A person who has a vital interest in the outcome of a suit should be allowed to intervene in the proceedings to protect their interests.

1. THIS suit has been filed by the Reliance Jute and Industries Ltd. and five others against the Oriental Bank of Commerce for enforcement of a guarantee issued by the defendant bank being guarantee No. 2 of 1979 in favour of one Paban kumar Kanoria guaranting the due payment and discharge of certain liabilities undertaken by one Kamal Krishna Singh to the said Paban Kumar Kanoria to the extent of Rs. 5,00,000/ -.

2. AFTER filing the suit the plaintiffs have made an application for iiridl judgment and decree for Rs. 5,00,000/- with interim interest on judgment and costs under chapter Xllia of the Rules of the Original side of this Court. At this stage the said kamr. l Krishna Singh seeks to intervene in the proceedings and with leave of Court has made the presant application praying inter alia that leave be given to him to intervene in these proceeding including the application for in a judgment made by the plaintiffs and to file affidavit and make submissions before any order is passed in the said proceedings ; that he be added as a party to the suit stay of further hearing or passing of any order on the application for final judgment made by the plaintiffs.

It is a matter of record that prior to the filing of the suit Kamal Krishna instituted arbitration proceedings in Indore. The Bank as also the plaintiffs are parties to the said arbitration which is pending. Kamal Krishna contends that he is vitally interested in this suit inasmuch as in the event a decree is passed against the Bank. It is ultimately he as a confirming party to the said guarantee he will have to meet the claim of the Bank as the principal debtor. He contends further that there are substantial defences to the claims of the plaintiffs in this suit.

3. IT is contended that plaintiffs are not the original creditors but the assignees of the guarantee and that this suit has not been filed in the proper form. It is also contended that the cause of action of the plaintiffs in this suit in its entirety arose outside the jurisdiction of this Court. It is further contended that the guarantee was conditional and personal and cannot be enforced at this stage. It is lastly contended that the plaintiffs have filed this suit in order to circumvent the arbitration proceedings. It is contended on behalf of the plaintiffs on the other hand that the suit is maintainable. It is further contended that kamal Krishna who seeks to intervene in this suit might be a proper party but is not a necessary party to this suit and that the whole object of the present application is to delay the realisation of the plaintiffs' claim. In support of his contentions the following decisions were sited on behalf of the intervenor. (a) Elian and Rabbath (Trading as Elianandrabbath vs. Matsas and Matsas reported in 1966 (2) Lloyd's List Law Reports 495. In this case, where an arbitration was pending between ship owners and the charterers in respect of Demurrage and a Bank guarantee furnished in respect thereof was sought to be enforced the shippers filed a suit for a declaration that the guarantee was not valid and prayed for an injunction to restrain the owners and their agents from proceeding to enforce the guarantee. In the court of Appeal it was held by the Lord denning, M. R. that though the shippers were not parties to the Bank guarantee, nevertheless they had an important interest in it. The shippers would be debited with the amount if the guarantee was enforced and ultimately might have to sue the shipowners in respect of their claims. It was held that the shippers could shorten the disputes by suing the shipowners at once for an injunction restraining the latter from enforcing the guarantee at an interlocutory stage. (b) The Minerals and Metals Trading corporation of India Ltd. vs. Surajbalaram sethi and anr. reported in 74 C. W N. 991. In this case a Division Bench of this Court held, inter alia observed as follows :-

"IT is true that the guarantees were executed by the Bank in