A numberice of motion was taken out for these interim reliefs.
The appellant wrote to the second respondent on 26th September, 1995, and alleged for the first time that the agreements had been entered into on behalf of the Finlay Mills and Gold Mohur Mills which had been nationalised on 27th June, 1995.
The aforesaid textile undertakings were, thereby, vested in the appellant with effect from 1st April, 1994.
The Textile Undertakings Nationalisation Ordinance, 1995 was promulgated on 27th June, 1995.
The letter stated that only the sum of Rs.
The appellant agreed to pay for the kapas by demand draft within 30 days of delivery to itself.
The amount of Rs.2,27,900/ was paid on 28th April, 1995, to the first respondent.
aggrieved thereby, the appellants are in appeal by special leave.
The appeals were dismissed by the Division Bench on 11th October, 1995 and 17th October, 1995.
With effect from 18th October, 1983, the management of the textile undertakings specified therein was vested in the Central Government by virtue of the Textile Undertakings Taking Over of Management Act, 1983.
Pursuant to its obligation aforementioned, the appellant furnished the irrevocable bank guarantee, issued by the second respondent, to the first respondent whereunder the second respondent unequivocally and unconditionally agreed to pay the first respondent on demand the price of the kapas number paid by the appellant.
This prayer for ad interim relief was rejected on 10th October, 1995.
The appellant agreed thereunder to furnish an irrevocable bank guarantee in the sum of Rs.50 lakhs to the first respondent in respect of the price of the kapas purchased under the said agreements, the bank guarantee to be invoked if payment of the price was number made by the appellant within 30 days of supply.
The balance amount pertaining to deliveries prior to 1st April, 1994, companyld number, it was alleged, be enforced against the appellant and the second respondent was, therefore, called upon number to make payment under the bank guarantee.
Appeals were filed by the appellants against the two orders aforementioned refusing ad interim relief.
The agreement required the appellant to give an irrevocable bank guarantee of the value of Rs.50 lakhs in favour of the first respondent to companyer the price of the kapas.
The first bank guarantee was procured by the appellant from the second respondent.
The first respondent invoked the bank guarantee for the balance amount.
Thereunder the appellant was to procure kapas the kapas would be processed at the first respondents ginning factory and it would be sold to the appellant.
2,27,900/ was due by the appellant on account of the said agreements because that amount pertaining to deliveries subsequent to 1st April, 1994.
Similar agreements were entered into from time to time for subsequent periods, the last being on 25th April, 1995.
It was dated 11th April, 1991, and it was extended from time to time until 1st October, 1995.
The prayer for ad interim relief thereon was rejected on 7th October, 1995.
Thereupon the appellant filed a suit in the High Court praying for a declaration that the bank guarantee stood discharged and or was void and of numberlegal effect for a mandatory permanent injunction restraining the first respondent from receiving any money under or in respect of or pursuant to the bank guarantee and restraining the second respondent from making any payment to the first defendant under the bank guarantee and for interim and ad interim reliefs in these terms.
On 4th February, 1991, the appellant entered into an agreement with the first respondent.
When issuing numberice on the special leave petition, this Court stayed encashment of the bank guarantee but there is numbermention of any interim relief in the order granting leave.
The appeal arises in the following circumstances, shortly put.
BHARUCHA, J. The judgment and order of a Division Bench of the High Court at Bombay is the subject matter of this appeal.
