Supreme Court: The Court should not direct accused to furnish bank guarantee as condition for releasing him on bail

Learned counsel for the appellant has relied on a judgment

of a Co-ordinate Bench delivered in Criminal Appeal No. 1193 of

2023 (Makhijani Pushpak Harish Vs.The State of Gujarat) in which

such a pre-condition of furnishing Bank Guarantee was held to be unsustainable. In that judgment, reference was made to an

earlier decision of this Court in Criminal Appeal No. 186/2023

(Subhash Chouhan Vs. Union of India) delivered on 20.01.2023.

In the light of the legal position explained in the aforesaid

judgment of the co-ordinate Bench, we direct that the appellant

shall not be required to comply with condition (1) contained in

the orders of the High Court dated 22.03.2023 and 28.03.2023.

Instead of the requirement of furnishing Bank Guarantee, we

direct that the appellant shall furnish a bail bond for Rs. five

lakhs in each of the two orders for bail, under appeal before

us. Rest of the conditions contained in the orders impugned

shall remain and would have to be complied with by the appellant  for being enlarged on bail.

 IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS. 1711-1712 OF 2023

KARANDEEP SINGH  Vs  CBI 

Dated: JUNE 09, 2023.

Print Page

Can the court restrain the invocation of a bank guarantee if it is not in terms of a bank guarantee?

 Courts are usually slow to interfere with the transaction between a bank and the beneficiary which is seen as being independent of the underlying contract between the lender and the supplier unless conditions call for such interference. The three conditions, as accepted in several decisions, are fraud of an egregious nature; special equities or the invocation not being in terms of the bank guarantee. It is sufficient if a party seeking a restraint on the invocation is able to establish any one of the three requirements. The test of special equity or irrevocable injustice is a matter of an assessment by a court on the particular facts presented to it for stay on a notice of invocation. The injury or injustice must be irrevocable, irremediable and irreversible : Refer : State Bank of India v. Sun Pharmaceuticals Industries Ltd. : AIR 2019 Cal 385. The party seeking an order for restraint must show that the invocation and consequent payment by the bank to the intended beneficiary would set the party back-irreversibly-in monetary terms which may not be recovered in the foreseeable future. {Para 25}

26. In the present case, the petitioner has satisfied two of the three ingredients, namely special equity and the invocation not being in terms of the guarantee. The clauses in the contract and more particularly the GCC clearly demonstrate that the bank guarantee was furnished towards performance security. There can be no issue with regard to performance since the petitioner has already received 90% of the contract price as discussed above. The invocation letter also demonstrates that there cannot be any performance issue with regard to the supplies effected by the petitioner. The invocation letter does not contain any allegation of a breach of performance obligations by the petitioner. The special equity also stands satisfied by reason of the petitioner facing an immediate and irreversible financial loss if the payment is made by Citibank NA, Dhaka to the respondent No. 1 in terms of the Letter of Invocation. 

 In the High Court of Calcutta

(Before Moushumi Bhattacharya, J.)

KSE Electricals Pvt. Ltd Vs Project Director, Bangladesh Rural Electrification Board

A.P. 230 of 2021

Decided on November 23, 2021,

Citation: 2021 SCC OnLine Cal 2986

Print Page

Whether the court can permit a stranger to the transaction to give a bank guarantee?

It is clear that the object of directing the petitioner to furnish the bank guarantee vide order dated 25.11.2019 was to secure the payment which the respondent was directed to deposit in the escrow account. The bank guarantee now furnished by the petitioner with the assistance of Arcelor Mittal, in my opinion, satisfies the said purpose and secures the respondent for its dues. Mere technical arguments are being raised to try and wriggle out of the directions passed by the court on 25.11.2019 by the respondent.

17. The second argument strongly urged was that the respondent does not wish to deal with a stranger Arcelor Mittal. It was strongly claimed that at the time of encashment of the bank guarantee if such a situation arises, the said Arcelor Mittal may turn around and start proceedings against the respondent. It is pleaded that the respondent is not interested in the Arcelor Mittal and this court cannot force the respondent to deal with the said company.

18. The plea is misplaced. A bank guarantee is a contract between the bankers and the beneficiaries. The respondent for the purpose of the bank guarantee has to deal with the guarantor, namely, the bankers and not the party at the instance the bank guarantee has been given.

19. In my opinion, there is no merit in the plea raised by the respondent. 

IN THE HIGH COURT OF DELHI

OMP (I) (COMM.) 218/2019

Decided On: 03.06.2020

 Bhubaneshwar Expressways Pvt. Ltd.  Vs.  National Highways Authority of India

Hon'ble Judges/Coram:

Jayant Nath, J.

