Tata International Limited v. I.C.I.Ci. Bank Ltd.

Bombay HC19 Dec 2007CHS/1940/2007

Case brief

AI extract

What is this about?

The court disposed of a preliminary issue regarding the validity of a bank guarantee invoked after its stated expiry date. Ruling that the 90th day was a Sunday, the court applied the principle of lex non cogit ad impossibilia, holding that invocation on the next business day was timely and within the period.

What did the court decide?

The preliminary issue was answered in favour of the plaintiff, and the chamber summons along with the preliminary issue was disposed of with no order as to costs.

What the court decided

¶1

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION.

¶2

CHAMBER SUMMONS No. 1940 of 2007 WITH SUIT No.1419 OF 1979

¶3

Tata International Limited ..Plaintiff.

Vs.

ICICI Bank Limited

..Defendant.

Mr A. S. Khandeparkar i/b Khaitan & Jaykar, Advocate for the Plaintiff.

¶8

Mr U. A. Mahajan i/b Divekar & Co. for the Defendants.

¶9

CORAM: V.C. DAGA,J. DATED: 19TH DECEMBER,2007.

¶10

ORDER :-

¶11

1.	This	suit was originally filed by
plaintiff-Com	pany;	named; as	Tata	Exports
Limited	aga	inst defendant-Sangli	Bank	Limited.
Subsequently,		original plaintiff-Com	pany	was
reconstituted		and renamed	as	"Tata
International		Limited" whereas,	the	defendant
"Sangli	Bank	Limited", by virtue	of the	scheme
of	amalga	mation, merged with	ICICI	Bank
Limited,		(the defendant-bank for	short).	All
these	subsequ	ent events have	resulted	in
substituting		the names of the pa	rties to	the

Tata International Limited v. I.C.I.Ci. Bank Ltd.

Bombay HC19 Dec 2007CHS/1940/2007

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Case brief

AI extract

What is this about?

What did the court decide?

The preliminary issue was answered in favour of the plaintiff, and the chamber summons along with the preliminary issue was disposed of with no order as to costs.

What the court decided

¶1

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION.

¶2

CHAMBER SUMMONS No. 1940 of 2007 WITH SUIT No.1419 OF 1979

¶3

Tata International Limited ..Plaintiff.

Vs.

ICICI Bank Limited

..Defendant.

Mr A. S. Khandeparkar i/b Khaitan & Jaykar, Advocate for the Plaintiff.

¶8

Mr U. A. Mahajan i/b Divekar & Co. for the Defendants.

¶9

CORAM: V.C. DAGA,J. DATED: 19TH DECEMBER,2007.

¶10

ORDER :-

¶11

1.	This	suit was originally filed by
plaintiff-Com	pany;	named; as	Tata	Exports
Limited	aga	inst defendant-Sangli	Bank	Limited.
Subsequently,		original plaintiff-Com	pany	was
reconstituted		and renamed	as	"Tata
International		Limited" whereas,	the	defendant
"Sangli	Bank	Limited", by virtue	of the	scheme
of	amalga	mation, merged with	ICICI	Bank
Limited,		(the defendant-bank for	short).	All
these	subsequ	ent events have	resulted	in
substituting		the names of the pa	rties to	the

2.	The factual matrix lie in very narrow
compass.	It is not disputed that	the
defendant	bank failed to honour performance	of
guarantee	dated 13.3.1978 issued by it	on
behalf	of its constituent M/s	Vishal
Internation	al, Bazar Street, Bombay-1. It	is
not	in dispute that the bank guarantee	issued
by	the defendant-bank on 13.3.1978 was	to
remain	valid for 90 days from the date	of
issue.	It was invoked by the erstwhile	M/s.
Tata	Exports Limited on 12th June, 1978,	in
view	of the alleged breach of	contract
comitted	by the constituent of the d	efendant
bank	M/s Vishal International Limited.	Thus
plaintiff	requested for remittance of	the
amount	guaranteed by then defenda	nt-bank,
which	bank failed to remit. Hence	the

3.	On	being summoned, the	defendant-b	ank
appeared	an	d filed	its	written		statement
denying	its	liability on	various	grounds.		One
of	the	grounds in def	ence is	that	the	bank

4.	The defe	ndant-bank	admitted thre	e
documents	filed	by	plaintiff; namely,	bank
guarantee	dated	13.3.19	78 issued by it	and
letter	dated	12.6.1978;	whereby the	bank
guarantee	was	invoked	by the plaintiff	and
yearly	calender	for	the year 1978	to
demonstrate	that	90th	day i.e. 11th	June,
1978	was	bank	holiday being	Sunday.

