In a commercial transaction, the principal always pays an advance sum on the basis of a guarantee furnished by the bankers. The bankers are bound to perform their part of the agreement without any demur whatsoever.

1. This first appeal arises out of a judgment and decree dt. 23-12-1981 passed by Shri D. Kisku, Subordinate Judge, 1st Court, Dhanbad in Money Suit No. 28 of 1979, whereby and whereunder the said learned Court decreed the plaintiffs-respondents suit.

2. The facts of the case lie in a very narrow compass.

3. The plaintiff invited tender for painting of equipments, structures, piping, flooring, foundation etc. for Sindiri Modernisation Project at Sindiri. M/s. Bharat Painters, a partnership firm submitted tender. The said Bharat Painters was impleaded in the suit as defendant No. 2. The defendants-respondents No. 3 to 7 were the partners of the firm of defendant No. 2. In relation to the aforementioned contract, a bank guarantee was furnished by the defendant No. 2 on 14-11-1977 for a sum of Rs. 88,000.00 in favour of the plaintiff. In pursuance whereof, the plaintiff-corporation advanced 10 per cent value of the order to be received by the defendant No. 2 and an initial advance to the extent of Rs. 88,000.00 was made by the plaintiff to the defendant No. 2 against the aforementioned bank guarantee on 16-11-1977.

4. The plaintiff alleged that the said defendant No.2 and/or its partners have committed various acts of omissions and commissions and as a result whereof the said bank guarantee (has?) become enforceable.

5. The plaintiff issued a notice upon the appellant-Bank to pay the amount covered by the aforementioned bank guarantee but the appellant failed and/or neglected to do so. The appellant, thereafter, filed the aforementioned suit for recovery of a sum of Rs. 1,05,505.00 being the principal of Rs. 88,000.00 aforementioned together with the interest thereupon.

5A. The learned Court below, by reason of the impugned judgment has passed a decree only as against the appellant for a sum of Rs. 88,000.00 , and, further, directed that the plaintiffs would be entitled to interest at the rate of 6 per cent per annum from 16-11-1977 till the date of payment of that sum to the defendant No. 2 to 30th March, 1979 for withholding the money of the plaintiffs.

6. Mr. A. N. Deo, the learned counsel appearing on behalf of the appellant, firstly, submitted that the suit was barred by limitation. According to the learned counsel, the bank guarantee had been made on 14-11-1977, and the suit could have been filed only within a period of six months during which the aforementioned bank guarantee was in force.

7. It is, however, admitted that the said bank guarantee was revalidated till 1-9-1979 whereas the suit was filed 30th March, 1977.

8. Mr. Deo, further submitted that in any event, suffered loss or damages by the plaintiff was a condition precedent for enforcing the bank guarantee, and, as in the instant case, the plaintiff did not allege that it has suffered any loss or damage because of any acts of omissions and commissions on the part of defendant No. 2 and/or its partners; the said bank guarantee could not have been enforced as against the appellant.

9. Mr. V.M.K. Sinha, the learned counsel appearing on behalf of the respondent, on the other hand, drew my attention to Cl. 12 of the aforementioned bank guarantee dt. 14-11-1977 which was marked as Ext. 1.

10. The learned counsel further submitted that in terms of Cls. 1 and 2 of the aforementioned deed of bank guarantee dt. 14-11-1977, the appellant bound itself to pay the amount guaranteed to the plaintiff without any demur whatsoever, and, in this view of the matter, the objection raised by Sri Deo has no substance.

11. In view of the rival contentions of the parties, the following questions arise for consideration of this appeal:-

(A) Whether the suit filed by the plaintiff-respondent was barred by limitation?

(B) Whether the suit was maintainable at the instance of the plaintiff although, it did not plead and prove any breach of contract on the part of the defendant No. 2 ?

12. Re-question-A Clause 12 of the aforementioned bank guarantee reads as follows:-

"Notwithstanding