( 1 ) I PROPOSE TO DISPOSE OF THE INTERIM APPLICATION filed IN THE PETITION UNDER SECTION 9 OF THE ARBITRATION and CONCILIATION ACT, 1996 IN WHICH APPLICATION THE petitioner HAS PRAYED FOR AN EX-PARTE ORDER RESTRAINING the RESPONDENT FROM ENCASHING SEVERAL BANK GUARANTEES. THIS PRAYER IS IN PARI MATERIA WITH THE FIFTH PRAYER IN the PETITION. ON 9. 9. 2003 MY LEARNED BROTHER HAD GRANTED an INTERIM INJUNCTION INTER ALIA FOR THE REASON THAT THE contract HAD NOT BEEN TERMINATED AND THEREFORE CLAUSE 22 of THE AGREEMENT BETWEEN THE PARTIES HAD NOT COME INTO play; THAT NO REASONS HAD BEEN ASSIGNED FOR THE invocation OF THE BANK GUARANTEES; AND THAT ONCE THE BANK guarantees WERE ENCASHED THE ARBITRATION WOULD BE rendered ANFRACTUOUS. THE CONCERNED BANK HAS NOT BEEN impleaded IN THESE PROCEEDINGS.

( 2 ) THE HON ble SUPREME COURT HAS ON NUMEROUS occasions DEVOTED ITS ATTENTION AND TIME ON ENUNCIATING and REITERATING THE LAW ON PARAMETERS OF JURAL interference WITH THE INVOCATION/encashment OF LETTERS OF credit AND BANK GUARANTEES. THE LAW HAS BEEN SO crystalized IN ITS PRONOUNCEMENTS THAT IT ADMITS OF NO debate OR DOUBT. OVER A QUARTER CENTURY AGO, THE COURT had IN TARAPORE AND CO. , MADRAS VS. V. O TRACTORS EXPORT moscow, AIR 1970 SC 891 ELABORATELY AND PERSPICUOUSLY explained THE SCOPE AND AMBIT OF JUDICIAL INTERFERENCE IN matters CONCERNING LETTERS OF CREDIT AND BANK GUARANTEES in THESE WORDS-- THE SCOPE OF AN IRREVOCABLE LETTER OF CREDIT IS explained THUS IN HALSBURY s LAWS OF ENGLAND (VOL. 34, paragraph 319 AT PAGE 185):

"it IS OFTEN MADE A CONDITION OF A MERCANTILE contract THAT THE BUYER SHALL PAY FOR THE GOODS BY MEANS of A CONFIRMED CREDIT, AND IT IS THEN THE DUTY OF THE buyer TO PROCURE HIS BANK, KNOWN AS THE ISSUING OR originating BANK, TO ISSUE AN IRREVOCABLE CREDIT IN favour OF THE SELLER BY WHICH THE BANK UNDERTAKES TO THE seller, EITHER DIRECTLY OR THROUGH ANOTHER BANK IN THE seller s COUNTRY KNOWN AS THE CORRESPONDENT OR negotiating BANK, TO ACCEPT DRAFTS DRAWN UPON IT FOR THE price OF THE GOODS, AGAINST TENDER BY THE SELLER OF THE shipping DOCUMENTS. THE CONTRACTUAL RELATIONSHIP BETWEEN the ISSUING BANK AND THE BUYER IS DEFINED BY THE TERMS of THE AGREEMENT BETWEEN THEM UNDER WHICH THE LETTER opening THE CREDIT IS ISSUED; AND AS BETWEEN THE SELLER and THE BANK, THE ISSUE OF THE CREDIT DULY NOTIFIED TO the SELLER CREATES A NEW CONTRACTUAL NEXUS AND RENDERS the BANK DIRECTLY LIABLE TO THE SELLER TO PAY THE purchase PRICE OR TO ACCEPT THE BILL OF EXCHANGE UPON tender OF THE DOCUMENTS. THE CONTRACT THUS CREATED between THE SELLER AND THE BANK IS SEPARATE FROM, although ANCILLARY TO, THE ORIGINAL CONTRACT BETWEEN THE buyer AND THE SELLER, BY REASON OF THE BANK s UNDERTAKING to THE SELLER, WHICH IS ABSOLUTE. THUS THE BANK IS NOT entitled TO RELY UPON TERMS OF THE CONTRACT BETWEEN THE buyer AND THE SELLER WHICH MIGHT PERMIT THE BUYER TO reject THE GOODS AND TO REFUSE PAYMENT THEREFOR; AND, conversely, THE BUYER IS NOT ENTITLED TO AN INJUNCTION restraining THE SELLER FROM DEALING WITH THE LETTER OF credit IF THE GOODS ARE DEFECTIVE. "chalmers ON "bills OF EXCHANGE" EXPLAINS THE LEGAL position IN THESE WORDS

"the MODERN COMMERCIAL CREDIT SERVES TO interpose BETWEEN A BUYER AND SELLER A THIRD PERSON OF UN- questioned SOLVENCY, ALMOST INVARIABLY A BANKER OF international REPUTE; THE BANKER ON THE INSTRUCTIONS OF the BUYER ISSUES THE LETTER OF CREDIT AND THEREBY undertakes TO ACT AS PAYMASTER UPON THE SELLER performing THE CONDITIONS SET OUT IN IT. A LETTER OF credit MAY BE IN ANY ONE OF A NUMBER OF SPECIALISED FORMS and CONTAINS THE UNDERTAKING OF THE BANKER TO HONOAUR ALL bills OF EXCHANGE DRAWN THEREUNDER. IT CAN HARDLY BE OVER- emphasised THAT THE BANKER IS NOT BOUND OR ENTITLED TO honour SUCH BILLS OF EXCHANGE UNLESS THEY, AND SUCH accompanying DOCUMENTS AS MAY BE REQUIRED THEREUNDER, ARE in EXACT COMPLIANCE WITH THE TERMS OF THE CREDIT. SUCH documents MUST BE SCRUTANISED WITH METICULOUS CARE, THE maxim DE MIN