Interim Order 1

Order Details: Order below exhibit
Pdf Text: OBE 1 E. A. 46/2020
MHCC010136782019
IN THE COURT OF CITY CIVIL FOR GREATER BOMBAY, AT
BOMBAY
ORDER BELOW EXHIBIT 1
IN
EXECUTION APPLICATION NO.46/2020
(CNR NO. MHCC010136782019)
IN
SHORT CAUSE SUIT NO.8794/1998
(HIGH COURT SUIT NO.1351/1998)
Sonali Bank Ltd.,
having its registered office at Motijheet
C/s. Dhaka, Bangladesh and Branch Office
at 15 Park Street, Calcutta - 700017. … Applicant
(Org. Defendant)
Versus
1 Dena Bank
a Body incorporated constituted under
Banking Companies (Acquisition and
Transfer of Undertaking) Act, V 1970
having its registered office at Maker Tower
E, 7th to 10th Floor, Cuffe Parade, Mumbai -
400005 and one of its branch office at
Industrial Finance Branch, Maker Tower E,
9th Floor, Cuffe Parade, Mumbai - 400 005.
2 Hanil Era Textiles Ltd.,
a company incorporated under the
Companies Act 1956 and having its
registered office at - Vanivli Village, Taluka
Khalapur, District - Raigad, Maharashtra
and Head Office at New Era House, Mogul
Lane, Matunga (W), Mahim - 400016.
… Respondents
No. 1 and 2
(Org. Plaintiffs)
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AND
3 Shri Sanjay Pachlangia,
4 Shri Shiv Shankar Tiwari,
5 Shri Subhashchandra Kalra,
Respondent No.3 to 5 all are Directors of
Respondent No.2 having its registered
office at - Vanivli Village, Taluka Khalapur,
District - Raigad, Maharashtra and Head
Office at New Era House, Mogul Lane,
Matunga (W), Mahim - 400016 … (Org. Plaintiffs)
6 Bank of Baroda,
having their Head Office at Baroda
Bhavan, R. C. Dutt Road, Alkapuri, Baroda
- 390007.
7 Dr. Hasmukh Adhia,
Non - Executive Chairman of Respondent
No.6, having their office at Baroda
Bhavan, R. C. Dutt Road, Alkapuri, Baroda
- 390007.
8 Shri Murli Ramaswami,
9 Shri S. L. Jain,
10 Shri Vikramaditya Singh Khichi,
Respondent No.8 to 10 all are Executive
Directors of Respondent No.6, having their
office at Baroda Bhavan, R. C. Dutt Road,
Alkapuri, Baroda - 390007.
11 Shri Debasish Panda,
12 Shri Ajay Kumar,
13 Prof. Biju Varkkey,
14 Smt. Soundara Kumar,
15 Shri. Bharatkumar D. Dangar,
16 Shri Srinivasan Sridhar
Respondent No.11 to 16 all are Directors
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of Respondent No.6, having their office at
Baroda Bhavan, R C Dutt Road, Alkapuri,
Baroda - 390007
17 Bank of Baroda,
Greater Mumbai Zone, Zonal Office, 3
Walchand Hirachand Marg, Mumbai - 400
001.
18 Bank of Baroda,
Senapati Bapat Marg Branch, Nair Mahal,
Senapati Bapat Marg, Matunga (West),
Mumbai - 400016
19 The Registrar,
City Civil Court at Bombay, Old Secretariat
Building, Kala Ghoda, Besides University,
Fort, Mumbai - 400032. … Respondents
CORAM : HIS HONOUR JUDGE, R. D. DESHPANDE
COURT ROOM NO. 61
DATE : 29.04.2025
Appearances: -
Adv. Nandini Joshi i/b Harish Joshi and Company for
Applicant/Original defendant.
Adv. Divya Bamne for respondents No. 6 to 18.
