' CH. MUHAMMAD MASOOD JAHANGIR, J.--- This petition is directed against the judgment dated 26- 10-1999 passed by the learned Civil Judge, Lahore as well as judgment dated 12-5-2004 delivered by learned. Additional District Judge, Lahore, whereby, the application for grant of temporary injunction filed by the plaintiff was dismissed.
2. The facts emanate from the case file are that the petitioner being plaintiff brought a suit for mandatory and permanent injunction against the respondents/defendants before the learned trial court on 19-10-1998. Along with the suit the petitioner also filed an application under Order XXXIX, rules 1 and 2 of C.P.C. For grant of injunctive order with the prayer that pending disposal of the main suit, defendants be restrained from encashing/making/receiving any payment against Bank guarantee dated 18-7;1996 in the sum of US Dollars. The suit as well as said application were contested by the defendants Nos.1 and 2 by filing their written statements as well as written replies.
After hearing the parties, the learned trial court vide judgment and decree dated 26-10-1999 dismissed the application under Order XXXIX, rules 1 and 2 and also dismissed the suit while declaring the same to have become infructuous. Aggrieved, the petitioner/plaintiff preferred an appeal before the learned lower appellate court which was partially accepted to the extent that the judgment and decree dated 26-9-1999 vide which suit of the petitioner was dismissed was set aside and partially dismissed to the extent of dismissal of the stay application. Being dissatisfied the present revision petition has been moved.
3. Mr. Ghulam Mujtaba, Advocate has appeared on behalf of original learned counsel for the petitioner and made a request for an adjournment which has been opposed by the learned counsel for the respondent. The instant petition was filed 10 years ago against interlocutory order whereby the application for temporary injunction was dismissed and unfortunately could not be decided within such long period. No prior intimation was preferred on behalf of learned counsel for the petitioner for adjournment of the case and I am also not inclined to further adjourn this matter any further keeping in view; peculiar facts and circumstances thereof. So, I am left with no other option except to decide the same after hearing arguments of learned counsel for the respondent and perusal of the record.
4. The prayer clause of the plaint filed by the present petitioner is relevant, which is reproduced hereunder:--- "In view of the above submissions it is respectfully prayed that this honorable Court be pleased to pass a decree in favour of the plaintiff against the defendants in the following terms:---
(a) Defendants Nos.] and 2 may be permanently restrained from encashing Bank Guarantee No,LG 1417/1996/0844 dated 18-7-1996 in the sum of US Dollars 153,606.60 and Bank Guarantee No,LG 1417/1996/6923 dated 7-8-1996 in the amount of US Dollars 49,999.88 issued by defendant No,4, and the same may be ordered to be returned to the plaintiff Furthermore, defendants Nos.1 and 2 may also be directed to pay the plaintiff all costs, charges and expenses which it may have to incur to keep the guarantees alive.
' Defendants Nos.1 and 2 be permanently restrained from receiving any payment against the aforesaid guarantees from defendant No,4.
' Defendant No,4 be permanently restrained from making any payment against the aforesaid guarantee.
' Defendants be permanently restrained from taking any action against the plaintiff for recovery of the disputed freight, charges through encashment of the petformance guarantee or otherwise.
(e) Any other relief which this honorable Court may deem fit under the facts and circumstances of the case may also be allowed.
(I) Costs of the suit may also be granted."
5. Along with the said prayer embodied in the plaint the plaintiff also filed application under Order XXXIX, rules 1 and 2 of C.P.C. With the prayer already mentioned in the preceding para of this judgment.
6. Arguments heard and record perused.
7. It is a settled principle of law that a Bank Guarantee is an independent contract between a party in whose favour the same is issued and the bank who issued the same and its encashment cannot be stopped or restrained by issuance of injunctive order on the reasons that a dispute is pending inter se the parties to the main agreement. This view is fortified from the judgment delivered by the august Supreme Court of Pakistan reported as "Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd." (PLD 2003 Supreme Court 191) (at page 201) wherein it has been held as follows:---
(i) The performance of guarantee stands on the footing similar to an irrevocable letter of credit of Bank, which gives performance guarantee must honour guarantee according to its terms. It is not concerned in the least with the relations between the supplier has performed his contracted obligation or not, nor with question whether the supplier is in default or not. The Bank must pay according to its guarantee all demand if so stipulated without proof or conditions exception is when there is a clear fraud of which Bank has notice.
(ii) There is an absolute obligation upon the banker to comply with the terms and conditions as enumerated in the guarantee and to pay the amount stipulated therein irrespective of any disputes there may be between buyer and seller as whether goods are up to contract or not.
