' This is a suit for the recovery of Rs,2,79,920.50 in respect of the amount which the plaintiff as guarantor paid on behalf of the defendant to the owners of the vessel "ARIS".
2. The facts giving arise to the suit briefly stated are that the defendant was given a contract by the Government of Pakistan to transport wheat from foreign country to the then East Pakistan in 1970.
The defendant entered into an arrangement with the owners of the vessel "ARIS" to hire the same.
The owners of the "ARIS" wanted a bank guarantee for the due payment of the hire charges. The defendant then contracted the plaintiff to give a bank guarantee to the owners of the said vessel and wrote a letter, dated 20th March, 1970 (Exh.P.1/1) asking the plaintiff to give a guarantee in the following words:- "In consideration of the owners of the ARIS enter into a Charter Party for the ARIS with ARK Ocean Lines of Karachi we hereby guarantee due performance in every respect of ARK of the terms and conditions of the Charter Party. We undertake to pay and make good all amounts to the owners of the ARIS that our liability under this Agreement shall be a primary liability and shall in no way be conditional upon the owners of the ARIS first proceeding against ARK. This agreement shall be governed by English Law."
' Plaintiff overseas branch at London gave the said guarantee, dated 31st March, 1970 exactly in the wording it was requested by the defendant. The Charter Party period expired on 20th July, 1970. The owners of the vessel made a claim from the defendant to pay balance amount of hire charges which the defendant disputed and, on the contrary, claimed certain amount for damage caused wheat cargo, from the owners of the vessel. The matter was then referred to the Arbitration between the defendant and owners of the vessel, which resulted in an award against the defendant in the sum of L 11.104. Thereupon, the owners of the vessel claimed the said amount as awarded by the Umpire from the plaintiff under the aforesaid guarantee. This amount was paid by the Bank to the owners of the vessel and in turn they have filed this suit claiming the aforesaid amount.
3. The defendant disputed its liability and 12 issues were framed in the suit, but at the time of arguments, learned counsel gave up all the issues and agreed to one issue as to whether the defendant is liable to pay the amount to the plaintiff under the said guarantee.
4. A.H.Mirza, learned counsel for the defendant raised the only plea that the guarantee to be issued by the plaintiff was for 60 days only and as the plaintiff did not incorporate the said period of 60 days in the guarantee, the payment made by the plaintiff to the owners of the vessel having been made beyond 60 days of the date of the guarantee is not the rightful payment. Mr. A.H. Mirza, in support of his plea referred to Exhs. P.1/1, P.1/10, P.1/18 and P.1/20. P.1/1 is a letter, dated 20th March, 1970 written by the defendant to the plaintiff making a request to the plaintiff to give owners of the vessel its guarantee. An application for approval of the State Bank was also enclosed therewith as Exh.P.1/10, which inter alia mentioned that the said guarantee will be valid for a period of 60 days from the date of issue. Exh.P.1/18 is a letter issued by the plaintiff to the State Bank of Pakistan for seeking permission to instruct its London Office to issue the said guarantee on the lines requested by the defendant. This letter also mentions that the said guarantee will be for a period of 60 days from, date of issue. Exh.P.1/20 is a letter from the State Bank of Pakistan to the plaintiff giving permission to extend guarantee for U.S. $ one lac only in favour of the owners of the vessel on account of the defendant.
5. On the other hand Mr. Ibrahim Pishori, learned counsel for the plaintiff submitted that the guarantee was furnished by the plaintiff in favour of the owners of the vessel in the exact wording referred to in Exhs.P.1/1 by the defendant itself. The said wording did not contain any such stipulation as to limiting the period of guarantee for 60 days from the date of its issue. In fact it was unconditional. He referred to Exhs.P.1/4, P.1/5, P.1/7, P.1/25 and P.1/40 and submitted that Exh.P.1/1 which is a letter requesting the plaintiff to give bank guarantee mentioned specific wordings in which the guarantee was to be given. It does not contain any fixed period. He also invited my attention that at two places in the said letter in the beginning as well as in the end the defendant seems to be very conscious about the guarantee to be given by the plaintiff "in the above words" which referred to the draft contents of the guarantee given in the letter itself. Referring to Exh.P.1/4, P.1/5, Mr. Pishori submitted that the guarantee was meant to be for the duration of the Charter Party which terminated on 20th July, 1970 when the vessel was redelivered to the owners of the vessel .
This has been specifically admitted by the defendant in its aforesaid two letters. On reading of Exh.P.1/7, dated 20th July, 1973 it appears that the defendant is conscious of the fact that the owners of the vessel will use the plaintiff's overseas branch for the recovery of the amount payable under plaintiff's guarantee. The defendant, however, showed its intention to contest the said claim as it has a claim for damages against the owners of the vessel. Exh.P.1/25 is a copy of the letter written. By the defendant of their agent in London which mentions that the owners of the vessel are claiming L 12,533.37 against the guarantee. This letter also mentions about the defendant's success against the owners if the case is properly handled in the arbitration which was pending at that point of time. Exh.P.1/40 is a letter from the defendant to the plaintiff which states "we have outstanding liabilities relating to the issue of guarantee." It was on culminating arbitration proceedings into award against the defendant that the defendants seems to have taken, for the first time, the plea of time as evident from its letter, dated 5th May, 1973 Exh.P.1/9 which reads as follows:- "You will kindly notice that we had requested you to issue this guarantee and had asked you that this guarantee should be valid for a period of 60 days from the date of issue."
6. As would appear from the correspondence referred to above the defendant at no point of time except on 5th May, 1973 as referred to above pleaded the plaintiff to issue the guarantee in question for a period of 60 days from the date of issue, which was to end on 30th May, 1970, whereas admittedly the Charter Party ended, on the defendant's own showing, on 20th July, 1970 when the ship was redelivered to the owners. The first letter P.1/1, dated 20th March, 1970 emphasises, more than once, upon the plaintiff to issue the bank guarantee in the terms specifically produced in the said letter in invested commas. It appears, as was also submitted by Mr. Pishori, that 60 days was for the purposes of State Bank of Pakistan, which does not generally sanction a bank guarantee for indefinite time. It also appears that the terms of 60 days will be inconsistent not only with the express wordings for the required guarantee but also for the impose of guarantee itself in asmuch as it was a meant for a Charter Party period, which ended after 51 days of 60 days period as contended by the defendant. It can, in no circumstances, be the intention of the parties to cut out 60 days from the Charter Party period. It may be in the mind that Charter Party will complete transport of the cargo within 60 days. The defendant has itself admitted in its letter that the guarantee was for Charter party period which ended on 20-7-1970, beyond the alleged period of 60 days.
' I am therefore, of the view that the plaintiff was not required to stand as guarantor for 60 days only, and notwithstanding the expiry of Charter Party period the plaintiff-Bank remained liable for payment under the guarantee and the defendant is liable to pay the amount of bank guarantee as the claim arose out of the terms of the Charte Party agreement within the Charter Party period. And as such the defendant is held liable to pay back the amount so paid by the plaintiff to the owners of the vessel. The suit is, therefore, decreed as prayed.