GENERAL ELECTRIC TECHNICAL SERVICES COMPANY INC. versus PUNJ SONS (P) LTD. AND ANOTHER
The Court held that the Bank must honour its commitment under the bank guarantee when a demand is made, unless there is fraud or special equities amounting to irretrievable injustice, and that restraining payment in the absence of such circumstances was erroneous.
- Parties
- Appellant: General Electric Technical Services Company Inc.; Respondent 1: Punj Sons (P) Ltd.; Respondent 2: Hongkong & Shanghai Banking Corporation
- Jurisdiction
- India
- Judgment Date
- 07 August 1991
- Procedural Posture
- Civil Appeal / Appeal Against Division Bench Order of Delhi High Court
- Outcome
- Appeal allowed
- Legal Topics
- Bank Guarantees, Injunctions, Performance of Contracts, Termination Due to Breach
Case Brief
Summary, issues, holding and outcome
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Parties
General Electric Technical Services Company Inc.
Appellant
Punj Sons (P) Ltd.
Respondent 1
Hongkong & Shanghai Banking Corporation
Respondent 2
Procedural Posture
Civil Appeal / Appeal Against Division Bench Order of Delhi High Court
Legal Issues
- 1 Whether the Court was justified in restraining the Bank from paying under the bank guarantee at the instance of respondent-1
Ratio Decidendi
The Court held that the Bank must honour its commitment under the bank guarantee when a demand is made, unless there is fraud or special equities amounting to irretrievable injustice, and that restraining payment in the absence of such circumstances was erroneous.
Court Disposition
Appeal allowed
Orders
- Impugned judgment and order of the High Court set aside
- Appellant entitled to costs in the Supreme Court
Full Case Text
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