Citation: MANU/DE/1145/2020

Print Page

Leading Supreme court judgment on Damages

Justice Bhagwati (as His Lordship then was)
speaking for the Bench examined the issue in great
detail in the light of law laid down by English and
Indian Courts. The learned Judge in his distinctive
style of writing after examining the entire case law on
the subject held that an expression "sum due"
occurring in Clause 18 would mean a sum for which
there is an existing obligation to pay in praesenti or in

other words which is presently payable and due and,
therefore, recovery of only such sums can be made
subject matter of Clause 18 which is presently payable
and due. It was held that a claim, which is neither
due and nor payable, cannot be made subject matter
of Clause 18. It was further held that Clause 18 does
not create a lien on other sums due to the contractor
or give to the purchaser a right to retain such sums
until his claim against the contractor is satisfied. It
was also held that a claim for damages for breach of
contract is not a claim for a sum presently due and
payable and the purchaser is not entitled in exercise of
the right conferred upon it under Clause 18 to recover
the amount of such claim by appropriating other sums
due to contractor.
39) Their Lordships approved the view taken by
Chagla C.J. in the case of Iron and Hardware (India)
Co. vs. Firm Shamlal and Bros., AIR 1954 Bom.423
by observing in para 11 as under.

“11. ………………………………………………….The same
view has also been taken consistently by different
High Courts in India. We may mention only a few
of the decisions, namely, Jabed Sheikh v. Taher
Mallik,AIR 1941 Cal 639 S. Milkha Singh v. N.K.
Gopala Krishna Mudaliar, AIR 1956 Punj 174 and
Iron and Hardware (India) Co. v. Firm Shamlal
and Bros., AIR 1954 Bom 423. Chagla, C.J. in the
last mentioned case, stated the law in these terms:
(at pp. 425-26)
In my opinion it would not be true to
say that a person who commits a breach of
the contract incurs any pecuniary liability,
nor would it be true to say that the other
party to the contract who complains of the
breach has any amount due to him from the
other party.
As already stated, the only right which
he has is the right to go to a Court of law and
recover damages. Now, damages are the
compensation which a Court of law gives to a
party for the injury which he has sustained.
But, and this is most important to note, he
does not get damages or compensation by
reason of any existing obligation on the part
of the person who has committed the breach.
He gets compensation as a result of the fiat
of the Court. Therefore, no pecuniary liability
arises till the Court has determined that the
party complaining of the breach is entitled to
damages. Therefore, when damages are
assessed, it would not be true to say that
what the Court is doing is ascertaining a
pecuniary liability which already existed. The
Court in the first place must decide that the
defendant is liable and then it proceeds to
assess what that liability is. But till that
determination there is no liability at all upon
the defendant.

This statement in our view represents the correct
legal position and has our full concurrence. A claim
for damages for breach of contract is, therefore,
not a claim for a sum presently due and payable
and the purchaser is not entitled, in exercise of the
right conferred upon it under clause 18, to recover
the amount of such claim by appropriating other
sums due to the contractor. On this view, it is not
necessary for us to consider the other contention
raised on behalf of the respondent, namely, that on
a proper construction of clause 18, the purchaser
is entitled to exercise the right conferred under
that clause only where the claim for payment of a
sum of money is either admitted by the contractor,
or in case of dispute, adjudicated upon by a court
or other adjudicatory authority. We must,
therefore, hold that the appellant had no right or
authority under clause 18 to appropriate the
amounts of other pending bills of the respondent in
or towards satisfaction of its claim for damages
against the respondent and the learned Judge was
justified in issuing an interim injunction
restraining the appellant from doing so.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.4814 OF 2016

M/s Gangotri Enterprises Ltd.  V Union of India & Ors. 
Dated:May 05, 2016.

Citation:(2016) 11 SCC 720

Print Page

When encashment of bank guarantee is not permissible?

