DWARIKESH SUGAR INDS.LTD vs PREM HEAVY ENGG. WORKS P.LTD

The Supreme Court addressed the enforceability of bank guarantees in the context of a contract for the supply of equipment, emphasizing that the guarantor's obligation to pay is unconditional and irrevocable as per the terms of the bank guarantee. The Court held that the purchasers are the sole judges of any breach of contract, and the guarantor cannot contest the demand based on pending disputes. The appeal was allowed, affirming the right of the beneficiaries to encash the bank guarantees despite the seller's claims of breach.