1 IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Regular Second Appeal 455 of 1998. Judgment Reserved on: 11.5.2009. Date of decision: 01.06.2009. H.P. Horticulture Produce Marketing …Appellant and Processing Corporation Ltd. Versus Punjab and Sindh Bank & Anr. …Respondents Coram The Hon’ble Mr.Justice Dev Darshan Sud,J. Whether approved for reporting ?1 No. For the Appellant: Mr.O.P. Sharma, Senior Advocate with Mr.K.R. Thakur, Advocate. For the Respondents: Mr.K.R. Thakur, Advocate. Dev Darshan Sud,J. This appeal has been preferred by the plaintiff against the concurrent findings of the two Courts below dismissing the suit of the plaintiff for recovery of a sum of Rs.1,48,000/-. The case pleaded is that the plaintiff is a Government Company incorporated under the Companies Act, 1956 having its Head Office in Shimla. It is engaged in marketing and purchasing fresh fruits and vegetables etc. throughout the country. 1 Whether the reporters of Local Papers may be allowed to see the judgement? Yes. 2 The plaintiff pleaded that on 31.7.1989 it appointed M/s.Sargodha Fruit Company, New Subzi Mandi, Yamuna Nagar (Ambala) through its partner Shri Gulshan Bajaj as its commission agent to sell fruits and vegetables etc. The entitlement of the commission agent was 1% on the gross sale on all consignments supplied to it. He was required to deposit all sales etc. within a period of 7 days of the sale, failing which interest at the rate of 18% per annum was to be charged. In addition, a bank guarantee of Rs.one lac was to be furnished to the plaintiff. Defendant No.2, Punjab and Sindh Bank, through its Branch Office filed such bank guarantee. Dispute arose between M/s.Sargodha Fruit Company and the plaintiff who alleged that the commission agent had failed to reconcile accounts and to remit the outstanding amount due and outstanding on account of sale made on behalf of the plaintiff thereby incurring the liability of invocation of the bank guarantee to compensate the plaintiff. The commission agent has not been impleaded as a defendant. The plaintiff has referred and produced on record a number of letters to prove that the demand for reconciliation of accounts and payment was infact made but of no avail. Plaintiff pleads that on 9.8.1990 a notice Ex.PW-2/B was sent to defendant No.2 by which they were informed that the guarantee deed be invoked and the amount be remitted to the account of the plaintiff. 3 The suit was resisted by the defendants primarily on the ground that it was not maintainable, that the guarantee was enforceable till 31.3.1990 and could not be invoked beyond that period. On the pleadings of the parties the learned trial Court settled six issues deciding the primary issue of the entitlement of the plaintiff against it and holding that the plaintiff was estopped from filing the suit. The suit was dismissed and appeal preferred by the plaintiff was also rejected by the learned appellate Court after re-appreciation of evidence on record. This appeal was admitted by this Court on the following substantial questions of law:- “1. Whether the Courts below were right in their construction of the documents Ext.PF and Ext.PG in adjudging the rights of the parties? 2. Whether the Courts below have misconstrued the evidence on record in rejecting the claim of the plaintiff? Question No.1: Ex.PF is the guarantee deed which has been executed by the Punjab and Sind Bank. The exclusionary clause reads: “We Punjab & Sind Bank, Yamunanagar therefore do hereby guarantee to you the payment of Rs.1,00,000/- (one lac) 4 upon our aforesaid customer/client M/s.Sargodha Fruit Co., Yamunanagar failing to make the payment themselves. It is understood and agreed that before we, Punjab & Sind Bank, Yamunanagar are able to make the payment, the amount must be outstanding against our customer/client, no claim shall be entertained by us unless the same is outstanding to you from our client/customer. It is further understood agreed that our liability shall under no conditions or circumstances, extend the sum of Rs.1,00,000/- (one lac) irrespective of the amount due to you from our aforesaid customer/client i.e. M/s. Sargodha Fruit Co.,Yamunanagar. Not withstanding anything to the contrary contained which above our liability under his guarantee is restneted to Rs.1,00,000/- (one lac) our guarantee shall remain enforce until 31.3.1990 unless a demand or claim