JUDGMENT : B.K. Patel, J. - In this writ petition, petitioners have assailed legality of order dated 25.1.2013 passed by learned Civil Judge (Senior Division), Jagatsinghpur rejecting petitioners' application for grant of ad interim temporary injunction ex parte under Order 39 Rule 3 of the CPC (for short, 'C.P.C.') filed in I.A. No. 17 of 2013, a proceeding for temporary injunction under Order 39 Rules 1 and 2 of the C.P.C., arising out of C.S. No. 20 of 2013. 2. Facts which stand undisputed, and supported by documents on record, are as follows:- In response to invitation from the PPT in the month of June, 2009 for applications from interested parties in accordance with the Request for Qualification (RFQ), a consortium of two companies, namely M/s. Sterlite Industries (India) Limited and M/s. Leighton Welspun Contractors Private Limited submitted its technical bid to undertake the work of 'Development of Multipurpose Berth to Handle Clean Cargo including Containers on BOT basis'. In the month of February, 2010 PPT issued "Request for Proposal" (RFP) to the short listed bidders, including above said consortium, inviting application to submit financial bid to execute the work. As per the RFP bidding documents included the following documents: (a) RFP Vol. I: Instruction to the bidders. (b) RFP Vol. II: Project Report. (c) RFP Vol. III: Concession Agreement. Terms in the RFP, which is the principal contract, relevant for the purpose of appreciating the dispute between the parties are as follows: Clause 1.2.4 (RFP-Vol. I)-A bidder is required to deposit, along with its Bid, a bid security equivalent to Rs. 3,30,00,000/- (Rupees thirty three million only), refundable not later than 60 (sixty) days from the Bid Due Date except in the case of the (lowest/highest) Bidder. The Bidders will have an option to provide Bid Security in the form of a demand draft or a Bank Guarantee acceptable to the Authority, and in such event, the validity period of the demand draft or Bank Guarantee, as the case may be, shall not be less than 180 (one hundred and eighty) days from the Bid Due Date, inclusive of a claim period of 60 (sixty) days, and may be extended as may be mutually agreed between the Authority and the Bidder from time to time. The Bid shall be summarily rejected if it is not accompanied by the Bid Security. Clause 1.3. Schedule of Bidding Process (RFP Vol. I). The Bid shall be summarily rejected if it is not accompanied by the Bid Security. Clause 1.3. Schedule of Bidding Process (RFP Vol. I). The authority shall endeavour to adhere to the following schedule: Clause 6.3-Construction Phase (RFP Vol. III) Concessionaire shall promptly commence and complete the work, including installation of equipment in accordance with the Project Schedule and shall also obtain from the Independent Engineer a certificate as to completion of construction of Project Facilities and Services in accordance with the provisions of this Agreement ("Completion Certificate") not later than 36 months from the date of commencement of the Concession Period. Clause 1.2.4 of the RFP stipulated that a bidder is required to deposit bid security equivalent to Rs. 3,30,00,000/- (Rs. 33 million only) refundable not later than 60 days from the bid due date except in the case of the highest bidder. Bid security could be submitted in the form of bank draft or Bank Guarantee. RFP, the bid document, also stipulated specific time schedule for proceeding ahead with the bidding process, signing of Concession Agreement and completion of the work. As per Clause 1.3, Letter of Award was to be issued by 30.4.2010, Concession Agreement was to be signed by 30.5.2010 and the bids were to remain valid till 30.7.2010. As per Clause 6.3, Completion Certificate of construction was to be issued not later than 36 months from the date of signing of the Concession Agreement. The RFP (Vol. I) also provided at Clause 2.20.7 the circumstances under which Bid Security amount could be forfeited. As per Clause 6.3, Completion Certificate of construction was to be issued not later than 36 months from the date of signing of the Concession Agreement. The RFP (Vol. I) also provided at Clause 2.20.7 the circumstances under which Bid Security amount could be forfeited. The clause reads: Clause-2.20.7- The Bid Security shall be forfeited and appropriated by the Authority as mutually agreed genuine pre-estimated compensation and damages payable to the Authority for, inter alia, time, cost and effort of the Authority without prejudice to any other right or remedy that may be available to the Authority hereunder or otherwise, under the following conditions: a) If a Bidder submits a non-responsive Bid; b) If a Bidder engages in a corrupt practice, fraudulent practice, coercive practice, undesirable practice or restrictive practice as specified in Clause 4 of this RFP; c) If a Bidder withdraws its Bid during the period of Bid validity as specified in this RFP and as extended by the Bidder from time to time; d) In the case of Selected Bidder, if it fails within the specified time limit- i) to sign the Concession Agreement and/or ii) to furnish the Performance Security within the period prescribed therefor in the Concession Agreement; or e) In case the Selected Bidder, having signed the Concession Agreement, commits any breach thereof prior to furnishing the Performance Security. As required, at the instance of the consortium, on 11.5.2010, defendant no. 3 IDBI issued Bank Guarantee of Rs. 3,30,00,000/- in favour of the PPT as bid security. Bank Guarantee in question dated 11.5.2010 at Annexure-2 to the writ petition and in Annexure-1 series to the counter-affidavit reads as follows: 1. As required, at the instance of the consortium, on 11.5.2010, defendant no. 3 IDBI issued Bank Guarantee of Rs. 3,30,00,000/- in favour of the PPT as bid security. Bank Guarantee in question dated 11.5.2010 at Annexure-2 to the writ petition and in Annexure-1 series to the counter-affidavit reads as follows: 1. In consideration of you, Paradip Port Trust, having its office at Paradip, Orissa-754142, India, (hereinafter referred to as the "Authority", which expression shall unless it be repugnant to the subject to context thereof include its, successors and assigns) having agreed to receive the Bid of Sterlite Industries(India) Limited, a company registered under provision of the Companies Act, 1956 and having its registered office at SIPCOT Industrial Complex, Madurai Bye pass Road, TV Puram, P.O. Tuticorin-628002, Tamil Nadu, India and acting on behalf of its Consortium (hereinafter referred to as the "Bidder" which expression shall unless it be repugnant to the subject or context thereof include its/their executors, administrators, successors and assigns), for the development of Multipurpose Berth to Handle Clean Cargo including Containers on BOT basis (hereinafter referred to as "the Project") pursuant to the RFP Document dated February, 2010 issued in respect of the Project and other related documents"), we IDBI Bank Ltd. Having our registered office at BDIP Tower, WTC Complex, Cuffe Parade, Mumbai-400005 and one of our branches at Trade Processing Centre, 5th Floor, Mafatlal Centre, Nariman Point, Mumbai-400021 (hereinafter referred to as the "Bank", at the request of the Bidder, do hereby in terms of Clause 2.1.7 read with 2.1.8 of the RFP Document, irrevocably, unconditionally and without reservation guarantee the due and faithful fulfillment and compliance of the terms and conditions of the Bidding Documents (including the RFP Document) by the said Bidder and unconditionally and irrevocably undertake to pay forthwith to the Authority an amount of Rs. 33 (Rupees Thirty Three million only) million as bid security (hereinafter referred to as the "Bid Security") as our primary obligation without any demur, reservation, recourse, contest or protest and without reference to the Bidder if the Bidder shall fail to fulfill or comply with all or any terms and conditions contained in the Bidding Documents. 