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VIBHU BAKHRU, AMIT MAHAJAN
Container Corporation Of India Ltd. – Appellant
Versus
Shivakriti International Ltd. – Respondent
JUDGMENT :
VIBHU BAKHRU, J.
1. The appellant has filed the present appeal impugning an ex parte order dated 12.03.2021 passed by the learned District Judge, inter alia, directing that the status quo be maintained in respect of the Performance Bank Guarantee no. 3178120BG0000192 dated 21.08.2020 and the Security Deposit Bank Guarantee No.3178120BG0000272 dated 06.10.2020 (hereafter ‘the PBG’ and ‘SDBG’ respectively).
2. Respondent no.1 (M/s Shivakriti International Ltd. – hereafter ‘SIL’) filed a suit, inter alia, praying for a decree of permanent injunction restraining the appellant (hereafter ‘Concor’) from invoking and encashing the PBG and SDBG. SIL further sought a decree of permanent injunction restraining respondent no.2 (State Bank of India) from acting upon any letter received from Concor demanding the invocation of the two bank guarantees in question.
3. The case set up by SIL in its plaint is briefly stated as under:
3.1 Concor issued a Letter of Acceptance (LoA) dated 06.02.2017 awarding the work pertaining to Signalling and Telecommunication at Khemli Station on Chittorgarh-Udaipur Section of Ajmer Division on North Western Railway. SIL signed the said LoA on 01.03.2017. In
The main legal point established in the judgment is that unconditional bank guarantees cannot be interdicted except in cases of established fraud or irretrievable harm to one of the parties. Financia....
Encashment of unconditional bank guarantees is permissible unless accompanied by established fraud or irremediable injustice; financial difficulties do not justify injunctions against such guarantees....
Bank - Bank guarantee cannot invoke - Bank guarantees cannot be interdicted on account of disputes between parties and any allegation that respondent has been reluctant to join proceedings for an ami....
Bank guarantees can only be interdicted in exceptional circumstances such as fraud or irretrievable injustice. Mere contractual disputes do not give rise to special equities for interdicting a bank g....
A party seeking to restrain the invocation of a bank guarantee must demonstrate either clear fraud or irretrievable injustice; mere contractual disputes do not suffice for injunctions.
The court clarified that injunction against unconditional bank guarantees requires proof of egregious fraud, irretrievable injustice, or special equities, none of which were sufficiently substantiate....
Bank guarantees are independent contracts and should be honored as per their terms, and any dispute between the parties does not affect the invocation of the bank guarantee.
The court reinforced that unconditional bank guarantees cannot be restrained unless egregious fraud or irretrievable injustice is established, which was not proven by the petitioner.
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