Court : Kerala
Reported in : 126CompCas32(Ker); 2003(3)KLT808
..... hindustan construction co. ltd. v. state of bihar and ors. (1999 (8) scc 436) the apex court held that the terms of bank guarantee are extremely material. since the bank guarantee represents an independent contract between the bank and the beneficiary, both the parties would be bound by the terms thereof. the court also held that the invocation will have to ..... is due. defendants are liable for 20% interest. first defendant requested the plaintiff to extend the bank guarantee for one lakh for a period of one year. plaintiff extended the period of bank guarantee upto 11.5.1985. kerala state electricity board terminated the contract and has proceeded to take further action against the defendants. defendants did not pay the amount. suit ..... . dr. m.n. kaul (air 1967 sc 1634) held that whether a guarantee is enforceable or not depends upon the terms under which the guarantor bound himself. in ..... was the bounden duty of the bank and the board to produce the bank guarantees before court and establish the same. the apex court in delhi development authority v. skipper construction co. (p) ltd. (2003 (1) scc 547) held that though contract of guarantee is a primary transaction it is independent transaction containing independent obligations. apex court in state of maharashtra v .....Tag this Judgment!
Court : Delhi
Reported in : II(1990)BC51; 73CompCas701(Delhi); 41(1990)DLT359; 1990RLR252
..... there can be no occasion to recall the mobilisation amount, and, thereforee, no occasion to invoke the mobilisation guarantee. the recovery of the mobilisation advance according to the terms of the contract, guarantee, can be there if the amount advanced is not used for the contract, or the amount advanced is misappropriated. neither of these conditions is satisfied in the instant case, as the ..... /16/136 dated 7.12.1987 is annexed as 'annexure-i' (at page 46), and is a 'security for compliance with his obligations in accordance with the contract'. this guarantee is called a performance guarantee, and guarantee no. np/g/16/137 dated 19.11.87 is annexed as 'annexure-j', and is relate to money advanced as 'mobilization advance' the petitioners. (5) ..... the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called a 'contract of indemnity', section 126 defines a contract of guarantee. it states : 'a contract of guarantee is a contract to perform the promise, or discharge the liability, of a third person in case of his default. the person who gives the ..... & engineers (p) ltd. (79) it is the further contended by mr. p.p. malhotra, counsel for the respondents that the observations of the supreme court that the bank guarantees are ''independent contracts' by virtue of the provisions of article 141 of the constitution, the said observations amount to 'law declared' within the meaning of article 141 of the constitution, and this .....Tag this Judgment!
Court : Mumbai
Reported in : AIR1997Bom35; 1997(4)ALLMR120; (1996)98BOMLR501
..... . there must be a specific plea of fraud. the party alleging fraud must necessarily plead and produce all necessary evidence in proof of the fraud in execution of the contract of guarantee. moreover, fraud like any other charge of a criminal proceeding must beestablished beyond reasonable doubt. afinding as to fraud cannot be based onsuspicion and conjecture, the material andevidence ..... necessary evidence in proof of the fraud in execution of the contract of the guarantee, but not the contract either of the original contract or any of the subsequent events that may happen as ground for fraud.'it was held in the above case (at page 409):'the grant ..... state trading corporation of india ltd. v. jainsons clothing corporation, : air1994sc2778 are also pertinent:'the court should normally insist uponenforcement of the bank guarantee and the. court should not interfere with the enforcement of the contract of guarantee unless there is a specific plea of fraud or special equities in favour of the plaintiff. he must necessarily plead and produce all the ..... of injunction is a discretionary power in equity jurisdiction. the contract of guarantee is trilateral contract which the bank has undertaken to unconditionally and unequivocally abide by the terms of the contract. it is an act of trust with full faith to facilitate free flow of trade and commerce in internal or .....Tag this Judgment!