2. 33 (Rupees Thirty Three million only) million as bid security (hereinafter referred to as the "Bid Security") as our primary obligation without any demur, reservation, recourse, contest or protest and without reference to the Bidder if the Bidder shall fail to fulfill or comply with all or any terms and conditions contained in the Bidding Documents. 2. Any such written demand made by the Authority stating that the Bidder is in default of the due and faithful fulfillment and compliance with the terms and conditions contained in the Bidding Documents shall be final, conclusive and binding on the Bank. 3. We, the Bank, do hereby unconditionally undertake to pay the amounts due and payable under the Guarantee without any demur, reservation, recourse, contest or protest and without any reference to the Bidder or any other person and irrespective of whether the claim of the Authority is disputed by the Bidder or not merely on the first demand from the Authority stating that the amount claimed is due to the Authority by reason of failure of the Bidder to fulfill and comply with the terms and conditions contained in the Bidding Documents including failure of the said Bidder to keep its Bid open during the Bid validity period as set forth in the said Bidding Documents for any reason whatsoever. 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 this Guarantee shall be restricted to an amount not exceeding Rs. 33 million (Rupees thirty three million only). 4. This Guarantee shall be irrevocable and remain in full force for a period of 180 (one hundred and eighty) days from the Bid Due Date i.e. up to 10.11.2010 inclusive of a claim period of 60 (sixty) days or for such extended period as may be mutually agreed between the Authority and the Bidder, and agreed to by the Bank, and shall continue to be enforceable till all amounts under this Guarantee have been paid. 5. 5. We, the Bank, further agree that the Authority shall be the sole judge to decide as to whether the Bidder is in default of due and faithful fulfillment and compliance with the terms and conditions contained in the Bidding Documents including, inter alia, the failure of the Bidder to keep its Bid open during the Bid validity period set forth in the said Bidding Documents, and the decision of the Authority that the Bidder is in default as aforesaid shall be final and binding on us, notwithstanding any differences between the Authority and the Bidder or any dispute pending before any Court, Tribunal, Arbitrator or any other Authority. 6. The Guarantee shall not be affected by any change in the constitution or winding up of the Bidder or the Bank or any absorption, merger or amalgamation of the Bidder or the Bank with any other person or entity. 7. In order to give full effect to this Guarantee, the Authority shall be entitled to treat the Bank as the principal debtor. 7. In order to give full effect to this Guarantee, the Authority shall be entitled to treat the Bank as the principal debtor. The Authority shall have the fullest liberty without affecting in any way the liability of the Bank under this Guarantee from time to time to vary any of the terms and conditions contained in the said Bidding Documents or to extend time for submission of the Bids or the Bid validity period or the period for conveying acceptance of Letter of Award by the Bidder or the period for fulfillment and compliance with all or any of the terms and conditions contained in the said Bidding Documents by the said Bidder to postpone for any time and from time to time any of the powers exercisable by it against the said Bidder and either to enforce or forbear from enforcing any of the terms and conditions contained in the said Bidding Documents or the securities available to the Authority, and the Bank shall not be released from its liability under these presents by any exercise by the Authority of the liberty with reference to the matters aforesaid or by reason of time being given to the said Bidder or any other forbearance, act or omission on the part of the Authority or any indulgence by the Authority to the said Bidder or by change I the constitution of the Authority or its absorption, merger or amalgamation with any other person or any other matter or thing whatsoever which under the law relating to sureties would but for this provision have the effect of releasing the Bank from its such liability. 8. Any notice by way of request, demand or otherwise hereunder shall be sufficiently given or made if addressed to [name of Bank along with branch address] and sent by courier or by registered mail to the Bank at the address set forth herein. 9. We the Bank undertake to make the payment on receipt of your notice of claim on us addressed to IDBI Bank Ltd., Trade Processing Centre, 5th Floor, Mafatlal Centre, Nariman Point, Mumbai-400021 and delivered at our above branch who shall be deemed to have been authorized to receive the said notice of claim. 10. 9. We the Bank undertake to make the payment on receipt of your notice of claim on us addressed to IDBI Bank Ltd., Trade Processing Centre, 5th Floor, Mafatlal Centre, Nariman Point, Mumbai-400021 and delivered at our above branch who shall be deemed to have been authorized to receive the said notice of claim. 10. It shall not be necessary for the Authority to proceed against the said Bidder before proceeding against the Bank and the guarantee herein contained shall be enforceable against the Bank, notwithstanding any other security which the Authority may have obtained from the said Bidder or any other person and which shall, at the time when proceedings are taken against the Bank hereunder, be outstanding or unrealized. 11. We, the Bank, further undertake not to revoke this Guarantee during its currency except with the previous express consent of the Authority in writing. 