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The Himachal Bank, Shimla, had refused to renew the Bank Guarantee, issued by it earlier, in favour of Vimal & Company, on behalf of Yashwant & Sons, at the specific written request of Vimal & Company, despite their repeated written requests in this connection.

(i) Is the bank justified in such inaction? Give reasons for your answer.

(ii) Had the position been any different, if Yashwant & Sons would have made such request? Give reasons for your answer.

(iii) Is the Bank under any obligation to necessarily renew the Bank Guarantee, if so required by Yashwant & Sons? Give reasons for your answer.


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