HONOURABLE SRI JUSTICE L. NARASIMHA REDDY WRIT PETITION No.33464 OF 2010 ORDER: The petitioner is a private limited company. It became necessary for it to furnish bank guarantee for a sum of Rs.45,43,250/- (first guarantee) in favour of M/s.Atlantic Intertrade Info Private Limited and for a sum of Rs.54,56,750/- (second guarantee) in favour of M/s.Warranby Limited, U.K. It approached the Canara Bank Branch at T.S.R. Complex, Secunderabad, 2nd respondent herein. On depositing of the entire amount i.e. Rs.1,00,00,000/-, the Bank Guarantees, referred to above, were given. 2. M/s.Atlantic Intertrade insisted on invocation of Bank Guarantee for Rs.45,43,250/-. Despite the resistance offered by raising certain objections, the Bank honoured the guarantee. The petitioner filed O.S. No.78 of 2004 in the Court of the III Additional Chief Judge, City Civil Court, Hyderabad in respect of the same. The suit was decreed. The Bank filed CCCA No.237 of 2006 before this Court and the same is pending. 3. M/s. Atlantic Intertrade has also insisted on realization of the amount covered by the second guarantee by relying on certain clauses in the Bank Guarantee as well as in Trade Agreements. The Bank was not satisfied as to the same and refused to honour the guarantee. Writ Petition No.22344 of 2006 filed by M/s. Atlantic Intertade is said to have been dismissed by this Court. In the meanwhile, the very second guarantee covering Rs.54,56,750/- ceased to be in force. The petitioner requested the Bank to refund the amount deposited by it for procuring the said guarantee. The bank did not return the amount. Hence, this writ petition. 4. The petitioner contends that there was absolutely no basis or justification in withholding the amount, once the guarantee has lapsed. 5. On behalf of the respondents, a detailed counter – affidavit is filed opposing the writ petition. Reference is made to several proceedings. It is stated that M/s. Atlantic Intertrade had filed criminal cases against the entire administration of the Bank, complaining that the second guarantee was not paid to it. The averment of the petitioner that the second guarantee has lapsed, is not denied. 6. Heard the learned counsel for the petitioner and the learned counsel for the respondents. 7. The bank guarantees were procured by the petitioner from the respondents against Rs.1,00,00,000/- deposited by it. The first guarantee for a sum of Rs.45,43,250/- was honoured when invoked by M/s. Atlantic Intertrade. The dispute to the same is pending adjudication before this Court in CCCA No.237 of2006. This writ petition is not concerned about the same. So far as the second guarantee is concerned, it is not in dispute that it ceased to be in force or live. As a matter of fact, when M/s. Atlantic Intertrade sought to invoke it, the Bank flatly declined and WP No.22344 of 2006 filed in this regard was dismissed. Therefore, the bank was under obligation to refund the amount deposited by the petitioner against which the guarantee was furnished. 8. Assuming that M/s.Atlantic Intertrade had initiated proceedings against the respondents, it cannot constitute the basis for them to withhold the amount deposited by the petitioner. At the most, the respondents can proceed against the petitioner in the event of their being required to pay any amount vis-à-vis the second guarantee. 9. Hence, the Writ Petition is allowed and the respondents are directed to refund a sum of Rs.54,56,750/- together with the accrued interest to the petitioner within a period of four (4) weeks from today. It is made clear that in the event of the respondents being required to pay any amount against the second guarantee furnished by them, the petitioner shall be under obligation to share the liability. There shall be no order as to costs. ___________________ L.NARASIMHA REDDY, J March 04, 2011. KTL