LARSEN AND TOUBRO LIMITED Vs. MUKERIAN PAPERS LIMITED

JUDGEMENT

(1.) This is an application under Sec. 9 of the Arbitration & Conciliation Act, 1996. Sec. 9 speaks as follows:-

(2.) By making this application, in effect, the petitioner wanted to restrain the respondent from invocation of the Bank Guarantee No. 29-223 dated 7th Feb., 1996 issued by the petitioner's bankers i.e. State Bank of India, Chowringhee Branch, 38-B, Chowringhee Road, Calcutta - 700 071.

(3.) Initially, the petitioner obtained the limited order from this Court on the ground that the bank guarantee is conditional one. In this respect, it is to be noted down hereunder that there is a gulf difference in between invocation of unconditional bank guarantee and conditional bank guarantee. There is no chance of injuncting the respondent or the banker from invocation and/or encashment of unconditional bank guarantee. But when the bank guarantee is conditional one, court has to look into the question of fraud and irretrievable injustice, in other words special equity.