S.A. v. Chase Manhattan Bank Bolivinter Oil, S.A. v. Chase Manhattan Bank Bolivinter Oil, S.A. v. Chase Manhattan Bank, (1984)1 AII E.R. 351are apposite: “The wholly exceptional case where an injunction may be granted is where it is proved that the bank knows that any demand for payment already made or which may thereafter be made will clearly be fraudulent. But the evidence must be clear both us to the real fact of fraud and as to the banks knowledge. It would certainly not normally be sufficient that this rests on the uncorroborated statement of the customer, for irreparable damage can be done to a banks credit in the relatively brief time which must elapse between the granting of such an injunction and an application by the bank to have it charged.” The aforesaid passage was approved and followed by this Court in U.P. Co-operative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd. U.P. Co-operative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd. U.P. Co-operative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd. , (1988)1 S.C.C. 174 . In para 32, Their Lordships have said thus: “When a position in law in well-settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the Subordinate Courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops.” Learned counsel for the first respondent fairly conceded that he has not alleged fraud anywhere in the plaint. Learned counsel only argued that if the bank guarantees are allowed to be encashed, the same cannot be recovered. I do not think the said argument could be accepted. The petitioner herein is a State -owned statutory body and it will be in a position to return the amount if ultimately plaintiff is in a position to contend and succeed that it is due to the fault of the Board, it could not perform the contract.
I do not think the said argument could be accepted. The petitioner herein is a State -owned statutory body and it will be in a position to return the amount if ultimately plaintiff is in a position to contend and succeed that it is due to the fault of the Board, it could not perform the contract. If there is a prospect of recovery, authorities, are unanimous in holding that it is not an irretrievable loss so as to grant injunction. In this case, the trial court has granted the injunction application and later vacated the order. Unless in civil miscellaneous appeal, there is an arguable case, the lower appellate court should not grant an injunction by ordering status quo. In the instant case, the lower appellate Court has really exceeded its jurisdiction in passing an order of status quo and also in extending the same from time to time. The lower appellate court has also acted illegally in directing the appellant before it to implead the Bank when the appellant itself did not want the Bank to be arrayed as a party. The lower appellate court ought not to have extended the interim order and also directed the Bank to be impleaded as a party. Such an action of the lower appellate court is per se illegal. I do not want to further comment on the order of the lower appellate court. This conclusion alone is sufficient to vacate the order of the lower appellate court. But the learned counsel for the first respondent argued that a revision under Art.227 of the constitution of India is not maintainable, and a regular appeal lies against the impugned order, before this Court. When there is an effective alternative remedy, Art.227 of the Constitution of India should not be invoked, is the case put forward by the first respondent. Learned counsel submitted that against an order of injunction, even though the Order is passed to maintain status quo, a regular repeal lies, or atleast a civil miscellaneous appeal lies: I fail to understand this argument. 12. In C.Kalahasti v. P.C.Munuswami Chetti C.Kalahasti v. P.C.Munuswami Chetti C.Kalahasti v. P.C.Munuswami Chetti , A.I.R. 1975 Mad. 3 a learned Judge of this Court had occasion to consider a similar question.
12. In C.Kalahasti v. P.C.Munuswami Chetti C.Kalahasti v. P.C.Munuswami Chetti C.Kalahasti v. P.C.Munuswami Chetti , A.I.R. 1975 Mad. 3 a learned Judge of this Court had occasion to consider a similar question. It was held in that case thus: “An order passed by an appellate court under O.39, Rule 1 cannot be construed as an order passed by the court in exercise of its original jurisdiction. Firstly, Secs.107(2), 104, 105 and O.43, Rule 1 do not have the effect of rendering an appellate court a court of original jurisdiction when exercising its power to pass incidental orders. Secondly, inasmuch as reference is made to Sec.104 in O.48, Rule 1, right of appeal given against the orders enumerated in O.43, Rule 1 will be subject to stipulation contained in Sec.104(2). Moreover, because of the use of the words” original or appellate jurisdiction “ in Sec.105 the court can only exercise either original or appellate jurisdiction but not both at one and the same time. Furthermore, the legislature would not have intended to confer the advantage of a second appeal in respect of orders passed under the Code when even appeals from, appellate decrees are required to satisfy the conditions laid down in Sec.100, Civil P.C.” In the aforesaid decision of our High Court, learned Judge has followed a decision of the Kerala High Court reported in Chellappan v. K.P. Varughese Chellappan v. K.P. Varughese Chellappan v. K.P. Varughese, A.I.R 1964 Ker. 23 wherein it was held thus: “...The power given to an appellate court under Sec.107, C.P.C. is only part of its appellate jurisdiction. It cannot be characterised as an original jurisdiction in an appellate court. In confers power on the appellate Judge not only to dispose of the appeal on its merits, but also to pass any interlocutory or incidental orders deemed necessary in the circumstances of the case to maintain the status quo, or to preserve the subject-matter of the appeal till the disposed of the appeal as an original court is empowered to do in the case of suits before it.
