( 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