Difference between Indemnity and Guarantee Indemnity Guarantee Section 124 of Indian Contract Act: a contract by which one party promises to save others from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person Section 126 of Indian Contract Act: a contract to perform the promise, or…
GREEV vs. KETTLE Key Words: mutual mistake in guarantee, estoppel, rectification Facts: Defendant Company (S), in consideration of Plaintiff Company’s (C) giving credit to principle debtor (D), guaranteed the payment of debt, which was stated in deed to be secured by ‘validly issued shares in Company’. Though both S and C believed this fact to…
Gray vs. Lewis AND Parker vs. Lewis (1873) 8 Ch App 1035 Facts: A shareholder, when initiated suit for damages against plaintiff-bank and defendant (who was the director of the plaintiff bank as well), director of a liquidated company for fraud and mala fide holding of accounts, got judgment against the bank and the defendant…
Kailash Sharma vs. The Patna Municipal Corporation and Ors. Citation: CWJC No. 9730 of 2006 Full Text here Facts: The Appellant-Company sold a certain number of fogging machines (used for killing mosquitoes) to the Respondent-Corporation for which the payment had to be made within one week of delivery. The Respondents did not pay within one week….
State Bank of Saurashtra vs. Chitranjan Rangnath Raja and Anr. Citation(s): 1980 AIR 1528, 1980 SCR (3) 915 Full Text here Facts: The appellant-bank allowed a cash credit facility limited to Rs. 75,000/- to the Principal Debtor (PD) on his pledging 5,000 tins of groundnut oil under the lock and key of the Bank and on…
Charan Singh vs Security Finance (P) Ltd. Citation(s): AIR 1988 Delhi 130 Full Text here Facts: The creditor after obtaining the money decree against the two principal debtors (PDs) and the Surety, holding them liable severally as well as jointly, decided to pursue his cause of action against the Surety, after he arrived at an agreement…
Aziz Ahmad vs. Sher Ali and Others Citation: AIR 1956 All 8 Full Text here Issue: Whether a surety is discharged when the creditor allows the execution of his decree against the ‘principal debtor to be barred by limitation. Position in England: In England, a failure to sue the principal debtor until recovery is barred by…
Ansal Engg. Proj. Ltd. v. Tehri Hydro Development Corp. Ltd. & Anr. 1997 88 CompCas 149 SC (if no fraud involved, court has no role) FACTS: The petitioner/appellant (A) had undertaken to do some construction for the defendant/respondent(R) and as per the terms of the contract had furnished a bank guarantee (BG) for faithful performance…
Hindustan Steel Workers Construction (HS)[1] Ltd. v. G.S. Atwal & Co. (Engineers) Pvt. Ltd. (GS)[2] 1995 SCC (6) 76 (Unconditional Bank Guarantee, Performance Guarantee) FACTS HS and GS entered into contracts whereby GS was to construct 11 schools. The United Commercial Bank, Calcutta (Bank) gave two Bank Guarantees (BG1 &2) to HS on behalf…
ONGC v. SBI Overseas Branch, Bombay AIR 2000 SC 2548 FACTS ONGC[1] had awarded a large gas pipeline contract to an Italian consortium S[2] at a certain contract price (CP). The work was to be executed within a given date else S was liable to pay certain percentage of C.P. S was also obliged to…
State of Madhya Pradesh v. Kaluram 1967 SCR (1) 266 (Suretyship, Section 139 and 141 of Indian Contract Act, Subrogation) FACTS At an auction for sale of felled trees, Jagatram (J) was awarded the sale, on payment of a security and subsequent payment of installments. He executed a contract in favour of the Governor of…
Ramchandra B. Loyalka v. Shapurji N. Bhownagree (1940) 42 BOMLR 550 (Section 124, 126 and 145 of Indian Contract Act, Difference between Indemnity and Guarantee) FACTS: The plaintiff (P) was a sub-broker employed by the defendant broker (D) on 50% commission. P introduced 6 constituents and became answerable to the broker for them. The constituents…