' Brief facts of the case are that respondent No,1 filed a suit for recovery of Rs,54,25,000 against the present petitioner. Alongwith the suit he filed an application for stay, whereby, it was prayed that the petitioner and respondent No,2 may be restrained to encash the Bank Guarantee of Rs,4,00,000 till the final disposal of the suit. This application was contested by the present petitioner. However, vide order dated 8-11-2002, the learned trial Court granted the application filed by respondent No,1 and directed that during the pendency of the suit, the bank guarantee shall not be encashed. This order is being assailed through the instant F.A.O.
2. The service of respondent No,1 has been got effected through registered post A.D. The receipt of the same has been received back. He has also been served through OCS. Nobody has entered appearance on his behalf. He is, therefore, proceeded against ex parte.
3. Learned counsel for the appellant contends on the strength of 2000 UC 53 (M/s. Pioneer Cables Ltd. v. WAPDA, etc.) and 1996 UC 367 (Power Engineering and Construction Company Limited v. The Board of Trustees of the Port of Karachi) that the Bank Guarantee being an independent contract from the original contract which is under litigation, its encashment cannot be restrained to enforce the terms of an earlier contract.
4. On the other hand, learned counsel for respondent No,2 states that his client will only follow the orders of the Court, as the case may be.
5. I have considered the arguments of the learned counsel for the parties.
6. Admittedly, in view of the law referred by the learned counsel for the appellant, since a bank guarantee is a separate contract from the original contract, the same cannot be restrained from being encashed to enforce the terms of an earlier contract, therefore, the order passed by the learned trial Court dated 8-11-2002, is set aside and the direction to restrain the encashment of bank guarantee is re-called. This appeal is accordingly allowed and disposed of in the above terms. No order as to costs.