S. Ravindra Bhat, J.

1. The plaintiff in the suit seeks a decree of declaration that the first defendant (hereafter called the "NHAI") cannot invoke a bank guarantee dated 13.10.2007 - which has been kept alive and is hereafter referred to as "the guarantee", for the sum of Rs. 3 crores. Permanent injunction is sought against the NHAI from invoking the bank guarantee and a mandatory injunction is sought against the NHAI to release or return the bank guarantee issued by the second defendant, (hereafter called "the bank").

2. The facts necessary for deciding the case are that the plaintiff successfully bid for construction work tendered by the NHAI. The plaintiff and the NHAI entered into a contract on 25.11.2005; in terms of the contract, the work commenced on 29.12.2005 and had to be completed within 18 months, i.e. 28.06.2007. The plaintiff contends that right from inception, the National Highways Authority of India, (hereafter referred to as "NHAI") was guilty of a series of omissions, which hindered the smooth progress of the work. These included delay in handing-over the site. The plaintiff alleges that despite the obligation to hand-over the site within 18 months, the NHAI dithe