An ex-parte injunction on a bank guarantee is impermissible unless egregious fraud or irretrievable injustice is established; the bank guarantee is an independent contract governed by its terms.

JUDGMENT :

G.S. KULKARNI, J.

1. This appeal is directed against an ex-parte order dated 9 February 2023 passed by the learned Single Judge on interim application (L) No. 31678 of 2023 filed in the Commercial Suit in question. By the impugned order, the learned Single Judge has granted an ex-parte injunction in terms of prayer clause (a) and (b) of this application. The relief as granted by the impugned order in terms of prayer clause (a) and (b) is required to be noted which reads thus:

“(a) That this Hon’ble Court be pleased to pass appropriate orders granting ex-parte stay on the invocation by respondent no. 1 dated 7 November, 2023 of the Bid Bond/Performance Guarantee (Exhibit X).

(b) That the Hon’ble Court be pleased to pass an ex-parte order of temporary injunction restraining the respondent no. 2 by themselves and/or through their branches or howsoever otherwise in any manner whatsoever from making payment on the Bid Bond/Performance Guarantee and/or cause further costs and expenses to be incurred by the applicant.”

2. At the outset, we may observe that a coordinate Bench of this Court considering the fact that the impugned order was an ex-parte order by its order dated 9 February 2024 disposed of this appeal, considering that it would be appropriate for the appellant to move the learned Single Judge for vacating of the ex-parte order as permissible in law, on the premise that the suit was yet to be transferred to the City Civil Court. The said order passed by this Court read thus:

“1. The impugned Order dated 9th November, 2023 passed by the learned Single Judge is admittedly an ex-parte Order passed in the Suit in question. The proper course of action for the Appellant would be to move an application for vacating of such order, on the contentions which are sought to be raised by the Appellant in the present Appeal.

2. We accordingly dispose of this Appeal, with liberty to the Appellant to move the learned Single Judge, if the proceedings of the Suit are yet to be transferred to the City Civil Court.

3. All contentions of the parties on such Application are expressly kept open.

4. In view of the disposal of the Appeal, Interim Application (L) No. 2705 of 2024 does not survive, it would stand dispose of.”

3. However the appellant assailed the aforesaid order before the Supreme Court in the proceedings of petition for Special Leave to Appeal No. 9747 of 2024, on which the Supreme Court passed an order on 17 May, 2024. Considering the fact that the commercial suit has stood transferred to the City Civil Court, it was observed that it would be appropriate for this Court to decide the present appeal on merits. Accordingly this Commercial Appeal was restored to the file of the Court for expeditious disposal, as it pertained to an injunction on the invocation of bank guarantee. We, accordingly, adjudicate the present appeal, as ordered by the Supreme Court.

4. The Commercial Suit in question was filed by respondent No. 1- Plaintiff against four defendants, Fayum Gas Company - defendant No. 1 (for short ‘Fayum Gas’), State Bank of India, Overseas Branch, defendant No. 2 (for short ‘SBI’), Quatar National Bank Alahli - defendant No. 3 (Appellant) and Central Bank of Egypt - defendant No. 4.

5. The reliefs which are prayed in the suit are primarily against defendant No. 1 - Fayum Gas Company and defendant No. 2 - State Bank of India, Overseas Branch. The prayers as made in the Suit reads thus:

“(a) That this Hon’ble Court be pleased to declare that Defendant No. 1’s termination of the Purchase Order dated 18th April 2023 is null and void and not binding on the Plaintiff.

(b) That the Hon’ble Court be pleased to declare that the invoation by Defendant No. 1 dated 7th November 2023 of the Bid Bond (Exhibit X) is null and void and has no effect in law.

(c) That the Hon’ble Court be pleased to declare that Defendant No. 1 is not entitled to invoke the Bid Bond at this stage.

(d) That the Hon’ble Court be pleased to pass an order of permanent injunc