JUDGMENT R. MAHADEVAN, J. 1. This Original Application has been filed for an injunction to restrain the Respondents 1 and 2, from invoking and encashing the Bank Guarantee for Rs1,00,00,000/- bearing B.G.No.007GT0113074005, dated 15.03.2013, established in favour of the 1st Respondent by the 3rd Respondent or from otherwise appropriating the hold back amount of Rs 1,00,00,000/-. 2. This Court has granted an order of interim injunction on 18.01.2015 and directed the Applicant to keep the Bank Guarantee alive, which is so till today. 3. The brief facts of the case are as follows:- The case of the Applicant is that he is a former Director and Promoter of the 2nd Respondent Company and they are engaged in the construction business. It was agreed between the Applicant, first, second Respondents and other shareholders of the second respondent company that the 51% equity share capital and the 100% preference share capital, held by the Applicant and his wife in the second respondent company, would be sold to the first respondent for Rs 15,52,50,000/- and a first Share Purchase Agreement (SPA) was entered into on 21.12.2012. According to the Applicant, all the terms and conditions were fulfilled by the Applicant and the Certificate of Completion and the CP Satisfaction Certificate dated 08/01/2013 were also issued. An indemnity was furnished by the Applicant and the other sellers, with regard to the liabilities relating to the period prior to the completion date. After the completion, the 1st Respondent caused a full-fledged audit to be conducted and financial statements were signed both by the Applicant and the Managing Director of the 1st Respondent and thereafter, no claims were made against the Applicant. The Applicant had also provided a Bank Guarantee dated, 15.03.2013, bearing B.G.No.007GT01130740005, in favour of the 1st Respondent towards security for any legitimate indemnity claims and as per clause 15.2 of the First SPA, the indemnity is valid only for a period of 2 years from the completion date. Since the completion certificate was issued on 08.01.2013, the Bank Guarantee is valid only till 08.01.2015 and there was no claim by the respondents till the second SPA was entered into. Since the completion certificate was issued on 08.01.2013, the Bank Guarantee is valid only till 08.01.2015 and there was no claim by the respondents till the second SPA was entered into. After evaluation by the third party auditor and the audit carried out by the first respondent’s own team of the second respondent company, the Second SPA was entered into on 08.04.2013, whereby the Applicant agreed to sell the remaining 49% of the balance equity share capital in the 2nd Respondent company. The first respondent after acquiring 100% shares, has assumed complete control of the second respondent company. By a letter dated 08.12.2014, the second respondent issued a letter to the Applicant, demanding Rs 1,53,01,755.56/- on account of alleged loss for the period prior to 31.03.2013. The claims were with regard to alleged inventory shortage, non-recoverable receivables, obsolescence of the Turbo Marshall series UPS, replacement charges of Apollo 1KVA UPS, VAT loss due to disallowance, etc. The Applicant has sent a detailed reply on 16.12.2014, denying the claims. Fearing hostile action by the Respondents 1 and 2, the Applicant has approached this Court for injunction, against invocation of Bank Guarantee, contending inter alia that the Bank Guarantee stood expired on 08.01.2015 and without any losses, the respondents would fraudulently invoke the Bank Guarantee. 4. The Respondents 1 and 2 have resisted the application, claiming that the injunction against invocation of a Bank Guarantee is permissible only under the limited grounds of fraud and irretrievable injustice and in the present case, both the above elements are absent. The respondents have also raised a preliminary objection, contending that the invocation letter, dated 10.01.2015 was received by the 3rd respondent on 12.01.2015, a day prior to the date, on which date, interim orders were granted by this court. The respondents have also claimed that the Applicant and the other shareholders had transferred the shares to the 1st Respondent only on 14.01.2013 and received the consideration in respect of the said transfer of shares on 17.01.2013. As per clause 1.1.17 of the first SPA, the completion shall mean the purchase of the shares and therefore, the invocation is well within the completion date. Even after the Second SPA, the Applicant was managing the Company till 30thJune 2013 and resigned only on 30.06.2013. After the financial year ending in March 2014, audit was conducted and several irregularities were found. Even after the Second SPA, the Applicant was managing the Company till 30thJune 2013 and resigned only on 30.06.2013. After the financial year ending in March 2014, audit was conducted and several irregularities were found. The claim was made with a detailed break up and shortage of stock/inventory has been clearly and factually established. The respondents have also stated that their claim is well within Clause 15 of the First SPA and the balance of convenience is also in their favour. The respondent, in their counter, have also denied the allegations of fraud and have sought for dismissal of the application. 