Coming now to the facts of the case at hand, we
find that wordings of Clause 62 of the contract in
question with which we are concerned is identical to

that of Clause 18 of Union of India (DGS&D) (supra).
Clause 62 of GCC provides for determination of
contract owing to default of contractor. The relevant
portion of Clause 62 reads as under:
“The amounts thus to be forfeited or
recovered may be deducted from any
moneys then due or which at any time
thereafter may become due to the Contractor
by the Railway under this or any other
contract or otherwise.”
42) On perusal of the record of the case, we find that
firstly, arbitration proceedings in relation to the
contract dated 22.08.2005 are still pending. Secondly,
the sum claimed by the respondents from the
appellant does not relate to the contract for which the
Bank Guarantee had been furnished but it relates to
another contract dated 22.08.2005 for which no bank
guarantee had been furnished. Thirdly, the sum
claimed by the respondents from the appellant is in
the nature of damages, which is not yet adjudicated
upon in arbitration proceedings. Fourthly, the sum
claimed is neither a sum due in praesenti nor a sum

payable. In other words, the sum claimed by the
respondents is neither an admitted sum and nor a
sum which stood adjudicated by any Court of law in
any judicial proceedings but it is a disputed sum and
lastly, the Bank Guarantee in question being in the
nature of a performance guarantee furnished for
execution work of contract dated 14.07.2006 (Anand
Vihar works) and the work having been completed to
the satisfaction of the respondents, they had no right
to encash the Bank Guarantee.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.4814 OF 2016
(ARISING OUT OF SLP(C) No. 27052 of 2012)
M/s Gangotri Enterprises Ltd. 
V
Union of India & Ors. 
Dated:May 05, 2016.

Citation:(2016) 11 SCC 720

Print Page

Whether court can grant injunction against invocation of bank guarantee?

 It is contended on behalf of the first respondent that the
invocation of Bank Guarantee depends on the cancellation of
the contract and once the cancellation of the contract is not
justified, the invocation of Bank Guarantee also is not justified.
We are afraid that the contention cannot be appreciated. The
bank guarantee is a separate contact and is not qualified by the
contract on performance of the obligations. No doubt, in terms
of the bank guarantee also, the invocation is only against a
breach of the conditions in the LoI. But between the appellant
and the bank, it has been stipulated that the decision of the
appellant as to the breach shall be absolute and binding on the
bank.
12. An injunction against the invocation of an absolute and
an unconditional bank guarantee cannot be granted except in
situations of egregious fraud or irretrievable injury to one of the
parties concerned. This position also is no more res integra. In
Himadri Chemicals Industries Limited v. Coal Tar
Refining Company (2007) 8 SCC 110
, at paragraph -14:
“14. From the discussions made hereinabove
relating to the principles for grant or refusal to
grant of injunction to restrain enforcement of a
bank guarantee or a letter of credit, we find that
the following principles should be noted in the
matter of injunction to restrain the encashment of
a bank guarantee or a letter of credit:
(i) While dealing with an application for
injunction in the course of commercial dealings,
and when an unconditional bank guarantee or
letter of credit is given or accepted, the
beneficiary is entitled to realise such a bank
guarantee or a letter of credit in terms thereof
irrespective of any pending disputes relating to
the terms of the contract.

(ii) The bank giving such guarantee is bound
to honour it as per its terms irrespective of any
dispute raised by its customer.
(iii) The courts should be slow in granting an
order of injunction to restrain the realisation of a
bank guarantee or a letter of credit.
(iv) Since a bank guarantee or a letter of
credit is an independent and a separate
contract and is absolute in nature, the existence
of any dispute between the parties to the
contract is not a ground for issuing an order of
injunction to restrain enforcement of bank
guarantees or letters of credit.
(v) Fraud of an egregious nature which would
vitiate the very foundation of such a bank
guarantee or letter of credit and the beneficiary
seeks to take advantage of the situation.
(vi) Allowing encashment of an unconditional
bank guarantee or a letter of credit would result
in irretrievable harm or injustice to one of the
parties concerned.”

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9821 OF 2016
(Arising out of S.L.P.(C) No. 7874 of 2016)
GUJARAT MARITIME BOARD
V
L&T INFRASTRUCTURE DEVELOPMENT
PROJECTS LTD. AND ANOTHER 
Citation:(2016) 10 SCC 46
Dated:September 28, 2016. 

Print Page

How to ascertain territorial jurisdiction of court in case of invocation of bank guarantee?

It is not only essential for the petitioner to show that a
part of cause of action has arisen within the jurisdiction of this
Court but he must also show that the said cause of action is an
integral part having nexus to the substantial cause of action.
 In view of the admitted position that contract was
executed in Bombay, i.e., within the jurisdiction of the High
Court of Bombay, performance of the contract was also to be
done within the jurisdiction of the Bombay High Court; merely
because bank guarantee was executed at Delhi and transmitted 
for performance to Bombay, it does not constitute a cause of
action to give rise to the respondent to lay the suit on the
original side of the Delhi High Court.  The contention that the
Division Bench was right in its finding and that since the bank
guarantee was executed and liability was enforced from the
bank at Delhi, the Court got jurisdiction, cannot be sustained.

