Q: Elucidate the citation of M/S. National Telecom Of India vs Union Of India And Another on 5 February, 2001 ?

Ans: 

M/S. National Telecom Of India vs Union Of India And Another on 5 February, 2001.


In National Telecom of India Ltd. vs Union of India, there was a bank guarantee in favour of the government in respect of supplies to be made by the contractor as per the purchase order. As per the agreement, the amount was payable without on demand. The following two conditions were put up to be fulfilled for the bank guarantee :
1. There should be a failure on the part of contractor to perform his obligations,
2. The amount claimed was by way of loss and damage to the government due to breach of contract like failure of supplying the goods beyond deadline etc.


The delhi high court held that the bank guarantee is invoked with the fulfilment of the above two condition.

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