Supreme Court · 2006 INSC 880 · Decided 22 November 2006

M/S. Reliance Salt LTD. v. M/S. Cosmos Enterprises and ANR.

Court
Supreme Court of India
Citation
2006 INSC 880 · [2006] SUPP. 9 S.C.R. 280
Case number
CIVIL APPEAL No. 5151/2006
Decided
22 November 2006
Bench
S.B. SINHA, DALVEER BHANDARI (2-judge bench)
Outcome
Appeal(s) allowed
Case type
Civil
Acts & sections cited
Contract Act Section 126, 17

Headnote

Contract Act, 1872-ss. 126 and 17-Agreement of consignment­ Bank Guarantee-Invocation of, by Principal company on non-settlement of C bills by consignment agent within stipulated period-Suit for injunction restraining Principal Company from invoking Bank Guarantee by consignment agent, by fraud-Correctness of-Held: Bank Guarantee constitutes agreement between Banker and Principal, though, at instance of promisor-On invocation of bank guarantee, bank is to plead case of fraud D and not the promisor-consignment agent-In terms of the agreement, Bank could not refuse

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