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IN THE HIGH COURT OF DELHI AT NEW DELHI
HARISH VAIDYANATHAN SHANKAR
Safety Controls And Devices Ltd. – Appellant
Versus
Ntpc Renewable Energy Limited – Respondent
| Table of Content |
|---|
| 1. petition filed for interim measures regarding bank guarantee. (Para 1 , 2 , 3) |
| 2. petitioner's arguments focus on delays and fraud. (Para 4 , 5 , 6 , 10) |
| 3. respondent asserts entitlement to invoke bank guarantee based on contract terms. (Para 11 , 12) |
| 4. court reviews statutory framework under section 9 of the act. (Para 14 , 15 , 16 , 17) |
| 5. judiciary reluctant to interfere with unconditional bank guarantees. (Para 18 , 19 , 20 , 21) |
| 6. petition dismissed, no grounds for judicial interference found. (Para 32 , 33 , 34) |
JUDGMENT :
HARISH VAIDYANATHAN SHANKAR, J.
1. The present petition under Section 9 of theArbitration and Conciliation Act, 1996, The Act has been filed on behalf ofM/s Safety Controls and Devices Ltd., The Petitioner, seeking ad-interim and interim measures restraining Respondent No.1 from acting upon, encashing and/or appropriating the Advance Bank Guarantee and Insurance Surety Bonds furnished by the Petitioner underAgreements bearing Reference No. NRE-CS-5800-004(SS1)-9-FC-COA-207 & NRE- CS-5800-004(SS1)-9-SC-COA-208 both dated 12.03.2025 for ‘ Substation Package of 945MVA Capacity for Power Evacuation from Solar PV Projects at Bikaner, Rajasthan ’
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.
Bank guarantees are independent and unconditional contracts, and courts should refrain from interfering with their invocation unless exceptional circumstances such as fraud or irretrievable injury ar....
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 invocation of bank guarantees must adhere strictly to the contractual terms; courts may intervene to prevent encashment if it risks undermining arbitration.
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