Judgment

Jagdish Singh Khehar, J.

1. Leave granted.

2. The appellant – M/s Adani Agri Fresh Ltd. (hereinafter referred to as `M/s AAFL') is a supplier of fruit and vegetables. It entered into a contractual agreement with M/s RMS Fruits and Company (hereinafter referred to as `M/s RMSFC'), a wholesale dealer in fruits, whose proprietor is one Mahaboob Sharif (respondent No.1 herein). For securing payment in lieu of the products supplied by the appellant to respondent No.1 -M/s RMSFC, the appellant required respondent No.1 to furnish bank guarantees, whereby the appellant would be entitled to recover the proceeds of the products, transported by it to M/s RMSFC. Three such registered bank guarantees constitute the basis of the controversy in hand. The said bank guarantees were executed by the State Bank of Mysore on 24.12.2010, 09.02.2011 and 10.02.2011. The terms of the bank guarantees being identical, reference to one will be sufficient for all intents and purposes. Relevant clauses of the first bank guarantee are being extracted hereunder:

“NOW THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDIOTIONALLY GUARANTEES as follows, irrespective of the validity and legal effects of the agreement, i