| Case ID |
420ff0b6-cb6a-4001-b26c-9876b96bc459 |
| Body |
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| Case Number |
Civil Petitions Nos. 3209 and 3359 of 2020 |
| Decision Date |
Feb 16, 2021 |
| Hearing Date |
Feb 16, 2021 |
| Decision |
The Supreme Court of Pakistan dismissed CPLA No. 3209 of 2020, affirming the High Court's decision that allowed the encashment of the insurance guarantee irrespective of any disputes regarding the primary contract. The court ruled that the insurance guarantee was an independent contract, thereby requiring the guarantor to fulfill its obligations regardless of the underlying contractual disputes. The court also clarified that the provisions of section 10 of the Civil Procedure Code could not be invoked to stay proceedings when some issues were common and others were not, but consolidation of suits could be ordered to avoid conflicting judgments. The case emphasized the principle that bank guarantees are autonomous contracts and should be enforced as per their terms without delay. |
| Summary |
This case revolves around the enforceability of bank and insurance guarantees under the Contract Act, 1872, and the procedural implications under the Civil Procedure Code. The Supreme Court of Pakistan addressed key issues related to the independence of guarantees, the conditions for granting temporary injunctions, and the consolidation of suits to prevent conflicting judgments. The court highlighted that the terms of the guarantees imposed absolute obligations on the guarantor, allowing for their encashment regardless of any disputes between the parties. The decision reinforces the legal principle that bank guarantees act as independent contracts, ensuring that parties can rely on them without the interference of ongoing disputes. The ruling serves as a crucial reference for cases involving guarantees, aiming to provide clarity and certainty in commercial transactions. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Not available
|
| Judges |
Mazhar Alam Khan Miankhel,
Amin-ud-Din Khan
|
| Lawyers |
Syed Mujtaba Haider Sherazi,
Syed Rifaqat Hussain Shah,
Muhammad Mansoor Usman,
Ahmad Nawaz
|
| Petitioners |
Others,
Atif Mehmood Kiyani
|
| Respondents |
Others,
Messrs Sukh Chayn Private Limited
|
| Citations |
2021 SLD 2402 = 2021 CLC 946
|
| Other Citations |
National Construction Ltd. v. Awan-e-Iqbal Authority PLD 1994 SC 311,
Shipyard K. Damen v. Karachi Shipyard PLD 2003 SC 191,
Muhammad Yaqoob v. Behram Khan 2006 SCMR 1262,
Muhammad Umar v. Sultan Mahmood PLD 1970 SC 139
|
| Laws Involved |
Contract Act, 1872,
Civil Procedure Code (V of 1908)
|
| Sections |
126,
10,
151
|