Q: Explain the citation of United Commercial Bank Vs. Bank of India

Ans:
United Commercial Bank vs Bank Of India And Others on 26 March, 1981
The honourable Supreme Court held that courts should refrain from granting injunctions restraining performance of contractual obligations arising out of a letter of credit or a bank guarantee between one bank and another. In that case, the order passed by the High Court granting a temporary injunction restraining the appellant-bank from recalling a payment made 'under reserve' from respondent No. 1, was set aside on a finding that it was difficult to say on the material on record that the plaintiffs had a prima facie case and that the plaintiffs had failed to establish that they would be put to irreparable loss unless an interim injunction was granted and that the balance of convenience clearly lay in permitting the normal banking transaction to go forward.

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