12. The Bank declares that it has power to issue this Guarantee and discharge the obligations contemplated herein, the undersigned is duly authorized and has full power to execute this Guarantee for and on behalf of the Bank. On 14.5.2010 the consortium along with other short listed bidders submitted bids. Upon scrutiny, on 5.7.2010 PPT issued Letter of Award of the work in favour of the consortium. Contents of the Letter of Award with regard to the bid security submitted by the consortium reads: Please note that the Bid Security of Rs. 33 million submitted along with your proposal will continue as performance security for due observance and performance of the said terms and conditions of the bid till the signing of the concession agreement and furnishing of the performance guarantee in accordance with the provision of the concession agreement. As per the terms and conditions of bid documents, If you fail or neglect to sign the Concession Agreement within the specified period indicated in the RFP i.e.; within 30 days of award of LOA, then this letter of award for your appointment as concessionaire shall forthwith automatically stand terminated and thereupon, without prejudice to any other rights and remedies of the Port Trust, the amount of Bid Security provided by you shall forthwith stand forfeited to the Port Trust and the Port Trust shall be entitled to appoint in your place another bidder at your risk as to costs and consequences. The duplicate copy of this letter may please be signed, sealed and returned as token of acceptance of this "Letter of Award" (LOA) within 7 (seven) days of the receipt of LOA. On 8.2.2011 the consortium of the two companies formed and registered themselves as the plaintiff Company and sent intimation regarding the same to the PPT. By letter dated 8.2.2011 plaintiff enquired from the PPT regarding status of environmental clearance which was required to be obtained by the PPT in terms of RFP (Annexure-4). By letter dated 9.4.2011 to the PPT, plaintiff informed that Bank Guarantee was extended up to 30.6.2011, requested for extension of period of signature of Concession Agreement to 30.6.2011 and enquired regarding status of environmental clearance (Annexure-5). By letter dated 22.6.2011 to the PPT, plaintiff informed regarding extension of validity of Bank Guarantee till 31.12.2011 and requested for extension of time to sign Concession Agreement till 31.10.2011. (Annexure-6). In reply by letter dated 30.6.2011 (Annexure-7) PPT informed to the plaintiff as follows: 1. PPT is pursuing with MOEF for grant of Environmental and Forest clearance for the above said project. In this connection, Public hearing of the project was conducted by the State Pollution Control Board on 29.6.2011 and successfully completed. Similarly, the forest diversion proposal is also under process and is in the stage of identification of appropriate land for compensatory afforestation. 2. The Bank Guarantee towards Bid Security extended till December, 2011 has been received by the Port. As such, PPT has no objection for signing the concession agreement within 31st October, 2011. Thereafter, by letter dated 17.10.2011 plaintiff intimated to the PPT that draft Concession Agreement has already been furnished to the PPT for perusal and signature and requested to advise the tentative date of signing of the Concession Agreement (Annexure-8). By letter dated 30.10.2011 PPT informed the plaintiff that PPT is pursuing with the Government for grant of Environment and Forest Clearance and also informed that date of signing of the Concession Agreement may be extended to 31.1.2012 on mutual consent (Annexure-9). By letter dated 12.12.2011 the plaintiff informed to the PPT regarding extension of Bank Guarantee till 30.6.2012 (Annexure-10). By letter dated 12.1.2012 plaintiff requested the PPT to inform regarding the status of and likely date of obtaining Environmental and Forest Clearances and also requested for extending the date of signing of Concession Agreement (Annexure-11). By letter dated 12.12.2011 the plaintiff informed to the PPT regarding extension of Bank Guarantee till 30.6.2012 (Annexure-10). By letter dated 12.1.2012 plaintiff requested the PPT to inform regarding the status of and likely date of obtaining Environmental and Forest Clearances and also requested for extending the date of signing of Concession Agreement (Annexure-11). By letter dated 30.1.2012 PPT informed the plaintiff regarding status of the Environmental Clearance and requested that signing of Concession Agreement may be extended to 31.3.2012 on mutual consent (Annexure-12). By letter dated 24.3.2012 plaintiff replied that it would sign Concession Agreement on mutually acceptable date, informed that formal communication regarding Environmental Clearance is awaited from the PPT office and requested to know regarding status of Forest Clearances and also requested that the signing date of the Concession Agreement may be suitably accepted (Annexure-13). By letter dated 29.3.2012 PPT informed the plaintiff regarding status of the Environmental Clearance and also requested the plaintiff that date of signing of Concession Agreement may be extended to 30.6.2012 on mutual consent terms (Annexure-14). By letter dated 18.6.2012 to the PPT plaintiff requested to know that status and likely date of obtaining Forest Clearance and also requested that signing date of Concession Agreement may be suitably extended considering the progress of such clearances (Annexure-15). In reply by its letter dated 22.6.2012 PPT apprised the plaintiff regarding status of the Forest and Environmental clearance and requested that the date of signing of the Concession Agreement may be extended to 31.12.2012 on mutual consent terms (Annexure-16). In its letter dated 23.6.2012, plaintiff extended validity of the Bank Guarantee till 30.9.2012 (Annexure-17). It is pertinent to observe that in this letter plaintiff did not extend the period of signing of Concession Agreement. Thereafter by letter dated 15.9.2012 PPT informed the plaintiff that Ministry of Environment & Forest, Government of India have granted Environment & CRZ Clearance for the project and Forest Clearance proposal for the project was under process and was likely to be obtained by December, 2012. (Annexure-18). In reply the plaintiff intimated PPT regarding extension of validity of Bank Guarantee till 31.12.2012 (Annexure-19). By letter dated 26.12.2012 PPT again requested the plaintiff to extend validity of the Bid and Bank Guarantee till March, 2013 (Annexure-20). In reply by letter dated 28.12.2012 it was categorically replied by the plaintiff that validity of the "Bank Guarantee alone" was extended up to 31.1.2013 (Annexure-21). By letter dated 26.12.2012 PPT again requested the plaintiff to extend validity of the Bid and Bank Guarantee till March, 2013 (Annexure-20). In reply by letter dated 28.12.2012 it was categorically replied by the plaintiff that validity of the "Bank Guarantee alone" was extended up to 31.1.2013 (Annexure-21). By letter dated 28.12.2012 PPT issued letter to the plaintiff to indicate the date of signing of Concession Agreement (Annexure-22). Contents of the letter, inter alia, read: Subsequently, it was decided by mutual consent to extend the date of signing the concession agreement (suggestion for which also came from Paradip Multi Cargo Berth Private Limited) considering the progress of the receipt of the clearances. In the meantime, Paradip Multi Cargo Berth Pvt. Ltd. were extending the Bid validity till 31.12.2012 and subsequently till 31.1.2013. Considering the progress of the clearance now, you are now requested to indicate the date on which the concession agreement would be signed. The conditions precedent relating to PPT will be fulfilled within the stipulated period as per the provisions of the concession agreement. This may please be treated as Most Urgent. In this backdrop, by letter dated 21.1.2013 plaintiff intimated the PPT that Bid submitted by the plaintiff in the month of May, 2010 has become unviable, unworkable and inoperative due to non-availability of the requisite clearances to the Project, which were to be secured by the PPT, for an inordinately long time of more than 3 years from the date of submission of the bid. In the letter it was also intimated that the plaintiff was not in a position to further extend validity of the Bank Guarantee from 31.1.2013; the Bid Security stands terminated on 31.1.2013; timeline for signing the Concession Agreement lapsed on 31.12.2012 and that PPT should return the Bank Guarantee/Bid Security at an early date (Annexure-23). 