5. The Applicant has filed a rejoinder, reiterating the contents in the affidavit filed in support of the original application and also that as per clause 15.3, the Bank Guarantee can be invoked, only if the parties do not arrive at an amicable settlement, within 30 days from the date of receipt of claim notice. The claim letter was received only on 13.12.2014 and therefore, the alleged invocation on 10.01.2015 is bad in law and the very fact itself indicates the mala fide of the respondents and has sought for allowing the application. 6. Mr.R.Senthil Kumar, the learned Counsel appearing for the Applicant relied upon the completion certificate dated 08.01.2013 to contend that after the execution of the completion certificate on 08.01.2013, in which, it has been clearly mentioned that the completion date is 08.01.2013, the Bank Guarantee can be invoked only before 08.01.2015, as the same is valid only for two years. The learned Counsel has also relied upon the various communications to contend that despite the audit conducted by third party auditors, no claim or dispute whatsoever was raised by the respondents until 08.12.2014 and the audited sheets furnished by the Applicant was unconditionally accepted. The learned Counsel has also contended that no loss has been suffered by the respondents and no documents relating to the claim have been furnished to the Applicant. The learned Counsel also has relied upon Clause 15.3 of the First SPA to contend that the Bank Guarantee can be invoked only after 30 days from the date of claim and therefore, the alleged invocation letter dated 10.01.2015 is invalid and the Applicant is, therefore, entitled to protection. Further, the claim notice was received by the Applicant only on 13.12.2014 and therefore, the Bank Guarantee could not have been invoked. Further, the claim notice was received by the Applicant only on 13.12.2014 and therefore, the Bank Guarantee could not have been invoked. According to the learned Counsel for the Applicant, the act of the respondent in invoking the Bank Guarantee on 10.01.2015 is tainted with mala fide intentions and amount to fraud. The learned Counsel also contended that the Bank Guarantee was executed only as an indemnity and when no loss has been suffered, the respondents are not entitled to invoke the Bank Guarantee. The learned Counsel has also contended that the fact though the Applicant had resigned only on 30.06.2013, the audited balance sheet was signed by one Mr.Sriram Ramakrishnan on 07.06.2013, the authorised personnel of the first respondent, would clearly show that the management was under the control of the first respondent. Under these circumstances, the learned Counsel, relying upon the judgments reported in2013-200-DLT-283-DB (State Trading Corporation of India Limited vs. SBI and others, AIR 1970 SC 1973 ; Punjab National Bank Limited vs. Sri Bikram Cotton Mills Limited and another and Edavan Kavungal Kelappan Nambiar vs. Moolakal Kunhi Raman and another, AIR 1957 Mad 164 and pressed for an injunction against invocation of the Bank Guarantee. 7. Per contra, Mr.Santosh Ukkur, the learned Counsel for the Respondents has painstakingly contended that the application itself on the date of first hearing had become infructuous, as the Bank Guarantee itself was invoked on 10.01.2015 and the same was received by the 3rd respondent on 12.01.2015. The learned Counsel also has relied upon Clauses 1.1.17 and 1.1.18 of the First SPA to contend that the completion date shall be the actual date of purchase and therefore, just because the certificate dated 08.01.2015 mentions the same completion date, the same cannot be considered as such. The learned Counsel submitted that the transfer of shares were made only on 14.01.2013 and the consideration was paid on 17.01.2013 and therefore, the Bank Guarantee can be invoked until 17.01.2015. The learned Counsel also relied upon the claim letter dated 08.12.2014 to contend that the annexures would clearly furnish the details of the claim and there were stock differences and defects in the UPS supplied by the Applicant on behalf of the second respondent. The learned Counsel also contended that the case of the Applicant does not satisfy the requirements for granting injunction against invocation of Bank Guarantee. The learned Counsel also contended that the case of the Applicant does not satisfy the requirements for granting injunction against invocation of Bank Guarantee. The learned Counsel also contended that the Applicant was fully aware that he is indebted to the respondents and that his claim is false. Under the circumstances, the learned Counsel for the Respondents, relying upon the judgments reported in BSES Limited (Now Reliance Energy Limited) vs. Fenner India Limited and another, AIR 2006 SC 1148; Himadri Chemicals Industries Limited vs. Coal Tar Refining Company, AIR 2007 SC 2748 and UP State Sugar Corporation vs. Sumac International Limited, AIR 1997 SC 1644 in support of his contentions, sought for dismissal of the application. 8. This Court heard the learned Counsel on either side and also perused the documents available on record. 9. The first question that arises of consideration, is as to whether the application can be entertained after the Bank Guarantee was invoked prior to the interim order of injunction? 10. The case of the respondents is that the Bank Guarantee was invoked on 10.01.2015 and the same was received by the bank on 12.01.2015. Therefore, the learned Counsel contended that the application was not maintainable on the date, on which the same was first taken up for hearing. This Court is unable to accept the contention of the learned Counsel for the respondents. Admittedly, the 3rd respondent had not disbursed the amount and the order of this Court has been communicated to them. Also, the Applicant has not only sought for an injunction against invocation, but also against encashing the Bank Guarantee or appropriating the hold back amount. Hence, the orders of this Court cannot be brushed aside on mere technicalities and the spirit of the order has to be observed. 