ORDER :

Sanjay Kumar, J.

1. These two appeals arise out of the order dated 15.07.2019 passed by the learned Judge, Commercial Court-cum-XXIV Additional Chief Judge, City Civil Court, Hyderabad ( for brevity, ‘the Commercial Court’), in C.O.P.No.31 of 2019, a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996. They are therefore amenable to final disposal at the stage of admission by way of this common order.

2. The core issue that arises before us presently is whether the Commercial Court was justified in refusing to grant an injunction as prayed for by Everest Industries Limited, NOIDA, Uttar Pradesh, the petitioner in C.O.P.No.31 of 2019, restraining MW High Tech Projects India Private Limited, Hyderabad, the first respondent therein, from invoking the unconditional bank guarantee issued by Kotak Mahindra Bank Limited, the second respondent therein. In consequence, the issue also arises as to whether the Commercial Court was right in thereafter directing MW High Tech Projects India Private Limited, the first respondent, to furnish third party security, despite refusal of an injunction, and to pay proportionate costs.

3. Parties shall hereinafter be referred to as arrayed in C.O.P.No.31 of 2019 on the file of the Commercial Court.

4. Facts, to the extent admitted and relevant, are as follows: The first respondent was awarded the work of designing, fabricating, supplying and erecting a pre-engineered building for the manufacturing facility of Jaguar & Company Private Limited at RIICO Industrial Area, Bhiwadi, Rajasthan. In turn, the first respondent awarded a subcontract of this work to the petitioner under letter dated 05.10.2016. A composite agreement for supply and erection of the pre-engineered building was entered into by and between them under Purchase/Frame Order dated 25.11.2016. In terms thereof, the petitioner was to complete the project by 15.03.2017. The defect liability period agreed upon was one year from the date of handing over of the completed project. In the event of failure to complete the project as per schedule, liquidated damages were payable @ 0.5% of the total contract value per week delayed, subject to a maximum of 5% of the total contract value. The Purchase/Frame Order provided for settlement of disputes through arbitration at Hyderabad in accordance with the Arbitration and Conciliation Act, 1996 ( hereinafter, ‘the Act of 1996’). The petitioner was also required to furnish an unconditional and irrevocable performance bank guarantee for 5% of the contract price, which was to be kept valid till the end of the defect liability period. In terms of this requirement, the petitioner furnished a bank guarantee for Rs.1,44,08,036/- from the second respondent bank. There under, the bank unconditionally and irrevocably guaranteed to pay the first respondent Rs.1,44,08,036/- immediately upon receipt of a written demand advising it that the petitioner had not fulfilled its obligations under the subcontract.

5. Admittedly, the petitioner completed the project and handed over the project site to the first respondent only on 31.08.2018. Correspondence ensued thereafter with regard to certain defects in the execution of the project and according to the petitioner, the same were satisfactorily attended to. While so, the petitioner claimed that it received e-mail dated 08.04.2019 from the second respondent bank stating that it had received a request from the first respondent, vide letter dated 04.04.2019, seeking to invoke the bank guarantee. Under letter dated 06.04.2019, the second respondent bank however informed the first respondent of its inability to honour the request, pointing out that the invocation did not contain a declaration that the petitioner had not fulfilled its obligations under the subcontract, as required by the bank guarantee.

6. It was at this stage that the petitioner approached the Commercial Court, by way of C.O.P.No.31 of 2019 filed under Section 9(1)(ii) of the Act of 199