Bank Guarantee =In rare cases when a Court interferes and restrains invocation of 4 bank guarantee, ordinarily a direction is issued for renewal of the bank guarantee if its validity is likely to expire in the near future. In the present case, however, the validity of the bank guarantee had expired prior to the order of injunction being made but the claim period was valid till 21.4.2009. The petitioner, in the considered view of this Court, took advantage of the omission in the order dated 19.3.2009 as well as in the subsequent order dated 23.3.2009 and attempted to steal a march by flatly refusing to give consent in respect of extension of bank guarantee. In all fairness, he should have consented to such extension having obtained an interim order by invoking the equity jurisdiction of this Court. This is a case where the maxim actus curiae nemenim gravabit would apply with full force. In the event the writ petition filed by the petitioner ultimately fails, the Corporation would find itself in a difficult position in the absence of any security.

1 1.4.2010 CAN 10274 of 2009 with W.P.No.5420 (W) of 2009 Sanjay Jhunjhunwalla …Petitioner Vs. Damodar Valley Corporation & ors. …Respondents Mr. M. Bose, Mr. S.G. Muskara …for the petitioner Mr. S. Pal …for the D.V.C. Mr. K. Dutta, Mr. P. Sinha, Mr. A. Mitra, Mr. D. Dasgupta, Mr. S. Shaw, Mr. S. Roy …for the respondent no.5 Alleging that Damodar Valley Corporation, respondent no.1, fraudulently invoked a conditional bank guarantee for Rs. 5,91,000/- furnished by IndusInd Bank Ltd., respondent no.5, the petitioner had moved this writ petition ex parte on 19.3.2009 before a learned Judge of this Court. His Lordship was satisfied that the bank was not liable to release payment merely on the demand of the Corporation being the beneficiary and that the beneficiary had to satisfy the bank that there had been a breach on the part of the petitioner, being the contractor. An order of injunction was passed restraining the Corporation from receiving any payment under the subject bank guarantee till the returnable date i.e. 23.3.2009. 2 On 23.3.2009, the Corporation made a prayer for vacating of the ex parte order dated 19.3.2009. Upon hearing the learned Advocate for the Corporation, His Lordship held that the terms of the guarantee were not unconditional and that the bank guarantee did not appear to provide for a mere assertion in such regard to be conclusive as to the bank’s liability under the guarantee. The order of injunction was directed to continue. Affidavits were called for and the writ petition was directed to be listed for hearing in the Monthly List of June, 2009. Since validity of the subject bank guarantee expired, the Corporation requested the bank to extend its validity suitably. Upon receipt of such request of the Corporation, the bank sought for consent of the petitioner for extension of the bank guarantee till 15.7.2009. The petitioner by his letter dated 6.4.2009 refused to give consent for extension of the bank guarantee. The petitioner thereafter noticed that an amount of Rs. 6,57,576.74p was debited from his current account. Feeling aggrieved by such action of the bank, the present application (CAN 10274 of 2009) has been filed praying for an order on the bank to forthwith credit the petitioner’s bank account with such sum and a further order has been prayed for on the bank not to act or take any further steps in terms of the request of the Corporation to extend the bank guarantee till 15.7.2009. 3 The bank has opposed the application by filing counter affidavit. According to it, the disputed amount has been debited from the petitioner’s current account by exercising banker’s lien and by renewing the fixed deposit maintained by the petitioner with the bank by opening another fixed deposit account. The bank justifies its action by referring to the agreement for accepting deposit as margin for bank guarantee/letter of credit executed by the petitioner in its favour. Mr. Bose, learned Advocate appearing for the petitioner, has contended that the bank has acted in a high-handed manner without seeking any clarification from the Court. The petitioner having denied consent for extension of the subject bank guarantee on the prayer of the Corporation, it had no business to open a further fixed deposit account and thereby debit the aforesaid sum from the petitioner’s current account. Mr. Bose is justified in his challenge to the impugned action of the bank in so far as it failed to obtain a prior clarification from the Court but that is not considered to be sufficient reason for granting relief as claimed in the application. By its order dated 19.3.2009, subsequently extended by order dated 23.3.2009, the Court had granted interim relief to the petitioner pending adjudication of the writ petition. It is well-known that interim order is passed in aid of the final relief. In rare cases when a Court interferes and restrains invocation of 4 bank guarantee, ordinarily a direction is issued for renewal of the bank guarantee if its validity is likely to expire in the near future. In the present case, however, the validity of the bank guarantee had expired prior to the order of injunction being made but the claim period was valid till 21.4.2009. The petitioner, in the considered view of this Court, took advantage of the omission in the order dated 19.3.2009 as well as in the subsequent order dated 23.3.2009 and attempted to steal a march by flatly refusing to give consent in respect of extension of bank guarantee. In all fairness, he should have consented to such extension having obtained an interim order by invoking the equity jurisdiction of this Court. This is a case where the maxim actus curiae nemenim gravabit would apply with full force. In the event the writ petition filed by the petitioner ultimately fails, the Corporation would find itself in a difficult position in the absence of any security. This Court, therefore, finds no reason to grant orders as prayed for in this application. The same stands rejected. The bank shall keep the fixed deposit for the sum of Rs.6,57,576.74p renewed till final disposal of the writ petition. Urgent photostat certified copy of the judgment and order shall be given to the applicants, if applied for, as early as possible. 5 (DIPANKAR DATTA, J.)