Oil & Natural Gas Corporation Ltd vs State Bank Of India, Overseas Branch, ...

The Supreme Court addressed the enforcement of a bank guarantee under Order XXXVII CPC, emphasizing that the contractor's obligation to provide a bank guarantee for liquidated damages is unconditional and irrevocable. The Court held that the bank's liability to pay upon demand is not contingent upon any disputes between the contractor and the company, thereby affirming the enforceability of the bank guarantee. The appeal was allowed, reinforcing the principle that bank guarantees serve as a security mechanism in contractual obligations.