ORDER
(Dictated and pronounced in open Court)
Heard Adv. Nandini Joshi for applicant (Org.
defendant). She vehemently argued that the present Execution
Application is taken out by applicant Bank against original
plaintiffs and the respondents No.6 to 18 for enforcement of
Common Order passed by the Predecessor of this Court in the
above-said suit, below applications at (Exh.13 and 15) dated
27.09.2016. Both these applications were taken out by this
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applicant. The prayer in the application at (Exh.13) was that the
Registrar of this Court may be directed to encash the Bank
Guarantee furnished by respondent No.18 which is on record and
to hand over said encashed amount of Rs.35,00,000/- along with
interest accrued thereon to this applicant. In the application at
(Exh.15) applicant prayed that the matter be adjourned till such
time the Bank Guarantee is invoked by the Registrar of this Court
and the amount of Rs.35,00,000/- along with interest is deposited
with the Ld. Registrar of this Court.
2. She further argued that, by Order dated 27.09.2016,
the Ld. Predecessor of this Court has disposed off both these
applications. That Order reads as under: - “Applications at Exh.13
and 15 are hereby allowed. Registrar is directed to encash the
Bank Guarantee No.0616 I G PER OO 111 4 dated 25.06.2014
(said Bank Guarantee) furnished by the plaintiffs and further
directed that after encashment of the Bank Guarantee, amount be
paid to the defendant. Applications (Exh.13 and 15) stand
disposed off accordingly.”
3. She further brought to the notice of this Court brief
facts leading to the passing of above-said Order. She further
submitted that the present Bank Guarantee was placed on record
as per the Orders of the Court as against which original plaintiff
was allowed to withdraw the sum of Rs.35,00,000/-. No intimation
of renewal of the present Bank Guarantee was given to the
applicant (Org. defendant) either by the Registrar of this Court or
by the Bank of Baroda. The Bank Guarantee has not been renewed
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by original plaintiffs. Applicant through its advocate by letter
dated 17.12.2015 informed the Registrar of this Court to invoke
the present Bank Guarantee. But the Ld. Registrar failed to do
anything in the matter. There were no steps either for encashment
for Bank Guarantee nor any reply was given by the Ld. Registrar to
the advocate’s letter dated 17.12.2015. In that context, above-said
two applications at (Exh.13 and 15) were taken out and the above-
said Order came to be passed.
4. She further argued that it was only upon passing of the
Order dated 27.09.2016 that the Ld. Registrar addressed letter
dated 01.10.2016 to the Bank for encashment of Bank Guarantee.
By their letter dated 04.10.2016, Bank of Baroda informed the Ld.
Registrar that they have reversed the Bank Guarantee in their
system as they have not received any request for extension. Hence,
they will not be able to invoke the present Bank Guarantee.
Applicant by their advocate’s letter dated 25.04.2018 addressed to
Bank of Baroda i.e. respondent No.18, stated the aforesaid facts
and called upon the Bank to encash the Bank Guarantee forthwith
and to remit the encashed amount in the name of Registrar of this
Court, failing which appropriate legal action shall be initiated
against the Bank for recovery of the amount of Bank Guarantee.
5. She further added that prior to moving this Execution
Application, applicant also addressed letter dated 12.03.2019 to
Bank of Baroda Head Office, Bank of Baroda Zonal Office and
Manager of Bank of Baroda at Mumbai and also the Registrar of
this Court calling upon them to comply with the Order dated
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27.09.2016. Another letter dated 16.04.2019 was also addressed
to the Registrar of this Court. But advocate for Bank and also the
Bank i.e. respondent No.18 issued letters denying their liability to
make any payment under the fresh Bank Guarantee as the Bank
Guarantee had lapsed and it was not renewed.
