Critcal Analysis of Restrainment On Bank Guarantees by Courts: ONGC vs State Bank of India, Overseas
Keywords:
Bank Guarantee, Principle of Autonomy, Fraud, Irretrievable harm or injustice, Special EquitiesAbstract
In India, a contract of guarantee is defined as an agreement to carry out the promise or discharge the liability of a third party in the event of a breach or default by that party (Section 126 of the Indian Contract Act, 1872) [1]. In a bank guarantee, the financial organization that provides the loan, in this case a bank, also takes on the role of creditor. The value of bank guarantees in facilitating the growth of businesses cannot be overstated. Businesses that encourage entrepreneurship. The concept of bank
guarantee is the primary emphasis of this study. The study demonstrates the practical and theoretical importance of this idea in contract law. Finally, this paper details the judicial intervention required for cashing a bank guarantee and the relevant legislation that govern the encashment of such guarantees.
References
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