JUDGMENT - Dr. B.P. SARAF, J. :---This appeal is directed against the judgment and order of the learned Single Judge dated 17th June, 1991 in Notice of Motion No. 78 of 1989 in Suit No. 1056 of 1988 restraining the appellants from invoking the Bank guarantee furnished by respondent No. 1.

2.The material facts of the case relevant for deciding controversy in this appeal, briefly stated, are as follows : The respondent No. 1 M/s. Richardson Cruddas (1972) Ltd., Bombay, had entered into an agreement dated 27th October, 1985 ("Agreement") with the appellants, M/s. Kisan Sahakari Chini Mills Limited, Shahjahanpur, Uttar Pradesh, for setting up of a sugar plant at Lucknow for an aggregate price of Rs. 4.55 crores. To secure timely delivery, erection and commissioning of the plant and machinery as provided in Clause 15.1.1 of the said agreement, the respondent No. 1 was required to furnish a Bank guarantee to the appellants for a sum of Rs. 22.75 lakhs representing 5% of the contract price. The said Bank guarantee was to enure till the successful completion of the trial operation of the plant as provided in Clause 7.3 of the agreement. The plant was commissioned on 8th December, 1987. The performance trial in terms of the above agreement was to take place upto the end of the second crushing season after the commissioning of the said plant which ended on 31st March, 1989. As the respondent No. 1 failed to give the performance trial in terms of the agreement within the stipulated time, the appellants, by their letter dated 27th March 1989, invoked the above Bank guarantee and requested the Bank to pay a sum of Rs. 22.75 lakhs to them. On the other hand, the respondent No. 1 through their advocate, served a notice on the respondent No. 2 Bank, which had issued the Bank guarantee in favour of the appellants, informing them that the performance trial which they were required to give under the agreement to the appellants could not be given by them because of the failure of the appellants to make necessary arrangement for the said trial, and as a result thereof, the Bank guarantee stood lapsed. By the said letter, the Bank was asked not to pay any amount to the appellants under the said guarantee in the event of the same being invoked by them. On receipt of the said notice, the Bank did not pay the amount of Rs. 22.75 lakhs to the appellants in terms of the Bank guarantee. The respondent No. 1 thereafter filled a suit in this Court, being Suit No. 1056 of 1988, for a declaration that the Bank guarantee had lapsed and stood discharged and for restraining the appellant from invoking the same and respondent No. 2 Bank from paying any amount to the appellants thereunder. A notice of motion was also taken out in the said suit for interim orders. The learned Single Judge, by the impugned order dated 17th June, 1991 passed in the notice of motion taken out by the respondent No. 1, restrained the appellants from invoking the Bank guarantee and the respondent No. 2 Bank from making any payment to the appellants in pursuance thereto. Hence this appeal.

3.We have heard Mr. Y.R. Naik, learned Counsel for the appellants, who submits that the learned Single Judge was not justified in passing the impugned order inasmuch as no case of irretrievable injustice and fraud could be made out by the respondent No. 1 to justify issue of an order of injunction restraining the appellants from invoking the Bank guarantee. Our attention was drawn by Mr. Naik to the following observation of the learned Single Judge in the impugned order :

"Under Clause 7.3.1., the trial was to be conducted by a Committee consisting of authorised representatives under the agreement and 1st defendants were to give a notice and fix date for the performance trial, and even in the absence of the plaintiffs, it could have been carried out, which, of course, was not done in the present case. It is possible, both the parties were not in a position to fix a convenient date for the purpose of h

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