THE HON’BLE SMT. JUSTICE TIRUMALA DEVI EADA CITY CIVIL COURT APPEAL No.143 OF 2019

JUDGMENT:

This is an appeal filed by the appellants, being aggrieved by the judgment and decree, dated 11.09.2018 passed in O.S.No.651 of 2012 by the learned II Additional Chief Judge, City Civil Court at Hyderabad (for short “the trial Court”).

2. The appellants herein are the defendants and the respondent is the plaintiff before the trial Court. The parties herein are referred to as they were arrayed in the suit before the trial Court for the sake of convenience and clarity.

3. The case of the plaintiff before the trial Court is that the plaintiff executed certain works for the Government of AP under a Contract and that during the execution of contract certain disputes arose between the Government and the plaintiff and consequently the contract was terminated, thus, he filed a suit in O.S.No.421 of 1992 on the file of V Senior Civil Judge, City Civil Court., Hyderabad for declaration that the proceedings issued by the Superintendent Engineer are null and void. He further filed another suit in O.S.No.326 of 1995 seeking recovery of money. The V Senior Civil Judge, City Civil Court, Hyderabad passed common judgment in both the suits wherein the suit in O.S.No.326 of 1995 was partly decreed for a sum of Rs.3,65,60,989/-, against which the Government of Andhra Pradesh has filed CCCA No.19 of 2002 and the High Court has granted interim stay in the said appeal vide orders dated 30.01.2012 in CMP No.1289 of 2002 directing the State to deposit 35% of the decreetal amount and permitting the plaintiff to withdraw half of the deposited amount by furnishing security. The said order became final as the Hon’ble Supreme Court refused to interfere with the order. In obedience to the orders of the High Court, the plaintiff approached the defendants bank with a request to furnish the bank guarantee in favour of the Court and upon scrutinizing the orders, the defendant bank has issued Bank Guarantee No.4 of 2002 for a sum of Rs.1,02,81,817/- on 11.07.2002 and another Bank Guarantee bearing No.22 of 2003 for a sum of Rs.12,26,000/- on 06.01.2004 in favour of V Senior Civil Judge, City Civil Court, Hyderabad, initially for a period of two years.

4. It is his case that the said Bank Guarantees were valid and were extended by the defendants at the instance of the plaintiff till 10.07.2008 and 05.01.2009 respectively. Subsequently, by virtue of the orders of the High Court dated 29.01.2009, the matter was referred to mediation and as a result of the conciliation, the State Government issued G.O.Ms.No.17, dated 18.02.2010 for settlement of the case. On receiving the copy of the said G.O., the plaintiff addressed a letter dated 23.02.2010 to the defendant informing about the final settlement and requested to cancel the bank guarantees and release the margin money deposit and interest accrued and to credit the same into his housing loan account with the defendants. The above said case was disposed by the High Court vide orders dated 12.04.2010 by recording the amicable settlement in terms of G.O.Ms.No.17. The said fact was also informed to the defendants by the plaintiff vide its letter dated 06.08.2010 by enclosing the orders of the High Court and once again requested the defendant bank to transfer all the margin money and interest thereon to his housing loan account lying with the defendants bank and to return the collateral security documents.

5. It is the case of the plaintiff that the defendants have not extended the bank guarantee from the date of expiry i.e. on 10.07.2008 and 05.01.2009 respectively. Thus, he is not supposed to pay any commission to the defendants, as the defendants have admitted that the bank guarantees expired on respective dates. The first defendant addressed a letter to the plaintiff refunding the margin money to the plaintiff by unilaterally deducting the commission and issued a demand draft for Rs.9,44,880/-. The plaintiff received the demand