ANSAL ENGINEERING PROJECTS LTD. versus TEHRI HYDRO DEVELOPMENT CORPORATION LTD. AND ANR.

ANSAL ENGINEERING PROJECTS LTD. versus TEHRI HYDRO DEVELOPMENT CORPORATION LTD. AND ANR.

No case of fraud or special equity was made out to warrant interference by way of injunction; bank guarantee is an independent contract and may be invoked by beneficiary irrespective of underlying dispute, and liability of the bank is absolute per its terms.

Parties
Petitioner: Ansal Engineering Projects Ltd.; Respondent: Tehri Hydro Development Corporation Ltd.; Respondent: UCO Bank
Jurisdiction
India
Judgment Date
31 July 1996
Procedural Posture
Special Leave Petition (civil) / Final Order on SLP
Outcome
Petition dismissed
Legal Topics
Bank Guarantee, Injunction, Arbitration Proceedings, Invocation of Bank Guarantee, Absolute Liability of Bank, Fraud Exception for Injunction
Arbitration Banking Law Contract Law Bank Guarantee Injunction Arbitration Proceedings Invocation of Bank Guarantee Absolute Liability of Bank +1 more

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Parties

Ansal Engineering Projects Ltd.

Petitioner

Tehri Hydro Development Corporation Ltd.

Respondent

UCO Bank

Respondent

Procedural Posture

Special Leave Petition (civil) / Final Order on SLP

Legal Issues

  1. 1 Whether an injunction can restrain the beneficiary from invoking the bank guarantee pending determination of amounts due
  2. 2 Whether bank guarantee is subject to determination of amounts by court/tribunal before invocation
  3. 3 Whether fraud or special equity exists for interference by injunction

Ratio Decidendi

No case of fraud or special equity was made out to warrant interference by way of injunction; bank guarantee is an independent contract and may be invoked by beneficiary irrespective of underlying dispute, and liability of the bank is absolute per its terms.

Court Disposition

Petition dismissed

Orders

  • Special Leave Petition dismissed
  • No injunction granted against invocation of bank guarantee