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Drive India Enterprise Solutions Ltd vs Haier Telecom (India) Pvt. Ltd. & Ors on 19 December, 2011 cites

Larsen & Toubro Limited vs Maharashtra Stateelectricity Board & ... on 13 September, 1995

14. Mr. Chagla on behalf of the Petitioner drew our attention to the Judgment in the case of Larsen and Toubro Ltd. Vs. Maharashtra State Electricity Board & Ors. AIR 1996 SC 334 to show the Court can intervene in certain cases. In that case bank guarantees were given, one of them being a performance guarantee. The Petitioner therein had commissioned a plant. The plant was completed. After taking trial and performance test it was taken over by the Respondent. A take-over certificate was issued. The plant was alleged not to have performed to the satisfaction of the Respondent. The arbitration clause in the contract between the parties was invoked. During the pendency of the arbitration several bank guarantees given by the Respondent to the Petitioner were invoked. The learned Single Judge of this Court refused to interfere and ::: Downloaded on - 09/06/2013 18:01:08 ::: (8) APPL 801/11 restrain the bank from making payment upon bank guarantee after considering, what is now settled law, emanating from and after the Judgment in the case of Svenska Handelsbanken Vs. M/s. Indian Charge Chrome (1974) 1 SCC 502. The Supreme Court issued no injunction against the enforcement of all but one of the bank guarantees which was the performance guarantee. Only in respect of that one bank guarantee the Supreme Court issued limited injunction. In paragraph 11 at page 338 of the Judgment the Supreme Court observed that since the plant was completed and was taken over by the Respondent, the guarantee would enure only till the successful completion of the trial operations and the plant is taken over. That event having ensued, the invocation of the bank guarantee was not encashable on its terms and hence in order to prevent irretrievable injustice an injunction only in respect of that bank guarantee was issued "on that score". The Supreme Court specifically observed that all other bank guarantees stood on a different footing. They were unequivocal and unconditional. There was no fraud or irretrievable injustice made out and issued no injunction in respect of those bank guarantees.
Supreme Court of India Cites 4 - Cited by 76 - J S Verma - Full Document
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