BILAL NAZKI, J. ( 1 ) THE appellant- plaintiff filed a suit against the defendant- respondent for recovery of a sum of rs. 3,49,500/- with interest @ 18% p. a. from 156. 1985. The suit was based on the following facts. ( 2 ) THE defendant Bank had stood guarantee as per three Bank guarantees totaling an amount of Rs. 3,00,000/- in a matter in which money had been advanced by the Bank as mobilisation advance to one m/s. Construction Rasa Pvt. Ltd. The Bank had given the Bank guarantees for completion of the contract work. The contractor had failed to complete the contract work. He had not repaid the mobilisation advance therefore the plaintiff revoked the guarantees. The Bank did not make the payment. It is submitted that M/s. Construction Rasa Pvt. Ltd. , had requested the plaintiff for mobilisation of advance of rs. 3,00,000/- for the purpose of the work. Three separate Bank guarantees were furnished by M/s. Construction Rasa Pvt. Ltd. , for Rs. 1,00,000/- each being Nos. 3/83, 4/83 and 5/83. These Bank guarantees were initially for a period of one year but were extended from time to time. Since M/s. Construction Rasa Pvt. Ltd. , failed to execute the work the plaintiff demanded the defendant Bank through a telegram on 5. 6. 1985 for encashment of the three Bank guarantees. On 17. 6. 1985 the plaintiff sent the confirmation letter by post to the defendant bank demanding encashment of the bank guarantees. On 26-10-1985 the plaintiff gave a reminder to the defendant bank demanding encashment of the guarantees. On 30. 10. 1985 the defendant bank acknowledged the letters received from the plaintiff and requested time, but the bank did not make the payments. On 6. 3. 1986 however the defendant Bank sent an evasive reply with false and untenable allegations evading its liability. Since the bank had failed to make the payment, notices through lawyer were given to the Bank. Even after notices there was no response and the suit was filed. The defendant Bank contested the suit on various grounds. The defendant stated that the Bank had never been told about the default and nature of the work of the contractor. It also stated that the plaintiff had not made any attempts to recover any amount from the contractor. Even after notices there was no response and the suit was filed. The defendant Bank contested the suit on various grounds. The defendant stated that the Bank had never been told about the default and nature of the work of the contractor. It also stated that the plaintiff had not made any attempts to recover any amount from the contractor. On the basis of these pleadings the following issues were framed: (1) Whether the plaintiff is entitled to recover the suit amount? (2) Whether M/s. Construction Rasa (P) ltd. , is a necessary party to the suit? (3) Whether this Court has no territorial jurisdiction to try this suit? (4) Whether the suit is bad for non-joinder of parties? (5) Whether the suit is barred by limitation? (6) To what relief?issue No. 1 was decided against the plaintiff and the finding on issues 2 to 5 was that, in view of the finding given on issue No. l the suit has to be dismissed. ( 3 ) THE learned Counsel appearing for the appellant submitted that the only defence taken by the respondents was that they were entitled to know as to whether the contractor had failed to execute the work or not and law on this issue has already been settled by various judgments of the supreme Court. He submits that the view is consistent from 1970 that once a Bank guarantee is given by the Bank it is an independent contract between the Bank and the recipient of the guarantee and it can be revoked. He submits that the only defence in such cases would be fraud and that defence would be available not to the Banks or institutions giving guarantee but to the persons on whose behalf guarantee was given. It was held in Tarapore and Co. , madras v. Tractors Export Moscow, AIR 1970 SC 891 , that opening of a confirmed letter of credit constitutes a bargain between the banker and the seller of the goods which imposes on the banker an absolute obligation to pay. Similarly in United commercial Bank v. Bank of India, AIR 1981 SC 1426 , the Supreme Court relied on observations made by Lord Denning M. R. in Elian v. Matsas, (1966) 2 LI LR 495. While refusing to grant an injunction Lord denning, M. R. , stated:". . . . . Similarly in United commercial Bank v. Bank of India, AIR 1981 SC 1426 , the Supreme Court relied on observations made by Lord Denning M. R. in Elian v. Matsas, (1966) 2 LI LR 495. While refusing to grant an injunction Lord denning, M. R. , stated:". . . . . A bank guarantee is very much like a letter of credit. The Courts will do their utmost to enforce it according to its terms. They will not, in the ordinary course of things, interfere by way of injunction to prevent its due implementation. Thus they refused in Malas v. British Imex Industries ltd. But that is not an absolute rule. Circumstances may arise such as to warrant interference by injunction. "after discussing various principles laid down in various judgments in para-38 of the judgment (supra) the Supreme Court laid down:"in the light of these principles, the rule is well established that a bank issuing or confirming a letter of credit is not concerned with the underlying contract between the buyer and seller. Duties of a bank under a letter of credit are created by the document itself, but in any case it has the power and is subject to the limitations which are given or imposed by it, in the absence of the appropriate provisions in the letter of credit. "the learned Counsel also submits that this principle has been followed by various courts including the Supreme Court in subsequent judgments. The Supreme Court in Oil and Natural Gas Corporation Ltd. v. SBI, Overseas Branch, 2000 (6) SCC 385 , while following its own judgment in hindustan Steel Works Construction Ltd. v. Tarapore and Co. , 1996 (5) SCC 34 , laid down:"the same is the principle stated by this court in Hindustan Steel Works Construction ltd. v. Tarapore and Co. , 1996 (5) SCC 34 . It is