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 : Kerala
Reported in : AIR1999Ker72
..... put before him in precise and explicit terms. it cannot be said in this case that the terms and conditions contained either in the bank guarantee or underlying contract are un-understandable or imperfect. the dispute as to the liability to indemnify the hscl in respect of the contribution can be adjudicated in a ..... can be led by the parties to get out of the express terms thereof. it further held :'whether the express terms of the guarantee bond give rise to the contract of guarantee sought to be enforced will be the only limited enquiry which could be gone into by the courts while deciding the rights and ..... the sum payable by the contractor under the provisions of this clause.'ii. now let us ascertain the nature of and circumstances under which the contract of bank guarantees (exts. a1 to a 3) were given by the bank in favour of the hscl on behalf of the geo-tech. an agreement was ..... 't pay to say he will'. this appears to be a cynical approach but really thought-provoking. this popular belief is totally denounced in the case of contract of bank guarantees. in tarapore & co., madras v. v/o tractors export, moscow (1969) 2 s.c.r. 920 : (air 1970 sc 1168) the supreme ..... obligations flowing from such contract of guarantee which is a tripartite contract between the creditor, principal debtor and the surety. once such suretyship agreement is established on the clear terms of the bond then .....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 : 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!
Court : Delhi
Reported in : III(2006)BC554; 2006(1)CTLJ448(Del); 129(2006)DLT38; 2006(88)DRJ291; (2006)144PLR24
..... the principal debtor is released, or by any act or omission of the creditor, the legal consequence of which is the discharge of the principal debtor. a bank guarantee is contract of a guarantee where the bank acts as the surety and the surety is normally discharged by virtue of section 134 when the principal debtor is released. this is the normal position ..... of which is the discharge of the principal-debtor, the surety is also automatically discharged. thereforee, under the scheme of the provisions under the contract act itself, the contract of guarantee is not entirely independent of the underlying contract between the principal-debtor and the creditor and/or of their acts of omission or commission resulting in any variation or modification or discharge of ..... no. 1 and the plaintiff, i.e., between the creditor and the principal debtor even to the limited extent permissible under section 134 of the indian contract act, 1872. another important circumstance is that the guarantee itself reveals that the bank is liable to pay on the first demand without the bank having any right of objection. this is equivalent to the ..... new delhi-110058(hereinafter called the 'contractor') shall deposit with pati-bel j.v., b-3/58, 3rd floor, safdarjung enclave, new delhi a bank guarantees to guarantee his proper and faithful performance under the said clause of contract in an amount of rs. 25,00,000/- (rupees twenty five lacs only)we the bank of baroda, opp. azad maidan panji -goa as .....Tag this Judgment!
Court : Mumbai
Reported in : 96CompCas897(Bom)
..... else. 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 proceedings must be established beyond reasonable doubt. a finding as to fraud cannot be based on suspicion and conjecture. the ..... invoke the bid guarantee in terms of the contract and hence, a clear prima facie case exists in favour of kirloskar. it was also held that the balance of convenience also is clearly in favour of kirloskar ..... bid could be revoked before the acceptance as kirloskar have done. the ntpc did not act to their detriment relying on the bid of kirloskar. 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. thus, ntpc could not ..... be impaired or discharged by any variation or alteration made, given, conceded with or without their knowledge or consent, by or between the parties to the said written contract. the validity of the bank guarantee will be extended by a further period of 12 months at the request of defendant no. 1. the plaintiff further states that till may, 1995, they did .....Tag this Judgment!
Court : Chennai
Reported in : AIR1978Mad134
..... bombay high court in ramachandra v. shapurji, : air1940bom315 beaumont c. j. speaking for the bench, after referring to the nature of a contract of guarantee and after having said that a contract of guarantee will involve two contracts, namely, one between the creditor and the principal debtor and the second between the creditor and the guarantor, observed that in order that it ..... must become a contract of guarantee as distinguishable from a contract of indemnity, there must be a third contract between the principal debtor and the surety, either express or implied. we shall quote the words of the learned chief justice :'of ..... the case is one of indemnity. in order to constitute a contract of guarantee, there must be a third contract, by which the principal debtor expressly or impliedly requests the surety to act as surety'.in these cases, we are concerned admittedly with contracts of guarantee, a contract of guarantee is a separate contract between the creditor and the guarantor, and we see nothing in ..... the act and particularly in section 4 (b) which either suspends such a contract or the obligations arising therefrom. it is impossible to read section 4 (b) .....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 : 1992(2)BomCR125; (1992)94BOMLR620; 80CompCas740(Bom); 1992(2)MhLj1110
..... not 6. on the first question, it was submitted by dr. chandrachud that a contract of guarantee is necessarily a tripartite agreement. a contract of guarantee is defined in section 126 of the contract act as follows : '126. 'contract of guarantee', 'surety', 'principal debtor' and 'creditor'. - a 'contract of guarantee' is a contract to perform the promises or discharge the liability, of a third person in case of ..... . the supreme court held in punjab national bank ltd. v. shri vikram cotton mills ltd. : 2scr462 as follows (at page 932 of 40 comp cas) : 'a contract of guarantee requires concurrence of three persons - the principal debtor, the surety and the creditor - the surety undertaking an obligation at the request, express or implied, of the principal debtor. the ..... of the constitution, it was permissible for any person to hold otherwise. the supreme court had clearly stated that a contract of guarantee requires concurrence of three persons. this being the situation, a contract of guarantee, because of section 126 of the contract act, has always to be considered as a tripartite document in india ...... by virtue of the provisions of section ..... arjundas bakhtiani v. union of india . now, it is true that dhanuka j. observed there that the party at whose instance the bank guarantee is furnished is not a party to the contract of bank guarantee. but, and i say with respect, this observation appears to me to be in direct conflict with what the supreme court held in punjab .....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!