Executive Vice President & Manager
Bank Asia Limited
Rangs Bhaban (3rd floor)
113-116 Old Airport Road
RE: BANK GUARANTEE NO. BNSD-GNTEE/01/001/53405 DATED 03.01.2001 FOR US$ 7,05,698.90
We refer to your letter dated 15.12.2003, received by us on 17.12.2003 on the above subject. We have perused the draft application for addition of Bank Asia Limited as a party in the Suit No. 862 of 2002 on the above subject.
The draft application appears to be in order. However, the legal compliance of the application will be ensured by your lawyer in Delhi. You should verify the factual statements made in the application. Typo errors in the draft may be corrected.
In this connection we consider it pertinent to mention that the suit was decreed ex-parte on 28.02.2003 as appearing from the draft application and the copy of the judgement. Pursuant to the provision of Article 123 of the Limitation Act, 1963 (Indian Act) the limitation for filing an application “to set aside a decree passed ex parte” is 30 days from “the date of the decree or where the summons or notice was not duly served, when the applicant had knowledge of the decree”.
We understand that Bank Asia had knowledge of the suit, but we are not aware as to when Bank Asia came to know about the ex parte decree. As such, in our opinion, the question of limitation would be the primary issue in this case and Bank Asia has to prove its unawareness of the ex-parte decree.
It is further mentioned that the ex parte decree passed by the Court reads as follows:
“I, therefore grant a decree of permanent injunction in favour of the plaintiff and against the defendant No. 2 (Summit Daqing Joint Venture) restraining the said defendant from seeking remittance of the amount of US $ 7,05,698 by way of encashment of bank guarantee No. BG 53405 dated 1.1.2002.”
It may be noted that the said “BG 53405” was issued by Bank Asia and not by Canara Bank, India and the said Bank Guarantee has been invoked by Summit Daqing Joint Venture in Bangladesh. Consequently, Summit Daqing Joint Venture being a defendant in the suit upon which notice was duly served (as found by the Court in paragraph No. 2 of the decree) is bound by the decree and can be executed against it pursuant to the provision of section 44A of the Code of Civil Procedure. Section 44A of the Code of Civil Procedure, 1908 [As amended by Code of Civil Procedure (Third Amendment) Act, 2003].
In order to avoid any confusion with regard to section 44A, we would like to mention that in our previous letters we gave opinion that the interim order does not come within the purview of section 44A. But now it is a judgement and decree and no more an interim order.
In the premises, we are of the opinion that it is Summit Daqing Joint Venture and not Bank Asia whose right has been affected by the ex-parte decree. Because so long the decree subsists, Summit Daqing Joint Venture cannot insist for payment under the Bank Guarantee No. BG 53405 dated 1.1.2002.
If you have any query, please do not hesitate to contact the undersigned.
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