This Civil Revision Petition is filed by the first respondent, viz., International Air Transport Association (hereinafter referred to as ‘the Association’), against the order in I.A No. 3186/97. The I.A in question was filed by the first respondent in the Civil Revision Petition being the plaintiff in O.S No. 335/97 on the file of the 1st Additional Subordinate Judge's Court, Ernakulam. The suit was filed by the plaintiff against the Association for recovery of Rs. 16,81,073.40 with interest at 18% thereof from the date of suit till the date of the realisation.

2. Plaintiff is an accredited agent of the Association. The member Airlines of the Association pay agency sales commission to agents like the plaintiff. When the agency was given to the plaintiff, the Association required a Bank Guarantee to be executed in its favour. Accordingly, the second respondent— Indian Bank, Pallimukku Branch, M.G Road, Ernakulam— executed a Bank Guarantee for Rs. 39,00,000/-. As per the Bank Guarantee, the Bank agreed to guarantee due payment of all amounts which might be or become payable by the plaintiff from time to time. As per the Bank Guarantee, the Bank undertook on demand being made by the Association without requiring proof of the amount and without demur to make payment. Plaintiff also executed an agreement in favour of the Association. The agreement and the Bank Guarantee gave right to the Association to invoke the Bank Guarantee at any time. The agreement stipulated that the plaintiff should report the sales and also the remittances not later than 15 days after the end of the period covered by the report. If the sales report and remittances are not received within the reporting period, the member Airlines concerned will send a notice of irregularity to the agent. It seems that the Association took the view that the plaintiff committed default in respect of member Airlines during the reporting period commencing from 16th July, 1996. Even though notices of irregularity were issued, that did not bear any result. Notices of default were also issued. The agency Administrator declared the plaintiff to be in default from 28-8-1996 and it was notified that the termination of his agency will take effect from 28-10-1996. Since the plaintiff did not settle at least 50% of the outstandings, the agency was terminated and the termination took effect on 20-1-1997. The Association invoked the Bank Guarantee. At that time, the plaintiff instituted O.S No. 201/1997. He filed I.A No. 577/97 for an injunction restraining the Association from invoking or encashing the Bank Guarantee. An ex parte order of injunction was granted against the Association. After the Association entered appearance, the matter was heard and by order dated 8th July, 1997, the IInd Additional Munsiff's Court, Emakulam vacated the order of injunction.

3. Subsequently, the plaintiff filed the present suit, viz., O.S No. 335/97 before the 1st Additional Sub Court, Emakulam. After referring to the previous facts up to the filing of the suit for injunction, the plaintiff submitted that according to him, if the Bank Guarantee is invoked, there will be an excess of Rs. 16,81,073.40 in the hands of the Association. According to the plaintiff, he is entitled to realise the above sum and that the first defendant has no right or authority to realise the sum of Rs. 39,00,000/- covered under the Bank Guarantee. Hence, the suit was filed for a decree allowing the plaintiff to recover the amount of Rs. 16,81,073.40 with costs.

4. Along with the suit, I.A No. 3186/97 was filed to attach the Bank Guarantee No. 18/1994 executed by the Indian Bank, Pallimukku Branch, Emakulam in favour of the Association. In the affidavit filed along with the petition for attachment before judgment, the material averments regarding the attachment are contained in paragraph 13. It is as follows:

“The petitioner is entitled to realise a sum of Rs. 16,81,073.40 from the 1st respondent being the excess amount invoked by the 1st respondent. There is every possibility to decree the suit as prayed for. The Indian Bank, Pallimukku branch has executed bank guarantee No. 18/94 dated 26-12-94 in favour of the 1st defendant. It is reliably understood that the 1st respondent is taking hasty steps to encash the amount covered under the bank guarantee with an intention to delay and defeat the decree that would be passed in the suit. The said bank guarantee is the only property of the 1st respondent available to realise the said amount within the territorial jurisdiction of this Hon'ble Court………………….. If the bank guarantee is encashed or invoked, the petitioner may not be able to enjoy the fruits of the decree likely to be passed in the above case.”

On this petition, an ex parte order was granted by the learned Sub-Judge, on 14th August, 1997, which reads as follows:

“Heard the petitioner. After perusing the documents and affidavit, I am satisfied that if the attachment is not allowed there is the likelihood to withdraw the bank guarantee to discredit the petitioner. Hence the 1st respondent is directed to furnish security for a sum of Rs. 19,00,000/- within a week. In the meantime there will be an order directing the garnishee not to encash or realise the amount covered under the bank guarantee No. 18/1994.”

It is against the above order that the present revision is filed.

5. Learned counsel for the petitioner, viz., the Association, submits that the order passed by the Court below is without adhering to the principles laid down under Order 38, Rule 5 of the Code of Civil Procedure. Further he submitted that the Bank Guarantee cannot be attached. It is a case where the plaintiff has committed abuse of process of Court. Not before the ink had dried in the order rejecting the application restraining the Association from invoking the Bank Guarantee, the plaintiff filed the present suit and got an attachment order. By the present order, the plaintiff has obtained the same relief which was declined to him by the Munsiff's Court in the suit for injunction. He further submitted that the amount claimed by the plaintiff in the suit is not correct.

