Back
SOUMEN SEN, BISWAROOP CHOWDHURY
Orissa Metaliks Private Limited – Appellant
Versus
Titagarh Rail Systems Ltd. – Respondent
JUDGMENT :
Soumen Sen, J.
1. An order of injunction restraining the appellant from operating the bank account without leaving a sum of Rs.7,75,44,000/- crores realised by the appellant upon invocation of the bank guarantee is the subject matter of challenge in this appeal.
2. The impugned order was passed on 27th November 2024 read with an order dated 28th November 2024 in an application for being money Suit (com) 160 of 2024 injunction and attachment before judgment being I.A. No.01 of 2024 in the suit filed by the respondent/plaintiff praying, inter alia, for a declaration that the bank guarantee dated 18th January 2023 is null and void and the appellant/defendant is entitled to a money decree of Rs.8,99,34,044/- crores realized by the appellant on invocation of the bank guarantee and a sum of Rs.115,57,28,449/- on account of the damages suffered by reason of termination of the contract.
3. Briefly stated, on March, 2022 the Railway Board, Ministry of Railways, Government of India issued an approval for procurement and operation of 05 rakes of BOXNHL wagons (with 01 brake van per rake) by the defendant under the General Purpose Wagon Investment Scheme (GPWIS).
4. The plaintiff represe
The court ruled that the plaintiff's failure to disclose material facts and the express stipulation that time was of the essence justified the invocation of the bank guarantee.
Maintainability of Suit - Record reveals that defendant’s contention that no notice under Section 80 CPC was given by plaintiffs was also decided in favour of plaintiffs while deciding an application....
The appellant's failure to present evidence does not exempt contractual obligations; timely fulfillment is crucial in commercial contracts, and discrepancies must be addressed effectively and timely ....
Invocation of an unconditional bank guarantee cannot be restrained unless fraud or irretrievable injustice is established; the nature of bank guarantees is independent and absolute.
A bank guarantee is an independent contract, and courts will not interfere with its execution unless there are exceptional circumstances such as fraud or irretrievable injustice.
Breach of contract – Award of damages—Work schedule is required for progressive payment and target and it is sine qua non for execution of contracted work.
Writ jurisdiction cannot be used solely for granting interim relief. Disputed factual matters are not within the purview of writ jurisdiction.
The court emphasized the importance of adhering to contract terms and the requirement for proof of loss or damage before invoking a Bank Guarantee.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