3. Thereafter, petitioner no. 1, a company, as plaintiff filed the suit on 22.1.2013 through its associate Vice-President Petitioner no. 2 against the opposite parties-defendant nos. 1 and 2 who represent Paradeep Port Trust (PPT) and opp. Party-defendant no. 3, the IDBI, Bank claiming following reliefs: (i) A decree of declaration declaring the work in question (Development of Multipurpose Berth to Handle Clean Cargo including Containers on BOT basis of Paradip Port Trust) is unworkable and unviable. 2 against the opposite parties-defendant nos. 1 and 2 who represent Paradeep Port Trust (PPT) and opp. Party-defendant no. 3, the IDBI, Bank claiming following reliefs: (i) A decree of declaration declaring the work in question (Development of Multipurpose Berth to Handle Clean Cargo including Containers on BOT basis of Paradip Port Trust) is unworkable and unviable. (ii) A decree of declaration declaring the work in question (Development of Multipurpose Berth to Handle Clean Cargo including Containers on BOT basis of Paradip Port Trust) is impossible to perform, since the requisite forest clearance is unable. (iii) Decree of permanent injunction injuncting Defendants from encashing Bank Guarantee submitted by the plaintiff as bid security purpose to the bid in question. (iv) Pass a decree of consequential relief directing the Defendants No. 1 and 2 to return back the bid security as furnished in terms of the bid in question. (v) Any other relief that the plaintiff is entitled to be declared taking into consideration the facts and the circumstances of the case. 4. In the application under Order 39 Rules 1 and 2 of the C.P.C. in I.A. No. 17 of 2013, filed in the suit, prayer was made to issue temporary injunction restraining the defendants from encashing Bank Guarantee submitted by the plaintiff as bid security pursuant to the terms and conditions of "Request for proposal" (RFP) till disposal of the suit. The impugned order rejecting application under Order 39 Rule 3 of the C.P.C. in which prayer was made to pass ad interim injunction ex parte till disposal of the I.A. No. 7 of 2013 reads as follows:- ORDER No. 5. Date-25.1.2013. The plaintiff-petitioner has filed a petition U/O 39, Rule 1 and 2 of the C.P.C. with a prayer to issue of temporary injunction restraining the O.Ps. from encashing the Bank Guarantee submitted by the petitioner as bid security pursuant to the terms and conditions of R.F.P. (Request for proposal) till disposal of the suit. The petitioner has also filed a separate petition to hear the petition U/O 39, Rule 3 of the C.P.C. along with affidavit to hear the petition urgently. Heard the learned counsel for the petitioner. The petitioner has also filed a separate petition to hear the petition U/O 39, Rule 3 of the C.P.C. along with affidavit to hear the petition urgently. Heard the learned counsel for the petitioner. As per the provisions U/O 39, Rule-3 C.P.C. before granting injunction the court is to direct notice to the O.P. It is submitted by the learned counsel for the petitioner that in case of delay, the object of granting of injunction would be defeated. It is submitted by the learned counsel for the petitioner that the O.Ps are trying to encash the Bank Guarantee submitted by the petitioner as bid security pursuant to the terms and condition of R.F.P. It is also submitted by the learned counsel for the petitioner that if the O.Ps are not restrained from encashing the Bank Guarantee submitted by the petitioner as bid security pursuant to the terms and conditions of RFA till disposal of the suit the petitioner will suffer from irreparable loss and injury. On perusal of the record, it is found that the plaintiff has filed the suit for declaration and permanent injunction along with other consequential reliefs and it is not a fit case to issue an ad-interim injunction exparte without hearing of the O.Ps. In the facts and circumstances of the case, the petition U/O 39, Rule-3 C.P.C. is rejected accordingly. Issue notice to the O.Ps in both ways fixing 8.2.2013 for hearing of show cause and awaiting S.R. and P.A. 5. Learned counsel for the petitioners and opp. party nos. 1 and 2, in course of hearing, made submissions at length drawing attention of the Court to the above referred relevant terms and conditions of the Bank Guarantee and RFP in support of their respective contentions. It is pertinent to point out that learned counsel appearing for PPT advanced arguments as if in this writ application issue of grant of temporary injunction under Order 39, Rules 1 and 2 of the C.P.C., if not the merit of the suit itself, is involved. However, it is to be borne in mind that this writ petition is confined to the adjudication of legality of impugned order passed under Order 39 Rule 3 of the CPC which provides for grant of ad interim injunction without notice to the other side. However, it is to be borne in mind that this writ petition is confined to the adjudication of legality of impugned order passed under Order 39 Rule 3 of the CPC which provides for grant of ad interim injunction without notice to the other side. The provision reads:- Before granting injunction, Court to direct notice to opposite party-The Court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party; Provided that, where it is proposed to grant an injunction without giving notice of the application to the opposite party, the Court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay, and require the applicant- (a) to deliver to opposite party, or to send to him by registered post, immediately after the order granting the injunction has been made, a copy of the application for injunction together with- (i) a copy of the affidavit filed in support of the application; (ii) a copy of the plaint; and (iii) copies of documents on which the applicant relies, and (b) to file, on the day on which such injunction is granted or on the day immediately following that day, an affidavit stating that the copies aforesaid have been so delivered or sent. Thus, the petitioners under Order 39 Rule 3 of the CPC have to satisfy the urgency of situation in order to be entitled to an order of ad interim injunction. 