The incidental orders passed by an appellate court in interlocutory applications moved in an appeal before it are ‘orders passed in appeal’ within the scope of Sec. 104(2), C.P.C. and cannot therefore by appealed against.” Both the above decisions were relied on by the Bombay High Court in the decision reported in Krishna Yeshwant Shiradkar v. Subhash Krishna Patil and others Krishna Yeshwant Shiradkar v. Subhash Krishna Patil and others Krishna Yeshwant Shiradkar v. Subhash Krishna Patil and others , A.I.R. 1989 Bom. 68. Of course, that is a case where an interim order was passed in appeal by a learned single Judge of that High Court. The legal position declared by this Court was accepted by the Bombay High Court also, The preliminary contention of learned counsel for first respondent is, therefore, rejected. Why I am invoking the judicial supervisory jurisdiction under Art.227 of the Constitution of India will be clear from the later portion of this order. 13. Learned counsel for first respondent submitted that the trial court has not entered a finding regarding jurisdiction, but since the learned counsel for petitioner has argued about jurisdiction, the same may also be considered. He also cited certain decisions. The main contention raised by learned counsel for first respondent is that even thought he second respondent-Bank is not having its registered office at Madras, it is having a Branch office at Madras and, therefore, the court has got jurisdiction. It was further argued that for the purpose of jurisdiction, initially the court need consider only the averments in the plaint. 14. It is true that regarding the question of jurisdiction, the court need initially look into only the plaint. The said submission of learned counsel cannot be doubted provided the plaint discloses everything. If the plaint does not disclose the material fact, and it the plaintiff had suppressed any material document, and on the basis of such suppression, he gained an advantage, this argument cannot be accepted. The entire plaint makes mention of a contract between the plaintiff and first defendant. It is also admitted in the plaint itself that it was pursuant to the terms of the contract, the bank guarantees were also entered. Naturally, what are the terms of the contract between the parties, is a matter which the plaintiff’ should have made mention of in the plaint.
It is also admitted in the plaint itself that it was pursuant to the terms of the contract, the bank guarantees were also entered. Naturally, what are the terms of the contract between the parties, is a matter which the plaintiff’ should have made mention of in the plaint. No reason has been assigned as to why the plaintiff has not produced the contractual document along with the plaint. In the contract document, there is a statement that if there is any dispute, and a suit is to be filed, Jabalpur Courts alone will have jurisdiction, where the petitioner herein is having its Registered Office. The Bank Guarantees were also executed for benefit of the petitioner herein. The performance of the contract was also at Jabalpur. The contract was also entered there. So, under such circumstances, it cannot be doubted that only the Jabalpur court has got jurisdiction. Therefore, the plaintiff ought to have filed the suit before that court. One of the terms of the contract provides for ‘jurisdiction’. It is by suppressing that fact, plaintiff has filed the above suit in the City Court at Madras and gained an advantage by playing fraud on court. Learned counsel for first respondent (plaintiff) submitted that the Bank in this case has got a Branch at Madras and, therefore, the City Civil Court at Madras has jurisdiction. The relief is sought is also against the Bank, i.e., not to pay the amount under the Bank Guarantees. Therefore, under Sec.20 of the Civil Procedure Code, the suit is properly framed. It is admitted in this case that even the Bank guarantee were executed in Bombay. Even though the second defendant Bank has got a Branch at Madras, it is not the case of the plaintiff that it had any dealing with that Bank so far as this case is concerned. Under Sec.20 of the Code of Civil Procedure, an explanation is added in regard to suits against Corporations. The explanation reads thus: “A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.” This amendment was incorporated under Act 104 of 1976.
