M/S Techpark India (P) Ltd. vs Ut Starcom Inc. And Another
2008 Latest Caselaw 2013 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 CS(OS) 1776/2007

%                                 Date of decision: 14.11.2008

M/S TECHPARK INDIA (P) LTD. .......                        Plaintiffs
                            Through: Mr. Sanjeev Narula, Advocate

                               Versus

 UT STARCOM INC. AND ANOTHER ....... Defendant
                              Through: Mr. K.S. Javali, Advocate for
                              Defendant no. 2
                            Defendant No.1 Ex-parte


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?

2.    To be referred to the reporter or not?

3.    Whether the judgment should be reported
      in the Digest?


RAJIV SAHAI ENDLAW, J.

1. The plaintiff has instituted the suit for permanent injunction to

restrain encashment of the bank guarantee issued by the defendant

No.2 bank at the instance of the plaintiff to the defendant No.1. Vide

ex-parte order dated 28.09.2007 invocation of the guarantee was

stayed till the next date of hearing and the plaintiff was directed to

keep the bank guarantee alive. The defendant No.1 failed to appear

in spite of being served with the summons of the suit and was on 29 th

February, 2008 ordered to be proceeded against ex-parte and

remains ex-parte. The defendant No.2 bank appeared but has not

contested the claim of the plaintiff. The ex-parte injunction order

restraining encashment of bank guarantee was, on 29th February,

2008, made absolute during the pendency of the suit and remains in

force. Considering the nature of the said interim order and further

considering that the payment under the bank guarantee, as CS(OS)1776/2007 Page 1of 4 demanded by the defendant No.1 has not been made, it is

inconceivable that the defendant No.1 does not know of the present

suit. The defendant No.1 appears not to be having any defence to the

suit and for this reason only appears to have chosen not to contest

this suit.

2. The plaintiff has led ex-parte evidence of its Managing Director

Mr. Rajiv Anand.

3. The bank guarantee No. DLG-007260/2007 dated 25th April,

2007 subject matter of the suit has been proved as exhibit PW1/5.

The defendant No.1 had asked for the said bank guarantee by way of

security required by the defendant No.1 from the plaintiff. The

defendant No.2 bank under the said bank guarantee undertook to

indemnify and keep indemnified the defendant No.1 to the extent of

Rs.40,80,000/- in the event of the material to be delivered by the

plaintiff to the defendant No.1 not meeting the specifications

mentioned in the bank guarantee. As per the terms of the

guarantee, the amount thereunder was agreed to be paid upon

receipt of a written claim or demand from the defendant No.1 on or

before 30th September, 2007.

4. What is conspicuous about the aforesaid bank guarantee is that

it does not use the words "unequivocal, without any protest, without

any demur, the defendant No.1 being the sole person to decide

whether the breach had occurred, or the demand of the defendant

No.1 being binding on the defendant No.2 bank". In the absence of

the aforesaid terms, the contention of the counsel for the plaintiff to

the effect that the bank guarantee is a conditional bank guarantee

CS(OS)1776/2007 Page 2of 4 and the bank was liable to make payment there under only upon the

condition of the goods supplied by the plaintiff not meeting the

specifications mentioned therein being established and not

otherwise, is correct.

5. The witness of the plaintiff has in his affidavit by way of

examination in chief deposed that the plaintiff completed the

supplies of the entire ordered quantities. The Challans of the

delivery of the goods have been proved as exhibit PW 1/6 to exhibit

PW1/24; that the defendant No.1 after receipt of goods fraudulently

attempted to encash the bank guarantee; that the claim of the

defendant No.1 that the goods supplied were not as per the

specifications was incorrect and untenable; "the entire ordered

quantity as per the specifications contained in the bank guarantee

had been duly complied with". Needless to state that the aforesaid

evidence of the plaintiff remained unrebutted. In the face of the

unrebutted evidence of the plaintiff to the effect that the goods had

been supplied as per the specifications, the condition subject to

which the defendant No.2 was to make the payment under the bank

guarantee had not accrued and thus the defendant No.1 was not

entitled to demand and the defendant No.2 is not liable to pay under

the guarantee aforesaid. Even though the aforesaid would be

sufficient, the counsel for the plaintiff has also argued that a

comparison of the letter dated 24th September, 2007 of the defendant

No.1 invoking the bank guarantee and of the specifications

mentioned in the bank guarantee would show that the allegation of

the defendant No.1 that the goods had not been supplied as per the

specifications is incorrect. It is stated that Office XP was not to be

pre-loaded on the desktops and Office XP was to be only supplied

and not pre-loaded on the note books. Be that as it may, in the face

CS(OS)1776/2007 Page 3of 4 of the statement of the witness of the plaintiff that the goods had

been supplied as per the specifications and the failure of the

defendant No.1 to challenge the same, the court has no option but to

believe the version of the plaintiff.

6. The counsel for the plaintiff confirms that the defendant No.1

has not filed any proceedings against the plaintiff and besides the

present suit there are no other inter-se proceedings subject matter

of the present suit.

7. The plaintiff has thus become entitled to the relief of injunction

claimed. A decree of permanent injunction is passed in favour of the

plaintiff and against the defendant No.1 restraining the defendant

No.1, its Directors and officers from invoking/encashing the

aforesaid bank guarantee and restraining the defendant No.2 from

releasing any payments under the said bank guarantee. However, in

the facts of the case, the parties are left to bear their own cost. The

interim order directing the plaintiff to keep the bank guarantee alive

shall stand discharged after 45 days here from. A decree sheet be

drawn up accordingly.

                                              RAJIV SAHAI ENDLAW
                                                   (JUDGE)
November 14, 2008
P




CS(OS)1776/2007                                                 Page 4of 4