Dismissed

Sharad Mehta v. Bhagwan Dass Madan and Anr.

Punjab & Haryana HC14 Mar 2013CR/1718/2013

Case brief

AI extract

What is this about?

The High Court dismissed the revision petition challenging the rejection of an injunction against bank guarantee enforcement. The court held that issues of breach and payment disputes must be adjudicated in a suit and cannot stall guarantee enforcement absent proven fraud or unfulfilled preconditions, citing the tripartite agreement terms.

What did the court decide?

The revision petition challenging the rejection of an injunction was dismissed and the impugned orders were maintained.

Sharad Mehta Vs Bhagwan Dass Madan… — Contract and Commercial Disputes | Punjab & Haryana HC (2013)

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CR No. 1718 of 2013

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IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH

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CR No. 1718 of 2013 Date of decision March 14 , 2013

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Sharad Mehta s/o Sh. Vijay Kumar Mehta

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....... Petitioner

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Versus

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Bhagwan Dass and another

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........ Respondents

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CORAM: HON'BLE MR. JUSTICE K. KANNAN

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Present:Mr. Rajesh Lamba, Advocate for the petitioner.

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K. Kannan, J (oral).

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The revision is against a rejection of a claim for injunction for enforcement of the bank guarantee. The Bank guarantee was given by the Bank through a triparte agreement that obligated the petitioner to construct the building for the respondent. The enforcement of bank guarantee was possible at the instance of the owner respondent and the Bank was bound to make the payment and honour the guarantee without any demur merely on demand of the owner. That ought to itself settle the issue of liability of the bank and the impossibility of a person to seek for a restraint against the enforcement of the bank guarantee. Two circumstances which are judicially recognized for injunction are i) when there is a fraud in obtaining the bank guarantee itself and ii) where there exists a precondition for enforcement of the Bank guarantee itself and that condition is not fulfilled. The reference in the bank guarantee that the

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CR No. 1718 of 2013 2

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owner may enforce the bank guarantee on a breach by the contractor cannot itself be treated as a pre-condition. If the petitioner has sought an adjudication that there had been no breach it will be a matter for decision at the trial and will not be used in an action for injunction for enforcement of a bank guarantee. The issue of breach by him or not and whether more amounts were payable by the owner to the contractor would be verily issues that fall for adjudication in suit and cannot be taken as ground for stalling the enforcement of the bank guarantee itself. The impugned orders are maintained and the revision petition is dismissed.

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(K. KANNAN) JUDGE

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March 14, 2013 archana

Sharad Mehta v. Bhagwan Dass Madan and Anr.

Case brief

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Sharad Mehta v. Bhagwan Dass Madan and Anr.

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