1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.87 OF 2008 IN SUMMARY SUIT NO.1419 OF 1979 The ICICI Bank Limited, A company incorporated under the Companies Act 1958, having its registered Office at Landmark, Race Course Circle, Dadodara 390007, Corporate Office at ICICI Bank Towers, Bandra Kurla Complex, Mumbai - 400 051 and Branch Office at 296, Perin Nariman Street, Post Box 78, Fort, Mumbai - 400 001. ... Appellant. Versus Tata International Ltd., a Company, incorporated under the Companies Act, 1956, and having its registered Office at Block A, Shivsagar Estate, Annie Besant Road, Worli, Mumbai - 400 018. .. Respondent. Mr.Umesh Mahajan i/by M/s.Divekar & Co. for the appellant. Mr.A.S. Khandeparkar i/by Khaitan & Jayakar for the respondent. CORAM : SWATANTER KUMAR, C.J. & J.P. DEVADHAR, J. CORAM : SWATANTER KUMAR, C.J. & J.P. DEVADHAR, J. CORAM : SWATANTER KUMAR, C.J. & J.P. DEVADHAR, J. JUDGMENT RESERVED ON : 11th MARCH, 2008 JUDGMENT RESERVED ON : 11th MARCH, 2008 JUDGMENT RESERVED ON : 11th MARCH, 2008 JUDGMENT PRONOUNCED ON : 10TH APRIL, 2008 JUDGMENT PRONOUNCED ON : 10TH APRIL, 2008 JUDGMENT PRONOUNCED ON : 10TH APRIL, 2008 ORAL JUDGMENT (Per J.P. Devadhar, J.) : 2 1. Whether a bank guarantee valid for 90 days, can be invoked on the 91st day, if the 90th day happens to be a public holiday or a Sunday is the question raised in this appeal. 2. The learned Single Judge, primarily relying upon the judgment of the Apex Court in the case of HUDA V/s. Dr. Babeswar Kanhar reported in (2005) 1 SCC 191 answered the above question in the affirmative. Challenging the aforesaid decision, the present appeal is filed. 3. In the present case, on 13-3-1978, the Appellant - Bank had executed a performance guarantee on behalf of M/s.Vishal International, Bombay, in favour of the respondent for US$ 9000. The said guarantee was conditional and was valid for 90 days. 4. It is not in dispute that the 90th day under the aforesaid guarantee dated 13/3/1978, fell on 11-6-1978 which was a Sunday and the offices of the bank were admittedly closed on that day. The respondent invoked the bank guarantee on 12-6-1978 by calling upon the appellant to pay the guarantee amount. As the appellant bank denied its liability to pay, the respondent filed a suit in the High 3 Court bearing Summary Suit No.1419 of 1979 for recovery of a sum of Rs.76,613/- which was equivalent to US$ 9000 with interest at the rate of 15% p.a. from the date of the suit till the date of the decree and thereafter at the rate of 6% p.a. till payment. 5. The Bank filed its written statement contesting the suit inter alia on the ground that the suit was not maintainable as the bank guarantee has been invoked after the guarantee period had expired. 6. In view of the objection raised by the bank, a preliminary issue was framed in the said Suit on 14-3-2007 which reads as under : "Whether the bank guarantee in question had already expired on the date of filing of the suit as contended in para 11 of the written statement." 7. The respondent, thereafter, took out a chamber summons bearing No.490 of 2007 seeking that the preliminary issue be struck down and that the suit be tried on all the issues at a time, inter alia on the ground that the preliminary issue was a 4 mixed question of law and fact and such an issue could not be framed as a preliminary issue. By the impugned judgment and order dated 19-12-2007, the learned Single Judge held that since the 90th day fell on Sunday, invoking the guarantee on the 91st day was valid and accordingly answered the preliminary issue in favour of the plaintiff. The chamber summons was also disposed off in the above terms. Challenging the aforesaid order, the present appeal is filed by the bank. 8. On behalf of the appellant - Bank, it is contended that in the absence of any averment in the plaint that the respondent could not invoke the bank guarantee on the 90th day being Sunday, the learned Single Judge could not have permitted the respondent to argue to that effect. It is contended that by permitting the respondent to argue that the 90th day being a holiday, the bank guarantee could be invoked on 91st day, without there being any pleadings to that effect in the plaint, grave prejudice is caused to the Bank in as much as the bank has been denied the opportunity to meet the said argument by amending the written statement. According to the bank, the learned Single Judge committed a grave error in presuming that the respondent was prevented from invoking the bank guarantee on the 90th day 5 being a Sunday. 