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IN THE HIGH COURT OF DELHI AT NEW DELHI
HARISH VAIDYANATHAN SHANKAR
Sadguru Engineers and Allied Services Pvt. Ltd. – Appellant
Versus
National Highways Infrastructure Development Corporation Ltd. – Respondent
| Table of Content |
|---|
| 1. petition filed under arbitration act. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11) |
| 2. petitioner's claims regarding invocation of bgs. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20) |
| 3. respondent's position on bg invocation. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28) |
| 4. court's jurisdiction under section 9 of a&c act. (Para 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38) |
| 5. court's reasoning and decision on bgs. (Para 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56) |
| 6. final conclusions of the court. (Para 57 , 58 , 59 , 60 , 61 , 62) |
JUDGMENT :
HARISH VAIDYANATHAN SHANKAR, J.
1. The present Petition has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 [A&C Act] seeking the following reliefs:
“a. Pass an ex-parte ad-interim order, thereby restraining the Respondents from invoking/ encashing the bank guarantees issued by the State Bank of India i.e., herein Respondent No.2; namely:
i. Performance Bank Guarantee No. 0151824BG0000014 for Rs.3,24,00,324/- dated 20.01.2024;
ii. Mobilization Bank Guarantee No. 0151824BG0000057 for Rs.3,50,46,351/- dated 04.03.2024;
iii. Performance Bank Guarantee No. 015
The invocation of bank guarantees must adhere strictly to the contractual terms; courts may intervene to prevent encashment if it risks undermining arbitration.
Unconditional bank guarantees may only be reviewed for egregious fraud or irretrievable injustice; disputes over contract performance must be resolved through arbitration.
The court emphasized the independence and unconditional nature of bank guarantees, while recognizing exceptions such as fraud, irretrievable injustice, or special equities.
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.
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 can only be restrained in exceptional cases of fraud or irretrievable injustice.
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