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2015 DIGILAW 724 (GAU)

Zenith Drugs & Allied Agencies Pvt. Ltd. v. United Bank of India

2015-06-11

HRISHIKESH ROY

body2015
JUDGMENT : Heard Ms. K. Yadav, the learned Counsel appearing for the petitioner (plaintiff). Also heard Mr. G. Sarma, the learned Counsel appearing for the respondents (defendants). 2. The petitioner filed the Summary Suit No.1/2010 under Order XXXVII of the CPC to recover Rs.11,90,336/- on account of the Bank Guarantee No.ZD-05/05 last renewed on 6.6.2005 for Rs.10 Lakh, issued by the United Bank of India (hereinafter referred to as “the UBI”) on plaintiff’s behalf to M/s Hindustan Antibiotics Ltd. (hereinafter referred to as “the Principal Company”) for the stock supplied by the Principal Company, which was stored in the warehouse of the plaintiff. The Bank Guarantee was issued against Term Deposit made by the plaintiff and since the Bank Guarantee was started from the year 2001 and was extended from time to time, the total amount of Term Deposit as on 29.10.2008 stood at Rs.11,04,890.18. 3. Prior to institution of the Summary Suit, the Principal Company tried to invoke the Bank Guarantee and the petitioner challenged the said Act by filing the Title Suit No.117/2006, where the Principal Company was arrayed as the contesting defendant and the UBI was made the proforma-defendant. The learned Civil Judge No.2, Guwahati on 26.3.2010 decreed the suit or in other words the Principal Company was restrained from invoking the Bank Guarantee given on behalf of the plaintiff. Accordingly since the validity of the last extended Bank Guarantee expired on 6.6.2006, the Summary Suit was filed by the plaintiff to claim the followings:- (1) The principal amount Rs.10,00,000/- (2) Interest @10% p.a. till 12th May 2010 Rs. 1,65,336/- (3) Cost of the suit including Advocate, Advocates fee, miscellaneous Expenses etc. Rs. 25,000/- Rs.11,90,336/- 4. The defendant bank appeared in the suit and through their application of 24.5.2010 (Annexure-B) under Order XXXVII Rule 3(5) of CPC, applied for grant of leave to defend the case by filing the Written Statement (W.S.). In their application, the bank acknowledged the judgment given in the Title Suit No.117/2006, whereby it was ordered that the Principal Company is not entitled to invoke the Bank Guarantee but they nevertheless pleaded that in the event of any Appeal/Revision is filed and the judgment dated 26.3.2006 is reversed, the bank will suffer irreparable loss and injury. But simultaneously the bank also took the stand that they have no interest in the securities and undertook to return the same on Court’s order. 5. But simultaneously the bank also took the stand that they have no interest in the securities and undertook to return the same on Court’s order. 5. The learned Civil Judge No.1, Guwahati through its order dated 11.6.2010 (Annexure-D) granted leave to the defendant bank by observing that triable issues are present in the summary suit which require proper adjudication. Accordingly a date was fixed for W.S. of the defendant. 6. Since leave to defend the summary suit was granted without directing the defendant to furnish security under Clause (b) of Rule 6 of Order XXXVII of the CPC and since the defendant otherwise admitted the plaintiff’s claim in the summary suit, an application was filed on 19.6.2010 (Annexure-E) by the plaintiff under Order XXXVII Rule 3(5) and 3(6) of the CPC, for depositing the admitted amount in Court by the defendants, to enable them to defend the summary suit as was permitted by the Court on 11.6.2010. In their objection to the plaintiff’s application, the defendants specifically averred that they do not intend to retain the securities in reference but they just asserted that the said securities were retained to cover up for the appeal period of the previously instituted suit so as to ensure prompt compliance of any direction that may be passed therein. Furthermore since the plaintiff by instituting the Summary Suit has made the said securities sub-judice and as such, the defendants have no option now but to act only in compliance of whatever orders that may be passed by this Court. It was also pleaded that if the Court ordered so, the defendants are ready and willing to deposit the amount. 7. But the learned Trial Judge, even while noting that the defendants have no intention to retain the security money and the same is being held by the UBI only for covering up the appeal period in respect of the decree passed on 26.3.2010 in the Title Suit No.117/2006, declared that since triable issues are to be decided in the summary suit, direction need not be issued to the defendants to make the deposit, in terms of Order XXXVII Rule 3(5) and 3(6) of the CPC and accordingly the plaintiff’s application was rejected by the Court, through the impugned order dated 2.8.2010 (Annexure-G). 8. 8. I have heard the submission made by the learned Counsel for the contesting parties and have also noted that in the last 6 years, the Principal Company has not filed any Appeal/Revision to challenge the decree passed against them in the Title Suit No.117/2006. Therefore it is now safe to assume that the order restraining the M/s Hindustan Antibiotics Ltd. to invoke the Bank Guarantee has now attained finality. Moreover the Bank Guarantee issued in respect of the stockists arrangement between the plaintiff and the Principal Company, had expired on 6.6.2006 and therefore the UBI can’t retain the security provided by the plaintiff particularly when, a decree was passed by the competent Court whereby the Principal Company was restrained from invoking the Bank Guarantee. 9. In the above circumstances, I feel that when the plaintiff’s claim in the Summary Suit is not being resisted by the defendant on merit, a jurisdictional error was committed by the Court in refusing to order on the plaintiff’s plea for deposit of security by the defendant UBI, under the 2nd proviso to Sub Rule (5) of Rule 3 and Clause (b) of Sub-Rule (6) of Order XXXVII of the CPC. Therefore the impugned order dated 2.8.2010 (Annexure-G) in the Summary Suit No.1/2010 is held to be untenable and the same is accordingly quashed. 10. Consequently the plaintiff’s Petition No.1258/2010 filed under Order XXXVII Rule 3(5) and 3(6) of the CPC stands allowed. The payable amount should accordingly be deposited by the defendants in the Court of the learned Civil Judge No.2, Guwahati within 6 weeks and the plaintiff is permitted to withdraw the said money. Thereafter the Summary Suit No.1/2010 can be decided on merit, in accordance with law. The parties are directed to appear before the Trial Court on 17.7.2015. 11. With the above order the case is allowed by leaving the parties to bear their respective cost. The Registry should return the LCR along with a copy of this order.