1 Amk IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 243 OF 2010 Sangli Miraj Kupwad Cities Municipal Corporation. .. Petitioner Vs. The Commissioner and Registrar, Co­operative Societies & Ors. .. Respondents Mr. N. V. Walawalkar Sr. Counsel i/b Mr. Sudhir Prabhu for the Petitioner. Mr. S. R. Ganbavale for Respondent No.2. Mr. R. M. Patne AGP for Respondent No.1. CORAM : MRS. R. S. DALVI, J. DATE : 11th March, 2010. P.C. 1. Rule. Rule is made returnable forthwith. 2. The petitioner corporation has a civil dispute with regard to the invocation of a bank guarantee in respect of the bank which has later gone into liquidation. The bank is represented by respondent No.2 its liquidator. The petitioner desires to sue respondent No.3 in respect of its independent contract with respondent No.3 upon a bank guarantee given by respondent No.3 by making the Liquidator of the bank in liquidation a party defendant in 2 the suit for invocation of the guarantee given by the bank on behalf of respondent No.3. 3. On the ground that the credit with the bank is secured for the depositors of the bank under The Deposit Insurance and Credit Guarantee Corporation Act, 1961 (the Act), respondent No.1 has refused permission to the petitioner to sue the liquidator for invoking the bank guarantee upon the contract of the petitioner with respondent No.3. 4. The amount under the guarantee is under a separate contract. The guarantee has to be honoured by the bank under its contract. Except for fraud, no injunction against the bank from honouring its guarantee also can be issued by the Civil Court. The amount which is payable under the guarantee which can be invoked by the petitioner is an independent obligation of the bank distinct from its obligations to the depositors under the aforesaid Act. The Act only applies to the transactions of the bank in respect of the depositors of the bank. 5. The Counsel on behalf of the liquidator states that the liquidator appointed on behalf of the bank does not deny the bank’s liability to honour the bank guarantee under the contractual law. However, if the bank does not have sufficient funds to honour the guarantee, the liquidator would have to follow due legal procedure to 3 honour that obligation in liquidation proceedings. That obligation has nothing to do with the depositors or the credit guarantee of the depositors. 6. The petitioner has only applied for leave to sue. Respondent No.2 would have to be sued since respondent No.2 bank has gone in liquidation. It is only a formal order which required to be passed as under Section 446 of the Companies Act. 7. The impugned order dated 4th September, 2009 suffers from an irregularity in the reason given for rejection of the leave to sue. The impugned order is set aside. Respondent No.1 shall reconsider the case of the petitioner in the light of the law relating to contracts of guarantee and its enforcement in Civil Court and pass the order for the formal leave required to be obtained to sue the liquidator on behalf of the bank in liquidation. 8. Writ petition is allowed and rule is granted accordingly. (R. S. DALVI, J.)