6. She further added that pursuant to the amendment in
the Indian Contract Act, 1872 in the year 2013, new exception 3 to
Section 28 is introduced. Pursuant to this exception, the claim
period in Bank Guarantee cannot be less than one year from date
of expiry of Bank Guarantee. As such, the non-obstante clause
contained in the present Bank Guarantee which purports to
extinguish the rights of the beneficiary i.e. Registrar of this Court
by preventing him from raising a claim within 1 year from expiry
of the Bank Guarantee and purports to discharge the original
plaintiff and the respondent No.18 Bank in less than a period of 1
year from expiry of the Bank Guarantee is void and cannot be
enforced by the Bank and cannot be acted upon. According to her,
the Bank Guarantee is required to be read as a whole. In their
written submissions though the non-obstante clause is relied upon
by the respondent No.18, it cannot absolve the Bank from their
unequivocal and unambiguous obligation made to forthwith pay
the amount to the Registrar of this Court, in case there is no
renewal made by them within 60 days prior to expiry of
Guarantee.
7. She further added that Execution Application is served
upon all the parties including original plaintiffs at whose instance
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the Bank Guarantee is issued. The respondent No.18 Bank has
failed to perform its obligations under the Bank Guarantee. Upon
plaintiff’s failure to renew the Bank Guarantee, the respondent
No.18 was obligated to forthwith hand over/deposit the amount of
Rs.35,00,000/- to the Registrar of this Court without any demand
or notice as per the terms in the Bank Guarantee. But it has
miserably failed and neglected to perform the said term.
Therefore, applicant has taken out this Execution Application for
execution of Order dated 27.09.2016 below applications at
(Exh.13 and 15). If that Order is not executed and the said amount
of Rs.35,00,000/- is not handed over to the applicant, despite
having an executable Order in its favour, it would result in a grave
miscarriage of justice and it would be severely prejudiced which
would result in causing great harm and loss to applicant.
Therefore, she prayed that as per the Order dated 27.09.2016,
upon encashment of the Bank Guarantee/depositing of the said
amount by the Bank, the Registrar of this Court may be directed to
pay or release the said amount of Rs.35,00,000/- in favour of
applicant along with accrued interest.
8. She invited attention of the Court to Section 2(2) of
the Code of Civil Procedure and argued that as per this provision,
there is an executable Order which is passed in favour of applicant
and therefore, it is very much entitled to execute that Order by
way of present Execution Application. That Order may be executed
by one or anyone or all the modes of execution of Decree/Order as
more particularly set out in Column No. J at page No.8 of the
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Execution Application.
9. She relied upon the case of ‘K. M. Basheer Vs. Trie-Tee
Trading Company Ltd. and Anr., reported in AIR 2007 Kerala 291’,
in which it is held by Hon’ble Kerala High Court that, “execution
Court is right in its view that the direction in Exh. P1 passed in
favour of petitioner-defendant does not amount to a decree as
defined under Section 2(2) of the Code. But it certainly amounts
to an executable order in favour of the petitioner and therefore,
the petitioner does qualify as decree-holder in terms of Section
2(3) of the Code of Civil Procedure. Since the interest in the
executable order is retained by him, he qualifies also as a holder of
the decree/executable order and is therefore entitled to maintain
an execution petition under Order XXI Rule 10 of the Code of Civil
Procedure. The respondent against whom an executable order is
passed is a judgment-debtor in terms of Section 2(10) of the Code
of Civil Procedure.”
10. Adv. Divya Bamne for respondents No. 6 to 18 apart
from advancing her arguments in reply, she has also placed on
record the Written Notes of Arguments at (Exh.4). She strongly
replied that the present Execution Application is not at all
maintainable as it is not an executable Decree or Order passed by
the Court of Competent Jurisdiction. Therefore, application for
Execution under Order XXI Rule 10 of the Code of Civil Procedure
cannot be taken out. No Order or Decree is passed against
respondents No.6 to 17. Therefore, present Execution Application
is not maintainable against them as they are not the necessary and
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proper parties to this application.
11. She further replied that the respondent No.18 has
issued the Bank Guarantee No.0616 I G PER OO 111 4 in favour of
Registrar of this Court. Therefore, beneficiary of said Bank
Guarantee is the Registrar of this Court and not the present
applicant. Since the present applicant is not the beneficiary of said
Bank Guarantee, respondent No.18 is otherwise legally entitled to
invoke the said Bank Guarantee. In pursuance to the Order passed
by the predecessor of this Court in Notice of Motion No.
