( 1 ) THIS order shall dispose of defendant s application under order 37 Rule 3 of the Code of Civil Procedure for leave to defend the suit filed by plaintiff under Order 37 of the Code. The facts relevant for the disposal of this application, briefly stated are that the plaintiff a Public Sector Company was supplying goods to a company known as "montari Industries Ltd. " on credit basis. To ensure due payment of the price of the goods a Bank Guarantee dated 9/12th september, 1994 for an amount not exceeding Rs. 50 lakhs was furnished to the plaintiff by the defendant bank. This Bank Guarantee was irrevocable. Defendant undertook to pay the amount due without any demur on the demand of the plaintiff as and when M/s. Montari Industries Ltd. failed to pay the amount of invoices within 30 days. The said Bank Guarantee was extended from time to time and the last extension was upto 7th September, 2000. When M/s. Montari Industries failed to pay the amount of the invoices raised by the plaintiff within 30 days the plaintiff invoked the Bank Guarantee vide letter dated 29th May, 2000 and called upon the defendant Bank to make payment of Rs. 47,38,693. 69 within two days. M/s. Montari industries Ltd. also addressed a letter dated 31. 5. 2000 to the plaintiff in which it was admitted that there was a failure on their part to pay the dues of the plaintiff. The defendant vide its letter dated 8. 6. 2000 pleaded inability to honour the Bank guarantee and pay the amount in view of Section 22 of the Sick Industrial companies (Special Provisions) Act, 1985 (SICA) on the ground that M/s. Montari industries Ltd. was before BIFR. The plaintiff insisted for payment as the Bank guarantee was an independent contract between the plaintiff and the defendant and as such the defendant was bound to abide by the terms and conditions thereof by making payment. On the failure of Defendant to make payment present suit under Order XXXVII of the Code of Civil Procedure was filed for the recovery of Rs. 40,83,759. 82 along with costs and interest. In its application for leave to defend the defendant Bank has raised two grounds for grant of unconditional leave to defend the suit. The first ground is that in view of Section 22 of SICA the defendant bank was unable to honour the claim of the plaintiff and the suit filed by the plaintiff is not maintainable. The second ground is that the plaintiff as well as defendant are government undertakings and as such in view of the directions passed by the supreme Court in Oil and Natural Gas Commission v. Collector of Central Excise, the plaintiff is required to obtain clearance from the Government of India or the Committee constituted under the directions of the Government of India before the filing of the suit.

( 2 ) I have heard learned Counsel for the defendant-applicant and learned Counsel for the plaintiff. Learned Counsel for the defendant has referred to Section 22 of the SICA to contend that after its amendment in the year 1994 no suit for the recovery of money or a suit for the enforcement of any security or guarantee in respect of any loan or advance granted to sick company can be instituted and proceeded further except with the consent of the Board or the Authority, as the case may be. Learned Counsel for the plaintiff, however, contends that the bar created by Section 22 of SICA gets attracted only when a guarantee is in respect of a loan or advance granted to the sick company. He argues that in the present case no loan or advance was granted by the plaintiff to M/s. Montari Industries and only goods were supplied to it and as such the plaintiff was well within its right to invoke the Bank Guarantee and file the present suit. He also contends that a Bank Guarantee is an independent contract between the beneficiary and the bank and its performance is not dependent upon the adjudication of dispute, if any, between the beneficiary and the person at whose instance the Bank Guarantee was furnished