Bombay High Court
S.C.J.L.(India) Ltd.
Versus
Union Bank
Decided On:

Headnote:Section 128-Liability of surety-A engaging B as contractor for carry not certain works -Bank furnishing Bank guarantee in favour of A at instance of B undertaking to pay guarantee amount-Default on part of B is carry not works-Huge losses to A -A suspending contracts with B and invoking Bank Guarantee.

       Held-Bank guarantee separate and independent contract between Bank and Beneficiary enforceable on its own terms and independent of suspension of contracts by A with B. Liability of guaranter to pay guarantee amount net at all affected.

       For Citation : AIR 1992 Bom 131