1521/2012 dated 17.01.2014, the respondent No.18 issued Bank
Guarantee No.0616 I G PER OO 111 4 of Rs.35,00,000/- in favour
of Registrar of this Court. Said Bank Guarantee was valid only for
a period of 1 year i.e. from 25th June, 2014 to 24th June, 2015 and
the same was renewable at the request of plaintiffs at whose
request the respondent No.18 has issued said Bank Guarantee. By
way of this Bank Guarantee, the respondent No.18 has agreed and
undertaken forthwith to pay the said Bank Guarantee amount of
Rs.35,00,000/- to the Registrar of this Court. Rights of the
beneficiary i.e. Registrar of this Court to invoke the said Bank
Guarantee and liability were subject to the conditions mentioned
in the Bank Guarantee which stipulated that said Bank Guarantee
shall be valid up to 24.06.2015 and the Bank shall be liable to pay
the Guarantee amount or any part thereof under the said Bank
Guarantee only and only if the beneficiary i.e. Registrar of this
Court served upon it a written claim or demand on or before
24.06.2015. Therefore, making of written claim or demand to the
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respondent No.18 on or before 24.06.2015 under the said Bank
Guarantee was mandatory. However, no claim was made within
the above-said stipulated period. Therefore, respondent No.18 is
not liable to pay the Guarantee amount on the basis of said
Guarantee. As such, the said Bank Guarantee is lapsed.
12. She further added that it is an admitted position that
the first demand or claim under the said Bank Guarantee was
made by the Registrar of this Court vide letter dated 01.10.2016.
That means said Bank Guarantee was invoked for the first time on
01.10.2016 i.e. much later the expiry of said Bank Guarantee. The
respondent No.18 by letter dated 04.10.2016 replied to the
Registrar of this Court and shown their inability to pay the
Guarantee amount since the said Bank Guarantee had already
expired. The subsequent letter by Registrar of this Court dated
09.05.2019 is also replied by respondent No.18 with the similar
contents. The legal notice issued by applicant is also replied by
respondent No.18 through their advocate.
13. She lastly submitted that since the Bank Guarantee in
question is already expired and the claim was not submitted to
respondent No.18 within the stipulated time, the liability of
respondent No.18 under the said Bank Guarantee has come to an
end. Therefore, neither the beneficiary nor the present applicant
are legally entitled to claim or demand or to receive any amount
from respondent No.18 on the basis of said Bank Guarantee.
Therefore, she prayed that present Execution Application may be
dismissed with costs.
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14. In support of her submissions she placed reliance on
the provisions of Section 28 of the Indian Contract Act, 1872 and
the following citation: -
‘Larsen and Toubro Limited and Anr. Vs. Punjab National Bank and
Anr., in Writ Petition (C) 7677/2019 dated 28.07.2021’, in which it
is held by Hon’ble Delhi High Court that, “it is clear that
respondent No.1 is erroneously of the view that they are in law
mandated to stipulate a claim period of 12 months in the bank
guarantee failing which the clause shall be void under Section 28
of the Contract Act. A perusal of para 15 of the writ petition shows
that a claim period has been explained as a time period
contractually agreed between the creditor and the principal debtor
which provides a grace period beyond the validity period of the
guarantee to make a demand on the bank for a default which has
occurred during the validity period. Respondent No.1 does not
deny the above averments of the petitioner in the counter affidavit.
As noted above, Section 28 of the Contract Act does not deal with
the said claim period. It deals with right of the creditor to enforce
his rights under the bank guarantee in case of refusal by the
guarantor to pay before an appropriate Court or Tribunal.”