9. It is further contended that the contract of guarantee valid for 90 days has to be construed strictly and if the beneficiary of the bank guarantee invokes the guarantee after 90 days, then the guarantor cannot be made liable beyond the term of his engagement. Therefore, the learned Single Judge could not have held that the respondent was entitled to invoke the guarantee after 90th day from the date of the execution of the guarantee. It is contended that the decision of the Apex Court in the case of HUDA (supra) is distinguishable on facts and, hence, the decision of the learned Single Judge is liable to be quashed and set aside. 10. We see no merit in the above contentions. The argument that in the absence of averment in the plaint the respondent could not be permitted to argue that the guarantee could not be invoked on the 90th day has no merit, because, that argument was in reply to the argument of the bank that invoking the guarantee on the 91st day was time barred. In other words, irrespective of the averment in the plaint, to counter the argument of the bank that invoking the guarantee on the 91st day was invalid, it was open to the respondent to contend that since the 6 90th day of the guarantee fell on Sunday, the same could be invoked on the 91st day and that in such a case invocation of the guarantee on the 91st day cannot be said to be time barred. 11. The question then to be considered is, whether the respondent is right in contending that if a bank guarantee expires on a public holiday or a Sunday, then the guarantee can be invoked on the next working day ? 12. In the present case, as noted earlier, it is not in dispute that the guarantee executed by the appellant - Bank on 13-3-1978 was to be valid for 90 days and the 90th day fell on 11-6-1978 which was a Sunday and the bank was closed on that day. The respondent has invoked the guarantee on Monday the next working day, that is, on 12-6-1978. In such a case is, can it be said that the guarantee is invoked after the guarantee has expired is the question. 13. The Apex Court while interpreting the provisions of Section 10 of the General Clauses Act, 1897, in the case of Harinder Singh V/s. S. Karnail Singh reported in AIR 1957 S.C. 271, inter alia held thus : 7 "5. ............. Broadly stated, the object of the section is, to enable a person to do what he could have done on a holiday, on the next working day. Where, therefore, a period is prescribed for the performance of an act in a Court or office, and that period expires on a holiday, then according to the section the act should be considered to have been done within that period, if it is done on the next day on which the Court or office is open. For that section to apply, therefore, all that is requisite is that there should be a period prescribed, and that period should expire on a holiday. ......." 14. Similarly, the Apex Court in the case of C.F. Angadi V/s. Y. S. Hirannayya reported in AIR 1972 S.C. 239, has held in paras 8 and 14 as follows : "8. The question then arises as to what is the principle which should be applied in a case where a party to a consent decree is given time to do an act within a specified day or by a specified day and fails to do it on the ground of impossibility of performance on the last day specified but does it on the next practicable day. This question arose for consideration in Muhammad Jan V/s Shiam Lal, ILR 46 All 328 = (AIR 1924 All 218 FB). There a decree in a pre-emption suit gave the plaintiff a period of one month within which to deposit the purchase money in order to obtain the benefit of the decree in his favour, and the period expired on a date on which the Court was closed for the vacation and the plaintiff made the deposit on the day on which the Court re-opened. Piggott, Lindsay and Sulaiman, JJ., held that the deposit was in time under the terms of the decree. They said that there is a generally recognised principle of law under which parties who are prevented from doing a thing in Court on a particular day, not by an act of their own but by the Court itself, are entitled to do it at the first subsequent opportunity. The 8 Court quoted with approval the decision in Shooshee Bhusan Rudro v. Gobind Chunder Roy, (1891) ILR 18 Cal. 231, where it was observed that the broad principle is that although the parties themselves cannot extend the time for doing an act in Court, yet if the delay is caused not by any act of their own, but by some act of the Court itself - such as the fact of the Court being closed - they are entitled to do the act on the first opening day. In Sambasiva Chari v. Ramaswami Reddi, (1899) ILR 22 Mad. 179, the Madras High Court held that there is a generally recognised principle of law under which parties who are prevented from doing a thing in Court on a particular day, not by any act of their own, but by the Court itself, are entitled to do it at the first subsequent opportunity. We have already referred to AIR 1931 Lah 386, where the Lahore High Court applied this principle to a pre-emption decree. Mayor v. Harding (1867) 2 QB 410, is a case in point. In that case the appellant had applied