Case Note & Summary
The appeal arose from a suit filed by Macgregor Navire Port Equipment A.B. against the Board of Trustees of the Port of Bombay, seeking an injunction to restrain the appellant from encashing a bank guarantee. The appellant had invoked the bank guarantee on March 29, 1988, but the bank did not make the payment, leading to a stay order from the High Court on April 28, 1988. The Supreme Court noted that the bank guarantee had expired on February 24, 1989, and previously directed that the bank should pay the appellant the amount of the bank guarantee along with interest at 18% pending the appeal. The court found that the appellant was entitled to Rs. 3,16,716.50 as the principal sum with interest at 8% from March 29, 1988, to October 28, 2001. The court ordered the parties to calculate the amount and directed the appellant to refund any excess payment to the bank within two months. The appeal was disposed of without costs.
Headnote
A) Banking Law - Bank Guarantee - Entitlement to Payment - Code of Civil Procedure, 1908 - The appellant was entitled to receive the principal sum of Rs. 3,16,716.50 along with interest at the rate of 8% from the date of invocation of the bank guarantee until a specified date. The court directed the calculation of the amount and refund of any excess payment made by the appellant to the bank (Paras 2-3).
Issue of Consideration
Whether the appellant was entitled to the principal sum and interest from the bank guarantee invocation.
Final Decision
The Supreme Court directed the calculation of the principal sum of Rs. 3,16,716.50 along with interest at 8% from March 29, 1988, to October 28, 2001, and ordered any excess amount paid to be refunded to the bank within two months.
Law Points
- Bank guarantee
- injunction
- interest calculation
- appeal disposal
