The main legal point established in the judgment is the requirement for absolute and egregious fraud to injunct the encashment of Bank Guarantee, as well as the unconditional nature of the Bank Guarantee and the joint and several liability of the consortium members.

D.D. Sinha, J.

The appellant has filed the suit, inter alia, seeking a declaration that the Joint Bid Agreement (JBA), the Counter Guarantee, and its invocation by the respondent no.1 vide its letter dated 21.9.2012 is illegal, wrongful and vitiated by fraud and is, therefore, null and void, non-est and of no effect whatsoever. The appellant has taken out a Notice of Motion for an order that pending the hearing and final disposal of the suit, direct and restrain by way of a temporary injunction the respondent no.3 from acting by themselves or through their servants, agents, representatives and/or all other persons claiming by, through or under them paying to the respondent no.1 or to anyone else any amount purportedly under the Counter Guarantee. Similar temporary injunction is sought against the respondent no.1 from receiving from the respondent no.3 any amount purportedly under the Counter Guarantee. The appellant has also claimed a temporary injunction restraining the respondent nos.1 & 3 from invoking and/or encashing the Counter Guarantee. The learned single Judge vide judgment dated 5.10.2012 dismissed the Notice of Motion. Being aggrieved by the said judgment of the learned single Judge, the appellant has filed the present appeal challenging the impugned judgment.

2. The learned counsel for the appellant has submitted that the brief facts of the case are as follows:-

(a) The appellant is a company incorporated in India. The respondent no.1 is a company incorporated in Singapore, wholly owned and controlled by Tamsek Holdings, an investment company of the Government of Singapore. The respondent no.2 is a subsidiary of the respondent no.1.

(b) The present appeal impugns the judgment dated 5.10.2012 whereby the learned single Judge has dismissed the Notice of Motion filed by the appellant seeking an injunction against the encashment of the Bank Guarantee.

(c) It is the stand of the appellant that in view of the law declared by the Apex Court in a catena of decisions with respect to Bank Guarantee and the approach of Courts in granting injunctions restraining the invocation of Bank Guarantee, it is evident that the Court can and ought to grant an injunction for invocation of Bank Guarantee if a prima facie case of (i) fraud; (ii) irretrievable injustice; (iii) invocation of a Bank Guarantee not being in terms thereof; and (iv) special equities is made out. It is submitted that once the appellant prima facie satisfies the Court regarding the existence of any of the conditions enunciated above, the appellant is entitled to interim relief.

3. The learned counsel for the appellant has submitted that the Bank Guarantee dated 13.10.2010 issued by the respondent no.3 in the sum of Rs.17,42,00,000/-being the Bank Guarantee No.29101GPER018310 (Counter Guarantee) in favour of the respondent no.1 is not the kind of guarantee which is usually given in the course of ordinary commercial transactions. The appellant has entered into a Joint Bid Agreement dated 21.8.2009 with the respondent no.2. The respondent no.2 on behalf of the consortium submitted a Bid Bond (issued by Standard Chartered Bank) in the sum of Rs.67,00,00,000/-to the respondent no.4. The respondent no.1 issued an indemnity to Standard Chartered Bank for the Bid Bond submitted by the Respondent no.2. The appellant in turn submitted the Counter Guarantee to the respondent no.1. Thus, the transaction was not a regular commercial transaction and the Counter Guarantee is not a kind of Bank Guarantee usually issued in the course of commercial transactions. Therefore, the constraints and limitations normally associated with restraining payment under regular Bank Guarantee are not attracted in the present case.

4. The learned counsel for the petitioner further submitted that the suit guarantee is a conditional one and the same can be invoked only in terms of the guarantee. Clause 4 of the suit guarantee reads as under:-

“4. In consideration of PSA International Pte Ltd.