7. The plaintiff has taken out	Chamber
Summons No. 1940 of	2007 to seek deletion of
the above preliminary	issue framed on
14.3.2007, contending that	the said issue
could not have been	framed as preliminary
issue, since it involves	mixed question of law
and fact and that the	genisis of the aforesaid
issue is already covered	by issue No.5 framed

8.	The	aforesaid	Chamber	Summons was
opposed	by	the	defen	dants contending	that	in
view	of ad	mission	of	the documents;	no	oral
evidence	is	require	d to	be taken.	The	issue
being	pure q	uestion	of	law, entire	suit can	be
disposed	of	on	this	issue. It	does	not
require	any	inv	estigation	of facts,	hence	it

Tata International Limited v. I.C.I.Ci. Bank Ltd.

Case brief

What is this about?

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Tata International Limited v. I.C.I.Ci. Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

Issues for consideration

Cases cited

Parties & counsel

Coram

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	"5.	Do defe	ndants	prove	that
the	guar	antee had	ex	pired	on
11th		June, 1978	and	, the	refore,
the		plaintiff’s clai	m	under	the
guarantee		ceased to		exist	in
force	as	alleged in	para	11	of
the		written		stat	ement?

	"Whe	ther		the	bank	guarantee	in
question		had		alre	ady	expired	on
the	date	of		filing	of	the	suit
as	contend	ed i	n	par	a 1	1 of	the
written						statem	ent?"

parties	agreed	that t	he	issue framed on
14.3.2007	be	deleted a	nd	issue No.5 framed on
27.1.1998	be	tried as	prel	iminary issue on its
own	merits.	Consequ	ently,	both parties were
directed	to	circulate		their additional
affidavits,	if	any,		together with the
compilation	of	judgments	on	which they propose
to rel	y.	Accordingly,		the plaintiff has
circulated	com	pilation	of	judgments but the
defendants	did	not.	Howe	ver, both parties, as
agreed,	advanced	their	oral	submissions on the
merits	of	the issue	and	jointly prayed that

urged	t	hat	the b	ank guar	antee	is	tripartite
contract		between	the	parties.		That	the terms
of	the	bank	guarantee	dated	13th	Marc	h, 1978
are	absol	utely	clear.	In		his	submission,

guarantee	ought	to	hav	e	been inv	oked	with	in 90
days	from	the	date	of	its issue	i.e.	o	n or
before	11th	June,	19	78.	That	it	was	involked
after	expiry	of	90	days	i.e.	on	12th	June,

11.	The contention of the defendant bank is
that,	it is immaterial whether 11.6.78	i.e.
90th	day was bank holiday. If it was	so, the
plaintiff	was well aware that 90th day	would
fall	on Sunday, as it was all the	more
necessary	for the plaintiff to invoke	bank
guarantee	on 89th day, rather than	waiting
till	the arrival of 90th day. That	contract
between	the parties was not to govern by	any
statute,	as such, the provisions of	General
Clauses	Act or Negotiable Instruments	Act
could	not be invoked to claim benefit	thereof.
In	nutshell, submission is that with	the
expiry	of 90th day, bank was absolved of	its
liability	to honour the subject	guarantee.
Since	the guarantee was invoked by	the
plaintiff	after expiry of the validity	period
mentioned	therein, the bank has rightly	denied

12.	Per contra, learned coun	sel for	the
plaintiff	submits that	th	e	bank guarantee	was
rightly	invoked on	12.6.1	978	i.e. 91st	day
since	the 90th day	i.e.		11.6.1978 was	a
"Sunday"	(bank holiday)	.	That	on 90th	day
nobody	would have	accep	ted	letter of	the
plaintiff	invoking bank	gua	rantee.	The	bank
would	not have hono	ured	its	commitment	under
the	bank guarantee	since	bank	was closed	on
that	day on account	of	S	unday/holiday.	He
submits	That nobody	can	be	asked to	perform

on to	submit t	hat if one cann	ot perfo	rm an act
by	reason	of circumstances	beyond	control,
then	that	lperson stands r	elieved	against the
consequences	of	his default by	reason	of the
maxim"	lex non	cogit ad im	possibilia	and actus
curiae	neminem	gravabit" (the	Law	does compel
man	to do	which he cannot	possibly	perform),

