NHDPL South Private Limited Vs Union Bank of India (Karnataka High Court)
Karnataka High Court held that invocation of bank guarantees via e-mail satisfies the requirement of section 4 of the Information Technology Act, 2000 and hence the invocation being proper and correct, the Bank had no other alternative but to make payment of the monies covered under the Bank Guarantee.
Facts- The petitioner is engaged in the business of real estate development. The petitioner had entered into an agreement for civil works to be undertaken for the project with a company known as Al Fara’a Infra Projects Private Limited vide an agreement dated 27.4.2016. In furtherance of Article 11 thereof, a Performance Guarantee in the form of irrevocable Bank guarantee had to be issued, which was so issued, drawn on Respondent No.1 – Union Bank of India. On 20.7.2016 for a sum of Rs.2,78,75,127/-, a Bank Guarantee bearing No.408101GL0001716 and on 20.7.2016 for a sum of Rs.5,57,50,254/-, a Bank Guarantee bearing No.408101GL0001816 were issued. Both these bank guarantees were extended from time to time and by virtue of the last renewal, the bank guarantees were valid upto 31.3.2019 and 30.4.2019 respectively.
Notably, the petitioner, on 29.3.2019, wrote to Respondent No.1 in relation to the bank guarantee dated 20.7.2016, which was expiring on 31.3.2019, and requested for renewal of the bank guarantee. In the event of the bank guarantee not being renewed, the Petitioner called upon the Bank to treat the same as a letter for invocation and deposit the proceeds into the bank account of the Petitioner by providing the details of the bank account. On 26.4.2019, the Petitioner wrote to Respondent No.1-Bank with reference to the aforesaid bank guarantee dated 20.7.2016, which was expiring on 30.4.2019, with a similar request.
