( 1 ) THIS is a petition filed on behalf of M/s. Ansal Properties, and Industries Ltd. (hereinaf[erreferredtoas the petitioner)under Section41 of the Arbitration Act, 1940 read with Schedule-11 thereof and Section 151 of the Code of Civil Procedure against the respondents and in this petition it has been prayed that respondents by themselves, their employees or agents be restrained from invoking and encashing the bank guarantee No. 13/00 datied 10. 9. 90forrs. l3,07,000. 00 valid upto30. 6. 94 and bank guarantee No-3/89 dated 20th January, 1989 forrs. 25,99,000. 00 valid upto 30th April, 1994 furnished by the petitioner.

( 2 ) BRIEFLY stated the facts of the case are that on or about 15th February, 1988, the respondent No. 2 actling for and on behalf of President of India invited sealed tenders for the designs and construction of viaducts, side and catch water drains and earthwork in formation in cuttings and in embankment in Zone No. E-11 on Jammu-Udhampur rail link project. Pursuant to the acceptance of the tender of the petitioner, an agreement was entered into on February 22, 1989 between the President of India acting through respondent No. 2 and the petitioner for the aforesaid work subject to the general conditions of the Contract-1971 and the special conditions of contract and Standard Specifications of Northern Railway 1987.

( 3 ) AS perclause47ofthespecialconditions,the petitioner was entitled for mobilisation advance upto the maximum of 10% of the value of the contract against the bank guarantee. In accordance with the aforesaid clause, the petitioner furnished a bank guarantee No. 3/89 dated 20th January, 1989 for Rs. 25,99,000. 00 through New Bank of India, Rajinder Nagar Branch, New Delhi (respondent No. 4) to secure repayment of mobilisation amount whereby and whereunder the said bank agreed to pay to the respondent No. I an amount not exceeding Rs. 25. 99,900. 00 against any loss or damage caused to or suffered by the Government by reason of any brea of the petitioner or any of the terms and conditions for repayment of the advance as mutually agreed and set forth in the agreement. The said bank guarantee bearing BG No. 3/89 reads as under :-

"bank GUARANTEE NOJ/89. 1. In consideration of the President of the Republic of India (hereinafter called "the Govt. ") having agreed under the terms and conditions of letter No. 74-W/8/54/wa dated 22. 11. 1988 made between Northern Railway and Ansal Properties and Industries Ltd. for design and construction of Viaduct, side and catch water drains and earthwork in formation in cuttings and embankment in Zone No. E-11 from Km. l2. 600 tokm. l3. 220onjammu-Udhampur Raillink Project hereinafter called the said "said agreement") to accept from Ansal Properties and Industries Ltd. (hereinafter called the said contractor" a guarantee bond for Rs. 25,99,000. 00 (rupees Twenty Five Lakhs, ninety nine thousand only) against repayable mobilization advance amounting Rs. 25,99,000. 00 (Rupees Twenty Five lakhs ninety nine thousand only) agreed to b (S given to the said contractor as per accepted conditions-of the contract, we New Bank of India, Rajinder Nagar Branch, New Delhi (hereinafter called "the Bank") do hereby undertake to pay the Government an amount not exceeding Rs. 25,99,000. 00 (Rupees twenty five lakhs, ninety nine thousand only) against any loss or damnage causcd to or suffered or would be caused to or suffered by the Govt. byreason of any breach by the said Contrctor of any of the terms and conditions for repayment of the advance as mutually agreed and set forth in the agreement. 2. We, New Bank of India. Rajinder Nagar Branch, New Delhi, do hereby undertake to pay the amount/s due and payable under this guarantee without any demur, merely on a demand from "the Govt. " staling that the amount claimed is due by way of loss or damage caused to or would be caused to or suffered by the Government by a reason of any breach by the said Contractor of any of the term