Court : Mumbai
Reported in : AIR1987Bom308; 1987(2)BomCR405; 69CompCas389(Bom)
..... invoke the bid guaranteed in terms of the contract and hence a lear primafacie case exits of issuing an injunction restraining the bank form making the payment. the balance of converience also is clearly in favour of ..... revoked before the acceptance as kirlokar have done, that the ntpc did not act act to their detriment relying on the bid of kirloskar, that the bid guarantee could only be invoked if the contract were to be awarded to kirloskar and they had failed to pay the amount or to perform their part which stage never arose, that ntpc could not ..... 7.4 and the owner ntpc is enabled by this clause to forfeit the amount if kirloskar were to fail to submit within 30 days after the performance guarantee/date of notice of award of the contract.35. the contra proferedum rule of interpretation provides that if two interpretations are possible, the the one fireball to the party who had forfeited the ..... % of the bid price along with the bid and a contract performance guarantee for 10% of the contract value at the time of award of contract.' the contract documents dilated on the submissions of the bid guarantee and performance guarantee thus :'7.2. the bid guarantee shall be made payable without any condition to the owner. the bid guarantee shall be valid for a period of seven (7) calendar .....Tag this Judgment!
Court : Karnataka
Reported in : 68CompCas450(Kar)
..... to warrant interference by an injunction. 32. therefore a reference to the said various paragraphs would clearly bring out that there is a marked distinction between letters of credit, contracts of guarantee and contracts of indemnity. the said supreme court case involved only a letter of credit. therefore, the reliance placed by learned counsel, shri sundaraswamy, on the said decision will not ..... to pay the money to the party concerned irrespective of the fact as to whether any loss to damage is proved or not. every document whether it be a contract of guarantee or a contract of indemnity, must be considered by the court with reference to the words found in the document and the tenor thereof. the court should find out from the ..... : air1980delhi174 . 16. to appreciate the said rulings referred to by both the advocates, it is necessary to find out the meaning of the words: (i) letter of credit; (ii) contract of guarantee ; and (iii) contract of indemnity. 17. the learned author h.p. sheldon, in his practice and law of banking, 8th edition (revised), has stated: 'letter of credit. - there are various kinds ..... learned counsel, shri sundaraswamy, that the said ruling indicated that there was not much of difference between letter of credit and contract of indemnity or contract of guarantee, does not appeal to me in the least. there is no reference to contract of guarantee or contract of indemnity in the said supreme court case. paragraph 27 of the said supreme court case reads (at page 200 .....Tag this Judgment!
Court : Karnataka
Reported in : ILR1992KAR1053; 1992(2)KarLJ583
..... agreement in terms of section 144 is proved.34. in ayyanna v. veerabhadram, air 1926 madras 62 it has been held that when a contract of guarantee mentions two sureties but only one signs the bond, it binds the surety who signs it unless it is shown that he was to be ..... that it was incapable of being enforced. it was also further held that it could not be taken to be a sufficient consideration to support the contract of guarantee. no doubt, in that case, the division bench decision of the high court allahabad in nanak ram v. mehin lal, (1875-77) ilr ..... qua harisingh passed from the plaintiff at the time of execution of ex.2 nor was anything done for his benefit on that day. the contract of guarantee, therefore, in my opinion, has been rightly held by the learned judge to be one without consideration'.27.4. it is not possible to ..... that anything done or any promise and for the benefit of the principal debtor must be contemporaneous to the surety's contract of guarantee in order to constitute consideration therefor. a contract of guarantee executed afterwards without any consideration is void. the case decided in air 1940 oudh 346, however, always down that the ..... after the original borrowing the creditor must prove, if he wants to proceed against the surety or guarantor, that in consideration of the contract of surety or guarantee he did something or refrained from doing something. it has also been further held that forbearance to sue is not sufficient to constitute consideration .....Tag this Judgment!
Court : Andhra Pradesh
Reported in : 55CompCas677(AP)
..... and sons v. banians and co., air 1926 mad 544, for the position that unless the debtor is a party to the contract of guarantee, it cannot be a contract of guarantee; but we are not persuaded to accede to the same in view of the authoritative decisions to the contra. in fact, in this ..... view we have taken, we have no hesitation to reject the contention of the learned counsel for the appellant. to sum up : (1) a contract of guarantee, unlike a contract of indemnity which is bilateral, is tripartite where three persons, viz., the principal debtor, the creditor and the surety, are involved. but, it ..... . bhownagree, air 1940 bom. 315, a division bench comprising beaumont c.j. and kania j. held that in order to constitute a contract of guarantee there must be a third contract by which the principal debtor expressly or impliedly requests the party to act as surety. in s. chattanatha karayalar v. central bank of india ..... it is substance that has to be looked into and not the form in order to determine in such cases as to whether it is a contract of guarantee or indemnity. in suresh narain sinha v. akhauri balbhadra prasad, : air1957pat256 , a division bench held that it is not necessary that the ..... of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor. 145. in every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety; and the surety is entitled to recover from the principal debtor whatever .....Tag this Judgment!
