The term 'action' in a Bank Guarantee, which provides that unless a 'suit or action' to enforce the claim is filed before the expiry date, the plaintiff's rights under the Guarantee would be forfeited, refers only to a judicial action in a Court of Law, which in most cases means a Civil Suit.

MONORANJAN MALLICK, J.

( 1 ) TRIPURA Jute Mills Ltd. has filed the Suit against the Standard Chartered Bank, the defendant for recovery of a sum of Rs. 10,38,440 on the following allegations :

( 2 ) BY a Tender Notice published in August 1974 the plaintiff invited tenders from the manufacturers of machinery for the supply and delivery of plant and equipment required for a Jute Mills to be set up at Agartala in the State of Tripura. By the letter, dated 28th September, 1974 addressed to the plaintiff, M/s. Bird and Co. Ltd. (hereinafter referred to as the said sellers) offered to manufacture and sell the machinery required by the plaintiff. Thereafter the negotiations started between the plaintiff and the sellers regarding the terms and conditions of the proposed contract and in course of such negotiation it was agreed that the plaintiff would pay the sellers a total sum of Rs. 40,63,844 by way of advance, in instalments provided the sellers furnished a Bank Guarantee or Guarantees in favour of the plaintiff for the sums to be advanced. Thereafter at the request of the sellers and in consideration of the premises, the defendant executed in favour of and delivered to the plaintiff a Bank Guarantee, dated April 28, 1976, bearing No. Sec. l0/75/27 for the sum of Rs. 10,38,440 being the first instalment, the aforesaid advance payment. The terms and conditions of the said Bank Guarantee have been set out by the plaintiff in paragraph 4 of the plaint. Such Bank Guarantee would remain in force and be valid upto April 24, 1976. A copy of the said Bank guarantee is annexed herewith as Annexure' A ' to the plaint. On 8th May, 1975 a formal contract in respect of the manufacture and supply of the said machinery was executed by the plaintiff and the sellers and in terms thereof on 8th May, 1975 the plaintiff made an advance payment of Rs. 10,38,440 to the sellers. On or about March 30, 1976, the period of the aforesaid Bank Guarantee was extended by the defendant till 24th April, 1977. The sellers committed various breaches of the said contract dated 8th May, 1975 and became liable to refund or repay to the plaintiff the amount advanced as aforesaid and consequently by the letter, dated 12th April, 1976 addressed to the sellers, the plaintiff demanded repayment of the said advance of Rs. 10,38,. 440. But the sellers wrongfully failed and/or neglected to pay the said sum or any part thereof and committed default in repayment of the said advance. Then by a letter dated 16th April, 1976 the plaintiff called upon the defendant Bank to pay the said sum of Rs. 10,38,440 but notwithstanding such demand the defendant and wrongfully failed and neglected to pay to the plaintiff the said sum or any part thereof. On 27th September, 1976 the sellers instituted, a Suit in the Ordinary Original Civil Jurisdiction in this High Court being Suit No. 559 of 1976 against the plaintiff and the defendant, inter alia, for cancellation of the Bank guarantee, dated 28th April, 1975 and for a perpetual injunction restraining the plaintiff from realising any sum under the said Bank Guarantee and also restraining the defendant from making any payment under the said Bank Guarantee. On the same date, the sellers applied for and obtained an ad interim Order of injunction. By an Order, dated November 4, 1976, the said Order of injunction was directed to continue till the disposal of the said application. But on March 10, 1977 the injunction application was dismissed and the ad interim Order was vacated. However, the operation of the said Order, dated March 10, 1977 was stayed for a week. On March 17, 1977 the sellers preferred an appeal against the said Order, dated March 10, 1977 being Appeal No. 84 of 1977 and obtained ad interim Order of injunction which continued till the disposal of the appeal. On June 8, 1978 when the appeal No. 84 of 1977 was dismissed the said Order of injunction was, vacated and the operation of the Order was ordered to be stayed for a fortnigh

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