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DELHI HIGH COURT
VIBHU BAKHRU
Kuber Enterprises – Appellant
Versus
Doosan Power Systems India Pvt. Ltd. – Respondent
| Table of Content |
|---|
| 1. factual background about the contract and dispute between parties. (Para 2 , 4 , 6 , 7 , 8 , 9 , 10) |
| 2. arguments presented by the petitioner regarding interdicting the bank guarantee. (Para 3 , 11 , 12 , 22 , 24 , 25) |
| 3. court observations on the limited grounds for interdicting bank guarantees. (Para 13 , 14 , 15 , 16 , 17 , 18 , 19 , 21) |
| 4. final orders regarding the cheque and petition disposition. (Para 23 , 26) |
JUDGMENT
[Hearing held through videoconferencing]
Vibhu Bakhru, J. (Oral)
IA Nos. 6495/2021, IA 6496/2021
1. Allowed, subject to all just exceptions.
O.M.P.(I) (COMM.) 158/2021
2. The petitioner has filed the present petition under Section 9 (1) of the Arbitration and Conciliation Act, 1996 (hereinafter the `A&C Act'), inter alia, praying as under:
"i) Direct the Respondent not to invoke and/or encash the Performance Bank Guarantees No. 003GT02180720033 of Rs.1,18,75,000/- dated 13.03.2018 till further orders;
ii) Direct the Respondent not to encash the HDFC bank cheque bearing No. 000209 amounting to Rs.1,18,75,000/- till further orders;
iii) Restrain the Respondent from taking any coercive steps against the Petitioner in relation to the Contract
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.
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 - 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....
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.
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....
Bank guarantees cannot be interdicted due to contractual disputes unless fraud or irretrievable injustice is established.
The court emphasized the independence and unconditional nature of bank guarantees, while recognizing exceptions such as fraud, irretrievable injustice, or special equities.
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....
Unconditional bank guarantees may only be reviewed for egregious fraud or irretrievable injustice; disputes over contract performance must be resolved through arbitration.
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