CROMPTON GREAVES LIMITED Vs. RAM CEMENT COMPANY LIMITED

JUDGEMENT

(1.) This is plaintiffs motion for interim injunction restraining the second defendant---Bank from making any payment to the first defendant in respect of or upon the suit Bank guarantee as also interim injunction restraining the first defendant not to encash the said guarantee or receive any payment thereunder.

(2.) One would have thought that Bank guarantees including performance guarantees are intended inter alia to obviate---and not foster---litigation. These guarantees have considerable significance of their own playing a vital role particularly in the field of commerce and industry. These speed up making and the implementation of commercial transactions and contracts. The in-built assurances of payment has a special sanctity of its own. The same are rightly likened to letters of credit and demand promissory notes. Actual experience, however, shows that notwithstanding all this, suits continue to be filed and injunctions continue to be claimed against the enforcement of solemn obligations under these guarantees. The present is one such case.

(3.) Either side viz., the plaintiffs and the first defendant have set forth their rival contentions with equal vehemence. The Bank (defendant No. 2) has rest itself content by engaging Attorneys with neither the Bank nor their Attorneys or Counsel present at the hearing.