The explanation reads thus: “A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.” This amendment was incorporated under Act 104 of 1976. Originally, a suit against Corporation could be instituted only where it has got its Registered Office unless the cause of action arises at some other place. By virtue of this Explanation, a suit could be instituted against the Corporation havings its principal office or if a cause of action arises in an area where a subordinate office is situated, suits could be instituted at the place where the subordinate office is situated. That means, cause of action must also have arisen where the Branch Office is situated. The existence of a branch alone is not sufficient. This question came for consideration in the decision reported in M/s.Patel Roadways Limited v. M/s.Prasad Trading Company M/s.Patel Roadways Limited v. M/s.Prasad Trading Company M/s.Patel Roadways Limited v. M/s.Prasad Trading Company, A.I.R. 1992 S.C. 1614. In paragraph 13 of the judgment, it was held thus: “As far as we can see the interpretation which we have placed on this section does not create any practical or undue difficulties or disadvantage either to the plaintiff or a defendant corporation. It is true that, normally, under clauses (a) to (c), the plaintiff has a choice of forum and cannot be compelled to go to the place of residence or business of the corporation and can file a suit at a place where the cause of action arises. If a corporation desires to be protected from being dragged into litigation at some place merely because a cause of action arises there it can save itself from such a situation by an exclusion clause as has been done in the present case. The clear intendment of the explanation, however, is that, where the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place.
The clear intendment of the explanation, however, is that, where the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place. It would be great hardship, if in spite of the corporation having a subordinate office at the place where the cause of action arises (with which in all probability the plaintiff has had dealings), such plaintiff is to be compelled to travel to the place where the corporation has its principal place. That place should be convenient to the plaintiff; and since the corporation has no office at such place, it will also be under no disadvantage. Thus the Explanation provides an alternative locus for the corporations place of business, not on additional one.” [Double emphasis] 15. There cannot be a cause of action against the Bank in this case. Unless there is a wrongful act on the part of the Bank, first respondent cannot have a cause of action against it. A ‘cause of action’ is defined thus’: “By “cause of action” it is meant every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, a bundle of facts which it is necessary for the plaintiff to prove in order to succeed in the suit.” If the Bank has not interfered with the right of the plaintiff, there cannot be any question of cause of action against the Bank and that too a particular branch. Taking into consideration these facts, it is clear that the first respondent herein has really indulged itself in judicial adventurism fully knowing that the court has no jurisdiction and that too by suppressing a material document (contract between the plaintiff and first defendant), and also not disclosing the lack of jurisdiction as per the contract before court. Under these circumstances, I feel that this is a fit case where this Court has to invoke the jurisdiction under Art.227 of the Constitution of India. I had occasion to consider a similar question in Nicco Corporation Ltd. v. Cethar Vessels Ltd. , (1997)3 L. W. 599 where-also me enforcement of bank guarantee came for consideration.
Under these circumstances, I feel that this is a fit case where this Court has to invoke the jurisdiction under Art.227 of the Constitution of India. I had occasion to consider a similar question in Nicco Corporation Ltd. v. Cethar Vessels Ltd. , (1997)3 L. W. 599 where-also me enforcement of bank guarantee came for consideration. When the plaintiff comes to court suppressing a material document and takes advantage of the same, it is fraud on court, and in such cases, the plaintiff should not be allowed to take advantage of his own fraud. It was so held in S.P.Chengalvaraya Naidu (Dead) By L.Rs.v. Jagannath (dead) by L.Rs. and others, (1994)1 S.C.C. 1 . In paragraph 6 of the judgment, their Lordships have said thus: “...A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by anothers loss. It is a cheating intended to get an advantage. .. .. .. .. A litigant, who approaches the court, is bound to produced all the documents executed by him which are relevant to the litigation if he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well as on the opposite party.” What is the consequence of such fraud was also considered by Their Lordships in para 5 of the judgment, where it was declare that, “...We have no hesitation to say that a person whose case is based on falsehood, has no right to approach the court he can be summarily thrown out at any stage of the litigation.” 16. Even though in this case the petitioner filed the contract document, for the grant of injunction, we have to take into consideration the conduct of the plaintiff. Plaintiff suppressed the vital document is clear from the schedule of documents filed along with the plaint. If only plaintiff had filed the document and disclosed the forum where the suit is to be filed, ad-interim injunction would not have been granted. Plaintiff took advantage of his own fraud. It is true that the petitioner filed the document subsequently and got the interim order vacated. 17. The Supreme Court had occasion to consider what the court should be when a suit is filed outside the Registered office of the Corporation.