6. Learned counsel for the petitioners submitted that plaintiff's suit is based on the allegations of fraud of an egregious nature perpetrated by the PPT resulting in irretrievable loss and injustice to the plaintiff. It is obvious from Clause 1.3 of RFP Vol. I and Clause 6.3 of RFP Vol. III that specific time schedule has been prescribed for the bidding process as well as completion of the work. Therefore, time is the essence of the contract between the parties. It is for the PPT to obtain Forest and Environment clearance from the Ministry of Environment and Forest to ensure completion of work within the stipulated time. III that specific time schedule has been prescribed for the bidding process as well as completion of the work. Therefore, time is the essence of the contract between the parties. It is for the PPT to obtain Forest and Environment clearance from the Ministry of Environment and Forest to ensure completion of work within the stipulated time. Plaintiff has already submitted draft Concession Agreement since October, 2011 and the period of signing of the Concession Agreement was extended, as provided in RFP, by mutual consent from time to time. The PPT having failed to obtain Forest and Environment Clearance for an unreasonably long period the plaintiff has not extended the validity period of the bid after 30.6.2012. Due to inordinate delay and uncertainty the project has become commercially unviable and unworkable. Plaintiff has incurred huge cost on technical studies and related technical matters and also has been incurring expenses towards Bank Guarantee commission charges for keeping the Bank Guarantee alive. It was categorically informed by the plaintiff to the PPT by letter dated 21.1.2013 that bid submitted in the month of May, 2010 is inoperative and unworkable by elapse of time for failure on the part of the PPT to obtain required clearance. Drawing attention of this Court to Annexure-24 to the writ petition, it was submitted that in the website of the PPT it has been disclosed that Concession Agreement will be signed on receipt of Forest Clearance which is yet to be obtained. It is not disputed that the work cannot be undertaken without obtaining necessary clearance from the Ministry of Forest and Environment. Specific allegations have been made in the plaint that in the absence of forest clearance from the concerned Ministry the PPT fraudulently issued the RFP and required the plaintiff to furnish bid security amount of Rs. 3,30,00,000/- in the shape of Bank Guarantee. Now the plaintiff having refused to extend the validity period of the bid, the PPT is making attempt to invoke/encash the Bank Guarantee without assigning any reason or without making out a case of forfeiture of the Bank Guarantee under any of the eventualities as enumerated under Clause 2.20.7 of the RFP extracted above. It was argued that it is obvious from the tenor and language of the Bank Guarantee that the Bank Guarantee furnished by the plaintiff is a conditional Bank Guarantee. It was argued that it is obvious from the tenor and language of the Bank Guarantee that the Bank Guarantee furnished by the plaintiff is a conditional Bank Guarantee. In clause 1 of the Bank Guarantee it has been mentioned that the Bank Guarantee could be invoked only "if the bidder shall fail to fulfill or comply with any terms and conditions of the Bidding Documents". PPT has not whispered a word regarding violation of any of the conditions under Clause 2.20.7 of the RFP. Plaintiff having not extended the bid period mutually with the PPT, validity of the bid period is already over. Plaintiff had duly submitted draft Concession Agreement to the PPT for approval with a request to intimate regarding date of signing of the Concession Agreement. However, the PPT is unable to sign the Concession Agreement in view of want of statutory clearances. In such circumstances, the PPT is not entitled to unilaterally invoke the bank guarantee. Learned counsel for the petitioner in support of his contention placed reliance on the decisions of the Supreme Court in Hindustan Construction Co. Ltd. Vs. State of Bihar and Others, and of the Bombay High Court in Kilburn Engineering Ltd., -vs- Oil and Natural Gas Corporation Ltd. And another: AIR 2000 Bombay 405. 7. Learned counsel for the petitioners further argued that, even after institution of the suit, though bid validity period has already expired due to non-extension thereof by the plaintiff after 30.6.2012, PPT has written letter dated 23.1.2013 to the IDBI Bank misrepresenting that the bid validity period is still in existence and requesting the bank to encash the Bank Guarantee in case the plaintiff fails to extend the validity of the Bank Guarantee by 31.1.2013. The letter dated 23.1.2013 from the PPT to the IDBI Bank reads: Sir, Please refer to letter dtd. 28th December, 2012. In this connection, it is to inform that the Bank Guarantee bearing No. 0200041BGB0095 dated 11.5.2012, issued by IDBI Bank in favour of PPT at the request of M/s. Sterlite Industries(I) Ltd., is expiring on 31.1.2013 (copy enclosed). The firm has been requested to extend the validity of the said Bank Guarantee till April, 2013, vide this office letter dtd., 23.1.2013. The firm has been requested to extend the validity of the said Bank Guarantee till April, 2013, vide this office letter dtd., 23.1.2013. In view of the above, we would like to request that in case the firm M/s. Sterlite Industries(I) Ltd., fails to extend the validity of the above Bank Guarantee by 31.1.2013 (within the office hours of 31.1.2013), the same may please be encashed and the equivalent amount of BG be deposited with FA & CAO PPT along with intimation to the undersigned. Yours faithfully, Chief Engineer Paradip Port Trust. 8. In reply, it was contended by the learned counsel for the PPT that the Bank Guarantee furnished by the plaintiff being an independent contract, there is no scope for reference to the principal contract i.e. RFP in order to adjudicate the dispute with regard to the PPT's authority to encash Bank Guarantee. It was argued that the Bank Guarantee furnished by the plaintiff has been described to be an unconditional and irrevocable Bank Guarantee. Bank is required to encash the Bank Guarantee as its primary obligation towards PPT without any demur, reservation, recourse, contest or protest and without reference to the plaintiff on demand made by the PPT. Learned counsel for the PPT argued that PPT has made all endeavours to obtain Forest and Environment Clearance. Plaintiffs allegation of fraud is not borne out by materials on record. It was specifically pointed out that the plaintiff has violated sub-clause (c) and (d)(i) of Clause 2.20.7 of RFP providing for forfeiture of bid security. It was argued that the plaintiff has withdrawn its bid during the period of bid validity and also has failed to sign the Concession Agreement within the stipulated period. Therefore, the plaintiff is not entitled to any order of injunction temporary or otherwise prohibiting invoking of the Bank Guarantee by the PPT. In