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TMI Blog1995 (4) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... e merits with the consent of learned counsel for the parties. 2. The first respondent herein is a public limited company, having its factory at Hyderabad also. It is engaged in the business of manufacturing cables and conductors and also undertakes to manufacture machinery required in cable industry. The appellant is in the business of manufacturing telecommunication equipment and in particular jelly-filled telephone cables. It is also a public limited company. The appellant gave to the first respondent herein its purchase order dated October 14, 1991, for supply of certain mentioned therein subject to the terms and conditions therein printed. In pursuance of one of the terms and conditions of the said purchase order the first resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be for a period of ten years. In view of the fact that the first respondent herein is a sick industry, it was urged on behalf of the writ petitioner (i.e., the first respondent herein) that in view of the provisions of section 22(1) of the Act, the appellant herein could not take out proceedings for enforcing the bank guarantee, because it was in the nature of an execution or distress. The argument prevailed before the learned single judge and, accordingly, the appellant herein was restrained from encashing the bank guarantee pending disposal of the writ petition on the merits. 4. Out of the various arguments made before us by learned counsel for the parties, the following three questions fall for consideration : (i) whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d single judge of this court in Aluminium Industries Ltd. v. Hindustan Cables Ltd. (W.P. No. 9420 of 1992 decided on 11-9-1992), which was based on the decision of this court in Andhra Cement Co's case, . However, as it was argued that these decisions are not binding on us because no reasons are given for taking the said view, we will not based our decision in this writ petition and writ appeal only solely on the said decisions. We also do not propose to give out own reasons either for supporting or opposing the aforesaid view, because we think that the writ petition and the writ appeal may be disposed of even without deciding the aforesaid questions. 5. The bank guarantee cannot be said to be the property of the first responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench observed : Learned counsel placed reliance on section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. The same, however, has no application to the instant case. Invoking the bank guarantee by the second respondent does not come within the meaning of the words 'execution, distress or the like against any of the properties of the industrial company' in sub-section (1) of section 22 of the Act. I also share the same view. In elaborating further, I would add that the invocation of the bank guarantee by the beneficiary under the guarantee does not put in motion any proceedings for execution, distress or the like against the properties of the company. It is difficult to accept the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no such challenge to the enforcement of any bank guarantee would be allowed to be made by any party. To quote the learned single judge : Under the bank guarantees, the second respondent undertook to pay the first respondent the sum specified therein 'on demand and without demur in the event of supplier failure or neglecting to perform and discharge the several duties and obligations on its part to be observed and performed in due execution of the job entrusted to it by the purchaser'. It has also stipulated that the decision of the company was as to whether the supplied has failed or neglected to perform or discharge the several duties and obligations on its part and as to the amount payable to the purchaser by the bank un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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