UNION OF INDIA vs M/S INDUSIND BANK LTD.

The Supreme Court addressed the applicability of the 1997 Amendment to Section 28 of the Indian Contract Act, 1872, in the context of bank guarantees related to export contracts. The Court held that the amendment does not absolve the bank from its obligation to honor the guarantees despite the expiration of the stipulated period, thereby reinforcing the principle that contractual obligations must be fulfilled unless explicitly discharged. The appeals by the Union of India were dismissed, affirming the lower court's decision in favor of the exporters.