( 1 ) THIS petition under Section 9 of the Arbitration and Conciliation Act,1996 (hereinafter REFERRED TO to as the Act) has been filed for the grant of interim relief restraining respondent no. 2 from invoking the Advance Bank Guarantee No. 316/96/568 for Rs. 2. 60 crores and the Performance Bank Guarantee no. 316/96/566 for Rs. 2. 60 crores against the Letter of Intent no. KISKO/1412 dated 17. 8. 1996. On July 9,1998 this Court after hearing learned counsel for the petitioner passed an ex-parte order of injunction restraining respondent no. 1 not to make payment under the aforesaid bank guarantees to respondent no. 2. After notice had been issued to the respondents, it filed an application under Order 39 Rule 4 Civil Procedure Code (IA No. 6720/98) for vacating the ex-parte order of injunction. Besides other pleas taken in the said application for vacating the ex-parte order of injunction, one of the pleas taken was that this Court has no territorial jurisdiction to try or entertain the petition as the jurisdiction vested only before the courts at Bangalore. The petitioner was also alleged to be guilty of concealment of material facts from this Court inasmuch as it was not brought to the notice of the court by the petitioner that the contract provided for exclusive jurisdiction of the courts at Bangalore. The pleas as contained in paragraphs 5 and 6 of the application for vacation of the ex- parte order of injunction were:

"5. THAT a bare perusal of the general conditions of the contract entered into between the petitioner and the answering respondent would clearly show that this Hon ble Court would not have the territorial jurisdiction to try or entertain the present petition. It is respectfully submitted that as per the said general conditions of the contract the jurisdiction would vest only before the Courts at Bangalore. Further, the venue of the arbitration is also at Bangalore. Thus, the present application being a creature of the arbitration clause, jurisdiction would only be vested in the forum prescribed by the arbitration clause itself. That being the legal position, this Hon ble Court would not have the territorial jurisdiction to entertain the present petition and the fact that the Bank Guarantees in question are sought to be encashed in Delhi is of no consequence because the petitioner s application is a creature of the main contract and not the terms of the bank guarantee. Even otherwise, the mere fact that some meeting or negotiation in respect of a particular contract were held in Delhi is of no consequence and cannot confer jurisdiction on Courts in Delhi inasmuch as the agreement in question was never signed in Delhi. It would, therefore, follow that this Hon ble Court is not vested with the territorial jurisdiction to try and entertain the present petition and the same is thus liable to be rejected in limine inasmuch as no cause of action or any part thereof arises within the territorial jurisdiction of this Hon ble Court. 6. The petitioner is guilty of concealment of several material facts from this Hon ble Court. Firstly the factum of having received notice of filing of the caveat had been concealed by the petitioner. Secondly, the petitioner has not annexed the arbitration clause or the jurisdiction clause as per the general conditions of the contract which clearly provide for exclusive jurisdiction of courts in Bangalore. Further, the letter terminating the contract has also not been annexed by the petitioner. "

( 2 ) IN reply to this objection it was contended by the petitioner that the contract consisted of Letter of Intent dated August 17,1996 which stated that "the contract stands concluded with the issue of this LOI. A formal and detailed agreement shall be concluded shortly". It is stated that no formal contract has thereafter been executed. It is also stated that the arbitration clause relied upon by the petitioner was a re- production of clause 9. 23. 3 of the general conditions