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SUREPALLI NANDA
Chaitanya Energy Private Limited – Appellant
Versus
Indian Bank – Respondent
ORDER :
Surepalli Nanda, J.
1. Heard learned senior counsel Sri S.Ravi, appearing on behalf of the Petitioner, the learned counsel Smt. V. Dyumani appearing on behalf of 1st Respondent and learned senior designate counsel Sri D.V.Sitaram Murthy, representing Sri A.Chandra Shaker, learned counsel appearing on behalf of the 2nd Respondent.
2. The petitioner approached the court seeking prayer as under:
3. PERUSED THE RECORD :
a) The counter affidavit filed by the 1st Respondent, in particular, Paras 4, 5 and 6, read as under :
A bank guarantee is an independent contract, and its invocation must comply with its terms; disputes regarding underlying agreements should be resolved in civil court.
fraud or misrepresentation against the 2nd respondent, the question of interfering in the present Writ Petition directing the respondents not to invoke the bank guarantees provided by the petitioner ....
Point of Law : It is trite law that a Court can restrain encashment of bank guarantee in cases of established fraud in invocation of bank guarantee. The fraud has to be absolute and egregious, vitiat....
Bank guarantees can be invoked regardless of disputes, unless fraud or irretrievable harm is clearly established.
The Court held that the invocation of the bank guarantees by HPL was in accordance with the terms of the bank guarantees and that there was no case for interdicting invocation of the bank guarantees.....
A Bank Guarantee cannot be invoked after its expiration, as the obligation of the Bank to pay is strictly defined by the guarantee's terms.
The court emphasized the independence and unconditional nature of bank guarantees, while recognizing exceptions such as fraud, irretrievable injustice, or special equities.
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....
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