Suit filed for - The defendants approached the plaintiff-bank for issuance of Bank Guarantee for an aggregate amount of Rs.20 lakhs on their behalf in favour of KSEB. Thereafter, the KSEB terminated the contract given to defendant 1 on account of breach of the terms and conditions of the contract and thus, the plaintiff-bank had to pay Rs.20 lakhs in aggregate under two Bank Guarantees furnished on behalf of defendant 1 to KSEB - The trial Court decreed the suit in favour of the plaintiff-bank and directed the defendants to pay Rs.19,00,000/- with interest at the rate of 18.5% per annum with future interest at the rate of 18.5% per annum from the date of suit till realization. However, the High Court non-suited the plaintiff-Bank on the ground that since the originals of the Bank Guarantees were not produced by the plaintiff-bank, the plaintiff-bank cannot successfully lay its claim on the said two Bank Guarantees - Hence, the appeal - The defendants 1, 2, 3 and 4 clearly admitted issuance of the Bank Guarantees - Though they have denied that defendants 2 to 8 went to the plaintiff-bank to deposit the title deeds of their properties, they admitted that defendant 4 had by his letter forwarded the title deeds of his properties to the plaintiff-bank - They admitted the assignment of Fixed Deposit Receipts in the sum of Rs.4,75,000/- and availment of mobilization advance of Rs.19 lakhs by defendant 1 - Nothing on record to establish the case of the defendants that the plaintiff-bank was party to such a fraud of creating fabricated documents after obtaining blank signed papers from the defendants. Also, in the schedule of properties under the heading "assets of the partners", it is clearly stated that these properties are mortgaged to the Bank as security for Bank Guarantee of Rs.20 lakhs - Supreme Court - FDRs had rightly encashed by the plaintiff Bank and the invocation of Bank Guarantees were done when they were in force, in view of their extension - Impugned order of the High Court set aside and the decree passed by the trial Court restored - Appeal disposed.

Topic(s)-Realization of money

Important Decision(s)-