Contract Act, and observed as under :-
"SECTION 124 of the Indian Contract Act defines a "contract of indemnity". A contract by which ... contract of indemnity", Section 126 defines a contract of guarantee. It states : "A contract of guarantee is a contract to perform the promise
performance of the
contract. It is as if two contracts—one in regard to the substantive terms of
the main contract and the other relating ... instrument, it is an independent agreement to refer the disputes to arbitration,
which is independent of the main contract or instrument. Therefore having
regard
conditions of the contract and certainly "arose out of" the
contract of was "in relation to" the contract and therefore,
could ... intention to arbitrate) founded on the promissory
notes which were independent contracts by themselves and
therefore, the claim did not arise out of the suit
nature of a contract of indemnity, under Section 124 of the Contract Act, which requires two persons. In a contract of guarantee the surety undertakes ... requirement of the principal contract between the appellant and the respondent, but that contract is independent and distinct from the contract of bank guarantee (which
independent
contract. The obligations therein are not dependent upon the parent contract.
It may be that the parent contract is referred to in 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
terms and conditions of the original contract.
(iii) The bank guarantee is a contract from the original contract pursuant to which the bank guarantee ... cover the dispute arising out of the contract of bank guarantee which contract is separate and independent of the main contract.
(vi) A claim arising
defendant No. 2 who stated that the bank guarantee was an independent contract and defendant No. 1 was bound to pay the said amount without ... constitutes a separate, distinct and independent contract. This contract is between the Bank and the defendants. It is independent of the main contract between HCCL
returned.
(d) The proposition of a Bank Guarantee being an
independent contract does not apply to a situation where
a party to the contract ... term of the contract and is
issued and regulated in terms of the contract. It is not
an independent contract as alleged. There
contract or any dispute
between the parties, as BG is an independent contract, as held by catena of
judgments. It is a fundamental principle ... said principle that the BG is a separate and independent contract and
injunction can only be granted on two principles, enumerated by the Court
Commercial Court at London and Bank
Guarantee being an independent contract, this Court will not entertain the
present suit.
17. Countering arguments of learned counsel ... principle of law that a bank guarantee is an
independent contract between the issuing bank and the
beneficiary and has no concern with the main