15. In rejoinder, Adv. for applicant Nandini Joshi filed her
Written Submissions at (Exh.6). She again brought to the notice of
the Court the past events and various Orders which were passed by
the Ld. Predecessor of this Court and Hon’ble High Court. She
replied that though the suit got dismissed on 05.10.2016, prior to
its dismissal an Order under execution dated 27.09.2016 came to
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be passed which is the subject matter of this Execution Application.
The Ld. Registrar of this Court is already directed by this Court to
encash the Bank Guarantee and to hand over the matured amount
to this applicant. Argument of the respondent No.18 that the Bank
Guarantee is lapsed and the beneficiary has not made claim within
the time stipulated in the Bank Guarantee is completely erroneous
in view of the specific clause in the Bank Guarantee that if it is not
renewed not less than 60 days prior to its expiry then the entire
amount of Bank Guarantee shall become forthwith due and
payable by the said Bank to the Registrar of this Court.
Notwithstanding that the periods of Guarantee or renewal thereof
have or have not already expired.
16. According to her, the Judgment relied upon by the
respondent No.18 in the cited case ‘Larsen and Toubro Limited and
Anr. Vs. Punjab National Bank and Anr.’ would not be helpful to it
as the facts situation in this cited case was altogether different.
The issue in this cited case pertained to the letter issued by the
respondent therein to the petitioners which stated that if claim
period is less than 1 year then the benefit of exception 3 to Section
28 of the Indian Contract Act, 1872 is not available to the Bank.
Therefore, the law laid down in this cited case is not helpful to
respondent No.18, in view of the specific clause in the Bank
Guarantee in question. Moreover, despite the aforesaid clause, the
respondent No.18 unilaterally reversed entry in their record
without giving any notice to the beneficiary and thus an undrawn
expired Bank Guarantee is closed without receipt of the original
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Bank Guarantee which is still lying with the Registrar of this Court.
Coupled with the fact that no notice was issued to the beneficiary
i.e. Registrar to reconfirm that no claim has been received, the
Bank has acted contrary to the terms of the Bank Guarantee and
therefore, according to her the protection of exception 3 to Section
28 of the Indian Contract Act, 1872 is not available to the
respondent No.18.
17. Upon perusal of record and after considering the
arguments advanced at the bar by both the parties, it is seen that
Summary Suit No.8794/1998 was filed against this applicant who
was the defendant in that suit, for the alleged recovery of sum of
US Dollars 150163.79 together with interest thereon at the rate of
20% per annum. Present applicant, who was defendant, failed to
record its appearance within the stipulated time and therefore, Ex-
parte Decree came to be passed against it on 23.11.1998.
Applicant took out Notice of Motion No.2541/1999 for setting
aside that decree. By Order dated 02.04.2001, Hon’ble High Court
set aside that Ex-parte Decree, subject to applicant depositing the
sum of Rs.35,00,000/- on the terms and conditions set out in that
Order. Plaintiff was allowed to withdraw that amount upon
furnishing the Bank Guarantee within 6 weeks from the passing of
that Order. Accordingly, plaintiff furnished Bank Guarantee of
Rs.35,00,000/- of Punjab and Sind National Bank (first Bank
Guarantee).
18. Then the Summons for Judgment was taken out by the
plaintiffs. Hon’ble High Court was pleased to grant unconditional
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leave to this applicant to defend the suit. But in the meantime,
original plaintiffs have withdrawn amount of Rs.35,00,000/-.
Therefore, they were directed to redeposit that amount of
Rs.35,00,000/- within 6 weeks by Order dated 04.05.2005.
19. It is also seen that original plaintiffs took out Notice of
Motion No.1941/2003 to permit them to retain the withdrawn
amount of Rs.35,00,000/-. That motion was disposed off by Order
dated 10.07.2003, whereby plaintiffs were permitted to retain said
amount. Plaintiffs challenged that Order dated 04.05.2005 for
Summons for Judgment before Hon’ble Apex Court in Civil Appeal
No.1885/2007. Hon’ble Apex Court disposed off said Appeal on 2nd
February, 2011 by holding that since the money has been lying
with the original plaintiff for about 10 years, it would be expedient
that the suit be decided as expedited.
