( 1 ) THIS is an application under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter REFERRED TO to as the Act), seeking to restrain the respondent, M/s. Bharat Heavy Electricals Limited (for short the BHEL), from encashing and receiving any amount under the bank guarantee No. Bom/60/236 dated 24 July 1996 in the sum of Rs. 7,86,750. 00 issued on behalf of the petitioner by the Bank of Baroda, India Exchange Place, Calcutta, in favour of the BHEL.

( 2 ) THE facts relevant to the controversy involved are as follows;

( 3 ) THE respondent BHEL, a Public Sector Undertaking, for the purpose of executing a contract awarded to it by National Thermal Power Corporation Limited (for short the NTPC), awarded a sub-contract to the petitioner for erection, testing, commissioning and trial operation of 2x210 MW Boilers, Part B at FGTPP, Unchahar, ST-2, District Rai Bareilly, Uttar Pradesh, and issued a letter of intent dated 21 June 1996, in favour of the petitioner, which was received by the petitioner on 6 July 1996. The value of the work awarded was Rs. 3,13,20,000. 00. It was scheduled to commence from 6 July 1996 and was to be completed by 5 December 1998. F