Home Case Index All Cases Indian Laws Indian Laws + SC Indian Laws - 1997 (5) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1997 (5) TMI 421 - SC - Indian Lawswhether to grant an injunction which has the effect of restraining the encashment of a bank guarantee? Held that:- It is unfortunate that the High Court did not consider it necessary to refer to various judicial pronouncements of this Court in which the principles which have to be fullowed while examining an application for grant of interim relief have been clearly laid down. Yet another scrious for which was carmnitted by the High Court, in the present case, was not to examine the tenns of the bank guarantee and consider the letters of invocation which had been written by the appellant. If the High Court had trail the trouble of examining the documents on record, which had been referred to by the trial court, in its order refiling to grant injunction, the court would not have granted the interim injunction. No justification for the High Court in invoking the alleged principle of adjust enrichment to the facts of the present case and then deny the appellant the Iight to encash the bank guarantee. If the High Court had taken the trouble to see the law on the point it would have been clear that in encashment of bank guarantee the applicability of the principle of undue enrichment has no application. From the facts stated hereinabove it appears to us that the respondent bank has not shown professional efficiency, to say the least, and has acted in a partisan manner with a view to help and assist respondent no. 1. At the time when there was no restraint order from any Court, the bank was under a legal and moral obligation to honour its commitments. It, however, failed to do so. It appears that the bank deliberately draged its feet so as to enable respondent no.1 to secure favourable order of injunction from the Court. Such conduct of a bank is difficult to appreciate we do not wish to say anything more but it may feel that it will be prejudicial in the event of the appellant taking action against it. Appeal is allowed. The judgment and order of the Allahabad High Court set aside and the order of the trial court dismissing the injunction application is restored.
|