held therein that encashment of an unconditional bank guarantee does not depend upon the adjudication of disputes. No distinction can also be made between a bank guarantee for due performance of a work contract and a guarantee given towards security deposit for a contract or any other kind of guarantee. Where the beneficiary shall be the sole Judge on the question of breach of primary contract the bank shall pay the amount covered by the guarantee on demand without a demur. Where the beneficiary shall be the sole Judge on the question of breach of primary contract the bank shall pay the amount covered by the guarantee on demand without a demur. In the absence of a plea of fraud, guarantee had to be given effect to. " ( 4 ) HOWEVER, the learned Counsel for respondents relied on a judgment in Federal bank Ltd. v. V. M. Jog Engineering Ltd. , 2001 (1) SCC 663 . This was a case where injunction was sought against the encashment of the bank guarantee and the Supreme court held that, Court should not grant injunction restraining encashment of Bank guarantee or letter of credit. However, the supreme Court held that, there could be two exceptions to this principle one if fraud is committed and the other where encashment will result in irretrievable damage. Therefore, it follows that the request for encashment of bank guarantee has to be honoured if it is made by the person in whose favour the bank guarantee is given when there is no allegation of fraud or irretrievable loss. However, the learned counsel for respondents submits that, in terms of the first paragraph of the Bank guarantee it would be clear that it is a conditional bank guarantee and it states that; if the said contractor fails to utilise the said advance for the purpose of the contract and/or the said advance thereon as aforesaid is not fully recovered by the corporation, we the Punjab and Sind Bank, civic Center, Bhilai hereby unconditionally and irrevocably undertake to pay to the Corporation on demand and without demur to the extent of the said sum of rs. 1,00,000/- (Rupees one lakh) and any claim made by the Corporation by reason of the Corporation not being able to recover in full the said sum of Rs. 1,00,000/- (Rupees one lakh) as aforesaid". He submits that, according to this clause in the bank guarantee is was only in case of contractor having failed to utilise the said advance for the purpose of the contract the bank was liable, therefore the Bank was entitled to know whether the contractor had failed to utilise the advance for the purpose for which it has been advanced. He submits that, according to this clause in the bank guarantee is was only in case of contractor having failed to utilise the said advance for the purpose of the contract the bank was liable, therefore the Bank was entitled to know whether the contractor had failed to utilise the advance for the purpose for which it has been advanced. But, the learned counsel has failed to appreciate the second paragraph of the same guarantee which lays down:"we, the Punjab and Sind Bank, Civic center, Bhilai further agree that the corporation shall be the sole Judge of and as to whether the said contractor has not utilised the said advance or any part thereof for the purpose of the contract and the extent of loss or damage caused to or suffered by the corporation on account of the said advance not being recovered in full and the decision of the Corporation that the said Contractor has not utilised the said advance or any part thereof, for the purpose of the contract and as to the amount or amounts of loss or damage caused to or suffered by the corporation shall be final and binding on us. "if paras 1 and 2 are read conjointly it becomes clear that the sole authority to come to a conclusion whether the contractor had failed to discharge his liabilities under the contract and utilise the amount advanced for the purpose for which it was advanced was the Corporation i. e. , the plaintiff. Therefore, this argument is not at all available to the learned Counsel for respondent. ( 5 ) HE also relies on a judgment of calcutta High Court in M/s. Banerjee and banerjee v. Hindustan Steel Works construction Ltd. , AIR 1986 Cal. 374 , on which reliance has also been placed by the trial Court. In this judgment the High Court had come to the conclusion:"i have already pointed out that in the present case, guarantees for security deposit are conditional. The guarantees become enforceable on fulfilment of two conditions: (1) The beneficiary will have to assess the extent of loss or damage caused or suffered by the beneficiary by reason of breach of contract by the contractor. (2) The beneficiary is the final adjudicatory authority and/or the sole Judge to decide whether the contractor had committed breach of contract and the quantum of loss, damage, costs, charges etc. (2) The beneficiary is the final adjudicatory authority and/or the sole Judge to decide whether the contractor had committed breach of contract and the quantum of loss, damage, costs, charges etc. , suffered or to be suffered by the beneficiary. "since the Court had come to the conclusion that guarantees were conditional and were enforceable on fulfilment of those two conditions therefore the High Court came to the view it had expressed. We have our own reservations about the correctness of the judgment of the Calcutta High Court in view of the judgments of the Supreme Court referred to above as to whether the conditions in the bank guarantee were at all the conditions which could have stopped the payment before the conditions set out by the calcutta High Court were met. But, we do not want to go into that question as that could be only of academic interest. The only point agitated before us in this appeal was whether the Bank guarantees were enforceable or not. ( 6 ) FOR the reasons given hereinabove, we hold that the bank guarantees were enforceable, set aside the judgment and decree of the trial Court and pass a decree for Rs. 3,49,500/- with interest @ 12% per annum from the date of suit till the date of realisation. No order as to costs.