Search Results Page
Search Results
1 - 10 of 25 (0.48 seconds)Section 17 in The Arbitration And Conciliation Act, 1996 [Entire Act]
Section 21 in The Arbitration And Conciliation Act, 1996 [Entire Act]
The Arbitration And Conciliation Act, 1996
Section 36 in The Arbitration And Conciliation Act, 1996 [Entire Act]
Section 44 in The Arbitration And Conciliation Act, 1996 [Entire Act]
Sundaram Finance Ltd vs Nepc India Ltd on 13 January, 1999
In M/s. Sundaram Finance Ltd. (supra), it was observed by
their Lordships
U.P. Co-Operative Federation Ltd vs Singh Consultants & Engineers (P) Ltd on 19 November, 1987
The law as to the contractual obligations under the
bank guarantee has been well settled in a catena of
cases. Almost all such cases have been considered in a
recent judgment of this Court in U. P. Cooperative
Federation Ltd. v. Singh Consultants and Engineers (P)
Ltd., (1988) 1 SCC 174, wherein Sabyasachi Mukherji,
as he then was, observed (at p. 189): that in order to
restrain the operation either of irrevocable letter of
credit or of confirmed letter of credit or of bank
guarantee, there should be serious dispute and there
should be good prima facie case of fraud and special
equities in the form of preventing irretrievable injustice
between the parties. Otherwise, the very purpose of
bank guarantees would be negatived and the fabric of
trading operations will get jeopardised. It was further
observed that the Bank must honour the bank
guarantee free from interference by the Courts.
Otherwise, trust in commerce internal and
international would be irreparably damaged. It is only
in exceptional cases that is to say in case of fraud or in
case of irretrievable injustice, the Court should
interfere. In the concurring opinion one of us (K.
Jagannatha Shetty, J.) has observed that whether it is
a traditional bond or performance guarantee, the
obligation of the Bank appears to be the same. If the
documentary credits are irrevocable and independent,
the Bank must pay when demand is made. Since the
Bank pledges its own credit involving its reputation, it
has no defence except in the case of fraud. The Bank's
obligations of course should not be extended to protect
the unscrupulous party, that is, the party who is
13 Arbitration Appeal. No.8/2010
responsible for the fraud. But the banker must be sure
of his ground before declining to pay. The nature of the
fraud that the Courts talk about is fraud of an
"egregious nature as to vitiate the entire underlying
transaction". It is fraud of the beneficiary, not the
fraud of somebody else.
General Electric Technical ... vs Punj Sons (P) Ltd. And Another on 7 August, 1991
In General
Electric Technical Services Company Inc. v. Punj Sons
(P) Ltd. (1991) (4) SCC 230 : (1991 AIR SCW 2136),
while dealing with a case of bank guarantee given for
securing mobilisation advance it has been held that
the right of a contractor to recover certain amounts
under running bills would have no relevance to the
liability of the bank under the guarantee given by it. In
that case also the stipulations in the bank guarantee
were that the bank had to pay on demand without a
demur and that the beneficiary was to be the sole
judge as regards the loss or damage caused to it. This
Court held that notwithstanding the dispute between
the contractor and the party giving the contract, the
bank was under an obligation to discharge its liability
as per the terms of the bank guarantee.
Dwarikesh Sugar Industries Ltd vs Prem Heavy Engineeing Work on 7 May, 1997
In Dwarikesh Sugar Industries Ltd. V. Prem Heavy
Engineering Works (P) Ltd. and another (1997) 6 SCC 450 it is held
"28. Coming to the allegation of fraud, it is an
admitted fact that in the plaint itself, there was no
such allegation. It was initially only in the first
application for the grant of injunction that in a
paragraph it has been mentioned that the appellant
herein had invoked the bank guarantee arbitrarily.
This application contains no facts or particulars in
support of the allegation of fraud. A similar bald
averment alleging fraud is also contained in the
second application for injunction relating to bank
guarantee No. 40/47. This is not a case where
defendant No. 1 had at any time alleged fraud prior to
the filing of injunction application. The main contract,
pursuant to which the bank guarantees were issued,
was not sought to be avoided by alleging fraud, nor
was it at any point of time alleged that the bank
guarantee was issued because any fraud had been
played by the appellant. We have no manner of doubt
that the bald assertion of fraud had been made solely
with a view to obtain an order of injunction. In the
absence of established fraud and not a mere allegation
of fraud and that also having been made only in the
injunction application, the Court could not, in the
present case, have granted an injunction relating to
the encashment of the bank guarantees."