Plaintiff took advantage of his own fraud. It is true that the petitioner filed the document subsequently and got the interim order vacated. 17. The Supreme Court had occasion to consider what the court should be when a suit is filed outside the Registered office of the Corporation. In Morgan Stanley Mutual Fund v. Kartick Das Morgan Stanley Mutual Fund v. Kartick Das Morgan Stanley Mutual Fund v. Kartick Das , (1994)4 S.C.C. 225 in paragraph 42, their Lordships held thus: “As far as India is concerned, the residence of the company is where the registered office is located. Normally cases should be filed only where the registered office of the company is situate. Courts outside the place where the registered office is located, if approached, must have regard to the following: Invariably, suits are filed seeking to injunct either the allotment of shares or me meetings of the Board of Directors or again the meeting of general body. The court is approached at the last minute. Could injunction be granted even without notice to the respondent which will cause immense hardship and administrative inconvenience. It may be sometimes difficult even to undo the damage by such an interim order. Therefore, the court must ensure that the plaintiff comes to court well in time so that notice may be served on the defendant and he may have his say before any interim order is passed. .. .. ..” The said decision was followed in Bloom Dekor Lim-ited v. Subhash Himatlal Desai Bloom Dekor Lim-ited v. Subhash Himatlal Desai Bloom Dekor Lim-ited v. Subhash Himatlal Desai , (1994)6 S.C.C. 322 . In the earlier case, viz., (1994)4 S.C.C. 225 , their Lordships held that me person who indulges in judicial adventurism has to pay heavy costs, and that too exemplary costs. 18. At this juncture, the conduct of the learned counsel for the first respondent herein, after his argument for 1 1/2 hours, is also worth mentioning. It was at his convenience, the case was adjourned to 10.12.1997, even though the matter was very urgent. When the case was posted on 11.12.1997, after advancing arguments for 1 1/2 hours, he wanted adjournment till Monday 15.12.1997 on the ground that he wants to file some more documents and also a counter-affidavit.
It was at his convenience, the case was adjourned to 10.12.1997, even though the matter was very urgent. When the case was posted on 11.12.1997, after advancing arguments for 1 1/2 hours, he wanted adjournment till Monday 15.12.1997 on the ground that he wants to file some more documents and also a counter-affidavit. I asked him to continue the argument and complete it, and also expressed my mind that I was reluctant to grant adjournment. Learned counsel abruptly closed his argument, and I declared in open court that orders will be pronounced in this caseon 12.12.1997. 19. A question may arise whether in site of vacating the order, can the second respondent herein (Bank) remain silent without paying the amounte As per the deeds of guarantees, when a demand is made, the Bank is bound to honour the guarantee and pay the proceeds to the petitioner without any objection. Compliance must be made immediately, and the second respondent (Bank) cannot postpone its obligation in this case, when the petitioner demanded the Bank to honour the Bank Guarantees, the Bank informed it (1st defendant Board) that it is going to inform the plaintiff, and it also said that it will act after obtaining legal advice. What was the necessity for informing the plaintiff, is not clear. But one thing is certain, namely, that the second respondent also did not act fairly, It was postponing its obligations, and in fact, the information given by it, enabled the plaintiff to file the suit and harass the petitioner herein, namely, the Madhya Pradesh Electricity Board. Customers and public expect and better behaviour and response from banks like the second respondent herein. One cannot expect such a conduct as portrayed in this case from a Bank like the second respondent herein which is an international Bank. Petitioner herein had to move from pillar to post for encashment of the Bank Guarantees. I direct the second respondent herein to pay the amount due on all the Bank Guarantees for which demand has been made by the petitioner herein. I further direct the second respondent to comply with this direction within a period of three days from the date of production of a copy of the order. It shall also report compliance of this direction to this Court on 23.12.1997. 20. In the result, I allow this revision petition with costs.
I further direct the second respondent to comply with this direction within a period of three days from the date of production of a copy of the order. It shall also report compliance of this direction to this Court on 23.12.1997. 20. In the result, I allow this revision petition with costs. In view of the fraud committed by the plaintiff, this is a fit case when the suit itself should be struck off from the file, and I do so. The suit O.S.No.6028 of 1997, on the file of XVII Assistant City Civil Court at Madras, is struck off from the file. Consequently, C.M.A.No.205 of 1997 now pending before the 6th Additional Judge (In charge of VII Additional Judge), City Civil Court at Madras, has become unnecessary. First respondent herein is liable for costs in ail the courts, payable to the petitioner herein. It is also liable to pay exemplary costs in this Revision in view of lack of good faith in filing the suit before a wrong forum and obtaining an interim order. By playing fraud on court. Advocates fee Rs.10,000 (Rupees Ten thousand). 21. For reporting compliance of direction by this Court to the second respondent Bank, call this case on 23.12.1997.