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1 - 7 of 7 (0.33 seconds)Section 129 in The Indian Contract Act, 1872 [Entire Act]
U.P. State Sugar Corporation vs M/S. Sumac International Ltd on 4 December, 1996
The Supreme Court has held in U.P. Sugar Corporation v. Sumac International Ltd. , that,
When in the course of commercial dealings an unconditional bank guarantee is given or accepted, the beneficiary is entitled to realise such a bank guarantee in terms thereof irrespective of any pending disputes. The bank giving such a guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. The very purpose of giving such a bank guarantee would otherwise be defeated."
State Of Maharashtra & Anr vs M/S National Construction ... on 9 January, 1996
The Supreme Court has held in State of Maharashtra v. National Construction Company, Bombay , that,
"The rule is well established that a bank issuing a guarantee is not concerned with the underlying contract between the parties to the contract. The duty of the bank under a performance guarantee is created by the document itself. Once the documents are in order, the bank giving the guarantee must honour the same and make payment. Ordinarily unless there is an allegation of fraud or the like, the courts, will not interfere directly or indirectly to withhold payment, otherwise trust in commerce, internal and international would be irreparably damaged. But that does not mean that the parties to the underlying contract cannot settle their disputes with respect to allegations of breach by resorting to litigation or arbitration as stipulated in the contract. The remedy arising excontratu is not barred and the cause of action for the same is independent of enforcement of the guarantee.
Canara Bank vs Gokuldas Shenoy And Anr. on 9 December, 1988
14. The Kerala High Court in Canara Bank v. Goukuldas Shenoy (1991)72 C.C. 298, laid down that the guarantor cannot plead discharge on the ground of compromise entered into between the bank and the principal debtor. With regard to the contention of the defendant that the compromise entered into between the plaintiff and the contractor would also have the effect of discharging the defendant from the guarantee obligations under Sections 129 and 135 of the Contract Act, the said contention is wholly untenable because the defendant bank is not a party to that compromise and it is in no way concerned with that compromise. Section 135 of the Contract Act reads thus,
A contract between the creditor and the principal debtor, by which the creditor makes a composition with, or promises to give time to, or not to use, the principal debtor, discharges the surety unless the surety assents to such contract.
The Companies Act, 1956
Vinay Engineering vs Neyvelilignite Corporation Ltd. And ... on 24 October, 1984
In Vinay Engineering v. Neyveli Lighnite Corporation Ltd., and another , it has been held that,
If the bank guarantees are unconditional, the bank has no defence when its guarantee is sought to be enforced. It is the document of guarantee that has to be scanned to ascertain whether the guarantee is conditional or otherwise and whether it is an autonomous contract by itself....
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