In Brief
The Uttar Pradesh State Government guaranteed repayment of bonds issued by a borrowing corporation (PICUP) that later failed to pay investors. When the State disputed its liability, the Supreme Court held that the State's guarantee was unconditional and irrevocable, binding the State to pay principal and interest despite the borrower's financial collapse. The Court awarded interest at the contractual rate until principal repayment, then 11% thereafter. Late payment penalties of 18% per annum were imposed, with personal liability for responsible officers. The decision follows the Hindustan Unilevers precedent and invokes Article 142 to achieve complete justice."
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