AI Structured Summary
Not yet generated for this judgment
Judgment
IN this complaint, under Section 17 read with Section 12 of the Act, the complainant has sought a compensation in a sum of Rs. 8,23,864.78 from the opposite party, the State Bank of Mysore.
THE opposite party is State Bank of Mysore, J.C. Road Branch, Bangalore, which had executed two Bank guarantees in favour of the complainant for a sum of Rs. 2,00,000/- and Rs. 3,00,000/- for one Mr. K.R. Prabhu who was purchasing Cinematographic Films from the complainant. The said K.R. Prabhu failed to pay the value of the goods purchased. So, the complainant invoked the Bank guarantee and requested the opposite party to pay a sum of Rs. 3,32,117.17 by their letter dated 5.10.91. Subsequently, the complainant also sent a reminder to the opposite party on 22.10.91 invoking the Bank guarantees. But the opposite party did not honour the Bank guarantees and made payment of the sums demanded.
It is the further case of the complainant that the opposite party by its letter dated 9.11.91 informed the complainant that the said R.K. Prabhu had filed a suit in O.S. No. 6280/1981 on the file of the City Civil Judge, Bangalore and had obtained an order of injunction restraining the opposite party from making payment of the said amount of Bank guarantees, and so, it could not make the payment and it would honour as soon as the order of injunction was vacated.
THE complainant nextly averred that even though the Bank guarantee was invoked on 5.10.91 itself but the opposite party purposely delayed in honouring the guarantee till the said K.R. Prabhu filed suit and obtained an injunction order on 8.11.91. So, the complainant, when he filed the complaint on 23.3.93 sought the payment of the said amount of Bank guarantee of Rs. 3,32,117.17 with interest thereon. It also claimed compensation in a sum of Rs. 4,00,000.00 from the opposite party. In all, the complainant claimed a sum of Rs. 8,23,864.78 from the opposite party. The opposite party filed its version. Admitted the fact that it had executed two Bank guarantees as averred by the complainant for one Mr. K.R. Prabhu. The opposite party also admitted that the said Bank guarantees were invoked by the complainant and demanded payment of a sum of Rs. 3,32,117.17 by their letter dated 5.10.91 which came to be received by it on 8.10.91.
THE opposite party nextly averred that it had on receipt of the letter of the complainant dated 5.10.91, referred the matter to the higher authorities for their guidance in making payment, and so, there was no intentional delay in complying with the Bank guarantees but in the meanwhile, the said K.R. Prabhu had filed a suit in O.S. No. 6280/91 on the file of the City Civil Court, Bangalore and had obtained an order of injunction restraining the opposite party from making payment of the sum as demanded by the complainant. So, the non-payment of the amount of Bank guarantee by the complainant was not in violation of the terms of the Bank guarantee but in compliance with the direction of the Civil Court in O.S. No. 6280/91. So, the opposite party averred that there was no deficiency in service on its part. During enquiry, the complainant filed his affidavit in evidence and got Exs. C1 to C13 marked in evidence. The Deputy Manager of the opposite party filed his affidavit in evidence. The opposite party further averred in the affidavit that it has paid a sum of Rs. 3,32,117.17 to the complainant on 6.5.94 when the order of injunction came to be vacated and the M.F.A. is filed before the Hon''ble High Court came to be disposed of.
WE have heard the learned Counsel for the complainant. Perused the pleadings and the material on record.
IT is not disputed that the opposite party Bank had executed two Bank guarantees for a sum of Rs. 2 lakhs and Rs. 3 lakhs in favour of the complainant for and on behalf of one Sri. K.R. Prabhu. IT is also not disputed that the complainant invoked the Bank guarantees and demanded a payment of Rs. 3,32,117.17, when the said K.R. Prabhu failed to pay the value of the goods purchased from the complainant. The complainant wrote the said letter of invoking the Bank guarantees to the opposite party on 5.10.91 which came to be received by the opposite party on 8.10.91. The opposite party, while on receipt of the said letter of the complainant invoking the Bank guarantees seeking payment of Rs. 3,32,000/- from it sought guidance from its higher authorities. The said K.R. Prabhu filed a suit in O.S. No. 6280/91 against the complainant and also the opposite party and obtained an order of injunction restraining the opposite party from making payment of the Bank guarantee amount to the complainant on 8.11.91. So, the opposite party could not make the payment of the said Bank guarantee amount to the complainant due to the restraint order issued by the Civil Court.
It is material on record that the said order of injunction issued by the Civil Court in the said suit O.S. No. 6280/91 came to be vacated on 6.12.93. Subsequently, the said K.R. Prabhu had filed M.F.A. challenging the said order of the Civil Court vacating the order of injunction. Even the said M.F.A. came to be disposed of in or about April 1994. Immediately, thereafter, the opposite party made the payment of a sum of Rs. 3,32,117.17 to the complainant on 6.5.94. The learned Counsel for the opposite party filed a Memo in this regard, in this complaint, on 17.4.95. The said Memo reads as under: "The respondent submits that it has paid a sum of Rs. 3,32,117.17 by Cheque No. 0469510 dated 12.1.94 in favour of the complainant in full payment of the amount due under the Bank guarantees No. 26/2 dated 11.1.88 and 26/4 dated 27.2.88, under cover of its letter dated 6.5.94, in view of the pendency of MFAs 2196 & 2197 of 1993 on the file of the High Court of Karnataka at Bangalore, wherein the learned Counsel of the complainant herein had submitted before the Hon''ble Court that payments will not be insisted upon during the pendency of the appeals. The cheque was sent after the disposal of the appeals. 2. It is submitted that the complaint may be dismissed as infructuous. The complainant has also surrendered the aforesaid original Bank guarantees duly discharged to the respondent."
THE said Memo which has not been rebutted by the complainant shows that the complainant had submitted before the High Court pending disposal of MFAs that payments would not be insisted upon pending disposal of the MFAs. As soon as the MFAs came to be disposed of, the opposite party honoured its commitment of making payment of the said sum of Rs. 3,32,117.17 to the complainant on 6.5.94. Having regard to these facts and in the circumstances of the case, we are constrained to hold that the opposite party had not committed any deficiency in service in not making payment of the Bank guarantee amount when it was demanded for payment in the month of October-November 1991.
IN the result, therefore, this complaint fails and it is dismissed. The parties are directed to bear and pay their own costs. Complaint dismissed.