38.6c New Delhi, India, Thursday, October 09, 2025
Top Stories Supreme Court
Political NEWS Legislative Corner Celebstreet International Videos
Subscribe Contact Us
close
Judiciary

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

By ANUSHKA BHATNAGAR      07 December, 2021 01:34 PM      0 Comments
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. 

BACKGROUND 

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.
 

PETITIONERS APPEAL 

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. 

OBSERVATIONS OF THE COURT 

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. 

CIVIL SUIT BY THE BANK 

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 the Court.
 

JUDGEMENT 

The bench consisting of Chief Justice DN Patel and Justice Jyoti Singh held orally that-

Bank guarantees that are not alive as on today cannot be encashed. It's a simple piece of paper, that's all. At best, the aggrieved party can file a suit for recovery for damages. 

The Bench further held that,

Once the life of bank guarantees comes to an end, the same cannot be encashed nor the same can be allowed to be enchased, neither by the bank, nor by Court, nor by any Tribunal or any other authority. At the highest, at the time of filing of plaint for encashment of bank guarantee, if it were alive and wrongfully encashment was not allowed, in that eventuality the claimant may be entitled for damages but certainly no order can be passed once the life of bank guarantee comes to an end."



Share this article:



Leave a feedback about this
TRENDING NEWS

pmla-appellate-tribunal-orders-immediate-release-of-seized-bmw-x7-in-hemant-soren-land-scam-case
Trending Crime, Police And Law
PMLA appellate tribunal orders immediate release of seized BMW X7 in Hemant Soren land scam case [Read Order]

PMLA tribunal orders ED to release seized BMW X7 in Hemant Soren land scam case, citing lack of proof linking the luxury car to money laundering.

08 October, 2025 08:06 PM
offence-under-category-of-upholding-family-prestige-sc-orders-release-of-man-on-remission
Trending Judiciary
'Offence under category of upholding family prestige,' SC orders release of man on remission [Read Judgment]

SC orders immediate release of life convict who served 22 years for a murder committed to uphold family honour, citing Maharashtra remission guidelines.

08 October, 2025 08:19 PM

TOP STORIES

allahabad-hc-refuses-interim-protection-to-sambhal-mosque-asks-petitioners-to-approach-appellate-court
Trending Judiciary
Allahabad HC Refuses Interim Protection to Sambhal Mosque, Asks Petitioners to Approach Appellate Court [Read Order]

Allahabad High Court refused interim protection to Sambhal mosque, directing petitioners to seek remedy before the appellate court under UP Revenue Code.

06 October, 2025 04:48 PM
calling-off-marriage-after-courtship-not-a-crime-or-breach-of-promise-delhi-hc
Trending Judiciary
Calling Off Marriage After Courtship Not A Crime Or Breach Of Promise: Delhi HC [Read Order]

Delhi High Court grants bail, ruling that ending marriage plans after courtship is not a breach of promise or offence under false promise to marry.

06 October, 2025 05:03 PM
celebrating-bail-on-social-media-not-ground-for-cancellation-without-specific-threat-to-complainant-delhi-hc
Trending Judiciary
Celebrating Bail On Social Media Not Ground For Cancellation Without Specific Threat To Complainant: Delhi HC [Read Order]

Delhi HC rules that celebrating bail on social media isn’t grounds for cancellation unless a specific threat or intimidation is proven.

06 October, 2025 05:25 PM
woman-cannot-claim-maintenance-after-securing-rape-conviction-against-live-in-partner-jammu-and-kashmir-hc
Trending Judiciary
Woman Cannot Claim Maintenance After Securing Rape Conviction Against Live-In Partner: Jammu & Kashmir HC [Read Order]

J&K High Court held that a woman who secured a rape conviction against her live-in partner cannot claim maintenance under Section 125 CrPC.

06 October, 2025 06:08 PM

ADVERTISEMENT


Join Group

Signup for Our Newsletter

Get Exclusive access to members only content by email