In Brief
The Andhra Pradesh Pollution Control Board challenged an order directing it to refund amounts covered by three invoked bank guarantees. The Supreme Court held that bank guarantees are independent contractual undertakings and once demanded in accordance with their terms, banks must pay without questioning the justification for invocation. A tribunal cannot interfere with properly invoked guarantees. The appeal was allowed, upholding the Board's right to invoke the bank guarantees in accordance with their express terms.
The lawyer headnote and full judgment text are available to registered users.