support of his contentions learned counsel for the PPT placed reliance of decisions of the Supreme Court in Oil and Natural Gas Corporation Ltd. Vs. State Bank of India, Overseas Branch, Bombay, ; National Highway Authority of India Vs. Ganga Enterprises and Another, ; Himadri Chemicals Industries Ltd. Vs. Coal Tar Refining Company, and Vinitec Electronics Private Limited Vs. HCL Infosystems Limited, 9. State Bank of India, Overseas Branch, Bombay, ; National Highway Authority of India Vs. Ganga Enterprises and Another, ; Himadri Chemicals Industries Ltd. Vs. Coal Tar Refining Company, and Vinitec Electronics Private Limited Vs. HCL Infosystems Limited, 9. Thus, so far as the present writ petition involving issue of grant of ad interim injunction is concerned, PPT seeks to defend the impugned order and resist grant of ad interim injunction mainly on the ground that the Bank Guarantee furnished by the plaintiff is unconditional and irrevocable. However, in course of arguments it was fairly conceded by the learned counsel for the PPT that a Bank Guarantee may be either conditional or unconditionally. In Oil and Natural Gas Corporation Ltd. -vs- State Bank of India, Overseas Branch, Bombay (supra), at paragraph 6, it has been made clear that even a confirmed Bank Guarantee or irrevocable letter of credit can be interfered with when there is fraud and irretrievable injustice involved in the case through it is settled law that contract of guarantee is a complete contract by itself and separate from the underlying contract by itself. Also it has been pointed in National Highways Authority of India -vs- Ganga Enterprises and another (supra), at paragraph 10, that a Court can be interfered with invocation of a Bank Guarantee if the invocation is against the terms of the guarantee or if there is any fraud. In Himadri Chemicals Industries Ltd. -vs-Coal Tar Refining Co. (supra) upon reference to a number of earlier decisions, at paragraph 14 it was concluded by the Supreme Court as follows: From the discussion made hereinabove relating to the principles for grant or refusal to grant of injunction to restrain enforcement of a bank guarantee or a letter of credit, we find that the following principles should be noted in the matter of injunction to restrain the encashment of a bank guarantee or a letter of credit: (i) While dealing with an application for injunction in the course of commercial dealings, and when an unconditional bank guarantee or letter of credit is given or accepted, the beneficiary is entitled to realize such a bank guarantee or a letter of credit in terms thereof irrespective of any pending disputes relating to the terms of the contract. (ii) The bank giving such guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. (ii) The bank giving such guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. (iii) The courts should be slow in granting an order of injunction to restrain the realization of a bank guarantee or a letter of credit. (iv) Since a bank guarantee or a letter of credit is an independent and a separate contract and is absolute in nature, the existence of any dispute between the parties to the contract is not a ground for issuing an order of injunction to restrain enforcement of bank guarantees or letters of credit. (v) Fraud of an egregious nature which would vitiate the very foundation of such a bank guarantee or letter of credit and the beneficiary seeks to take advantage of the situation. (vi) Allowing encashment of an unconditional bank guarantee or a letter of credit would result in irretrievable harm or injustice to one of the parties concerned. In Vinitec Electronics Private Ltd. -v- HCL Infosystems Ltd. (supra) also the Supreme Court, while examining the terms of one of the Bank Guarantees involved therein, observed at paragraph 19 as follows: In the unamended bank guarantee the Bank affirmed that they are guarantors and responsible on behalf of the supplier up to a total of Rs. 16,81,238.50 (Rupees sixteen lakhs eighty-one thousand two hundred thirty-eight and paise fifty only) and had undertake to pay any sum or sums within that limit upon receipt of written demand from the purchaser within the validity of bank guarantee provided it is established that the supplier be in default for the performance of their warranty obligations under the contract. This makes it abundantly clear that what was furnished was a conditional bank guarantee and the bankers were liable to pay the amounts only upon establishing the fact that the supplier was in default for the performance of their warranty obligations under the contract. xxx All the above referred decisions were cited by the learned counsel for the PPT. 10. In the present case, undisputedly neither the schedule of Bidding Process nor the time prescribed for completion of work has been adhered to. Clause 1.2.4 of the RFP-Vol. I provides that period of validity of Bid Security could be extended as may be mutually agreed between the PPT and the successful Bidder from time to time. 10. In the present case, undisputedly neither the schedule of Bidding Process nor the time prescribed for completion of work has been adhered to. Clause 1.2.4 of the RFP-Vol. I provides that period of validity of Bid Security could be extended as may be mutually agreed between the PPT and the successful Bidder from time to time. It is found that from time to time on the request made by the PPT, plaintiff extended the period of bid validity and also extended validity period of Bank Guarantee. In its letters the PPT informed the plaintiff regarding status of the Forest and Environment clearance. Though the plaintiff had submitted draft Concession Agreement, the PPT consistently stated that it would sign Concession Agreement on mutually acceptable date. Thus, on the request of the PPT, plaintiff extended the date of signing of Concession Agreement and also extended the validity period of Bank Guarantee from time to time. However, by letter dated 23.6.2012 plaintiff extended the validity of Bank Guarantee only till 30.9.2012. Thereafter also PPT requested by letter dated 15.9.2012 to extend the period of the Bid and Bid Security till December, 2012, in response to which plaintiff extended validity of Bank Guarantee till 31.12.2012. Also, in response to subsequent letter dated 26.12.2012, plaintiff categorically replied in letter dated 28.12.2012 that validity of Bank Guarantee 'alone' was extended up to 31.1.2013. Therefore, apparently, validity of the Bid period has not been extended on mutual consent term since much prior to the institution of the suit. Clause 2.20.7 specifically provides for the circumstances under which Bid Security would be forfeited by the PPT. It was urged on behalf of the PPT that there has been violation of Sub-Clauses (c) and (d)(i) of the said Clause by the plaintiff. However, in view of non-extension of Bid period by the plaintiff on mutual consent term, as stated supra, the contention raised on behalf of the petitioners that PPT has no scope to urge that plaintiff has violated Sub-Clause (c) by withdrawing its Bid during the period of Bid Validity as specified in the