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V.D.Swami And Company Pvt.Ltd vs M/S. Lodge Cottrell India Pvt. Ltd on 3 December, 2013 cites

Hindustan Construction Co. Ltd vs State Of Bihar And Ors on 8 October, 1999

28. The learned counsel in support of his submission relied upon the decision of this Court in Hindustan Construction Co. Ltd., v. State of Bihar ((1999) 8 SCC 436. This Court in Hindustan Construction Co. having referred to the terms of clause (9) of principal contract between the parties therein came to the conclusion that the bank guarantee specifically refers to the original contract and postulates that if the obligations expressed in the contract, are not fulfilled by HCCL, the right to claim recovery of the whole or part of the 'advance mobilisation' then alone the bank was liable to pay the amount due under the guarantee to the Executive Engineer. The Court found that the bank guarantee specifically refers to clause (9) of the principal agreement and it is under those circumstances it came to the conclusion that the amount covered by the bank guarantee becomes payable and the same could be invoked only in the circumstances referred to in clause (9) of the principal agreement. The bank guarantee executed by the bank in the instant case in favour of the appellant herein does not contain any such clause. Mere fact that the bank guarantee refers to the principal agreement without referring to any specific clause in the preamble of the deed of guarantee does not make the guarantee furnished by the bank to be a conditional one. In the very said judgment this Court observed that : (SCC p.422 pare 9) "9. What is important, therefore, is that the bank guarantee should be in unequivocal terms, unconditional and recite that the amount would be paid without demur or objection and irrespective of any dispute that might have cropped up or might have been pending between the beneficiary under the bank guarantee or the person on whose behalf the guarantee was furnished. The terms of the bank guarantee are, therefore 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 invocation, therefore, will have to be in accordance with the terms of the bank guarantee, or else, the invocation itself would be bad".
Supreme Court of India Cites 11 - Cited by 245 - S S Ahmad - Full Document

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.
Madras High Court Cites 8 - Cited by 7 - Full Document

Vinitec Electronics Private Limited vs Hcl Infosystems Limited on 2 November, 2007

The dictum laid down in the said judgment would show that since a reference about the principal agreement entered into between the parties was referred to in the bank guarantee, it cannot be said that the bank guarantee is a conditional bank guarantee. To make a bank guarantee as conditional bank guarantee, a particular clause of the underlying contract has to be made as part of the deed of guarantee. In the instant case, no clause from the underlying contract was incorporated in the bank guarantee to make it as a conditional bank guarantee. Therefore, I am not inclined to accept the submission of the learned counsel appearing for the plaintiff in this regard. Hence, I am of the opinion that the bank cannot be restrained from making payment covered under the bank guarantee. Merely because a reference was made in the preamble portion of the bank guarantee with regard to underlying contract, it does not mean that the clauses in the underlying contract has to be taken into consideration as a condition for invoking the bank guarantee. Further, I am of the opinion, as contended by the learned counsel appearing for the first defendant, the bank guarantee is an independent contract and unless the clause in the underlying contract is incorporated in the bank guarantee as a condition to make payment, it cannot be said that the bank guarantee is a conditional bank guarantee.
Supreme Court of India Cites 4 - Cited by 170 - B S Reddy - Full Document

M/S South East Asia Shipping Co. Ltd vs M/S Nav Bharat Enterprises Pvt. Ltd. & ... on 13 March, 1996

26. It is the submission of the learned counsel appearing for the plaintiff that the said decision relied upon by the learned counsel appearing for the first defendant cannot be made applicable to the facts of the present case, since in the present suit, the relief sought for is only for permanent injunction restraining the second defendant from making any payment to the first defendant pursuant to any invocation of the bank guarantees. Before instituting the suit, the plaintiff has also obtained leave of this Court to institute the suit under clause 12 of the Letters Patent, where the entire cause of action arose within the jurisdiction of this Court.
Supreme Court of India Cites 1 - Cited by 192 - K Ramaswamy - Full Document
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