GENERAL ELECTRIC TECHNICAL SERVICESCOMPANY INC. vs PUNJ SONS (P) LTD. AND ANOTHER

The Supreme Court held that the High Court erred in restraining the Bank from encashing the Bank guarantee due to misconstruing the terms of the guarantee and the contractual obligations. The Court emphasized that the liability of the Bank under the guarantee remains intact regardless of the appellant's recovery of the mobilization advance or outstanding amounts under running bills. The Court ruled that the Bank must honor its commitment under the guarantee unless there is evidence of fraud or special equities, thus allowing the appellant's appeal and permitting the encashment of the Bank guarantee.