20. Plaintiff took out Notice of Motion No.1521/2012 for
direction to the Prothonotary and Senior Master of Hon’ble High
Court, Bombay for not to insist upon for renewal of Fist Bank
Guarantee for sum of Rs.35,00,000/- and that the respondent
Bank be directed not to pay Rs.35,00,000/- to the Prothonotary
and Senior Master of Hon’ble High Court, Bombay. Simultaneously,
this applicant moved Exh.2 for renewal of First Bank Guarantee
which was lapsed in the year 2008. By Order dated 17.01.2014,
plaintiffs aforesaid Notice of Motion No.1521/2012 was dismissed
while application at Exh.2 filed by this applicant was allowed.
Plaintiff was directed to renew the First Bank Guarantee or to
redeposit sum of Rs.35,00,000/- in the Court within 2 weeks.
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21. Plaintiff challenged that Order by filing Writ Petition
No.1451/2014, but it came to be dismissed on 11.02.2014.
Hon’ble High Court granted time to the plaintiff to renew the First
Bank Guarantee of Rs.35,00,000/- or in the alternative time to
redeposit the sum of Rs.35,00,000/- was extended by a period of 2
weeks from the date of passing of that Order. Original plaintiff
moved Hon’ble High Court in the aforesaid disposed of Writ
Petition for further extension of time to comply the Order dated
11.02.2014. By Order dated 05.05.2014 Hon’ble High Court
granted one weeks time to renew First Bank Guarantee or in the
alternative to redeposit an amount of Rs.35,00,000/-.
22. Original plaintiff moved Civil Application
No.1515/2014 in the disposed of Writ Petition to produce a fresh
Bank Guarantee of Rs.35,00,000/-. By Order dated 01.07.2014
said Civil Application came to be allowed. At the time of hearing of
that application, plaintiff drew Hon’ble Court’s attention to the
Bank Guarantee of Bank of Baroda (the present Bank Guarantee)
along with a covering letter addressed by the Manager to the
Registrar of this Court. Some directions were given while deciding
that Civil Application including the direction that, “(v) in so far as
interest accrued on the said sum of Rs.35,00,000/- is concerned,
the respondent No.1 can make an appropriate prayer at the
hearing of the suit and the said issue is kept open for being urged
at the hearing of the suit. (vi) On the fresh Bank Guarantee being
furnished, applicant would be entitled to encash the old Bank
Guarantee of Punjab and Sind National Bank.
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23. In view of above, the Bank Guarantee in question was
furnished by original plaintiffs for Rs.35,00,000/- in favour of
Registrar of this Court. But the Bank Guarantee in question was
not renewed by the plaintiffs. Therefore, present applicant moved
2 applications at (Exh.13 and 15) on which the Common Order
dated 27.09.2016 came to be passed by the Predecessor of this
Court. Applicant is seeking execution of that Common Order.
24. It is also seen that after Common Order dated
27.09.2016 was passed by the Predecessor of this Court, the Ld.
Registrar of this Court addressed letter dated 1st October, 2016 to
the respondent No.18 for encashment of the Bank Guarantee in
question. But by letter dated 04.10.2016, respondent No.18
informed the Ld. Registrar that they have reversed the Bank
Guarantee in their system and that they have not received any
request for extension. Therefore, they would not be able to invoke
the present Bank Guarantee.
25. The correspondence was also made by this applicant to
the respondent No.18 through their advocate before moving this
Execution Application. But respondent No.18 once again informed
that they are not liable to pay any amount. In view of that, present
Execution Application is taken out by the applicant.
26. It is important to note that after passing of Order dated
27.09.2016, above said Summary Suit came to be dismissed on
05.10.2016. The present Execution Application was filed earlier
before the Registrar of this Court. But since the Registrar of this
Court is made party to this Execution Application, it is transferred
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to this Court for appropriate Orders.
