( 1 ) THE petitioner, Scrap Mould Will, entered into a contract with the respondent, Metal Scrap Trade Corporation Limited, on or about June 10, 1987, for supply of 28,000 MT plus/ minus shredded scrap at the seller's option. The scrap was intended to be purchased by the respondent as the canalising agent for distribution to various ultimate consumers in the country.

( 2 ) ONE of the terms and conditions of the said contract between the parties required the petitioner to furnish a performance bond from an approved bank for US dollars 1,82,280 being 5% of the value of the contract.

( 3 ) IN compliance with the aforesaid requirement, the petitioner furnished a bank guarantee issued by the Standard Chartered Bank, 4, Netaji Subhas Road, Calcutta, for US dollars 1,82,280.

( 4 ) BY the said bank guarantee, the said Standard Chartered Bank guaranteed that they would indemnify the respondent and/or keep the respondent indemnified against any loss or damage that may be caused to, or suffered by, the respondent by reason of any breach of contract by the petitioner of any of the terms and conditions of the said contract or performance thereof.

( 5 ) THE relevan