JUDGMENT

1. This commercial division summary suit is instituted for recovery of a sum of Rs.8,56,00,000.00 alongwith interest at the rate of 17.40% p.a. from 26/2/2018, the date the bank guarantees, which form the basis of the suit, were invoked.

2. The plaintiff and defendant are the banking companies. Initial transaction was between the plaintiff and Vijaya Bank, which merged with the defendant, under an amalgamation scheme with effect from 1/4/2019.

3. The material averments in the plaint can be summarised as under:

(a) On 9/11/2016, the plaintiff had sanctioned a Gold Metal Loan to the tune of Rs.100.00 Crores to M/s. Nakshatra Brand Ltd. (M/s. Nakshatra) in accordance with terms and conditions incorporated therein. One of the term was that M/s. Nakshatra would secure the loan by furnishing a Bank Guarantee covering 110% margin of the limit under the loan. At the request of M/s Nakshatra on 15/5/2017 the defendant Viajaya Bank, issued Bank Guarantee No.51011BGIS170040, for or a sum of Rs.2,83,00,000.00 towards security of the gold loan sanctioned by the plaintiff equivalent to the notional international price of 10 kg. gold to M/s. Nakshtra. The issuance of the said bank guarantee