The main legal point established is that in cases of unconditional bank guarantees, the court may interfere if the plaintiff establishes a strong arguable case on merits and special equity justifying the injunction.

SOUMEN SEN, J.

1. In a suit for declaration that the recession of contract by the defendant is illegal and the invocation of the performance bank guarantee is fraudulent and wrongful, the plaintiff has filed this application praying essentially for an order of injunction restraining the defendant no.1 from encashing the performance bank guarantee bearing No.01154101 IPG 000277 dated 19th August, 2010 for a sum of Rs.61,53,350/-.

2. The dispute essentially arose during the performance of a contract awarded to the plaintiff for construction of foundation, substructure, approaches including allied and miscellaneous works for bridge No.182(9 x 45.7 mtr.) between IB and Brajraj Nagar Station in connection with 3rd Line between Champa-Jharsuguda. The suit originally filed was directed against the threat by the Union of India to invoke the bank guarantee furnished in lieu of performance by the plaintiff. The grievance of the plaintiff is that the plaintiff in course of construction of the Railway Bridge found it impossible to undertake the construction by well-sinking method due to rocky bed. The plaintiff contends that the construction could be carried out only by piling. The plaintiff contends that under the scope of work the plaintiff would be required to do Geotech Investigation which involves soil testing. The plaintiff, however, was prevented from doing so by the defendant on the ground that the soil testing had already been carried out for the said bridge before awarding the contract and the plaintiff was requested to proceed on the basis of the said soil investigation report. However, after doing about 55% of the work the plaintiff encountered insurmountable difficulties in proceedings further due to hard rock beneath the earth. It was well neigh impossible for the plaintiff to undertake construction applying the well sinking method. The well sinking method is completely unsuitable for construction of the bridge with the said topographical feature and this fact was never disclosed to the plaintiff. The plaintiff had no means to ascertain the presence of hard rock bed in an around the said area where the construction would take place as the defendant no.1 requested the plaintiff to carry construction on the basis of the soil report made available by the defendant to the plaintiff. The plaintiff contends that it is admitted position that the rock bed would not permit such construction. Notwithstanding the aforesaid and for no fault of the plaintiff the contract was subsequently terminated and according to the plaintiffs a fresh contract has been awarded or is proposed to be awarded with the plaintiffs being disqualified to participate in the tender process although a very fundamental process of construction has been altered from the well sinking method to the piling method. The claim of the plaintiff is vindicated in the light of the complete change of procedure for construction suggested by the Union of India, in proposing the altered terms for the same construction. In the suit that was initially limited to the performance guarantee or the bank guarantee furnished, in lieu thereof, the plaintiffs subsequently amended the plaint to challenge the termination of contract and seek damages. The case made out by the plaintiffs is that it was impossible to perform the contract. The said amendment was allowed and upheld by the Division Bench.

3. Mr. Pratap Chatterjee learned Senior Counsel appearing with Mr. Samrat Sen, Senior Advocate for the plaintiffs has submitted that the Union did not permit the plaintiffs to have soil testing of its own and had ask the plaintiff to execute the work on the basis of the soil report furnished by the defendant, by reason whereof, it was not possible for the plaintiffs to ascertain the presence of hard rock under the earth which were completely unsuitable to undertake construction by well sinking method. The defendant was aware of the said difficulties but insisted that the plaintiff should