JUDGMENT The substantial relief prayed for in this application under Section 41 of the Arbitration Act, 1940, is that the respondent be restrained from claiming and/or realising any amount from the final bill of the petitioner or realising any amount from the security deposit of the petitioner or its agent till the disposal of the arbitration proceeding. 2. The petitioner company's Tender for construction and conversion of the respondent's Slip way No. 3 into a building berth and for civil, structural and allied works connected thereto, was accepted by the respondent and a formal contract was entered into between the petitioner and the respondent on 4th October, 1989. 3. According to the terms of the Tender, the construction was to commence by the end of October 1987, and was to be fully completed by December 1988. 4. In terms of the contract, the petitioner company furnished as Security Deposit four separate Bank Guarantees to the respondent to the tune of Rs. 25,42,732/-, being 10 per cent of the total contract value. The said Bank Guarantees were initially made for a year, but were renewed from time to time. According to the petitioner, the said Bank Guarantees were not, however, renewed after 1st August, 1994. 5. Clause 13.02 of the General Conditions of Contract makes provision for refund of the Security money in two stages. In the first stage, 2 per cent would become due and would be paid to the contractor upon certification by the Engineer that the works had been satisfactorily completed in scheduled time and the final bill as raised by the Contractor had been finalised and settled. The balance 8 per cent was to be paid to the Contractor on the expiry of the period of maintenance subject to fulfilment of the conditions contained in Clause 13.02. Such period of maintenance was to be for a period of two years from the date of issue of Completion Certificate by the Engineer in accordance with Clause 8.08 of the General Conditions of Contract. 6. It appears that because of various problems the work could not be completed within the stipulated period and the period of completion was mutually extended from time to time, and according to the petitioner, the work was ultimately completed on 14th December, 1991, within the extended time. 6. It appears that because of various problems the work could not be completed within the stipulated period and the period of completion was mutually extended from time to time, and according to the petitioner, the work was ultimately completed on 14th December, 1991, within the extended time. The petitioner thereupon raised its Final Bill through its letter dated 28th November, 1991, and several objections were taken against the same. The respondent raised counter-claims against the petitioner company, which were denied, except to an extent of Rs. 19,000/-. 7. According to the petitioner company, despite the fact that the Bank Guarantees had lapsed on 1st August, 1994, and, although, the petitioner company was entitled to refund of the Security Deposit on the expiry of the period of maintenance, as per Clause 13.02 of the General Conditions of Contract, the respondents wrote to the petitioner's banker to either renew the Bank Guarantees or to remit the guaranteed money to the respondent. 8. The petitioner thereupon raised a dispute by its letter dated 16th November, 1994, questioning the respondents competence to withhold payment of the Final Bill or to release the Security Deposit. 9. It appears that since the respondents failed to refer the matter to arbitration in terms of the arbitration clause contained in the General Conditions of Contract (Clause 15), the petitioner company filed an application under Section 20 of the Arbitration Act, and also filed a separate application under Section 41 for the reliefs indicated hereinbefore. 10. Appearing in support of the application under Section 41, Mr. Asoke Banerjee, learned advocate, firstly urged that since the Bank Guarantees had lapsed on 1st August, 1994, the respondent was not entitled to either invoke the same or ask the petitioner's Bank to renew the same. 11. Mr. Banerjee then urged that since it had been mutually agreed between the respondent and the petitioner that 14th December, 1991, would be taken to be the date of completion of the work, and since in accordance therewith the period of maintenance had ended on 13th December, 1993, the respondent was bound under the contract to refund the Security Deposit, and, as a result, the respondent should be restrained from realising any amount from the Security Deposit, till the disposal of the Arbitration proceedings. 12. Appearing for the respondent, Mr. 12. Appearing for the respondent, Mr. R. Bachawat, learned advocate, submitted that, although, the petitioner had claimed that the work had been completed on 14th December, 1991, no Completion Certificate had been issued by the Engineer, as envisaged in Clause 8.08 of the General Conditions of Contract, which would establish that the work had indeed been completed by 14th December, 1991. Consequently, in the absence of a Completion Certificate, it could not be contended that the work had been satisfactorily completed and that the clause relating to refund of the Security Deposit had come into operation. 13. Mr. Bachawat then urged that, in any event, the Bank Guarantees provided by the petitioners company were, in fact, the Security Deposits and represented independent Agreements entered into between the petitioner's Bank and the respondent, and could not, therefore, be made the subject matter of an arbitration proceeding under the arbitration agreement.. Mr. Bachawat added that since the Bank could not be a party to the arbitration proceeding, no order involving the Security Deposit, that is, the Bank Guarantees, could be passed behind its back. Mr. Bachawat urged that what could not be directly, could not be done indirectly either. 14. Referring to the decision of the Supreme Court in the case of (1) U.P. Co-operative Federation Ltd. v. Singh Consultents and Engineers (P) Ltd. reported in 1988(1) SCC at page 174, Mr. Bachawat urged that while considering a similar question relating to invocation of Bank Guarantees, the Hon'ble Supreme Court held that the Court cannot issue an injunction in a proceeding under Section 41 of the Arbitration Act, read with Rules 1 and 2 of Order 39 of the Code of Civil Procedure, restraining the principal from invoking and encashing the guarantee, except in cases of fraud or apprehension of irretrievable injustice to the contractor. 15. Mr. Bachawat submitted that neither fraud nor irretrievable injustice had been alleged against the respondent, and the only grievance of the petitioner was that, although, the period of maintenance was over, the respondents had wrongfully withhold payment of the Security Deposit. 16. Mr. Bachawat urged that this was not a fit case for grant of an order as prayed for, and the application under Section 41 of the Arbitration Act was liable to be dismissed. 17. 16. Mr. Bachawat urged that this was not a fit case for grant of an order as prayed for, and the application under Section 41 of the Arbitration Act was liable to be dismissed. 17. Neither the pleadings nor the submissions made on behalf of the respective parties reveal any element of fraud or irretrievable injustice to the petitioner. If the Bank either renews the Bank guarantees without the petitioner's instructions, or remits the guaranteed a mount, to the respondent after lapse thereof, the petitioner can always sue for damage's. 18. As observed by the Hon'ble Supreme Court in the U.P. Cooperative Federation Ltd. case (supra), commitments of Banks must be honoured without interference by the Courts, except in cases where there is a serious dispute and a good prima facie case of fraud or when it is necessary to prevent irretrievable injustice. In the language of the Supreme Court-“Otherwise the very purpose of bank guarantees would be negatived and the fabric of trading operation will get jeopordised.” 19. The question of refund of Security Deposit, and/or payment of the petitioner's Final Bill, are arbitrable disputes and will have to be decided in arbitration. In the absence of a Completion Certificate the learned Arbitrator will have to decide on evidence whether the work has been completed or not, and, if so, on what date, as such exercise will be highly relevant in deciding whether the Security Deposit should be refunded to the petitioner. 20. Consequently, no relief can be given to the petitioner in the application under Section 41 of the Arbitration Act, 1980, and the same is, accordingly, dismissed. All parties to act on the minutes of the operative portion of this judgment.