16 November 2021 | TRF Ltd. v. Indure Private Limited and connected cases | OMP (I) (COMM.) 371/2021 | Sanjeev Narula J | Delhi High Court | 2021 SCC OnLine Del 5023

Noting that the law against injuncting invocation/encashment of an unconditional bank guarantee is settled and there could be no interference unless egregious fraud, or special equities are pleaded and established, the court dismissed an application under Section 9 ACA.

It had found from its terms that the guarantees were unconditional and, therefore, had to be paid by the issuing bank without demur or protest.

As regards the plea of fraud, the court found that the petitioner did not discharge the burden of proof.

An argument that because proceedings under IBC are pending, there may not be a chance to recover the amount later was also rejected. Narula J said that the point goes to another exception to the invocation of the guarantee, irretrievable harm, but it was speculative.

Lastly, the point that the purpose for which the bank guarantee was furnished stood fulfilled was also rejected because Gangotri Enterprises v. Union of India (2016) 11 SCC 720 that had been cited for the point was stated to be per incuriam in State of Gujarat v. Amber Builders (2020) 2 SCC 540.

Read the judgment here.