S. S. Chadha ( 1 ) THE applicant has filed a petition under Section 20 of the Arbitration Act, 1940 for a,direction to the respondents to file the arbitration agreement between the parties and for reference of the disputes. That was registered as a suit. Along with the suit, the present application under Section 41 (b) read with Schedule II of the said Act claiming interim relief was filed. This Court issued notice to the respondents and in the meanwhile, defendant No. 4-bank was restrained encashing the bank guarantee No. 14/50 dated June 2, 1983 in the amount of Rs. 25,000. 00. The petitioner undertook to renew the bank guarantee for a period of one year. The application is for disposal after notice. ( 2 ) ORDINARILY, the encashment of the bank guarantees is independent of the disputes between the parties. A separate contract comes into existence between the parties to the bank guarantee on execution of the bank guarantee and the respondent is thus entitled to encash the bank guarantee in terms thereof. On facts in this case. ( 3 ) I find that the bank guarantee in para 2 records the undertaking of the Bank of Baroda to pay the amounts due and payable under the guarantee, without any demur, merely on a demand from the Government through the Senior Divisional Accounts Officer, Northern Railway, New Delhi stating: "that the amount claimed is due by way of loss or damage caused to or would be caused to or suffered by the Government by reason of any breach in the said agreement or by reason of the contractor failure to enform the said agreement. Any such demand made on the bank shall be conclusive as regards the amount due and payable by the Bank under this guarantee. However, our liability under guarantee shall be restricted to an amount not exceeding Rs. 25,000 -. " ( 4 ) A copy of the demand made by the Senior Divisional Accounts Officer dated February 2, 1985 is on the record. It merely calls upon the Manager, Bank of Baroda for encashment of the bank guarantee in favour of Senior Divisional Accounts Officer. The obligation of the bank is to pay the amounts due and payable under the guarantee without any demur but it has to be in terms of para 2. It merely calls upon the Manager, Bank of Baroda for encashment of the bank guarantee in favour of Senior Divisional Accounts Officer. The obligation of the bank is to pay the amounts due and payable under the guarantee without any demur but it has to be in terms of para 2. The Senior Divisional Accounts Officer does not state in the letter of demand that either the amount claimed is due by way of loss or damage caused or the Government is likely to suffer loss by breach of the contract or by reason of the contractor s failure to perform the agreement. The essential pre-requisite of the demand is not complied with when making the demand. The bank is obliged to pay only if the demand is made in terms of the bank guarantee. According to the applicant, the work was executed and completed by July 32, 1983 and that at no stage any defect was pointed out by the concerned Engineer. This is disputed and, therefore, the disputes have arisen between the parties. ( 5 ) FOR the reasons, I am inclined to and hereby maintain the ex-parte injunction till the disposal of the main suit. The petitioner undertakes to renew the bank guarantee from time to time and keep it alive at least for six months after the conclusion of suit No. 317-A/85. I. A. is disposed of in the above terms. ( 6 ) COUNSEL for the parties want to file documents. Let the same be filed within 4 weeks. List the case before the Deputy Registrar/joint Registrar on 30th September, 1985 for admission and denial of documents and for further proceedings.