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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> <br /> High Court of Delhi <br /><br /> Invocation of bank guarantee restricted only for fraud and irretrievable injustice<br /><br /> MANU/DE/3350/2015 - (02 Nov 2015)<br /><br /> </td> </tr> <tr> <td align="left" valign="top">Zillion Infra Projects (P) Ltd. v. Fab-Tech Works & Constructions Pvt. Ltd. and Ors.</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE"><strong>The Delhi High Court allowed an appeal against an order restraining the encashment of a bank guarantee by the Appellant. It noted that as per precedent laid down, a Court could prevent exercise of a guarantee given only in case of fraud or of irretrievable injustice being perpetrated on the giver of such guarantee. The Respondent’s claim of being prejudiced because it was likely to succeed at arbitration against the Appellant failed to satisfy either of the two criteria. By preventing encashment of the guarantee by the Appellant, the Single judge in the previous decision had defeated the purpose behind the bank guarantee.</strong></td> </tr> <tr> <td align="left" valign="top" ><strong>Relevant : U.P. State Sugar Corpn. v. Sumac International Ltd. <manuid>MANU/SC/0380/1997</manuid> I.T.C. Ltd. v. Debts Recovery Appellate Tribunal <manuid>MANU/SC/0968/1998</manuid> Himadri Chemicals Industries Ltd. v. Coal Tar Refining Co. <manuid>MANU/SC/3256/2007</manuid></strong></td> </tr> <tr> <td align="left" valign="top" ><strong>Tags : Bank guarantee, prejudice, future success</strong></td> </tr> <tr> <td align="left" valign="top"> </td> </tr> <tr> <!--<td><strong>Source : <a target="_new" href="http://www.manupatrafast.com/">newsroom.manupatra.com</a></strong></td>--> <td align="left" valign="top"><strong>Source : newsroom.manupatra.com</strong></td> </tr> <tr> <td align="left" valign="top"> </td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top"> </td> </tr> </table> </div> </body> </html>