BADAR DURREZ AHMED, J.

( 1 ) INITIALLY, the application [ia No. 11121/2003] under Order 39 Rules 1 and 2 of CPC was argued on 30. 11. 2005 and orders were reserved. The counsel also sought time to take instructions as to whether the suit itself could be disposed of at this stage. On 05. 12. 2005 the counsel responded by saying that it could. The following issues were framed:-"1. Whether any contract/agreement came into existence between the plaintiff and the defendant No. 1? 2. Whether the defendant No. 1 is entitled to invoke the Bank Guarantee? 3. Relief. "and, it was submitted that the arguments advanced at the hearing of the said application be treated as arguments in the suit and the same be disposed of. It is so being disposed of by this judgment.

( 2 ) THE plaintiff has filed the present suit seeking a declaratory decree as well as a decree for permanent injunction. The declaration that is sought by the plaintiff is that no agreement / contract has come into being between the plaintiff and the defendant No. 1 for the construction of Semi-Merry Go Round system for Tenughat Thermal Power Station, Lalpania, Jharkhand pursuant to the letter inviting tenders dated 17. 02. 2003 issued by the defendant No. 1. The relief of permanent injunction that is sought by the plaintiff is for restraining the defendant No. 1 from invoking / negotiating the bank guarantee no. LKB/4692/22050 of 22. 03. 2003 for a sum of Rs. 15. 00 lakhs issued by the defendant No. 2 (bank) at the request of the plaintiff to the defendant No. 1. An injunction is also sought against the defendant No. 2, restraining it from making any payment under the said bank guarantee to the defendant No. 1. The application [ia No. 11121/2003] under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter referred to as the cpc ) was filed by the plaintiff seeking the interim relief of restraining the defendant No. 1 from invoking / negotiating the said bank guarantee as also restraining the defendant No. 2 from making payment to the defendant No. 1 under the said guarantee.

( 3 ) ON 25. 11. 2003, the plaint was registered as a suit and this court directed the issuance of summons to the defendants. Notice was also issued to the defendants in the said application (IA No. 11121/2003) and ex parte interim orders were passed restraining the defendant No. 1 from invoking the said bank guarantee subject to the condition that the validity of the bank guarantee was extended for a further period of three months from the date of its expiration. The defendant No. 2 was also restrained from releasing the bank guarantee and from making payment till further orders from this court. This ex parte order has continued till date. The bank guarantee has, however, been kept alive by extending its validity from time to time.

( 4 ) THE admitted facts in brief are that the defendant No. 1 issued a letter inviting tender (hereinafter referred to as the lit ) on 17. 02. 2003 (Annexure- a to the plaint), inter alia, to the plaintiff in respect of the construction of Semi-Merry Go Round System for Tenughat Thermal Power Station, Lalpania, jharkhand. It was a condition of the LIT that the bids must be accompanied by earnest Money Deposit of Rs. 15. 00 lakhs. Clause 7. 0 of the Instructions to tenderers related to Earnest Money. While the said clause specifically provided for the deposit of Earnest Money of Rs. 15. 00 lakhs by crossed bank draft or pay order, it is an admitted position between the parties that subsequently instead of the requirement of depositing the Earnest Money by crossed bank draft or pay order, the tenderers could give a bank guarantee for the said amount in favour of the defendant No. 1. Clause 7. 5 of the Instructions to Tenderers prescribed that the Earnest Money of the unsuccessful tenderers would be discharged / returned on the award of contract to the successful tenderer. It was also provided that in the case of the successful tender

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