Case Analysis – State Bank of India vs. Mula Sahakari (SC): Indemnity vs. Guarantee

State Bank of India & Anr. Vs Mula Sahakari Sakhar Karkhana Ltd.(Supreme Court of India) 

FACTS

In the given case, the respondent is a cooperative organisation that has signed a contract with Pentagon Engineering Pvt. Ltd. for the complete installation of a paper factory for Rs. 3,40,00,000/-. The cooperative organisation had the right to retain 10% of the contract price under the terms of the contract, but the Pentagon asked that the responder renounce that right and instead provide a letter of credit so that they could provide a suffici

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