FENNER (I) LTD vs PUNJAB & SIND BANK

The Supreme Court held that the appellant, M/s. Fenner (India) Ltd., is entitled to invoke the Bank Guarantee issued by Punjab and Sind Bank despite not advancing the full amount of Rs. 30,00,000 as stipulated in the agreement. The Court clarified that the Bank Guarantee was unconditional and irrevocable, thus obligating the bank to pay upon demand for any loss incurred due to the seller's breach. The Kerala High Court's reversal of the trial court's decree was set aside, affirming the appellant's right to enforce the guarantee under the terms of the agreement.