GUJARAT MARITIME BOARD vs L&T INFRASTRUCTURE DEVELOPMENT PROJECTS LTD.

The Supreme Court addressed whether the High Court was justified in restraining the Gujarat Maritime Board from invoking a bank guarantee under Article 226 of the Constitution of India. The Court held that the unconditional bank guarantee executed by Yes Bank was enforceable, emphasizing that the bank's obligation to pay was absolute and not contingent on any disputes between the parties. Consequently, the Court set aside the High Court's order and allowed the invocation of the bank guarantee, affirming the principle that guarantees must be honored as per their terms.