Law: Contract, Act, 1872

Section: 126,128

Law: Civil Procedure Code (V of 1908)

Section: 1,2

(a) Contract Act (IX of 1872)--- ----Ss.126 128---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 2 ---- Commercial contracts --- Contract of performance guarantee, in the form of a Bank guarantee ---- Grant of injunction / restraining order under O.XXXIX, Rr.1 2, C.P.C., against encashment of an unconditional Bank guarantee----Independence and autonomy of the contract of guarantee---Scope impugned order of Trial Court whereby respondents application under O.XXXIX, Rr.1 2, C.P.C., seeking to restrain petitioner from encashing Bank guarantee was allowed, until such time Arbitration Tribunal determined whether or not respondent committed default of contract----Contention of petitioner, inter alia, was that such guarantee was made in a commercial contract, and was to be encashed as soon as petitioner made declaration that respondent committed default of contract---Validity---For purposes of making a demand for encashment of guarantee, it was explicitly provided that petitioner shall be sole and final judge for deciding whether the respondent had fully performed obligations under the contract or defaulted on same---- Court could not rewrite contract of guarantee by making encashment of same contingent upon finding of Arbitration Tribunal and none of the terms of contract of guarantee were absurd, inconsistent or vague --- Trial Court therefore made an error by issuing temporary injunction against encashment of guarantee --- Impugned order was set aside --- Revision was allowed, accordingly. Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191; Braganza v. BP Shipping Limited 2015 SCMR 742; System Company v. MTU Middle East FZE PLD 2019 Sindh 382; Green Group of Hotels v. Municipal Corporation, Peshawar 2017 MLD 257; Pakistan Industrial Credit and Investment Corporation Ltd. v. Khairpur Sugar Mills Ltd. 2012 CLD 1192; Montage Design Build v. The Republic of Tajikistan PLD 2015 Isl. 13; Standard Construction Company (Pvt.) Limited v. Pakistan through Secretary Ministry of Communications 2010 SCMR 524; Husein Industries Ltd. v. Sui Southern Gas Company Ltd. PLD 2020 Sindh 551; Atlas Cable (Pvt.) Limited v. Islamabad Electric…

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