to Justices to state a case under the Summary Jurisdiction Act, 1857. He received the case from them on Good Friday, and transmitted it to the proper Court on the following Wednesday. It was held that he had complied sufficiently with the requirement of the Act directing him to transmit the case within three days after receiving it, as it was impossible for him to transmit the case earlier than he did because of the closure of the offices of the Court from Friday till Wednesday. Meller J., dealt with the matter as follows : ‘Here it was impossible for the appellant to lodge his case within three days after he received it. As regards the conduct of the parties themselves, it is a condition precedent. But this term is sometimes used rather loosely. I think it cannot be considered strictly a condition precedent where it is impossible of performance in consequence of the offices of the court being closed, and there being no one to receive the case. The appellant lodged the case on Wednesday, that is, he did all that it was practicable for him to do.’ In Halsbury’s Laws of England, Vol.57, 3rd 9 Edition, page 97, para 172, it is observed : ‘172. The fact that the last day of a prescribed period is a Sunday or other non-juridical day does not as a general rule give the person who is called upon to act an extra day; it is no excuse for his omission to do the act on some prior day’. ‘This general rule does not hold good where the effect of it would be to render performance of the act impossible. This would be the case if the whole of the prescribed, period consisted of holidays, in which case the act may lawfully be done on the next possible day. ‘Again the general rule does not hold good where the last day is a Sunday and the act to be done is one the performance of which on a Sunday is prohibited by the Sunday Observance Act, 1677, or where the act has to be done, not by the party only, but by the Court or by the party in conjunction with the Court. In such cases the act may, when the last day limited for the performance of it happens to be a day when the Court or its office is closed, be done on the next practicable day.’ We think that the second exception to the general rule stated in the passage and in effect followed in the rulings cited above must apply to the facts here." 9. ----------------- to 13. ----------------- "14. We may also state that there is no evidence in this case that at the time, when the compromise was entered into, either of the parties knew that the 31st of December, 1959 or the 1st of January, 1960, would be holidays". 15. Recently, the Apex Court in the case of HUDA (supra) has held that the logic of Section 10 of the General Clauses Act, 1897 can be pressed into service even in cases where the said Section does 10 not otherwise in terms apply. The Apex Court further held that there is a general principle that a party prevented from doing an act by some circumstances beyond his control, can do so at the first subsequent opportunity. 16. Applying the aforesaid yardsticks laid down by the Apex Court to the facts of the present case, it can safely be held that the logic of Section 10 of the General Clauses Act applies in the matter of invoking the bank guarantee and, therefore, in the present case, since the 90th day of the guarantee fell on Sunday and the offices of the bank were closed, the respondent was entitled to invoke the guarantee on the 91st day which is the immediate next working day of the bank. 17. It is pertinent to note that the words used in the guarantee executed by the bank on 13-3-1978 are : "this guarantee is valid for 90 days from the date hereon". It does not state that the bank is liable only if the guarantee is invoked "within 90 days" or "not later than 90 days". In other words, the guarantee does not contemplate that if the 90th day falls on a Sunday or a public holiday, then the guarantee would be valid for 89 days only. It is neither the case of the bank that on 11-6-1978 11 (Sunday) its offices were open, nor it is the case of the bank that there was any provision made by the bank so as to enable the respondent to invoke the guarantee on Sunday, the 11-6-1978. In these circumstances, as the bank was admittedly closed on the last day for invoking the guarantee i.e. on 11/6/1978, it cannot be said that invocation of the guarantee on the immediate next working day of the bank i.e. on 12/6/1978 was time-barred. 18. For all the aforesaid reasons, we find no infirmity in the decision of the learned Single Judge in holding that in the facts of the present case, the respondent was justified in invoking the guarantee valid for 90 days on the 91st day because the 90th day fell on Sunday and the bank was closed on that day. In the result, the appeal fails and the same is hereby dismissed with no order as to costs. CHIEF JUSTICE J.P. DEVADHAR, J.