Court : Andhra Pradesh
Reported in : AIR1981AP153
..... decision in periyamianna v. banians and co.. air 1926 mad 544 for the position that unless the debtor is a party to the contract of guarantee, it cannot be a contract of guarantee; but we are not persuaded to accede to the same in view of the authoritative decisions to the contra. in fact, in this ..... view we have taken, we have no hesitation to reject the contention of the learned counsel for the appellant.26. to sum up :--(1) a contracts of guarantee, unlike a contract of indemnity which is bilateral, is tripartite where three persons, viz., the principal debtor, the creditor and the surety, are involved but, it is ..... it is the substance that has to be looked into and not the form in order to determine in such cases as to whether it is a contract of guarantee or indemnity.in suresh narain v. akhauri, : air1957pat256 , a division bench held that it is not necessary that the principal debtor should as a ..... , the principal debtor as well, by virtue of reference to clause 4 of ex. a-1 in the recitals of ex. a-2 because the contract of guarantee could also be oral. merely because the third-party, namely, the principal debtor, does not figure in by nomination in ex. a-2, it cannot ..... performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor. 145. in every contract of guarantee there is an implied promise by the principal debtor to idemnify the surety; and the surety is entitled to recover from the principal debtor whatever sum .....Tag this Judgment!
Court : Madhya Pradesh
Reported in : III(2008)BC177
..... terms of the document on the basis of which the respondent nos. 1 and 3 has claimed the amount from the bank guarantee constitute a contract of guarantee and not a contract of indemnity. under the bank guarantee in question, the bank has undertaken to pay any amount not exceeding rs. 20,23,675/- to the respondent nos. ..... affirmed the order of the learned single judge and dismissed the appeal.15. on the other hand, learned counsel for respondent has submitted that bank guarantee is an independent contract between a bank and the beneficiary i.e. the department and if appellant commits any breach then the decision of the department is final so ..... the said decision.12. in the case of a.s. motors pvt. ltd. (supra), it is held that normally in cases arising of contract and when a bank guarantee is proposed to be revoked a writ court will not normally interfere as the matter is as per the agreement however if one of the ..... is over and subject to the e.e. certifying that no liability attached to the contractor.4. the appellant as per clause 5 of the contract furnished a bank guarantee vide b.g. no. sbb/npnd/bg/rpnn/88/95-96. clauses 2 and 3 is relevant which reads as under:2. we state ..... out a prima facie strong case. we find no force in the contention. all the clauses of the contract of the bank guarantee are to be read together. bank guarantee/letters of credit is an independent contract between the bank and the beneficiary. it does not depend on the result of the dispute between the person .....Tag this Judgment!
Court : Supreme Court of India
Reported in : AIR1994SC2778; 1995(1)ARBLR351(SC); I(1996)BC27(SC); 85CompCas470(SC); JT1995(5)SC403; (1995)2MLJ89(SC); (1995)109PLR287; 1994(4)SCALE332; (1994)6SCC597; Supp3S
..... the necessary evidence in proof of the fraud in execution of the contract of the guarantee, but not the contract either of the original contract or any of the subsequent events that may happen as a ground for fraud.12. under these circumstances, the high court was wholly wrong in ..... entered into by the respondent with the appellant. the learned single judge was quite right in refusing to issue the injunction in terms of clause 17 of the contract and the bank guarantee given by the respondent.13. pending appeal, this court directed the respondent to deposit the amount in the registry and the registry was directed to keep the amount ..... and balance of convenience is in favour of issuing injunction to prevent irremediable injury. the court should normally insist upon enforcement of the bank guarantee and the court should not interfere with the enforcement of the contract of guarantee unless there is a specific plea of fraud or special equities in favour of the plaintiff. he must necessarily plead and produce all ..... a certificate by the named officer to the bank of the default committed by the respondent in the performance of the contract. the grounds for the breach of contract are irrelevant. bank guarantee clearly mentions that the bank guarantee, thereby, given by the respondent is 'irrevocable and unconditional'. in the event of the respondent committing default or failure for whatever reason on its .....Tag this Judgment!