Premium Industries India Ltd., ... vs Quality Fabricators, Rep. By Its ... on 13 August, 1998
In this regard, the learned counsel appearing for the plaintiff relief upon the decision reported in 1999 (III) CTC 618 Hindustan Construction Co. Ltd., and others v. State of Bihar and others and 1998 (II) CTC 492 Premium Industries India Ltd., Calcutta vs. Quality Fabricators, rep. By its Proprietor Sri Arunagiri, 404, Anna Salai, O.P.Building, II Floor, Madras 35 and 2 others and submitted that even if the bank guarantee is unconditional and irrevocable bank guarantee and if the said bank guarantee refers to underlying contract, then the clauses in the bank guarantee can be looked into as a condition to revoke the bank guarantee. In the instant case, the guarantee was furnished by the bank only for due repayment of advance payment by the plaintiff to the first defendant. The preamble portion of the bank guarantee also refers to underlying contract. Hence, the bank guarantee issued by the second respondent bank has to be construed only as a conditional bank guarantee. Unless the person who revokes the bank guarantee fulfils his obligation fixed under the conditional bank guarantee, the bank is not liable to pay the amount.