13.     Secondly, in the decision of this Court in N. KUMARA SWAMYs   
case (5 supra) it was found that there was no pleading on the part of
the petitioner as to how part of cause of action arises within the
territorial jurisdiction of this Court. In the present writ petition also,
there are no pleadings to that effect and the thrust in the affidavit is
only on the contention that the bank guarantee is conditional and
without any allegation of breach of contract, the same cannot be
invoked. In the absence of any pleadings, therefore, in the present
writ petition, to support the contention that cause of action arises
within the jurisdiction of this Court, I am clearly of the opinion that the
ratio of the decision in SOUTH EAST ASIA SHIPPING CO. LTD.s   
case (3 supra) applies to the facts and circumstances of the case.

        The issue is thus required to be held against the petitioner.
HYDERABAD HIGH COURT

THE HONBLE SRI JUSTICE VILAS V. AFZULPURKAR          

WRIT PETITION No.41519 of 2015   

DATED:07-01-2016 

Consortium of Sai Rama Engineering Enterprises and Megha Engineering &   
Infrastructures Ltd.
Vs
Oil and Natural Gas Corporation Limited, Rep.
Citation:AIR 2016 (NOC)498 HYD

Print Page

When injunction should not be granted for restraining enforcement of bank guarantee?

It is well-settled that a bank guarantee is an independent contract between the bank and the beneficiary and thus the bank guarantee is required to be honoured in accordance with its terms. If the bank guarantee is unconditional and irrevocable the exceptions in the bank not honouring its obligations under the bank guarantee are firstly a fraud of which the bank has a clear notice. Such a fraud must be of an egregious nature so as to vitiate in its entirety the underlying transaction. The nature of the fraud should be such that the beneficiary of the bank guarantee is seeking to be benefited from such fraud. The second exception are the 'special equities' such as an irretrievable injury or irretrievable injustice which would be caused to the party at whose instance the bank guarantee is issued and if an injunction at the relevant time is not granted the party can never be compensated for such an injury. {U.P. Cooperative Sugar Ltd. vs Singh Engineers Pvt.Ltd MANU/SC/0021/1987 : (1988) 1 SCC 174 and BSES Ltd. vs Fenner Ltd. (supra)} 

IN THE HIGH COURT OF BOMBAY

Appeal (Lodging) No. 395 of 2015 in Arbitration Petition (Lodging) No. 647 of 2015

Decided On: 09.06.2015

Appellants: S. Satyanarayana & Co.
Vs.
Respondent: West Quay Multiport (Private Limited) and Ors.

Hon'ble Judges/Coram:M.S. Shah, C.J. and G.S. Kulkarni, J.

Citation: 2016(2) ALLMR 280

Print Page

When plaintiff should not be granted Injunction to restrain other side from encashing bank guarantee?

 The fact that the quantum of delay and damages is being disputed by the parties establishes the existence of a dispute and consequently the said acts cannot be termed as an established fraud. The disputes raised by the Petitioner relate to the works contract between the parties, namely the underlying contract which are required to be raised before the Arbitral Tribunal. It is settled law that the Bank Guarantee is an independent contract and a challenge to the invocation/encashment of an irrevocable and unconditional Bank Guarantee has to be considered without any reference to the underlying or main contract or to the disputes/claims thereunder. It is trite law that a Court can restrain encashment of Bank Guarantee in cases of established fraud in issuance of the Bank Guarantee. However, the fraud has to be absolute and egregious vitiating the very foundation of the Bank Guarantee. In the present case, the Petitioner has failed to make out any case of fraud much less fraud of an egregious nature. The allegations therefore made by the Petitioner that the invocation of the Bank Guarantee is vitiated by fraud cannot be accepted and the said contention is rejected. The Petitioner has not advanced any arguments for any injunction on the ground of irretrievable injury/special equity.

