Bombay High Court
KHUSHBU IMPEX THROUGH ITS SOLE PROP. MR. BHUPESH SEVANTILAL SHAHversusLYKA LABS LTD.
- Decided
- Disposal
- Disposed Off
Holding
The Court held that the bank guarantee must provide for interest at 6% per annum on renewal until the disposal of the Commercial First Appeal.
Summary
Khushbu Impex, the original plaintiff, had deposited Rs.61,25,697.50 with the Bombay High Court to obtain a stay of the trial court decree. The appellants, Lyka Labs Ltd., sought the return of this amount, conditioned on the applicant furnishing a bank guarantee from a scheduled nationalised bank. The parties agreed that the sole point of contention was whether the guarantee should accrue interest. The Court held that, consistent with its prior practice, any bank guarantee issued for such withdrawal must provide for interest at 6% per annum on renewal until the appeal is disposed. Accordingly, the Court allowed the applicant to withdraw the deposited sum upon furnishing the guarantee with the stipulated interest clause, and disposed of the interim application without costs.
Issues considered
- Whether the bank guarantee furnished by the applicant for withdrawal of the deposited amount must carry interest at 6% per annum.
Subjects
- bank guarantee
- stay of decree
- commercial first appeal
- interest rate
- interim application
- withdrawal of deposit
Judgment
912. IA 3060.2026.doc
Khushbu Impex vs. Lyka Labs
Digitally signed
JYOTI by JYOTI
PRAKASH
PRAKASH PAWAR
PAWAR Date: 2026.07.10
19:30:48 +0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
INTERIM APPLICATION NO. 3060 OF 2026
IN
COMMERCIAL FIRST APPEAL NO. 18 OF 2025
Khushbu Impex through its
Sole Proprietor Mr. Bhupesh Shah … Applicant/Respondent/
Orig. Plaintiff
IN THE MATTER BETWEEN
Lyka Labs Ltd. and Ors. … Appellants/
Orig. Defendants
V/s.
Khushbu Impex through its
Sole Proprietor Mr. Bhupesh Shah … Respondent/
Orig. Plaintiff
_______________________________________
Mr. Sahil Mahajan for the Appellants
Mr. Chetan Kapadia, Senior Advocate a/w. Ms. Vidisha Rohira, Ms. Sabeena
Mahadik and Mr. Mangesh Avhale for the Respondent
_______________________________________
CORAM : R. I. CHAGLA AND
FARHAN P. DUBASH, JJ.
DATE : 10th JULY 2026
P.C. :
1. By this Interim Application, the Applicant/Respondent/Original Plaintiff has
sought for permission to withdraw the amount of Rs.61,25,697.50 deposited
by the Appellants before the Registry of this Court whilst securing a stay of
the decree passed by the Trial Court.
Page 1 of 3
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Order dated 10th July 2026
912. IA 3060.2026.doc
Khushbu Impex vs. Lyka Labs
2. During the arguments, the parties have agreed that the Applicant may
withdraw the said amount of Rs.61,25,697.50 deposited by the Appellants
subject to the Applicant furnishing a bank guarantee of a scheduled
nationalized bank. The only issue of dispute is with regard to whether the
aforesaid bank guarantee being furnished by the Applicant for withdrawal of
the deposited amount would carry interest on an annual basis in order to
secure the Appellants in the event the Appellants may succeed in their
Commercial First Appeal.
3. We have considered this issue. It has been a stand taken by this Court that
when such bank guarantees are furnished by the Applicant for withdrawal of
the deposited amount, in order to secure the Appellants’, the Applicants may
be directed that upon renewal of the bank guarantee, it would provide for
interest at 6% per annum till the disposal of the Appeal. This would be in
order to secure the Appellants in the event they may succeed in their Appeal.
4. Accordingly, we permit the Applicant to withdraw Rs.61,25,697.50 deposited
by the Appellants before the Registry of this Court subject to furnishing a
bank guarantee of a scheduled nationalized bank and if the bank guarantee is
to be renewed from year to year, the same shall provide interest at 6% per
annum till the disposal of the Commercial First Appeal.
5. The Applicant shall furnish the bank guarantee of a scheduled nationalized
bank within one week from the date of this order and subject to which the
Applicant is permitted to withdraw the deposited amount of Rs.61,25,697.50
or such other increased amount, lying deposited with the Registry. Further,
in the event the bank guarantee is to be renewed from year to year, the
Applicant shall provide for interest at the rate of 6% per annum on the bank
guarantee. This shall be till the disposal of the present Commercial First
Appeal.
Page 2 of 3
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Order dated 10th July 2026
912. IA 3060.2026.doc
Khushbu Impex vs. Lyka Labs
6. Needless to state that once the Appellants had deposited the said amount of
Rs.61,25,697.50 for obtaining stay of the decree, the interest on the decretal
amount stopped running.
7. The Interim Application is accordingly disposed of. There shall be no order
as to costs.
( FARHAN P. DUBASH, J. ) ( R. I. CHAGLA J. )
Jyoti Pawar
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Order dated 10th July 2026
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