( 1 ) BY means of this application brought under Section 41 read with Second -chedule of the Arbitration Act, 1940 and Order 39 Rules 1 and 2 of the Code of Civil Procedure the petitioner EM and EM Associates seeks a stay against the respondent Delhi Development Authority (to be referred to as DDA), their officers, agents and servants from encashing the bank guarantee/guarantee bond No. 44/82 for Rs. 46,300. 00.

( 2 ) THIS application is resisted by the respondent/dpa.

( 3 ) THE perusal of the bank guarantee shows that the Syndicate Bank (hereinafter to be referred to as the Bank) undertook to pay the amount due and payable under this guarantee without any demur on demand from the DDA staling that the amount claimed is due by way of loss or damages caused to or would be caused to or suffered by the DDA by reason of any breach on the part of the petitioner-contrator of any of the terms and conditions contained in the original contract between the parties on the basis of which this bank guarantee was given by the Bank. Copy of the letter of demand by the DDA upon the Bank is Annexure P-2 dated 15-10-1984 in which the following relevant lines appear :

". . . . IN this co