under this guarantee is made on our bank in writing or before 31.3.1990 all your rights under the said guarantee shall be forefieted a & we shall be relieved & discharged from all liability thereunder.” Ex.PG is a letter addressed by the Assistant Accounts Officer to M/s.Sargodha Fruit Company. It states:- “M/s.SARGODHA FRUIT CO. SHOP No.3, NEW SUBZI MANDI 5 YAMUNANAGAR, PIN-135001. Sub: Bank Guarantee. Dear Sir, You have failed to send us no due certificate from our Chamba, Kullu, Parwanu Offices till date and the bank guarantee furnished by you is being expired on 31.3.90. You are requested to get it extend by another three months and also ensure that the accounts are fully reconciled by them failing which we shall ask your bankers to forefeet the same. Thanking you, Yours faithfully, Sd/- Asstt.Accounts Officer Copy to: 1. The Manager, Punjab and Sindh Bank, Yamuna Nagar, for information and necessary actin with the request that in case bank guarantee No.5/81 is not extended it may forefieted. 2. The Branchy Manager, hpmc Kullu, Parwanu with reference to his office letter of even No.7664-66 dated 20.2.90 for immediate necessary action please. 3. All the AMO/Incharges under Shimla Region for similar necessary action please. Sd/- Asstt.Accounts Officer” Both these documents have been considered by the two Courts below. Learned counsel appearing for the appellant urges that these documents have been misinterpreted by the Courts below. The learned trial 6 Court, while dealing with this submission, has held that Ex.PF is clear that the guarantee is only valid upto 31.3.1990. The Court holds that Ex.PG issued by the Assistant Accounts Officer only asks the commission agent to have the guarantee deed extended and does not make any demand from the bank. The letter states that the accounts should be reconciled failing which the guarantee would be forfeited. Referring to the evidence of the witnesses namely, PW-1, K.S. Dogra and PW-2, H.K. Kaushik, the trial Court holds and rightly so that they have also not specified the amount due and outstanding from the commission agent. This point was also urged before the learned appellate Court which re-appreciated the entire evidence and has negatived the contention of the plaintiff that any demand was made or ascertained as required by Ex.PF. After reappraisal of the entire evidence, the learned appellate Court holds that there is nothing on record to suggest that the Assistant Accounts Officer of the plaintiff had no authority to correspond on behalf of the plaintiff with the defendants. It also holds that as no demand having been raised by the plaintiff-appellant, the guarantee could not be invoked. Both the Courts below having found concurrently against the plaintiff, I do not see any reason to interfere in the findings as given by the Courts below. As I found both from the letter Ex.PG and deed of guarantee Ex.PF that the letter does not 7 raise any demand on the commission agent thereby entitling the plaintiff to invoke the bank guarantee. Ex.PF is clear and unequivocal when it provides that the claim will be entertained by the bank only if it is shown that it is outstanding and that the deed was valid only up to 31.3.1990. When both these documents are read in conjunction, there is no doubt that no ascertained sum of money due and outstanding or acknowledged by the commission agent, M/s.Sargodha Fruit Company, has been proved on record. This question is answered against the appellant. Question No.2: Having answered the first question against the appellant, this question would loose its relevance as the other evidence on the record does not in any manner suggest that a demand had been made on the defendants to invoke the bank guarantee. Obviously, if Ex.PF had to be resorted to for determining the rights of the parties, it should have strictly complied with the conditions as laid down and stipulated in this deed. I do not find anything from the evidence on record to show or suggest that in-fact a demand was made on the defendants for invoking the guarantee deed and claiming the amount from the commission agent. I dot find any mis-appreciation of the evidence on record. This question is decided against the appellant. 8 In the facts and circumstances of the case, there is no merit in this appeal which is dismissed. There shall be no order as to costs. June 1, 2009. (Dev Darshan Sud) (aks) Judge.