Vinitec Electronics Private Limited vs Hcl Infosystems Limited

2. The dispute between the parties relates to invocation of the bank guarantee furnished by the appellant to the respondent.

4. The case of the appellant was that it had supplied all the equipments to the respondent by 2nd August, 2000 but the respondent committed default in making the stipulated payment amounting to Rs.49,99,338/-. The said sum according to the appellant remained unpaid. The respondent agreed to pay the sum provided the performance bank guarantee of 10% value was furnished. That is how bank guarantee as required by the respondent was furnished which was amended on 20th August, 2001. The case of the appellant was that even after furnishing the bank guarantee the respondent made a payment of only Rs. 30 lakhs on 22nd August, 2001 and false assertion of payment of Rs.11,99,335/- was made. It was also alleged that a sum of Rs. 8 lakhs still remained unpaid.

7. The learned Single Judge after elaborate consideration of the matter found no merit in the injunction application filed by the appellant and accordingly dismissed the same. The Division Bench of the Delhi High Court affirmed the order of the learned Single Judge.

Whereas in terms of Clause No.15 of the Agreement for receiving the entire balance payments of Rs.49,99,335/- from the company, the supplier have agreed to provide a Performance Bank Guarantee equivalent to Rs.16,81,238.50 as 10% of the value of the contract to be kept valid till the warranty period during which times the Supplier is required to perform their warranty obligations to the Purchaser; and Whereas pursuant to the application made by the supplier, we Oriental Bank of Commerce, Kirti Nagar, New Delhi (hereinafter called the Bank) have accordingly agreed to give the supplier a bank guarantee for the aforesaid purpose.

We, the bank, affirm that our liability under this guarantee is limited to the total amount of Rs.16,81,238.50(Rupees sixteen lacs eighty one thousand two hundred thirty eight and paise fifty only) and it shall remain in full force upto and including 31st August,2003 and shall be extended from time to time for such further period(s) as desired by the purchaser, Company and supplier on whose behalf this Guarantee has been given."

22. The recitals in the preamble in the deed of guarantee do not control the operative part of the deed. After careful analysis of the terms of the guarantee we find the guarantee to be an unconditional one. The appellant, therefore, cannot be allowed to raise any dispute and prevent the respondent from encashing the bank guarantee.

25. In our considered opinion such vague and indefinite allegations made do not satisfy the requirement in law constituting any fraud much less the fraud of an egregious nature as to vitiate the entire transaction. The case, therefore does not fall within the first exception.

26. Whether encashment of the bank guarantee would cause any irretrievable injury or irretrievable injustice. There is no plea of any special equities by the appellant in its favour. So far as the plea of irretrievable injustice is concerned the appellant in its petition merely stated:

27. The plea taken as regards irretrievable injustice is again vague and not supported by any evidence.

29. In this view of the matter, we see no merit in this appeal.

30. We make it clear that this order and as well as the order passed by the Delhi High Court shall have no bearing on the merits of the case pending before the Arbitral Tribunal.

31. The appeal is accordingly dismissed. We make no order as to costs.