9911796707
TMI Blog1996 (1) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... contractor") submitted its tender offer for the work which was conditionally accepted by the appellants on 30.3.1967. On 6.1.1968, the second respondent, the Central Bank of India (hereinafter called "the Bank"), executed performance guarantee No.57/22 whereby it guaranteed that the contractor would faithfully conform to the terms and conditions of the contract to be entered into between the appellants and the contractor. Under the terms of the guarantee, the Bank was jointly and severally liable with the contractor for the latter's default in performance; the liability of the Bank being limited to ₹ 14,12,836/-, i.e. 5% of the contract price. The guarantee was to remain in force till 3.7.1972. Soon thereafter, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Code. That section deals with the doctrine of res judicate and provides that any matter which might or ought to have been made a ground claim they had incurred expenses totalling ₹ 1,44,18,970.24. At this stage, on 21.6.1972, the appellants filed Short Cause Suit No. 491/72 only against the Bank on the original side of the Bombay High Court praying for the recovery of ₹ 14,12,836/-, which was the amount stipulated in performance guarantee No.57/22, with interest. It would be pertinent to note that the suit was filed before the guarantee lapsed on 3.7.1972. On 17.1.1983, the Bombay High Court dismissed the suit for non-joinder of parties, holding that the contractor was a necessary party for deciding the issue of default and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd finally decided by a Court competent to try such suit. That clearly means that on the matter or issue in question there has been an application of the judicial mind and a final adjudication made. If the former suit is dismissed without any adjudication on the matter in issue merely on a technical ground of non-joinder, that cannot operate as res judicate. In its impugned order, the High Court of Bombay has taken note of the fact that the Short Cause Suit was dismissed on the technical ground of non-joinder of a necessary party i.e. the contractor. It has, however, stressed the fact that in the appeal against the Order of the lower Court, the appellants had made the contractor a party and yet the appeal was dismissed. The High Court has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a bar to Spl. Civil Suit No. 27/83. The plea based on the principle of res judicata fails. We may now deal with the issue involving Order 2 Rule 2 of the Code which reads as under: "2. Suit to include the whole claim. - (1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any court. (2) Relinquishment of part of claim. - Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished. (3) Omission to sue for one of several reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating to the work. In the plaint of the Short cause suit, the foundation of the appellants claim rested upon the performance guarantee No.57/22. The basis of the appellants' claim was that under the terms of the bank guarantee, the Bank was liable to make good to the appellants all losses that became due by reason of any default on the part of the contractor in the proper performance of the terms of the contract. The appellants annexed particulars and laid out facts to show that the contractor had, by allegedly abandoning the work, failed to observe the terms of the contract. The appellants further alleged that these actions of the contract had caused them to incur losses of ₹ 76,37,557.76. However, in view of the limitation pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to give rise to a cause of action separate from that of the underlying contract. However, in the present case we are handicapped because the High Court (both the learned Single Judge and Division Bench) had no occasion to analysis the nature of the bank guarantee. We, therefore, refrain from making any observation regarding the true nature of the bank guarantee except pointing out that the two causes of action may not be identical. That would be a matter for the Trial Court to consider on a true analysis of the bank guarantee at the appropriate stage. In the plaint of the Spl. Suit, the main relief sought by the appellants was on the basis of the contract entered into between the appellants and the contractor. The appellants alleged a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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