“7. Now, a Bank Guarantee is the common mode of securing payment of money in commercial dealings as the beneficiary, under the Guarantee, is entitled to realise the whole of the amount under that Guarantee in terms thereof irrespective of any pending dispute between the person on whose behalf the Guarantee was given and the beneficiary. In contracts awarded to private individuals by the Government, which involve huge expenditure, as for example, construction contracts, Bank Guarantees are usually required to be furnished in favour of the Government to secure payments made to the contractor as "Advance" from time to time during the course of the contract as also to secure performance of the work entrusted under the contract. Such Guarantees are encashable in terms thereof on the lapse of the contractor either in the performance of the work or in paying back to the "Government Advance", the Guarantee is invoked and the amount is recovered from the Bank. It is for this reason that the Courts are reluctant in granting an injunction against the invocation of Bank Guarantee, except in the case of fraud, which should be an established fraud, or where irretrievable injury was likely to be caused to the Guarantor. This was the principle laid down by this Court in various decisions. In U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers Pvt. Ltd., [1988] 1 SCC 174, the law laid down in Bolivinter Oil SA v. Chase Manhattan Bank, (1984) 1 All ER 351 was approved and it was held that an unconditional Bank Guarantee could be invoked in terms thereof by the person in whose favour the Bank Guarantee was given and the Courts would not grant any injunction restraining the invocation except in the case of fraud or irretrievable injury. In Svenska Handelsbanken v. Indian Charge Chrome, (1994) 1 SCC 502/(1993 AIR SCW 4002 : AIR 1994 SC 626); Larsen and Toubro Ltd. v. Maharashtra State Electricity Board, (1995) 6 SCC 68 : (1995 AIR SCW 4134 : AIR 1996 SC 334); Hindustan Steel Works Construction Ltd. v. G.S. Atwal and Co. (Engineers) (P) Ltd., (1995) 6 SCC 76 : (1995 AIR SCW 3821 : AIR 1996 SC 131); National Thermal Power Corporation Ltd. v. Flowmore (P) Ltd., (1995) 4 SCC 515 : (1995 AIR SCW 430 : AIR 1996 SC 445); State of Maharashtra v. National Construction Co., (1996) 1 SCC 735 : (1996 AIR SCW 895 : AIR 1996 SC 2367); Hindustan Steel Works Construction Ltd. v. Tarapore and Co., (1996) 5 SCC 34 : (1996 AIR SCW 2861 : AIR 1996 SC 2268) as also in U.P. State Sugar Corporation v. Sumac International Ltd., (1997) 1 SCC