27. In my humble opinion, argument of respondent No.18
that the Bank Guarantee is expired/lapsed as the beneficiary i.e.
Ld. Registrar of this Court has not made any claim within the time
stipulated in the Bank Guarantee cannot be accepted. Because
there is specific clause in the Bank Guarantee which is executed by
the respondent No.18 in favour of Ld. Registrar of this Court and
which is reproduced here.
It reads thus, “….and the said Bank DOTH HEREBY CONVENANT
TO AND DECLARE that if the Plaintiff above named do not obtain
and furnish the renewal/s of Guarantee as afore said in favour of
the Registrar of City Civil Court at Bombay and / or her / their
successor in office not less than 60 days prior to the expiry of the
period of Bank Guarantee herein as aforesaid or renewal or
renewals thereof the Bank Guarantee so as to keep the same valid
and subsisting till the disposal of the above suit the entire amount
of Bank Guarantee herein shall become forthwith due and payable
by the said Bank to the Registrar of City Civil Court at Bombay and
/ or her / their successor/s in office NOTWITHSTANDING:
1) That the periods of the guarantee or renewal or renewals
thereof have not expired.
2) That the period of the Guarantee or renewal or renewals
thereof has already expired.
3) That the aforesaid City Civil Court Suit No.8794/1998 in still
pending disposal
And the said Bank shall without any demur, demand, action,
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Notice or objection forthwith deposit by Demand Draft of Pay
Order with the Registrar of City Civil Court, Bombay.”
28. In view of the above-said clause, the entire amount of
Bank Guarantee became forthwith due and payable by the
respondent No.18 Bank to the Registrar of this Court. In view of
the non-obstante clause therein, respondent No.18 was bound
without any demur, demand, action/Notice or objection forthwith
to deposit by Demand Draft or Pay Order said amount to the
Registrar of this Court within 60 days before expiry of Bank
Guarantee i.e. around 23rd April, 2015. Because it is in the nature
of undertaking executed by the respondent No.18. But it has failed
to fulfill and has given complete go bye to that clause.
29. It is also worth to note that despite the aforesaid clause
which is reproduced above, respondent No.18 has unilaterally
reversed the entry in their record without giving any notice to the
Registrar of this Court and accordingly, the said Bank Guarantee is
closed even without receipt of original Bank Guarantee which is
still lying in the custody of Ld. Registrar of this Court. Thus, the
respondent No.18 has acted contrary to the terms of the Bank
Guarantee.
30. Section 2(2) of the Code of Civil Procedure defines
“decree” means the formal expression of an adjudication which, so
far as regards the Court expressing it, conclusively determines the
rights of the parties with regard to all or any of the matters in
controversy in the suit and may be either preliminary or final. It
shall be deemed to include the rejection of a plaint and the
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determination of any question within Section 144, but shall not
include -
(a) any adjudication from which an appeal lies as an appeal from
an order, or
(b) any order of dismissal for default.
31. Section 2(3) defines the word ‘decree holder’ means
“any person in whose favour a decree has been passed or an order
capable of execution has been made.”
32. Though in the case at hands, there is no Decree passed
by the Predecessor of this Court in favour of applicant. But
certainly an order in the nature of Common Order below
applications at (Exh.13 and 15) dated 27.09.2016 came to be
passed in its favour which is certainly capable of execution.
Because certain directions are given by way of that Order to the
Registrar of this Court to encash the Bank Guarantee in question
and to pay an amount of Rs.35,00,000/- mentioned therein to the
applicant.
33. The law laid down by Hon’ble Kerala High Court in the
cited case ‘K. M. Basheer Vs. Trie-Tee Trading Company Ltd. and
Anr.’, on which Adv. Nandini Joshi for applicant placed her
reliance, squarely applies to the case at hands as the facts situation
is exactly similar. Therefore, I do not find any force in the
submission made by advocate for respondent No.18 that there is
no executable Order passed in favour of applicant by this Court by
way of Common Order below applications at (Exh.13 and 15)
dated 27.09.2016.
