Revoke bank guarantee

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 December 2013 Dear sir
i am send a bank guarantee Rs 10 lack (mortgage my home ) in a mobile company .this company commited 10 lack credit amount for 10 days period .
this company billed 3 invoice some Rs 8 lack and all payment is due then company send 1 mail about due payment .after this mail i am send 2.50 lack neft in company account and demond som time clear all dues. but company send a letter in my bank regarding revoke bank guarantee all limit 10 lack.
then i am a submit civil suit at civil court lucknow in this matter and Submit a letter in bank in hand branch manager.
To bank manager bom branch gomti nagar lucknow dear sir pls do not revoke this bank guarantee i am a suit file in civil court and and this case is registered in court after case registration a notice send to you and party today by court in this mattar .
today morning recive a letter this sub.by branch manager,but today evening bank gaurantee revoke by manager.
all deus by him -5 lacks
bank gaurantee revoke by company-10 lack
pls support.

Querist : Anonymous

Querist : Anonymous (Querist)

14 December 2013 pls answer.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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22 July 2025 I understand your situation involves a bank guarantee of Rs 10 lakh given to a mobile company, where there is a dispute over payments, and despite your civil suit and request to the bank, the bank guarantee was revoked (called/encashed) by the bank.

Here’s a general guidance and suggestions for your situation:

Understanding the situation:
You gave a Bank Guarantee (BG) of Rs 10 lakh as security.
The company billed you for Rs 8 lakh but payments were pending.
You paid Rs 2.5 lakh and requested some time to clear the dues.
The company sent a letter to the bank asking to revoke/encash the BG for the full Rs 10 lakh.
You filed a civil suit and informed the bank not to revoke the BG.
Despite this, the bank revoked the BG.
Key points:
Bank Guarantee is an independent contract:
The bank is bound to pay the beneficiary on demand as per the BG terms, irrespective of the dispute between you and the beneficiary. This is why banks usually honor the beneficiary’s demand unless a court stays the encashment.
Court order needed to stop encashment:
To prevent the bank from encashing the BG, a stay order or injunction from the court is needed before the bank acts on the demand.
Your suit after the BG revocation:
If the BG is revoked (paid to the beneficiary), you may recover the amount only through your suit against the company. But you have no control over the bank once the BG is encashed.
Bank Manager’s role:
Bank managers generally must act on the instructions of the beneficiary if the demand is proper as per BG terms unless restrained by court order.
What you can do now:
Check if the bank actually encashed the BG:
Get written confirmation from the bank if the BG amount has been paid to the beneficiary.
Inform your advocate immediately:
Your lawyer can request urgent relief from the court (if possible) and guide on the next steps in your suit.
File for stay or injunction in court:
If possible, request the court to restrain further actions by the company/bank on the BG and protect your interests.
Prepare to recover amount from company:
Since BG is encashed, your remedy is to recover money from the company through your civil suit.
Suggestions for future cases:
When a dispute is anticipated, approach the bank before the beneficiary demands encashment to get a stay order.
Request bank to act only after court directions.
Always inform your bank immediately upon dispute arising.

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