6. Learned counsel for the first respondent/plaintiff, Shri Sreekumar submitted that the revision petition is not maintainable. Petitioner can approach the Court below and if it offers security for Rs. 19 lakhs, the attachment will be withdrawn. Bank Guarantee is the only property which the Association has got within the jurisdiction of this Court. There is nothing illegal or irregular in the order passed by the Court below.

7. Since the records from the Court below were not available, I directed the parties to produce the copies of the plaint, attachment petition and Bank Guarantee. After hearing the parties, I am of the view that the order passed by the Court below cannot be maintained for a moment. It was only on 8-7-1997 that the Munsiff's Court, Ernakulam in I.A No. 577/97 in O.S No. 201/97 held that no case had been made out by the plaintiff for an injunction restraining the Association from invoking the Bank Guarantee. Regarding the first objection of the first respondent that the revision is not maintainable, I rely on the decision of this Court in Rai Premchand v. Ahamed and Co., 1982 Ker LT 294. Admittedly, no appeal lies from an order passed under Order 38, Rule 5 of the Code of Civil Procedure. This Court in 1982 Ker LT 294 held that an order of attachment before judgment is one which involves serious adverse civil consequences. Such consequences will justify a conclusion that the order is a case decided within the meaning of Section 115 of the Code of Civil Procedure. The consequential conclusion is that the order is revisable under Section 115 of the Code of Civil Procedure. His Lordship Justice Sukumaran in the case relied on the decision of the Andhra Pradesh High Court in Y. Vijayalakshmamma v. Sakinalu Lakshmaiah, AIR 1980 AP 176 and Vaidya Rudra Dutt v. Smt. Teeja, AIR 1972 Raj 141. I entirely agree with Sukumaran, J. and hold that the revision is maintainable.

8. The next question is whether the lower Court was correct in ordering attachment of the Bank Guarantee. By the interim order, the Court below has restrained the garnishee from paying the amount under the Bank Guarantee to the plaintiff. In this context, I refer to certain portions of the Bank Guarantee, which are as follows:

“We hereby agree and undertake, on demand being made for the same by you or the Chairman/Secretary, AIP-9 or the Nominee and without requiring proof of the amount due to all or anyone of your member airlines or to you without demur to make payment to AIP-9 or the Nominee in Indian Currency the amount as herein provided in this guarantee.”

The guarantee is executed for a sum of Rs. 39,00,000/-.

9. The Bank Guarantee was allowed to be encashed in I.A No. 577/97 in O.S No. 201/97 and it was held by the learned Munsif that there were no circumstances by which the invocation of the Bank Guarantee can be injuncted. No fraud was proved nor any irreparable damage proved. Now the Court below has interdicted the garnishee from paying the amount under the Bank Guarantee to the Association. The effect is the same as an injunction granted to the garnishee. I am of the view that the Court below has acted without jurisdiction in attaching the Bank Guarantee.

10. I have already extracted the salient features of the Bank Guarantee. Under the Bank Guarantee, the Bank is liable without proof to pay the amount covered by the Bank Guarantee on demand to the Association. The Supreme Court in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P.) Ltd., AIR 1997 SC 2477: (1997 All LJ 1425) the observed as follows at page 2482 (of AIR):

“The law relating to invocation of such bank guarantee is by now well settled. When in the course of commercial dealings an unconditional bank guarantee is given or accepted, the beneficiary is entitled to realise such a bank guarantee in terms thereof of any pending disputes………..The Courts should, therefore, be slow in granting an injunction to restrain the realization of such a bank guarantee. The Courts have carved out only two exceptions. A fraud in connection with such a bank guarantee would vitiate the very foundation of such a bank guarantee……………..The second exception relates to cases where allowing the encashment of an unconditional bank guarantee would result in irretrievable harm or injustice to one of the parties concerned. Since in most cases payment of money under such a bank guarantee would adversely affect the bank and its customer at whose instance the guarantee is given, the harm or injustice contemplated under this head must be of such an exceptional and irretrievable nature as would override the terms of the guarantee and the adverse effect of such an injunction on commercial dealings in the country.”

So far as the second point is concerned, the Court relied on the decision in U.P Co-operative Federation Ltd. v. Singh Consultants and Engineers (P.) Ltd., (1988) 1 SCC 174. The resulting of irretrievable injury has to be such a circumstance which would make it impossible for the guarantor to reimburse himself, if he ultimately succeeds. This will have to be decisively established and it must be proved to the satisfaction of the Court that there would be no possibility whatsoever of the recovery of the amount from the beneficiary by way of restitution. In this case, both the exceptions have not been proved. On the other hand, the plaintiff himself has stated in the petition for attachment that the Association has got assets outside the Courts jurisdiction. Hence, I am of the view that the order attaching the Bank Guarantee is illegal and is hereby set aside. I am to further state that the affidavit attached to the petition for attachment before judgment does not give the full ingredients, which are necessary under Order 38, Rule 5 of the Code of Civil Procedure.

11. In the above view of the matter, the order passed by the Court below is set aside and this revision is allowed. The order of attachment made by the lower Court is cancelled. The second respondent will allow the Association to invoke the Bank Guarantee on the production of a copy of this order.

Revision allowed.