The main legal point established in the judgment is the determination of jurisdiction, misjoinder of cause of action and multifariousness, and the limitation of the suit with respect to the bank guarantees.

( 1 ) THE plaintiff, a company incorporated under the Companies Act, 1956, filed the present suit under Order XXXVII of the Code of Civil Procedure, 1908 (hereinafter referred to as the "said code") for the recovery of Rs. 85,60,000. 00 along with interest @ 20 per cent per annum.

( 2 ) IT is stated that one Dany Dairy and Food Engineers Ltd. (for short, "dany dairy"), which used to deal, inter alia, in the manufacture and sale of dairy equipments submitted proposals and offers for the supply, erection and commissioning of evaporating plant pursuant to which a meeting took place at the head office of the plaintiff and a formal purchase order was issued on 25. 05. 1998 to the local office and registered office of Dany Dairy.

( 3 ) THE terms and conditions included the furnishing of a bank guarantee and the defendant bank furnished three guarantees to the plaintiff, the details of which are as under:

S. No . Bank Guarantee Number ? Amount Date of Issue

Valid up to

1. 614 (Ex. P-3) Rs. 50. 00 lakh 9. 6. 1988

(reduced to ????? 13. 6. 1988

Rs. 25. 00 lakh ) 8. 12. 1988

extended on 10. 12. 1988, 27. 5. 1989, 5. 12. 1989 up to 8. 6. 1990 2. 615 (Ex. D-5) 16. 5 lakh ?? 9. 6. 1988

8. 6. 1989

extended on 27. 5. 1989 and 5. 12. 1989. Valid up to 8. 6. 1990 3. 626 (Ex. P-5) 12. 00 lakh 12. 9. 1988

11. 3. 1989

extended on 13. 4. 1989, 27. 5. 1989 and 5. 12. 1989. Valid up to 11. 6. 1989

( 4 ) IT is claimed that there was a default on the part of Dany Dairy consequent to which a demand notice was sent on 21/3/1990 for the encashment of the bank guarantees but the defendant failed to make payment.

( 5 ) A suit is stated to have been filed in the Court of the 1st Additional Civil judge Saharanpur in which the defendant was also impleaded. In the said suit, an injunction is stated to have been granted on 17/1/1991 restraining the defendant from making payments which was vacated on 13/2/1992. Thereafter, a telex is stated to have been sent on 4/6/1992 indicating approaches made to the head office, zonal office and other offices to which no reply was received. Thus, the present suit.

( 6 ) IT is claimed that the defendant works for gain at Delhi, the letters of guarantee were addressed to the plaintiff"s Delhi office and the sum guaranteed was payable at Delhi and thus, this court has the jurisdiction in the present matter.

( 7 ) THE defendant filed an application being. A. 8213/1993 for leave to defend, which was allowed vide order dated 7/7/1993 and the defendant was granted unconditional leave to defend.

( 8 ) THE defendant in the written statement has taken the stand that the present suit is liable to be stayed in view of the provisions of Section 10 of the said code. It is stated that a suit has been filed by Dany Dairy in the court of civil Judge, Saharanpur against the plaintiff and the defendant, inter alia for the grant of a decree of Rs. 66,901. 00 against the plaintiff and permanent injunction restraining the plaintiff from realizing the amounts towards bank guarantees which is being contested by the plaintiff. In that suit it is the case of Dany Dairy that the terms and conditions of the agreement had been fulfilled and on reconciliation of accounts between Dany Dairy and the plaintiff, a balance of Rs. 66,901. 00 was found to be due to Dany Dairy from the plaintiff. It is averred that the question whether there was any breach on the part of Dany Dairy in the performance of the contract is a question pending adjudication in that suit, which was instituted prior to the present suit. It is thus claimed that the present suit is liable to be stayed pending adjudication of the Saharanpur suit.

( 9 ) ANOTHER plea taken in the written statement is of lack of territorial jurisdiction of this court to try the present suit as the applications for the issue of the bank guarantees were received by the defendant at its branch in saharanpur and the said bank guarantees were also issued