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2013 (1) TMI 504 - BOMBAY HIGH COURTIllegal, wrongful and fraud Joint Bid Agreement (JBA), the Counter Guarantee, and its invocation by the respondent no.1 - Held that:- A perusal of the clauses of the guarantee would show that the Counter Guarantee is an unconditional irrevocable guarantee and contains equivocal promise to pay a sum of Rs.17.42 crores without any demur or protest. It is in these circumstances of the case that the finding recorded by the single Judge is just and proper and sustainable in law since Counter Guarantee is unconditional and irrevocable, as set out that it is clear that Defendant No.2 initially furnished a Bid Bond of Rs. 67 crores through the Standard Chartered Bank to Defendant No.4 on behalf of the Consortium which included the Plaintiff’s contribution. Since the Plaintiff was required to make its contribution to the extent of 26 per cent of the said Bid Bond i.e. to the extent of 17.42 crores and since the Defendant No.1 counter indemnified the said Bid Bond of Rs. 67 crores, the Plaintiff furnished a Counter Guarantee dated 13th October 2010 issued by Defendant No.3 in favour of Defendant No.1 for a sum of Rs. 17.42 crores. The terms of the Counter Guarantee make it clear that the Counter Guarantee is for issue of Bid Bond of Rs. 67 crores by PSA on behalf of the Consortium. The payment under the Counter Guarantee is described as the payment obligation of the Plaintiff to the beneficiary pursuant to the Bid Bond. The payment under the Counter Guarantee is without demur, reservation, recourse, contest or protest. The only condition for such payment is that the demand or the payment must be supported by the documents listed in Clause 4 and must be in accordance with Clauses 5 and 6. Admittedly the demand complies with this requirement. Upon such demand being made, the Defendant No.3 Bank, within 3 days upon receipt of a written request from Defendant No.1, is bound to pay an amount upto Rs. 17.42 crores as payment obligation to Defendant No.1 pursuant to the Bid Bond, without any demur, reservation, recourse, contest or protest, without notice or reference to the Plaintiff, irrespective of whether the Defendant No.1’s demand is disputed or not by the Plaintiff or any other person. Mr. Khambata counsel for the respondent nos.1 & 2 is therefore correct in his submission that the expression “payment obligation” is merely descriptive of what the Counter Guarantee has been furnished for, and it cannot be contended that the same is a conditional guarantee. He is further correct in his contention that once the Bid Bond for a sum of Rs.67 crores is encashed, Defendant No. 1 is entitled to be reimbursed to the extent of Rs. 17.42 crores, which is the Plaintiff’s share of the amount covered by the Bid Bond and which has been encashed by Defendant No.4. Thus the contention canvassed by the learned counsel for the appellant that the respondent no.1 would be entitled to make a claim under the Counter Guarantee only if it establishes that the loss caused under the indemnity is attributable to the action/inaction of the appellant is difficult to agree, in the facts and circumstances of the present case as already observed hereinabove, the Counter Guarantee is unconditional irrevocable guarantee, its legal complexion does not change merely because it is given in the context of an obligation to indemnify - no case is made out for showing indulgence in the present appeal which suffers from lack of merits.
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