The Indure Private Limited vs M/S.Cethar Vessels Limited on 22 November, 2010
8. There is no quarrel as regards the principles enunciated in the above
judgments. The Court has to see whether those principles are applicable to the
facts of the present case or not. There is no dispute that the bank guarantee is
a distinct and different and a separate contract, and the existence of any
dispute between the parties to the contract is not a ground for issuing an order
of injunction to restrain enforcement of bank guarantee. It is also pertinent to
note that the above case law deals with only unconditional bank guarantees. In
the present case, originally there was an unconditional bank guarantee and
later, the same was converted into a conditional one by the Federal Bank, the
above mentioned second respondent, by inserting the clause, by letter dated
29.07.2008. By that letter, it was informed to the appellant that the operation
of the bank guarantee will commence only after receiving the payment of
Rs.2,34,96,212.79. Therefore, the bank guarantee in the present case is a
conditional one and the copy was given to the appellant, even though the
insertion was made by the bank unilaterally. The validity of the insertion of
the new clause in the bank guarantee cannot be gone into by this Court in the
present proceedings. It is too late in a day for this Court to go into the
validity of the conditional bank guarantee existing today. It is for the
appellant to challenge the modified bank guarantee, the moment when it was
informed to them about the insertion. The appellant ought to have challenged the
same in the manner known to law. There is only mere protest by way of a
representation to the higher official of the Federal Bank, the above mentioned
second respondent and also to the Reserve Bank of India. After that, they have
not challenged the conditional bank guarantee, in which a new clause was
inserted without their consent. When there is existence of a conditional bank
guarantee, the principles enunciated in the above stated judgments, cannot be
pressed into service. In the case of (1999) 8 SCC 436, reported in Hindustan
Construction Co.Ltd. v. State of Bihar and Others, the Supreme Court considered
the scope of unconditional as well as conditional bank guarantees and held in
paragraph-14 as under:-