(iii) The bank guarantee should be enforced on its own terms and against the bank guarantee would not affect or prejudice the case of contractor, ultimately the dispute is referred to arbitration for the reason, once the terms and conditions of the guarantee were fulfilled, the bank's liability under the guarantee was absolute and it was wholly independent of the dispute proposed to be raised.
(iv) The contract of bank guarantee is an independent contract between the bank and the party concerned and is to be worked out independently of the arising out of the work agreement between the parties concerned to such agreement and, therefore, the extent of the dispute and claims or counter were matters extraneous to the consideration of the question of enforcement of bank and were to be investigated by the arbitrator.
(v) Where the bank had undertaken to pay the stipulated sum to respondent, at any time, without demur, reservation, recourse, contest or protest, and without reference to the contractor, no interim injunction restraining payment under guarantee could be granted.
(vi) The Bank guarantee is an autonomous contract and imposes an obligation on the bank to fulfill the terms and the payment on the bank becomes due on the happening of a contingency on the occurrence of which guarantee becomes enforceable.
(vii) When once bank guarantee is discharged, the obligation of the bank ends and there is no question of going behind such discharge bank guarantee. Courts should refrain from probing into the nature of the transactions between the bank and customer, which led to the furnishing of the bank guarantee.
(viii)In the absence of any special equities and the absence of any clear fraud, the bank must pay on demand, if so stipulated and whether the terms are such must have to found out from the performance guarantee as such.
(ix) The unqualified terms of guarantee could not be interfered with by irrespective of the existence of dispute.
8. In the above referred case the august Supreme Court of Pakistan refused to grant injunctive order for restraining the party from encashment of. Bank guarantee. The above referred view has also been followed by this court in the judgment reported as "Pakistan Petroleum Limited v. BBJ Pipe Industries (Pvt.) Ltd. And another" (2005 M LD. 1710), while holding that court should not interfere with the performance of a bond or bank guarantee on the touchstone that a bank guarantee was not concerned with the underlying contract between the parties to the contract as it is quite distinct from the underlying contract and gave rise to a separate cause of action.
9. A Bank Guarantee is a special kind of contract depending upon the happening of a specific event and when once it is discharged, the guarantee vanishes off. The obligations emanating from the said guarantee are independent of the obligations bearing out of contract specifically entered between the parties.
' In the present case, the version of the petitioner/plaintiff was that in response, to a tender for supply of pipes the petitioner had submitted a bid, which was accepted and an order for supply of pipes was placed to the petitioner by the defendants and that in compliance of contract entered between the parties the petitioner through respondent No,4 submitted performance guarantee for an amount equal to 10% of the contract price and when the shipments were completed on 31-10-1996, respondent No,1 demanded excessive payment from the 'petitioner which was refused by the petitioner and as respondent No,1 threatened to encash the performance guarantee the petitioner preferred his suit.
The question of excessive demand by respondent No,1 from the petitioner is a question of fact which has to be proved by the petitioner after production of strong evidence. At present stage both the courts below have rightly concluded that petitioner failed 'to make out prima facie case for grant of temporary injunction. It can safely be inferred that encashment of bank guarantee has no relevancy with obligations arrived at between the parties through a contract which being independent containing' its own terms and conditions has to be performed by the parties independently. The petitioner has brought a suit for permanent injunction before the learned trial court which in its present form is hardly maintainable. If the petitioner has a grouse against the fulfillment of conditions of the' contract on the part of respondents, then a suit for specific performance was to be filed by the petitioner but the encashment of bank guarantee has nothing to do with the alleged dispute between the parties, which must be decided independently on the basis of obligations of the parties imposed by the contract through its forms and conditions.
11. Sequel of the discussion is that the impugned order passed by the learned trial court to the extent of dismissing application for grant of stay and the impugned judgment delivered by learned Additional District Judge, Lahore to the extent of dismissal of appeal whereby the dismissal of stay application by the learned trial court was maintained are strictly in accordance with law and do not call for any interference. The revision petition is without any substance and force which is dismissed. It is pointed out by the learned counsel for the respondents that the main suit is still pending before learned Civil Judge, Lahore and next date of hearing is 2-10-2014, who is directed to decide the said suit within a period 'of five months positively with a report to this Court through the Deputy Registrar (J) as it is sad state of affairs that the main suit could not be finalized for the last about 10 years in spite of that proceedings thereof were never stayed by this Court. It is once again directed that unless the proceedings before the learned courts below are stayed by any specific order they are bound to continue with the trial of the case irrespective of the pendency of the matter before this Court. The Registrar of this Court shall communicate this 'direction to the members of the subordinate Judiciary through the respective District and Sessions Judges in the Punjab.