( 1 ) BY this order, I propose to deal with an interim application bearing I. A. No. 3945 of 1989, filed by the Nangia Construction (India) Private Ltd (hereinafter called the Petitioners) in Suit No. 1375-A of 1989.

( 2 ) SUIT No. 1375-A of 1989 has been filed under section 20 of the Arbitration Act.

( 3 ) THE interim application I. A. No. 3945 of 1989 has been filed under action 41 read with Second Schedule of the Arbitration Act 1940, and section 151 of the Code Civil Procedure. By the said interim application, the. applicant/petitioner prays that respondent No. 1 National Buildings Construction Corporation Ltd. , and respondent No. 2, the Chairman-cum-Managing Director of the National Buildings Construction Corporation Ltd. , be restrained from terminating the contract which contains an arbitration clause, it is also prayed that the National Building Corporation Ltd. (hereinafter called "the NBCC"), be restrained from encashing to bank guarantees No. NP/g/16/136 and NP/g/16/137 dated 7. 12. 87/19. 11. 87, which are valid upto 30. 4. 90 and 30. 6. 92 respectively.

( 4 ) GUARANTEE No. NP/g/16/136 dated 7. 12. 1987 is annexed as "annexure-I" (at page 46), and is a "security for compliance with his obligations in accordance with the Contract". This guarantee is called a performance guarantee, and guarantee No. NP/g/16/137 dated 19. 11. 87 is annexed as "annexure-J", and is relatal to money advanced as "mobilization advance" the Petitioners.

( 5 ) THE Petitioners say that they are carrying on bussiness as a private limited company at 58, Nehru Place, New Delhi, and that their Chairman- cum-Managing Director is Shri PC. Nangia. The Petitioners say that they are carrying on business of construction contracts with Government and Government Corporations, and is a company of repute.

( 6 ) IT is asserted in the petition that the State of Haryana had invited pre-qualification tenders for the work styled as "widening to four lanes including strengthening of existing pavements of Shershah Suri Marg, National Highway-1 from km 50 to km 74. 8 (Murthal to Smalkha Contract-1", somewhere in October/november, 1986.

( 7 ) THE Petitioners state that pursuant to said invitation, a number of parties had responded. Respondent No. 1, National Building Construction Corporation (hereinafter called the NBCC), were one of the tenderers who were pre-qualified by the State of Haryana, and tender documents were issued to them.

( 8 ) THE Petitioners state that in the second week of April, 1987, the Petitioners received a telephone call from the respondent No. 1, asking them as to whether the petitioner would be the associate contractor of the NBCC for the entire work mentioned hereabove on a back to bank basis, taking into consideration that the NBCC will have commission/ margin money of 5% on the value of the contract.

( 9 ) THE Petitioners further state that in response to the telephonic conversation they submitted their rates to respondents No. 1 on 15. 4. 1987. It is also asserted that the rates were submitted for the entirity of aforesaid work on back to back basis, and accepting that 5% of the amount will be payable to the NBCC on account of their commission/margin money.

( 10 ) THE NBCC have filed documents to show that a meeting had taken place between the representatives of the NBCC and Mr. Madan Lal Nangia of the Petitioner company on 21. 4. 1987 for the purpose of finalising the agreement between the Petitioners and respondent No. 1 with respect to the the work of widening to four lanes including strengthening of existing pavements of Shershah Suri Marg. National Highway-1, from km 50 to km 74. 8 (Murthal to Sannikha) Contract-1. The memorandum of this meeting indicates that some kind of arrangement had already come into existence between the parties. Mr. Madan Lal Nangia who had signed the said memorandum, had signed it "tantative!y". .

( 11 ) IT is also by asserted that the NBCC received the rates submitted by the Petitione