TaxTMI 
TaxTMI 
2000 (3) TMI 1021
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....rial unit within the meaning of the West Bengal Relief Undertakings (Special Provisions) Act, 1972 ('the said Act of 1972'), as also under section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (as 'SICA of 1985') wherein the Board for Industrial and Financial Reconstruction (as 'the BIFR') has propounded a scheme for rehabilitation, and thereby the invocation of the bank guarantee dated 11-7-1999, issued by the United Bank of India has to be declared as arbitrary, motivated and/or illegal. 2. The facts of the case briefly are as follows : A contract was entered into between the petitioner and respondent No. 1 being the ONGC on 7-9-1996, for complete rehabilitation work of 'EE platform' for a lump sum price of....
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....ch invocation of bank guarantee dated 11-7-1996, which was for a sum of Rs. 69,60,000 is allowed to be honoured by the bank. 8. He further submitted that according to the said bank guarantee the respondent-corporation shall have an unqualified option under this guarantee to invoke the banker's guarantee and claiming the amount thereunder in the event of the contractor failing to honour any of the commitments entered into under the contract. 9. According to him, the delay in completion of the work would not cause invocation of bank guarantee, but would extend the validity period of the said bank guarantee. Accordingly, the petitioner has extended the bank guarantee till 31-5-2000. He further submitted that the petitioner-company did no....
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....a scheme has been propounded by the BIFR under the SICA as arbitrary, illegal and bad. 13. He further submitted as follows : (i)Inasmuch as the fact that the 'bank guarantee' is 'separate' and 'independent' of the parent contract, and the contract of bank guarantee is between the bank and the beneficiaries, the declaration of 'sickness' under the said Act of 1972 or the declaration of 'sickness' by the BIFR under the SICA of 1985 is, indeed, an irrelevant consideration. (ii)The identical question came for consideration before the Division Bench presided over by the Justice Ajit Kumar Sengupta and the Justice Nitish Kumar Batabyal in connection with the appeal bearing No. 960 of 1992 between Turnkey International Ltd. v. Allahabad B....
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....antee herein contained shall be irrevocable and shall continue to be enforceable until it is discharged by corporation in writing. Clause 3. The bank also agree. . . shall be entitled to enforce this guarantee against the bank as a principal debtor in the first instance without proceeding against the contractor. . . ." 18. He further submitted that the said bank guarantee also is unqualified and the bank's obligation to pay is without any demur or protest. In support of his contention he relied upon the judgments in United Commercial Bank v. Bank of India [1982] 52 Comp. Cas. 186 (SC), General Electric Technical Services Co. Inc. v. Punj Sons (P.) Ltd. [1992] 74 Comp. Cas. 624 (SC), U.P. Co-operative Federation Ltd. v. Singh Consultan....