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 directed that the appellant should be paid the amount of the bank guarantee along with interest at 18% from the date of invocation. The court later determined 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 that any excess amount paid by the appellant to the bank should be refunded within two months of communication of the order. The appeal was disposed of without any order as to costs.
Headnote
A) Banking Law - Bank Guarantee - Entitlement to Principal and Interest - Not mentioned - The appellant was entitled to receive a principal sum along with interest 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. Held that the appellant was entitled to Rs.3,16,716.50 with interest at 8% (Paras 3).
Issue of Consideration
Whether the appellant was entitled to the principal sum and interest from the bank guarantee invocation date.
Final Decision
The appeal was disposed of, directing the calculation of the principal sum and interest, with a refund of any excess amount paid by the appellant to the bank within two months.
Law Points
- Bank guarantee
- injunction
- interest calculation
- appeal disposal
