NEW INDIA ASSURANCE COMPANY LTD. vs SHRI KUSUMANCHI KAMESHWARA RAO & ANR.

The Supreme Court, while adjudicating an appeal under Article 136, upheld the decree of the Andhra Pradesh High Court in favor of the plaintiff for recovery of Rs. 1,25,000 from the insurance company, which had issued a guarantee bond. The Court found that the insurance company was liable to pay the amount due under the guarantee bond executed on 26th April 1971, as the second defendant failed to fulfill the terms of the agreement dated 23rd April 1971. The Court emphasized that the guarantee was unconditional and irrevocable, thus affirming the plaintiff's right to claim the amount without reference to the second defendant.