Yapka Developers (Private) Limited v. Secretary, Ministry of National Policies, Economic Affairs, Resettlement & Rehabilitation, Northern Province Development & Youth Affairs, et al. – CA INJ/06/2022-2022

In the case between YAPKA DEVELOPERS (PRIVATE) LIMITED and various government ministries, among whom are the Ministry of National Policies, Economic Affairs, and a beneficiary bank, the court addressed the issue of whether an injunction should be granted to restrain the respondents from encashing a performance guarantee issued under a contract for constructing housing units for conflict-affected families. It was held that the performance guarantee constitutes an independent obligation and may only be restrained in case of proven fraud, which was not established on the facts. The findings reaffirmed the principle that performance bonds are separable from underlying contract disputes and generally must be honored by banks or guarantors unless clear evidence of fraud exists. This decision rel