( 1 ) THE plaintiff has filed the suit for a decree of declaration and permanent injunction praying that the first defendant be restrained from invoking/encashing two bank guarantees dated 17th February, 2000 executed by the second defendant towards the workers dues until the completion/transfer of the lease in favour of the first defendant by the Government of Tamil Nadu in terms of the agreement between them. The plaintiff has also filed an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908 (for short the Civil Procedure Code) for grant of exparte ad interim injunction restraining defendant No. 1 from invoking/encashing the said two bank guarantees. The first defendant has filed the reply to the application opposing the same, inter alia, on the grounds that suit itself is not maintainable as essential conditions for claiming such injunction against encashment of Bank Guarantees namely, fraud or irretrievable loss and injury are not made out. The second and third defendants have not contested the application.

( 2 ) BRIEFLY stated the facts are: that on 9. 10. 1998, a Memorandum of Understanding (Mou), was made by plaintiff-DCW Home products Ltd (hereinafter referred to as the Vendor) and the first defendant - Gujarat Heavy Chemicals Ltd. (hereinafter referred to as the Buyer) whereby the Vendor agreed to sell its salt manufacturing unit in Tamil Nadu and the business to the first defendant along with all its movable and immovable assets, for lumpsum consideration of Rs. 450. 00 lacs. Under the Mou, on 23. 10. 1998 a sum of Rs. 45. 00 lacs was paid by the Buyer to the Vendor leaving a balance of Rs. 405. 00 lakhs. There is no dispute about this. Thereafter on 17th February, 1999 sale agreement for transfer of business of the salt unit was executed between the plaintiff (Vendor), the third defendant, DCW Ltd. (confirming party - Co-Vendor) and the first defendant (the Buyer) with some changes with regard to the schedule of payments of the said sale consideration of Rs. 450. 00 lakhs. Clause 13. 2, inter-alia, provided deductions under two heads out of the balance of Rs. 405 lakhs; (a) towards the payment to be made by the Buyer to the Vendors creditors as detailed in the schedule V and (b) Rs. 24,67,758. 00 paid s advance by the Buyer to the Vendors for settling the contractor s dues, thus leaving the net balance of Rs. 3,28,24,242. 00 which was agreed to be paid by the Buyer on completion. Admittedly, full sale consideration was received by the Vendors and the business of the salt manufacturing unit was transferred to the Buyer but the lease of the land of the salt manufacturing unit is yet to be transferred in the name of the buyer by the Government of Tamil Nadu. It was agreed that in the eventuality of the lease of the salt unit not being transferred by the Government of Tamil Nadu in favour of the buyer, the business of the salt unit would revert back to the Vendors and the sale consideration of Rs. 450. 00 lakhs would be refunded by the Vendors to the Buyer. Clause 14 of the agreement provided that Vendors shall secure for the Buyer an unconditional and irrecoverable bank guarantee securing payment of Rs. 450. 00 lacs (total sale consideration) to the Buyer, in this eventuality.

( 3 ) CLAUSE 15. 1 of the sale agreement further provided that liability on account of Salary, Provident fund, Gratuity, Leave encashment, Superannuation and other dues etc. of the employees up to the date of the transfer shall be that of the Vendors to the extent of Rs. 60,46,000. 00. , as detailed in schedule VII. The payment of this amount was secured by the Vendors by another unconditional Bank Guarantee in favour of the Buyer which could be encashed in the event the Vendors do not settle the dues of the employees/contract workers at the time of "completion/transfer of lease" in favour of the Buyer. It is pleaded that the first defendant (Buyer) paid an amount of Rs. 18,61,561. 00 to employees/contract