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ARUN PALLI, VIKRAM AGGARWAL
OFB Tech Private Limited – Appellant
Versus
KCC Buildcon Private Limited – Respondent
JUDGMENT
Mr. Vikram Aggarwal, J.
The appellant-defendant No.1 assails the order dated 15.04.2024, passed by the Commercial Court, Gurugram, vide which, while issuing notice of the injunction application preferred under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908 (for short "the CPC"), it has restrained the appellant-defendant No.1 from invoking/encashing the bank guarantee issued by the IndusInd Bank (respondent-defendant No.2), at the request of respondent No.1-plaintiff.
2. A suit for declaration along with consequential relief of permanent injunction was filed by respondent No.1-plaintiff against the appellant-defendant. The parties had business relations, wherein respondent No.1-plaintiff used to procure raw materials like bitumen, petroleum products, steel and other products from the appellant-defendant No.1, to use in its business of infrastructure and road construction across the country.
3. Though no formal contract had been executed between the parties and all procurements were based on purchase orders and counter delivery invoices/challans, two bank guarantees amounting to Rs. 3.5 crore and Rs. 1.5 crore each had been furnished at the instance of the res
The court emphasized the obligation to decide injunction applications within 30 days as per CPC, ensuring timely justice in commercial disputes.
Bank guarantees must be honored and cannot be injuncted during their validity unless a case of fraud, irretrievable injustice, or special equities is established.
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.
Enforcement of bank guarantees is upheld unless established fraud or irretrievable injustice is demonstrated; the onus lies with the party seeking injunction to provide clear evidence for equitable r....
An ex-parte injunction on a bank guarantee is impermissible unless egregious fraud or irretrievable injustice is established; the bank guarantee is an independent contract governed by its terms.
A bank guarantee is an independent contract, and injunctions against its invocation require clear evidence of fraud or irretrievable injustice, which were not established in this case.
The court held that interim injunctions regarding bank guarantees must include conditions to keep the guarantees alive to prevent undermining the interests of the bank providing the guarantee.
The main legal point established in the judgment is that the invocation of a bank guarantee cannot be injuncted unless there is an allegation of fraud or irretrievable injury, and that a bank guarant....
Point of Law : Invocation of Bank guaranteed – Stay of - Just as injunctions relating to invocation of the bank guarantee are granted in exceptional cases, the same logic applies to grant of stay of ....
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