14.	Learned counsel for the	plaintiff
further	submits that un	der Section 25 of	the
Negotiable	Instruments	Act ("the N.I.Act"	for
short) wh	en the day on	which a promissory	note
or bill	of exchange is	at maturity is a	public
holiday,	the instrument	shall be deemed to	be
due on	the next	preceding business	day.
According	to him,	the expression	"public
holiday"	includes "Sund	ays" and/or any	other
day de	clared by th	e Central Government	by
notification	in the o	fficial Gazette, to be	a
public	holiday. The	learned counsel for	the
plaintiff	borrowing assi	stance from the	said

15.	Learn	ed counsel for t	he plainti	ff also
placed	reli	ance on	the	ratio	of Se	ction 10 of
the	General	Clauses	Act	and	went	to submit
that	the	principle	underly	ing	therein	can very
well	be	pressed	into	serv	ice.	He placed
reliance	on	the jud	gment	of	the Ap	ex Court in
the	case	of Huda	and	Anoth	er vs.	Dr.Babeswar

	"Subject	t	o	certain	e	xception	s, the
general	rule	is	that,	when	an	act	may be
done	or	a	be	nefit	enjoyed	du	ring a
certain	peri	od,	the	act	may be	don	e or
the	benefit	enjo	yed	upto	the	last	moment
of	the	last		day	of	that	period."

gravabit	(the	act of	court	shall
prejudice	no	man). Abo	ve being	the
position,	there	is nothing	infirm in	the
orders	passed	by the	forums	below.
However,	the	rate of	interest	fixed
appears	to	be slightly on	the	higher
side	and is	reduced to 9%	to be	paid
with	effect	from 3-12-2001	i.e.	the
date o	n which	the letter	was received	by
HUDA."	(Empha	sis supplied)

17.	At the o	utset, I	must me	ntion that	both
parties	proce	eded	to	argue	this	matter	on	the
premise	that	90th	day	was	11th	June,	1978	and
it	happened	to	be	bank	holiday	being	S	unday.
As	such wit	hout	consi	dering	the	question	as	to
from	which	day	the	period	would	begin	to	run,

had	the	right	to invoke	bank	guar	antee	till
and	including	90th	day i.e.		includ	ing	11.6.78
under	the ter	ms of	guarantee	the	fact	that	the
plaintiff	did	not	choose to	inv	oke	prior	to

21.	Having said so, the next question which
needs	consideration is, what should happ	en if
the	performance on the last date	specified
becomes	impossibility of performance and	the
act	is performed or done on the	next
practicable	day. One can conveniently	answer
this	question on the basis of the judgm	ent in
the	case of Madura Co. Private Limited	vs.
A.	Thangal J.M. and Anr, A.I.R. 1964	Kerala
190;	wherein the term of the contract	between
the	private parties provided that a suit	for
damages	should be brought within one year	from
the	date of delivery of the goods or fr	om the
date	the goods should have been	delivered.
The	consignee did not bring suit within	the
prescribed	period due to the fact that	Court
was	in recess. Hence suit was brought	on the
date	on which the Court reopened, althou	gh by
that	time, the prescribed period had	expired.

The	Kerala	High	Court he	ld	that	the	suit	was
within	time.	It	went	on	to		observe	that
Section	10	of	the Gen	eral	Claus	es	Act	would
not	be	applic	able but	pr	inciple	e	mbodied	in
the	said	Section	and sum	med	up	in	the	maxims:
"lex	non	cogit	ad	imp	ossibilia		and	actus
curiae	nemi	nem	gravabit"	co	uld		sustain	the

neither	the	righ	t	nor	the	reme	dy could	be
considered		as	extin	guished			because	the
non-filing		of	the	suit	stemm	ed	not from	any
act	or	omission	of	the	con	signee	but from	the
fact	that	the	Court	was	in	rec	ess; and	all
that	he	could	do,	nam	ely,	the	filing of	the

could		not	ex	tend	ti	me	for	doing	an	act	in
Court,		yet	if	the	de	lay	was	caused	not	by	any
act	of	their	ow	n,	but	by	some	act	of	the	Court
itself		- s	uch	as	the	fa	ct of	the	Court		being

closed,	the	suitor was enti	tled to do the act
on the	firs	t opening day.	The Court further
observed	that	the condition	could not be
considered		strictly a	condition precedent
where	it	was impossibility	of performance in
consequence		of the offices	of the Court being
closed	and	there being no	one to receive the
plaint.	The	suit filed	by the consignee

