Lawstreet Journal

Delhi High Court States That Orders Cant Be Passed For Encashment Of Bank Guarantees That Are Not Alive As On Date

Lawstreet Journal 7 Dec 2021 7:04pm

Image courtesy: Lawstreet Journal Judiciary Delhi High Court States That Orders Cant Be Passed For Encashment Of Bank Guarantees That Are Not Alive As On Date

An appeal seeking encashment of bank guarantees issued in the year 2013, and that expired in 2016 was dismissed by the Delhi High Court. 


The Court was hearing an appeal against a single Judge order denying relief to the original petitioner, an importer selling goods to global brands.

It was alleged that though goods were supplied by the appellant to some global brands, no consideration was received. Following this, the appellant requested the concerned bank for encashment of bank guarantee, which was denied.


Senior Advocate Ritin Rai for the appellant argued that the bank guarantees were unconditional in nature and therefore the bank should have allowed its encashment. 


There were certain observations made by the Court such as the fact that as on today the bank guarantees in question are not alive. The life of bank guarantee came to an end in the month of March in 2016, it noted.

The bench further stated that - 

“It ought to be kept in mind that no bank guarantee can be allowed to be encashed if it is not kept alive as on date of passing of orders." 

Furthermore, the Bench noted that no suit had been filed by the appellant for recovery of consideration after supplying goods to global brands. 


Furthermore, the bank concerned had already filed a civil suit against the appellant and global brands wherein the prayer was that bank guarantee was unenforceable. An appeal against that suit is also pending before… Continue Reading...

Tagged: Delhi High Court  
Disclaimer: SoOLEGAL in Media collaboration with Lawstreet Journal. SoOLEGAL take no responsbility for the content provided by Lawstreet Journal. For any discrepancies Contact Lawstreet Journal.
Did you find this write up useful? YES 0 NO 0

C2RMTo Know More

Something Awesome Is In The Work









Sign-up and we will notify you of our launch.
We’ll also give some discount for your effort :)

* We won’t use your email for spam, just to notify you of our launch.

SAARTHTo Know More

Launching Soon : SAARTH, your complete client, case, practise & document management SAAS application with direct client chat feature.

If you want to know more give us a Call at :+91 98109 29455 or Mail