V.V.S. Roa, J, J.

1. This miscellaneous appeal is by the plaintiff against the judgment and decree dated 03.3.2009 in O.S.No.809 of 1997 passed by the Court of VIII Additional Senior Civil Judge, (FTC), City Civil Court, Hyderabad. The suit was filed for declaration and permanent injunction. By impugned judgment, the Court below ordered to return the plaint to be presented to the proper territorial Court. In this appeal, the appellant is referred to as plaintiff and respondents 1 and 2 are referred to as defendants 1 and 2.

2. The first defendant is a company incorporated under the Companies Act, 1956, having its Registered Office at Marol Industrial Area, MIDC, Mumbai. The plaintiff entered into a contract valued at Rs.2,61,91,236/-with first defendant at Mumbai for construction/erection of spinning mill at Murbad in Thane District, State of Maharashtra. Time is essence of the contract. The construction has to be commenced by 10.1.1995 and completed within a period of 11 months by 30.11.1995. The first defendant paid mobilisation advance of Rs.21,40,000/-and the plaintiff gave and executed a Bank Guarantee (BG) for the said amount through second defendant Bank. Alleging that the plaintiff failed to complete the work within the stipulated time, first defendant sought to invoke BG, in November 1996.The plaintiff assured to complete the work and extended BG upto 31.3.1997.But the work was allegedly abandoned in January 1997 before completing the same. As a result, the contract stood terminated on 31.3.1997.The plaintiff then filed the suit before the Court below for declaration and injunction restraining the first defendant from invoking BG alleging that the first defendant played fraud on the plaintiff by fabricating a bill as if it is prepared by the plaintiff with a view to set up false claim and realised the BG amount unjustly. The plaintiff also alleged that they raised a bill for a sum of Rs.2,16,27,551/-towards works executed, cost of extra items operated not covered by the agreement on account of idling of plant and machinery, for the delays caused by the defendant in not giving site in time, not giving details of drawings in time and also not supplying the power as per terms and conditions.

3. The first defendant opposed the suit raising the following contentions and pleas. The contract was executed on 28.1.1994 at Bombay for construction of spinning mill at Murbad. The first defendant agreed to give Rs.21,40,000/-as mobilisation advance and initial deposit of Rs.6,07,000/- against two BGs of plaintiff. The same was furnished on 28.12.1994.The BG will become payable unconditionally on demand without protest. The second defendant bank agreed to pay BG amount irrevocably if the same is not utilized by the plaintiff and gave enforceability to BG till the advance is fully recovered from the plaintiff. Plaintiff failed to complete the work within the stipulated time of extended period. The work was not completed and mobilisation advance was not utilized. Contract was terminated on 03.1.1997.Therefore BG was invoked but in view of the ad interim injunction the second defendant did not make the payment against BG demanded on 12.3.1997.The first defendant also opposed the suit contending that the Court at Hyderabad has no jurisdiction, that cause of action or part of cause of action did not arise at Hyderabad and that as per clause 66 of contract, only Courts at Bombay have jurisdiction. The allegation that first defendant resorted to fraud is denied. The plaintiff filed rejoinder disputing the scope of BG and also denied the allegation that the first defendant has not recovered mobilisation advance from the bills. Second defendant filed a memo adopting rejoinder filed by the plaintiff as their written statement.

4. First defendant filed I.A. No.2354 of 1997 raising objection to the territorial jurisdiction of the Court below. By an order dated 28.4.2001, the said I.A., was dismissed relying on the decision of the S