	"The question that arises for	decision
is,	whether when a fixed period is	given
to	do a certain act, and the	person
bound	to perform it is, from no act	of
his	own, but from some act or order	of
the	Court, prevented from carrying	it
out,	he gets the advantage of the	next
open	day. The same point has been	the
subject	of frequent discussion both	at
home	and here. In the case of	(1867)2
QB	410; the same question arose.	The
courts	were closed from Good	Friday
until	the following Wednesday, and	it
was	held that the transmission of	the

record on	Wednesday was a trans	mission
within the	period required by the	Act,
although the	period had expired.	That
case was f	ollowed in the case	of
Waterton v.	Baker, (1868) 3 QB 173	and
this has	since been considered as	the
leading case	in regard to	these
questions.	The broad principle	there
laid down	is that although the	parties
themselves c	annot extend the time	for
doing an	act in court, yet if the	delay
is caused n	ot by any act of their	own,
but by	some act of the Court,	itself,
such as	the fact of the court	being
closed, they	are entitled to do the	act
on the fir	st opening day. This,	then,
is the	general principle; and it	has
been followed	in this Court. In	the
case of Hosse	in Alli v. Donzelle, IL	R 5
Cal 906 a	tenant was sued under Act	VIII
of 1869,	and a decree obtained	against
him in the	terms of Section 52 of	that
Act, which	provides that if the	amount
of arrears,	interest and costs be	paid
within 15	days from the date of	the
decree, execut	ion shall be	stayed.
Owing to	the court being closed it	was
impossible to	carry out the	express
terms of	the Act; but the amount	was
paid on	the first opening day, and	this
Court, in	conformity with the rules	laid
down in (1	867) 2 QB 410, held that	the
payment	was	good.

Clauses	Act	is concerned,	learned	counsel	for
the	defendant	has rightly	contended	that	it
cannot	be	applied to priva	te contrac	ts but	as

"What is stipulated in clause	4 of	the
letter dated 30-10-2001	is	a
communication regarding re	fusal	to
accept the allotment. This	was done	on
28-11-2001. Respondent no.1	cannot	be
put to loss for the closure	of	the
office of HUDA on 1-1	2-2001	and
2-12-2001 and the postal	holiday	on
30-11-2001. In fact he had	no	control
over these matters. Even the	logic	of
Section 10 of the General C	lauses	Act,
1897 can be pressed into serv	ice.	Apart
from the said section	and	various
provisions in various other	Acts,	there
is the general principle that	a	party
prevented from doing an act	by	some
circumstances beyond his control,	can	do
so at the first subsequent	opp	ortunity
(See Sambasiva Chair v.	Armada	Ready).
The underlying object of the	p	rinciple
is to enable a person to do	what	he
could have done on a holiday,	on	the
next working day. Where, t	herefore,	a
period is prescribed for the	perfo	rmance
of an act in a court or off	ice, and	that
period expires on a holiday,	then	the
act should be considered to	have	been
done within that period if it	is done	on
the next day on Wichita the	court	or
office is open. The reason	is that	law
does not compel the performan	ce of	an
impossibility. (See Hossein	Ally	v.
Donzelle). Every consider	ation	of
justice and expediency wo	uld	require
that the accepted princip	le	which
underlies Section 10 of	the	General
Clauses Act should be applied	in	cases
where it does not otherwise	in	terms
l Th iil d	li
appy. e prncpes un	ryng	are
lex non cogit ad impossibilia	(the	law
does not compel a man iil i	to do	the i
mpossbe) and actus cura	e n	mnem

27.	Hav	ing noticed the	a	foresaid
observations		made by the	Apex	Court;
whereunder		underline principle of	Section	10
of the	G	eneral Clauses Act was	made	applicable
even tho	ugh	it was not applicable	to a	private
contract.		Extending underline		principle
contained	in	Section 10 of the	General	Clauses
Act,	it	can very well be said	that	"Sunday"
being	a	non banking business day,	it was	not
possible	fo	r the plaintiff to	invoke	bank
guarantee		on the last day. Th	erefore,	it was
rightly	inv	oked on 91st day	i.e.12th	June,
1978,	the	next practicable day.	The	bank
guarantee,		in my considered view,	was	invoked
within	the	period prescribed in	the	bank