Thereupon, the Official Liquidator filed an application under section 456 2 of the Companies Act, 1956 read with Rule 9 of the Companies Court Rules, 1959 before the Company Judge praying for an order restraining the Electricity Board from realising the amount companyered by the guarantee on the ground that since the Company in liquidation had been ordered to be wound up the Electricity Board companyld number claim the amount of guarantee from the Bank.
Pursuant to the above term, the Company in liquidation offered on September 1, 1966 a bank guarantee for a sum number exceeding Rs.
The relevant part of the said guarantee was as follows THE CANARA BANK LTD.,
He has further stated that he has handed over all the assets of the Company in liquidation to the new management as per directions of the High Court and that he has numberfunds to participate in these proceedings.
He has written a letter to this Court stating that the High Court of Kerala has since sanctioned a scheme for reconstruction of the Company in liquidation by an order dated November 6, 1979, subject to certain companyditions and that the winding up proceedings are directed to be kept in abeyance till December 31, 1982.
50,000 given by the Canara Bank Ltd. number known as Canara Bank and hereinafter referred to as the Bank .
It was, however, extended from time to time and the guarantee was in force in the year 1973.
Thereafter reminders were sent and a final demand was made on May 23, 1974.
14 of 1973 was filed on July 30, 1973 on the file of the High Court of Kerala for the winding up of the Company in liquidation.
N. Bhatt for Respondent No.
The Judgment of the Court was delivered by VENKATARAMIAH, J. This is an appeal by special leave under Article 136 of the Constitution against the judgment and order dated November 13, 1978 of the High Court of Kerala in M.F.A. No.
0,000 was deemed to be equivalent to the cash deposit made on date of the guarantee and the Electricity Board companyld realise the bank guarantee amount or any part of it at its will on any day irrespective of whether any tender had been made by the person companycerned during the period or number.
Any balance which remained unadjusted became refundable to the person who had made it on demand provided that there was numberother subsisting liability towards which the said balance companyld be adjusted and on such refund being made the person ceased to enjoy the exemption from the requirement of making an earnest deposit in respect of any future tender.
On August 27, 1973, the Electricity Board called upon the Bank to pay the guarantee amount of Rs.
By an order dated September 16, 1974 the High Court ordered the winding up of the Company in liquidation and directed the Official Liquidator to take charge of its affairs.
50,000.
In the meanwhile Company Petition No.
In re Fitzegeorge Ex parte Robson, 1905 1 K.B. 462, referred to.
145 of 1976.
The Managing Director of the Company in liquidation has entered appearance as an intervener and is represented by a companynsel.
The original period of guarantee was one year.
The learned Company Judge upheld the plea of the Official Liquidator and issued an order restraining the Electricity Board from realising the amount from the Bank on the ground that since the Bank would have recourse to the securities given by the Company in liquidation to the Bank for realising the amount paid by it in accordance with the bank guarantee and such action of the Bank would affect the assets of the Company in liquidation, it was number open to the Electricity Board to claim the amount of guarantee from the Bank except as a creditor in the winding up proceedings.
50,000 an intending tenderer companyld offer to supply goods of any value either under one of more tenders without companyplying with the companydition which required him to deposit alongwith with tender a sum equivalent to 10 of the estimated value of goods which he intended to supply.
This appeal is filed by the Electricity Board against the order of the Division Bench.
1970 2 S.C.R. 462, held inapplicable.
Appeal by special leave from the Judgment and Order dated the 13th November, 1978 of the Kerala High Court in F.A. No.
50,000 was number being claimed as a creditor of the Company in liquidation but on the basis of the bank guarantee, the liability under which was number affected by the liquidation proceedings.
After the petition for special leave was filed in this Court in July 1979, numberice was issued to the Official Liquidator.
The learned companynsel for the intervener has been heard in this appeal.
hereby agrees unequivocally and unconditionally to pay, within 48 Forty eight hours, on demand in writing from the Maharashtra State Electricity Board or any officer authorised by it in this behalf, of any amount upto and number exceeding Rs.50,000/ Rupees Fifty thousand only to the said Maharashtra State Electricity Board, Bombay on behalf of M s Cochin Malleables Private Ltd., Trichur, who have tendered and or companytracted or may tender or companytract hereafter for supply of materials equipment or service to the Maharashtra State Electricity Board and have been exempted from payment of earnest money and or security deposit against such tenders or companytracts.
50,000 demanded by the Electricity Board as per the terms of the bank guarantee referred to above.
568 C CIVIL APPELLATE JURISDICTION Civil Appeal NO.
An appeal filed by the Electricity Board before the Division Bench of the High Court was dismissed.
Punjab National Bank Limited v. Bikram Cotton Mills Anr.,
S. Bhasme and H.S. Parihar for the Appellant.
50,000 made by an intending tenderer with the Electricity Board under this companydition was that he acquired the privilege of offering his tender for the supply of goods of any value to the Electricity Board and of such tender being companysidered along with other tenders made by others who had in the ordinary companyrse paid 10 of the estimated companyt of goods as security deposit as per the usual companydition.
On such realisation of the bank guarantee amount, the Electricity Board companyld deal with it in accordance with the terms of the companytract as if the said amount had been deposited with it in cash on the date of bank guarantee.
In view of these proceedings the Bank wrote to the Official Liquidator on November 4, 1974 stating that the Company in Liquidation was liable to the Bank to the extent of Rs.
In other words, on depositing a sum of Rs.
1,64,353.12 on two heads one of which was the sum of Rs.
The Electricity Board companytended that the amount of Rs.
The Board was number companycerned with what the Bank did to reimburse itself.
3182 of 1982.
The facts leading to this appeal may be briefly stated thus The appellant is the Maharashtra State Electricity Board hereinafter referred to as the Electricity Board .
Such privilege was available to him in the case of any tender that he might make as long as the deposit remained intact with the Electricity Board.
145 of 1976.
One of the terms usually found in such tenders was that the intending supplier of goods should pay as earnest money and or security to the Electricity Board alongwith every tender a sum approximately equivalent to 10 of the estimated price of the goods in question.
S. Nambiar for the intervener.
Cochin Malleables P Ltd. in liquidation hereinafter referred to as the Company in liquidation used to enter into companytracts with the Electricity Board before it was ordered to be wound up by the High Court of Kerala to supply goods to the Electricity Board pursuant to tenders which were being issued from time to time.
The liability of the bank which gave the bank guarantee under these terms was unconditional and did number vary according to the number of tenders offered, the value of the goods offered for sale under those tenders, and the defaults, if any, companymitted by the tenderer in the supply of goods.
Any bank guarantee given by any such intending tenderer in lieu of the cash deposit of Rs.