RFP or extended by the Bidder from time to time does not appear to be unfounded. Also, non-signing of Concession Agreement by the plaintiff would not attract the circumstance under Sub-Clause (d)(i) of the above said Clause. Also, non-signing of Concession Agreement by the plaintiff would not attract the circumstance under Sub-Clause (d)(i) of the above said Clause. It is not disputed that plaintiff has already submitted draft Concession Agreement and has requested from time to time to the PPT to intimate the date of signing of Concession Agreement. In such circumstances, it cannot be held outright that the plaintiff has failed to sign the Concession Agreement within the specified time limit. It is also found that in the letter dated 23.1.2013 from the PPT to the IDBI Bank there is no reference to violation of any of the specific terms under Clause 2.20.7 warranting forfeiture of the Bank Guarantee. In fact at one point of time it was sought to be argued on behalf of the PPT that the PPT is yet to ask the Bank for encashment of the Bank Guarantee for which there is no urgency for grant of temporary injunction. However, during pendency of this writ petition, the PPT filed application insisting vacation of interim order passed by this Court directing not to encash the Bank Guarantee without leave of the Court which circumstance is indicative of eagerness on the part of the PPT to invoke the Bank Guarantee. 11. Facts and circumstances of the present case are substantially identical to the facts and circumstances relating to Bank Guarantee which was subject matter of adjudication in Hindustan Construction Co. Ltd. -vrs.- State of Bihar and others (supra) in which it was observed and held as follows: 8. Now, a bank guarantee is the common mode of securing payment of money in commercial dealings as the beneficiary, under the guarantee, is entitled to realise the whole of the amount under that guarantee in terms thereof irrespective of any pending dispute between the person on whose behalf the guarantee was given and the beneficiary. In contracts awarded to private individuals by the Government, which involve huge expenditure, as, for example, construction contracts, bank guarantees are usually required to be furnished in favour of the Government to secure payments made to the contractor as "advance" from time to time during the course of the contract as also to secure performance of the work entrusted under the contract. Such guarantees are encashable in terms thereof on the lapse of the contractor either in the performance of the work or in paying back to the Government "advance", the guarantee is invoked and the amount is recovered from the bank. It is for this reason that the courts are reluctant in granting an injunction against the invocation of bank guarantee, except in the case of fraud, which should be an established fraud, or where irretrievable injury was likely to be caused to the guarantor. This was the principle laid down by this Court in various decisions. In U.P. Coop. Federation Ltd. v. Singh Consultants & Engineers (P) Ltd. the law laid down in Bolivinter Oil SA v. Chase Manhattan Bank was approved and it was held that an unconditional bank guarantee could be invoked in terms thereof by the person in whose favour the bank guarantee was given and the courts would not grant any injunction restraining the invocation except in the case of fraud or irretrievable injury. In Svenska Handelsbanken v. Indian Charge Chrome, Larsen & Toubro Ltd. v. Maharashtra SEB, Hindustan Steel Workers Construction Ltd. v. G.S. Atwal & Co. (Engineers) (P) Ltd., National Thermal Power Corpn. Ltd. v. Flowmore (P) Ltd., State of Maharashtra v. National Construction Co., Hindustan Steelworks Construction Ltd. v. Tarapore & Co. as also in U.P. State Sugar Corpn. v. Sumac International Ltd. the same principle has been laid down and reiterated. 9. What is important, therefore, is that the bank guarantee should be in unequivocal terms, unconditional and recite that the amount would be paid without demur or objection and irrespective of any dispute that might have cropped up or might have been pending between the beneficiary under the bank guarantee or the person on whose behalf the guarantee was furnished. The terms of the bank guarantee are, therefore, extremely material. Since the bank guarantee represents an independent contract between the bank and the beneficiary, both the parties would be bound by the terms thereof. The invocation, therefore, will have to be in accordance with the terms of the bank guarantee, or else, the invocation itself would be bad. 10. In the instant case, the whole matter can be disposed of purely on the basis of the terms of the bank guarantee. 11. We will first consider the bank guarantee relating to "mobilization advance". The invocation, therefore, will have to be in accordance with the terms of the bank guarantee, or else, the invocation itself would be bad. 10. In the instant case, the whole matter can be disposed of purely on the basis of the terms of the bank guarantee. 11. We will first consider the bank guarantee relating to "mobilization advance". This guarantee was furnished in terms of clause 9 of the principal contract between HCCL and the defendants which provides as under: 9. Advance mobilisation loan.- The employer will make an advance loan to the contractor at 13 per cent simple interest per annum for the costs of mobilization in respect of the works in a lump sum amount equivalent up to 15 per cent of the contract price named in the letter of acceptance, payable in the proportionate amounts of foreign and local currencies as provided for in the contract. Payment of the loan will be due under separate certification by the Engineer after (i) execution of the form of agreement by the parties thereto, (ii) provision by the contract of the performance security in accordance with clause 5, and (iii) provision by the contractor of a bank guarantee, by a bank acceptable to the employer in an amount equal to the advance loan, such bank guarantee to remain effective until the advance loan has been completely repaid by the contractor out of current earnings under the contract and certified accordingly by the Engineer. A form of bank guarantee acceptable to the employer is indicated in Section 9 Annexure B. The advance loan shall be used by the contractor exclusively for mobilization expenditures, including the acquisition of constructional plant, in connection with the works. Should the contractor misappropriate any portion of the advance loan, it shall become due and payable immediately, and no further loan will be made to the contractor thereafter. The advance mobilization loan shall be paid within 15 days of the date of certification. 