Bombay High Court

Simplex Infrastructures Limited vs Siemens Limited And Anr on 5 January, 2015

Bench: S.J. Kathawalla

Citation;AIR 2015(NOC)543 Bom

Print Page

Basic principles for grant of injunction in case of bank guarantee

The grant of injunction is a discretionary power in equity jurisdiction. The contract of guarantee is a trilateral contract which the bank has undertaken to unconditionally and unequivocally abide by the terms of the contract. It is an act of trust with full faith to facilitate free flow of trade and commerce in internal or international trade or business. It creates an irrevocable obligation to perform the contract in terms thereof. On the occurrence of the events mentioned therein the bank guarantee becomes enforceable. The subsequent disputes in the performance of the contract does not give rise to a cause nor is the court justified on that basis, to issue an injunction from enforcing the contract, i.e., bank guarantee. The parties are not left with no remedy. In the event of the dispute in the main contract ends in the party's favour, he/it is entitled to damages or other consequential reliefs.

9.It is settled law that the court, before issuing the injunction under Order 39, Rules 1 and 2, CPC should prima facie be satisfied that there is triable issue strong prima facie case of fraud or irretrievable injury and balance of convenience is in favour of issuing injunction to prevent irremediable injury. The court should normally insist upon enforcement of the bank guarantee and the court should not interfere with the enforcement of the 4 (1982) 3 SCC 358 5 (1992) 2 SCC 330 contract of guarantee unless there is a specific plea of fraud or special equities in favour of the plaintiff. He must necessarily plead and produce all the necessary evidence in proof of the fraud in execution-of the contract of the guarantee, but not the contract either of the original contract or any of the subsequent events that may happen as a ground for fraud.

Supreme Court of India

State Trading Corpn.Of India Ltd vs Jainsons Clothing Corpn on 14 September, 1994

Equivalent citations: 1994 AIR 2778, 1994 SCC (6) 597

Bench: Ramaswamy, K.

Print Page

Basic principle to be followed by court for grant of injunction restraining realisation of bank guarantee

 We would uphold and restate the law on injunction against

honouring Letter of Credit by a Bank as summed up by the learned
Single Judge as follows:
(1) The Court must be slow in granting an order of injunction
restraining the realisation of a bank guarantee or Letter of Credit.
(2) There are two exceptions to the above rule. The first is that it
must be clearly shown that a fraud of a grievous nature has been
committed and to the notice of the Bank. The second is that
injustice of the kind which would make it impossible for the
guarantor to reimburse himself, or would result in irretrievable harm
or injustice to one of the parties concerned, should have resulted.
(3) It is not enough to allege fraud but there must be clear evidence
both as to the fact of fraud as well as to the bank's knowledge of
such fraud.
 It would suffice to say here that injunctions against the
negotiating banks for making payments to the beneficiary must be
given cautiously as constant judicial interference in the normal
practices of market can have disastrous consequences as it affects
the trustworthiness of the Indian banks and markets.


REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3103 OF 2015
(Arising out of SLP (C) No.9689 of 2014)
M/S. MILLENIUM WIRES (P) LTD.
...APPELLANT
:versus:
THE STATE TRADING CORPORATION
OF INDIA LTD. AND ORS.
...RESPONDENTS
AND
CIVIL APPEAL NO. 3104 OF 2015
(Arising out of SLP (C) No.11848 of 2014)
Dated;March 23, 2015.

Print Page

Whether bank guarantee has to be interpreted like a contract?

  A bank guarantee being but a contract, has to be interpreted like a contract i.e. no single part or clause of the contract can be picked and read/interpreted in isolation and the contract between the parties and their intention, is to be gauged from a complete reading thereof. If it were to be held, that before the bank guarantee could be encashed the respondent was required to satisfy the bank that the petitioner had breached the contract and that it had indeed suffered loss or damage or was likely to suffer loss or damage therefrom, then, the clauses of the said bank guarantee whereunder the bank had agreed to pay the amount thereunder, without any demur, merely on demand from the respondent stating that the amount claimed was due by way of loss or damage caused or would be caused to or suffered by the respondent by reason of any breach by the petitioner of any of the terms and conditions contained in the agreement or by reason of the petitioner‟s failure to perform the said agreement and of such demand made by the respondent on the bank being conclusive as regards the amount due and payable by the petitioner under the guarantee, would become otiose/ meaningless.

Delhi High Court

Omaxe Infrastructure And ... vs Director Contract (Union Of ... on 24 December, 2014

Author: Rajiv Sahai Endlaw

Print Page

When court should not grant injunction restraining encashment of bank guarantee during pendency of arbitration proceeding?

In the present matter impugned order was passed in reference to an application moved under Section 17 of the Arbitration and Conciliation Act, 1996 (Act) whereby an injunction was sought against the encashment of bank guarantees in question. The application was dismissed. It was the contented that once the contracts having been duly performed, the bank guarantees cannot be invoked and encashed. The injunction qua encashment of the bank guarantees was sought on the ground of special equities and it was accordingly further contended that the arbitrator could not have passed the impugned order having regard to the fact that the contracts in issue had been performed.

