The valuation of a suit for declaration and injunction to avoid forfeiture of a bank guarantee can be based on the amount of the guarantee, as this amount represents the value of the relief claimed.

The judgment of the Court was as follows :––

Sen, J.: In this appeal, the plaintiff is challenging the validity of an order dated July 19, 1976, passed by the Learned Judge, 10th Bench, City Civil Court at Calcutta in Title Suit No. 181 of 1976 whereby the Learned Judge directed the plaint to be returned to the filing lawyer for presentation before the appropriate court on the view that the said court has no pecuniary jurisdiction to entertain the suit.

2. In terms of a contract entered into between the plaintiff/appellant and the first respondent (defendant No.1) the plaintiff supplied to the said respondent some amount of G. S. wire. Under the terms of the said contract, the plaintiff was entitled to 100% payment against the railway receipt along with other necessary documents presented through the bank on furnishing a consolidated bank guarantee for 10% value of the order from a scheduled bank of India duly executed in terms of the agreement. Admittedly such a bank guarantee was furnished by the plaintiff and the defendant/respondent No.2 Allahabad Bank for a sum of Rs. 91,900/- on January 28, 1975. The guarantee bond provided that in consideration of the premises the guarantor undertakes that the contractor shall duly supply the materials of correct quantity and strictly in accordance with the contract failing which the guarantor shall pay to the purchaser on demand such amount or amounts as the guarantor may he called upon to pay to the maximum aggregate of the aforesaid sum of Rs. 91,900/-. The bond further provided that the guarantor shall pay to the purchaser on demand the aforesaid sum without demur and without requiring the purchaser to invoke any legal remedy that may be available to it to compel the guarantor to pay the same or to compel such performance by the contractor provided that where the guarantor considers the demand of the purchaser unjustified it shall nevertheless pay the same though under protest to the purchaser and shall not withhold any payment on that account.

3. A dispute arose between the plaintiff/appellant and the first respondent on the point as to whether the plaintiff/appellant had duly fulfilled its obligation under the contract and strictly in accordance therewith or not and the first respondent forfeited the bond and called upon the guarantor defendant/respondent Allahabad Bank to remit the aforesaid sum of Rs. 91,900/-. In the aforesaid background, the plaintiff/appellant instituted the aforesaid suit, being Title Suit No. 181 of 1976 in the City Civil Court of Calcutta. The plaintiff pleaded that there had been due compliance on his part of the terms of the contract, and as such, there exists no ground for forfeiting the bond. It was alleged on the other hand that bills to the tune of Rs. 1,53,101.10 presented by the plaintiff/appellant stood unpaid by the first respondent. Accordingly, it was claimed that the first respondent "is not entitled to enforce and/or to give effect to the bank guarantee dated 28.1.1975 and to realize the amount as covered under the bank guarantee from defendant No.2 in giving effect to the bank guarantee". The plaint then proceeded to recite "In view of the circumstances the plaintiff is entitled to get a decree for declaration, that the defendant is not entitled to enforce and/or to give effect to the bank guarantee executed between the parties to the suit on 28.1.1975 and to realize the amount as covered under the bank guarantee from defendant No. 2 in giving effect to the said bank guarantee. The plaintiff is further entitled to get a decree for permanent injunction restraining the defendant No.1 from enforcing and/or giving effect to the bank guarantee executed between the parties to the suit on 28.1.1975 and from realizing the amount as covered under the blink guarantee from defendant No.2 in giving effect to the said bank guarantee". On the pleadings as aforesaid, the plaintiff prayed for declaration and injunction on terms, as aforesaid. The suit