12. It was in terms of the above clause that the bank guarantee was furnished by HCCL. It provides as under: The Executive Engineer, Kharkai Dam Division II, Icha, Chaliama, Post Kesargarhia, District Singhbhum, Bihar. Ref: Construction of Icha Dam-Subernarekha Multipurpose Project-Contract/Tender Notice No. SMP/ICC/CE-8/87, Adityapur, dated 23-10-1987. In accordance with the provisions of the conditions of contract, clause 9 (advance mobilization loan) of the above-mentioned contract, Hindustan Construction Co. It provides as under: The Executive Engineer, Kharkai Dam Division II, Icha, Chaliama, Post Kesargarhia, District Singhbhum, Bihar. Ref: Construction of Icha Dam-Subernarekha Multipurpose Project-Contract/Tender Notice No. SMP/ICC/CE-8/87, Adityapur, dated 23-10-1987. In accordance with the provisions of the conditions of contract, clause 9 (advance mobilization loan) of the above-mentioned contract, Hindustan Construction Co. Ltd. incorporated in Bombay under the Companies Act, 1956, and having their registered office at Construction House, Walchand Hirachand Marg, Ballard Estate, Bombay-400 038 (hereinafter called 'the contractor') shall deposit with the Executive Engineer, Kharkai Dam Division II, Icha, Chaliama, Post Kesargarhia, District Singhbhum, Bihar, a bank guarantee to guarantee their proper and faithful performance under the said clause of the contract in an amount of Rs. 10,00,000 (Rupees ten lakhs only). We, State Bank of India, incorporated under the State Bank of India Act, 1955, and having one of our branches at Nyayamurti C.N. Vaidya Marg, Fort, Bombay -400 023 (hereafter referred to as 'the said Bank'), as instructed by the contractor, agree unconditionally and irrevocably to guarantee as primary obligator and not as surety merely, the payment of the Executive Engineer, Kharkai Dam Division II, Icha, Chaliama, Post Kesargarhia, District Singhbhum, Bihar, on his first demand without whatsoever right of objection on our part and without his first claim to the contractor, in the amount not exceeding Rs. 10,00,000 (Rupees ten lakhs only) in the event that the obligations expressed in the said clause of the above-mentioned contract have not been fulfilled by the contractor giving the right of claim to the employer for recovery of the whole or part of the advance mobilization loan from the contractor under the contract. We further agree that no change or addition to or other modification of the terms of the contract or of works to be performed thereunder or of any of the contract documents which may be made between the Executive Engineer, Kharkai Dam Division II, Icha, Chaliama, Post Kesargarhia, District Singhbhum, Bihar and the contractor, shall in any way release us from any liability under this guarantee, and we hereby waive notice of any such change, addition or modification. Our liability under this guarantee is restricted to an amount not exceeding Rs. Our liability under this guarantee is restricted to an amount not exceeding Rs. 10,00,000 (Rupees ten lakhs only) and the said guarantee shall remain in full force up to 11-10-1990 with a claim period of six months thereafter i.e. up to 11-4-1991, twelve months after the issuing of maintenance certificate, whichever is earlier. Unless demand or claim under this guarantee is made on us in writing on or before 11-4.1991 we shall be relieved and discharged from all liabilities thereafter. This guarantee shall remain valid in full effect from the date of the advance payment under the contract until the Executive Engineer, Kharkai Dam Division II, Icha, Chaliama, Post Kesargarhia, District Singhbhum, Bihar, receives full repayment of the same amount from the contractor, but not later than 11-4-1991 in any case. Dated at Bombay this 12-10-1989. For State Bank of India sd/- Commercial Branch, Bombay-400 023. 13. The Bank, in the above guarantee, no doubt, has used the expression "agree unconditionally and irrevocably" to guarantee payment to the Executive Engineer on his first demand without any right of objection, but these expressions are immediately qualified by following: ....in the event that the obligations expressed in the said clause of the above-mentioned contract have not been fulfilled by the contractor giving the right of claim to the employer for recovery of the whole or part of the advance mobilization loan from the contractor under the contract. 14. This condition clearly refers to the original contract between HCCL and the defendants and postulates that if the obligations, expressed in the contract, are not fulfilled by HCCL giving to the defendants the right to claim recovery of the whole or part of the "advance mobilization loan", then the Bank would pay the amount due under the guarantee to the Executive Engineer. By referring specifically to clause 9, the Bank has qualified its liability to pay the amount covered by the guarantee relating to "advance mobilization loan" to the Executive Engineer only if the obligations under the contract were not fulfilled by HCCL or HCCL has misappropriated any portion of the "advance mobilization loan". It is in these circumstances that the aforesaid clause would operate and the whole of the amount covered by the "mobilization advance" would become payable on demand. It is in these circumstances that the aforesaid clause would operate and the whole of the amount covered by the "mobilization advance" would become payable on demand. The bank guarantee thus could be invoked only in the circumstances referred to in clause 9 whereunder the amount would become payable only if the obligations are not fulfilled or there is misappropriation. That being so, the bank guarantee could not be said to be unconditional or unequivocal in terms so that the defendants could be said have had an unfettered right to invoke that guarantee and demand immediate payment thereof from the Bank. This aspect of the matter was wholly ignored by the High Court and it unnecessarily interfered with the order of injunction, granted by the Single Judge, by which the defendants were restrained from invoking the bank guarantee. 12. In Kilburn Engineering Ltd.,-vs- Oil and Natural Gas Corporation Ltd. And another (supra), also upon reference to the preamble Clause in the Bank Guarantee which stipulated the period during which the Bank Guarantee should operate, it was held that in spite of absolute Clause in the Bank Guarantee, the Bank Guarantee cannot be called as an absolute Bank Guarantee, and considering the facts and circumstances, injunction against encashment of Bank Guarantee was granted. 13. In the present case also, in view of specific stipulation in the Bank Guarantee that the Bid Security could be forfeited "if the bidder shall fail to fulfill or comply with any terms and conditions of the Bidding Documents", the Bank Guarantee cannot be called to be an unconditional and irrevocable Bank Guarantee. In view of facts and circumstances of the case and nature of pleadings of the plaintiff narrated above, the Court is required to examine the allegations of fraud and injustice in order to adjudicate whether the contract between the plaintiff and the PPT has become unworkable and enviable being frustrated due to the conduct of the PPT. Therefore, the petitioner has made out a prima facie case for grant of ad interim injunction. 14. Accordingly, the writ petition is allowed. The impugned order is quashed. Defendants-opposite parties are restrained from invoking the Bank Guarantee till disposal of I.A. No. 7 of 2013. Final Result : Allowed