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34. I have also carefully gone through facts of the cited
case ‘Larsen and Toubro Limited and Anr. Vs. Punjab National Bank
and Anr.”, on which Adv. Divya Bamne for respondent No.18
placed her reliance. But the facts of this cited case are altogether
different with the case at hands. Because in this cited case, the
matter pertained to the letters issued by the respondent therein to
the petitioner therein which stated that if claim period is less than
1 year then the benefit of exception 3 to Section 28 of the Indian
Contract Act, 1872 is not available to the Bank. But this is not so in
the case at hands. Therefore, with due respect the law laid down
therein is not helpful to the respondent No.18 in view of the
specific clause mentioned in the Bank Guarantee which is
reproduced above.
35. In view of an amendment by way of new exception 3 to
Section 28 of the Indian Contract Act, 1872 in the year 2013, the
claim period in the Bank Guarantee cannot be less than 1 year
from the date of expiry of Bank Guarantee. Therefore, in view of
non-obstante clause appearing in the Bank Guarantee on record
which purports to extinguish rights of the beneficiary i.e. the Ld.
Registrar of this Court by preventing him from raising claim within
1 year from expiry of the Bank Guarantee and purporting to
discharge respondent No.18 so also the original plaintiff in less
than 1 year period from expiry of the Bank Guarantee would be
void and cannot be enforced and acted upon. Because the Bank
Guarantee is required to be read as a whole.
36. It is also important to note that the respondent No.18
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has not challenged the Common Order passed by Predecessor of
this Court below applications at (Exh.13 and 15) dated
27.09.2016. This being the executing Court, it cannot go beyond
Order under execution. Said Order is required to be executed, in
its true spirit. Since, the respondent No.18 Bank has refused to
encash the Bank Guarantee in question, the original of which is
still lying in the custody of Ld. Registrar of this Court, the
directions are required to be given to the respondent No.18 either
to encash the Bank Guarantee in question dated 25.06.2014 or to
forthwith deposit said amount of Rs.35,00,000/- with the
beneficiary i.e. the Registrar of this Court as per Order dated
27.09.2016. Hence, the following Order: -
ORDER
1. Respondent No.18 Bank is directed to encash the Bank
Guarantee No.0616 I G PER OO 111 4 dated 25.06.2014
which is lying in the custody of Ld. Registrar of this Court
and to deposit forthwith said amount of Rs.35,00,000/- with
the Registrar of this Court.
2. Upon encashment of the said Bank Guarantee and
depositing of an amount of Rs.35,00,000/- by respondent
No.18 as aforesaid, the Ld. Registrar of this Court is directed
to pay or release said amount of Rs.35,00,000/- to
applicant/DH as per Common Order dated 27.09.2016.
3. The modes of execution of Common Order dated 27.09.2016
as mentioned by applicant/DH and as set out in Column No.
J on page No.8 of the Execution Application are kept in
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abeyance until further orders.
4. Inform Ld. Registrar of this Court accordingly about this
Order.
DATE: - 29.04.2025 (R. D. DESHPANDE)
JUDGE, CITY CIVIL COURT
& ADDL. SESSIONS JUDGE,
GR. MUMBAI.
Dictated on : 22.04.2025 and 23.04.2025
Transcribed on : 22.04.2025 and 23.04.2025
Checked on : 25.04.2025
Signed on : 29.04.2025
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OBE 1 23 E. A. 46/2020
"CERTIFIED TO BE TRUE AND CORRECT COPY OF THE
ORIGINAL SIGNED JUDGMENT/ORDER"
DATE: 29.04.2025, AT 01.55 P. M. Siddhesh Shankar Shirke
STENOGRAPHER (GRADE-I)
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (with Court
no.) :
SHRI R. D. DESHPANDE (C.
R. NO. 61.)
Date of pronouncement of
Judgment/order : 29.04.2025
Judgment/order signed by the P. O.
on : 29.04.2025
Judgment/order uploaded on : 29.04.2025
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