On the contrary the Appellant was alleged of fudging the balance sheet filed, at the time when it had bid for the contract(s). It was alleged that the filing of incorrect balance sheets was deliberate and intended to secure the contracts in issue. By way of the impugned order the Respondent was restrained from encashing the bank guarantees in issue subject to the condition that they would be kept alive. 

It was held that in matters of grant of interim injunction, the court, exercises an equitable jurisdiction, and that, jurisdiction extends not only to orders generally passed for interim injunctions but also vis-à-vis those pertaining to bank guarantees. In so far as bank guarantees are concerned, the width and amplitude of power available to the court is narrower. Ordinarily, encashment of an unconditional bank guarantee is not injuncted by a court. In order to obtain an order of injunction, the aggrieved party is required to demonstrate that it is either a case of fraudulent invocation or, one of special equities or in a given case, covered by both exceptions. 
The impugned order was accordingly held to be correct.

IN THE HIGH COURT OF DELHI AT NEW DELHI

ARB. P. 33/2014
AVINASH EM PROJECTS PVT. LTD.

versus

GAIL (INDIA) LIMITED

CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
ORDER
10.11.2014

Print Page

Whether furnishing of bank guarantee is necessary for withdrawal of land acquisition compensation?

 We have heard Mr. Paramjit Singh Patwalia, learned senior counsel appearing for the appellants and Mr.Pallav Shishodia, learned counsel appearing for the respondents. Mr.Patwalia contended that the High Court had committed an error in imposing a condition on the appellants to furnish bank guarantee for withdrawal of the compensated amount when the respondents enjoyed the possession of the acquired land for more than 40 years without making payment of compensation. According to Mr.Patwalia, since the appellants had no source of income nor had any property to secure the withdrawal of the amount or to furnish bank guarantee, it would be a mere impossibility to withdraw the compensated amount and accordingly, in the facts and circumstances of the case, the condition imposed on the appellants should be withdrawn. This submission of Mr.Patwalia was hotly contested by Mr.Pallav Shishodia, learned counsel appearing for the respondents who contended that the appellants have already been paid in excess under the terms and conditions of an agreement of the year 1978 and if now they are permitted to withdraw the amount already deposited and lying in the court and in view of the submission of Mr.Patwalia that the appellants have no source of income nor have any property to secure the amount that would be withdrawn, it would be a mere impossibility to recover the amount from the appellants, if allowed to be withdrawn, in the event the writ petition succeeds in which the award in question has been challenged.

4. Having heard the learned counsel for the parties and after considering the materials on record and considering the submissions made on behalf of the parties, we dispose of this appeal with the following directions:

[a] The amount deposited in the High Court shall be deposited in fixed deposit of any nationalized bank in the name of the appellants within a period of one month from this date initially for a period of six months which shall be renewed from time to time until further orders of the High Court or till the disposal of the writ petition whichever is earlier. [b] The interest that would accrue on the aforesaid sum shall be permitted to be withdrawn without furnishing any security or without furnishing bank guarantee by the appellants but the principal amount to be invested as a fixed deposit in the Bank shall not be withdrawn by the appellants till the disposal of the writ petition or until further orders of the High Court.

Supreme Court of India

Yashwant Waman Patil & Ors vs Municipal Corporation Of Greater ... on 18 February, 2008

Bench: Tarun Chatterjee, Harjit Singh Bedi

Citation;AIR 2008SC 2951,2008 ALL SCR1364

Print Page

Suit seeking declaration from immunity to pay amount under Bank Guarantee-liable to pay ad-valorem court fees

 The trial Court and the first Appellate Court, however, committed patent error while entertaining the suit without payment of ad-volaram court fees. The suit merely seeking declaration from immunity to pay the amount under the Bank Guarantee cannot be treated as a mere suit for declaration. The suit is susceptible to monetary evaluation. Obviously, the respondent No. 1 (plaintiff) was required to pay the entire court fees on ad-volaram basis and the valuation of the suit is defective. So also, it would be in the interest of justice to secure payment of interest amount/compensation in case the suit fails because the dispute arose out of commercial transaction.

Bombay High Court

M/S Great Eastern Energy vs M/S Jain Irrigation Systems Ltd on 17 February, 2010

Bench: Shri V.R. Kingaonkar

Citation;2010 (4) MHLJ759

Print Page