TMI Blog1995 (9) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial Bank, Calcutta (hereinafter referred to as Bank ) gave two Bank Guarantees to the appellant on behalf of the respondent. The first is dated 16.8.1979 for a sum of ₹ 6.50 lacs (No. 350/79) renewed on 4.5.1982, 10.5.1983 and 3.5.1984 whereby the original date expiring on 15.5.1982 was extended from time to time. The other Bank Guarantee is for a sum of ₹ 32.50 lacs (No.399/79) dated 10.10.1979, renewed on 10.6.1981, 9.7.1982, 22.2.1983 and 7.7.1983, whereby the date of expiry, 10.7.1981, was extended from time to time. The Bank renewed the Guarantees on the instructions of the respondent. 3. It is seen that disputes arose between the appellant and respondent regarding the performance of the contract resulting in a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available at pages 40 to 45 of the paper book (Volume I). There is slight variation in some of the clauses of the above said two Guarantees. Substantially the the two Bank Guarantees are of same import. We will only quote clauses 1,4 and 5, appearing at pages 41 and 42 of the paper book (Volume I), of the Bank Guarantee No. 399/79 dated 10.10.1979:- 1. In consideration of the Creditor M/s. Hindustan Steelworks Construction Limited, Calcutta, agreeing to make to the DEBTOR: M/s. G.S.Atwal Co. (ENGINEERS) P. LTD. at Calcutta, a Mobilisation Advance of ₹ 32.50 (Rupees thirty two lakhs and fifty thousand only) upto a maximum of the value of the contracts under the said Agreements, against Bank Guarantee in favour of Creditor by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to or suffered by or that may be caused to or suffered by the Creditor (Principal) from time to time shall be final and binding on us. (emphasis supplied) 5. It is common ground that at the request of the respondent the Bank has furnished Bank Guarantees to the appellant. The respondent is the beneficiary. In the dispute pending for adjudication in arbitration, between the appellant and the respondent, the Bank is not a party. The principles to be borne in mind by the Court in the matter of grant of injunction against enforcement of a Bank Guarantee/Irrevocable Letter of Credit have been laid down in a catena of decisions of this Court. We have referred to the said principle in Larsen Toubro Ltd. vs. Maharashtra State Ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 6.50 lacs and ₹ 32.50 lacs respectively, which are covered by the Guarantees. We are of the view that the Guarantees furnished by the Bank to the appellant are unconditional and the appellant is the sole judge regarding the question as to whether any breach of contract has occurred and, if so, the amount of loss to be recovered by the appellant from the respondent. The entire dispute is pending before the Arbitrator. Whether and if so, what is the amount due to the appellant is to be adjudicated in the arbitration proceeding. The order of the learned single Judge proceeds on the basis that the amounts claimed were not or cannot be said to be due and the Bank has violated the understanding between the respondent and the Bank in g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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