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DELHI HIGH COURT
VIBHU BAKHRU
Dadheech Infrastructures Private Limited – Appellant
Versus
DTE Gen MD Accn Project – Respondent
| Table of Content |
|---|
| 1. introduction of contract and guarantees involved. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. petitioner's argument against invocation of bank guarantees. (Para 8) |
| 3. court's reasoning on bank guarantees and conditions of invocation. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19) |
| 4. legal stance on the contract's termination and specific relief. (Para 20) |
| 5. final decision to dismiss the petition. (Para 21) |
JUDGMENT
[Hearing held through video conferencing]
Vibhu Bakhru, J. (Oral)--The petitioner has filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereafter `the Act'), inter alia, praying that the respondent may be restrained from invoking and encashing the Performance Bank Guarantees - Bank Guarantee No.0770171GPER0040 for an amount of Rs.11,00,00,000/- and Bank Guarantee No. 0770171GPER0042 for an amount of Rs.2,91,00,000/- (hereafter referred to as the `Performance Bank Guarantees'). The petitioner further prays that the respondent may be injuncted from encashing the Retention Guarantees being the Bank Guarantees furnished by the petitioner against disbursal of Retention Money, being Bank Guarantee No. 0770171GPER0037 f
The court ruled that bank guarantees must be honored regardless of existing disputes, affirming their unconditional nature and limiting judicial intervention to cases involving fraud or irretrievable....
The unconditional nature of bank guarantees requires them to be honored despite disputes between the parties, and specific enforcement of a contract is impermissible under the Specific Relief Act, 19....
Bank guarantees cannot be interdicted on account of contractual disputes between the parties, and exceptions for interdicting bank guarantees include cases of egregious fraud and irretrievable injust....
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.
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.
Unconditional bank guarantees can only be interdicted on grounds of egregious fraud and special equities.
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....
Bank guarantees cannot be interdicted due to contractual disputes unless fraud or irretrievable injustice is established.
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