| Case ID |
44faf58c-7ad0-478f-9761-2bf5f6a16946 |
| Body |
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| Case Number |
Suit No. 561 of 1990 |
| Decision Date |
Dec 12, 1995 |
| Hearing Date |
Oct 24, 1995 |
| Decision |
The court ruled that the plaintiff's application for an interim injunction against the encashment of the performance guarantee was granted, while the application regarding the mobilization guarantee was disallowed. The decision emphasized that encashment of the performance bond depended on determining who had committed default in fulfilling obligations. The plaintiff had established a prima facie case for irreparable loss if the performance guarantee were encashed, while the mobilization guarantee was enforceable as it was tied to a received advance. The court reiterated the necessity of adhering to the terms of the guarantees irrespective of disputes arising from the underlying contracts. |
| Summary |
In this case before the Sindh High Court, MESSRS ZEENAT BROTHER (PVT.) LTD. sought a declaration to discharge two bank guarantees executed by United Bank Limited related to a construction project at Aiwan e Iqbal Complex, Lahore. The plaintiff contended that encashment should be restrained as the guarantees were tied to the completion of contractual obligations, which had not been fulfilled due to delays caused by the defendants. The court evaluated the nature of performance and mobilization guarantees, affirming that while performance guarantees could be restrained under certain conditions, mobilization guarantees, tied to advances received, were not subject to the same scrutiny. The ruling highlighted the importance of contract adherence and the independent nature of bank guarantees, reinforcing the legal principles surrounding encashment of such guarantees in construction disputes. |
| Court |
Sindh High Court
|
| Entities Involved |
United Bank Limited
|
| Judges |
RASHEED AHMED RAZVI
|
| Lawyers |
Bilal A. Khawaja
|
| Petitioners |
MESSRS ZEENAT BROTHER (PVT.) LTD.
|
| Respondents |
AIWAN E IQBAL AUTHORITY THROUGH CHAIRMAN, AIWANE IQBAL COMPLEX, LAHORE AND 3 OTHERS
|
| Citations |
1998 SLD 170,
1998 PLD 183
|
| Other Citations |
1993 CLC 1926,
1983 CLC 2252,
1984 CLC 381,
AIR 1986 Cal. 374,
PLD 1976 Kar. 644,
1981 SC 1426,
AIR 1982 Delhi 78,
AIR 1982 Delhi 357,
1981 Rajdhani LIZ 138,
AIR 1983 Delhi 128,
PLD 1994 SC 311
|
| Laws Involved |
Contract Act, 1872,
Civil Procedure Code (V of 1908)
|
| Sections |
126,
OXXXIX,Rr.1,2
|