Invocation of an unconditional bank guarantee cannot be restrained unless fraud or irretrievable injustice is established; the nature of bank guarantees is independent and absolute.

1. Invoking the appellate jurisdiction of this Court under S.37 of the Arbitration and Conciliation Act, 1996 (for short, the AC Act - ), the appellants herein have called in question the impugned order dated 4 - 7-2020 passed by the learned Judge, Commercial Court (District Level), Nava Raipur, Atal Nagar, District Raipur, whereby the learned Commercial Court has rejected the application filed by the appellants herein seeking interim injunction under S.9(1) of the AC Act finding no merit and refused to restrain the respondents herein from encashing the performance bank guarantee (PBG) to the extent of Rs. 6,77,26,553/-.

2. Respondent No.2 South East Central Railway issued a notice inviting tender for work in Lajkura - Raigarh Section for construction of 4 line between Jharsuguda and Bilaspur. The scope of the said work was widening, including soil investigation, design of bridges, execution of earthwork, minor bridges, major bridges, RUB, extension of FOB, staff quarter and other service buildings, supply of ballast and other miscellaneous works in which the appellants participated and were declared successful bidders and consequently, letter of acceptance (LoA) was issued in their favour on 21-9-2016. Accordingly, agreement dated 13-6-2017 came to be executed between the parties with a stipulation that the work will be completed within 24 months from the date of issuance of LoA dated 21-9-2016 and accordingly, the appellants submitted bank guarantee worth Rs. 6,77,26,553/- in shape of performance bank guarantee (PBG) with the respondents as per the terms and conditions of the NIT. However, thereafter, in the course of execution of work, dispute arose between the parties regarding laxity in performance and dissatisfaction with progress of work, and when the work in question could not be completed within the stipulated time despite several extensions given to the appellants, ultimately, respondent No.2 terminated the contract on 2-1-2020 which was called in question by the appellants herein before this Court by filing W.P.(C)No.31/2020 and which was dismissed by this Court (Division Bench) on 24-2-2020 giving liberty to the appellants to invoke the arbitration clause, if any.

3. It is the case of the appellants that since arbitrator was not appointed despite making application, thereafter, they filed application under S.9(1) of the AC Act on 28-2-2020 before the District Judge, Bilaspur for grant of interim injunction, which was returned to the appellants to file before the Commercial Court (District Level) after coming into force of the Commercial Courts Act, 2015. In the said application, it was pleaded that the contract period for completion of the said contract was extended by the respondents herein up to 31-3 - 2020 invoking clause 17 - A of the general conditions of contract without any penalty and without any liquidated damages, but the contract in question has been terminated on 2-1-2020 prior to last date of completion of work i.e. 31-3-2020, which is ex facie illegal and bad in law and by which the appellants have prima facie case and are entitled to obtain interim injunction under S.9(1) of the AC Act.

4. The respondents filed reply to the said application filed under S.9(1) of the AC Act before the Commercial Court opposing the said application stating inter alia that the appellants have neither prima facie case in their favour nor balance of convenience lies in their favour and there is no irreparable loss to the appellants if the application for interim injunction is rejected and a