11. Now, the next question to be considered, is as to whether the Applicant has satisfied the tests for granting injunction? 12. The learned Counsel for the Applicant has contended that the Applicant has approached this Court, apprehending that the respondents would invoke the Bank Guarantee with mala fide intentions. The learned Counsel has further contended that it is only an indemnity guarantee and no loss has been suffered by the respondents. The learned Counsel also has contended that the completion certificate was issued as early as on 08.01.2013 and the Bank Guarantee is valid only for two years till 08.01.2015. The learned Counsel has further contended that it is only an indemnity guarantee and no loss has been suffered by the respondents. The learned Counsel also has contended that the completion certificate was issued as early as on 08.01.2013 and the Bank Guarantee is valid only for two years till 08.01.2015. The learned Counsel also contended that the Bank Guarantee cannot be invoked before 30 days from the claim notice and relied upon Clause 15 of the First SPA, which reads as follows:- “15. Indemnity:- 15.1 Indemnity:- The Vendors shall indemnify, defend and hold harmless, the Company and the Purchaser and/or its Affiliates, promptly upon demand at any time and from time to time, against any and all losses, claims, damages, proceedings, penalties, judgments and expenses (“Losses”) arising out of or in connection with: (i) any misrepresentation or any breach of any Warranty; or (ii) any and all costs and expenses incurred by the Purchaser and/or the Company in respect of a claim under this Indemnity; or (iii) any liabilities (including contingent liabilities, whether or not known or contemplated at the time of execution of this agreement) of the Company which relate to or arise out of, the period prior to completion; or (iv) any pending or threatened claims against the Company or any claims which may be made against the Purchaser and/or the Company and which relate to or arise out of, the period prior to completion. The indemnity obligations of the Vendors as set out above: (i) shall be (a) for a period of 5 (five) years from the completion date in respect of any claim arising to the title to the immovable properties of the Company specifically owned by it; and (b) for a period of 2 (two) years from the completion date, for all other claims other than as set out in (a) above; and (ii) shall be upto Rs.1 crore for any losses mentioned above, provided however that there shall not be any limit on the indemnity obligation in case of losses arising due to any claim on the title to the sale shares, or in respect of any losses arising due to any fraud or any concealment of any facts by the Promoter in respect of any written document signed by the Promoter and resulting in any personal gain to the Promoter, provided such fraud or concealment and resulting personal gain to the Promoter is proved in a court of law. The indemnification rights of the purchaser under this agreement are independent of, and in addition to, such other rights and remedies as the Purchaser may have at Law or in equity or otherwise, including the right to seek specific performance, rescission, restitution or other injunctive relief, none of which rights or remedies shall be affected or diminished thereby. 15.3 The Purchaser shall be entitled in their absolute discretion, to take such action as they may deem necessary to avoid, dispute, deny, resist, appeal, compromise or contest or settle any claim (including without limitation, making claims or counter claims against third parties). If the Company and the Purchaser assert a claim in respect of a loss for which the Company and the Purchaser is entitled to be indemnified in accordance with this Clause 15, then the Company and the Purchaser shall deliver to Vendors a notice (a “Claim Notice”) describing in reasonable detail the facts giving rise to any claims for indemnification here under and shall include in such claim notice (if then known) the amount estimated in good faith or the method of computation of the amount of such claim (the “Estimated Claim Amount”) and containing a reference to the provisions of this agreement in respect of which such claim shall have occurred. The Company, the Purchaser and the Vendors shall first try to amicably settle the claim. The Company, the Purchaser and the Vendors shall first try to amicably settle the claim. If the parties do not arrive at an amicable settlement within 30 (thirty) days of the receipt of claim notice by the vendors, then subject to Clause 15.2, the Company and the Purchaser shall be entitled to first settle the Estimated Claim Amount against the Hold back amount or the Bank Guarantee in the manner provided in Clause 6.7 of this agreement. 15.4 Notice of Claim; Right to Participate in and Defend Third Party Claim.” 13. The learned Counsel for the Applicant has relied upon the following judgments in support of his contentions:- (a) In 2013-200-DLT-283-DB (State Trading Corporation of India Limited Vs. SBI and others), it has been held as follows:- “19. The law in relation to bank guarantees has also now attained a wider dimension with the passage of time. Originally the only exception carved out to prevent the encashment of a bank guarantee was fraud. However, subsequent judicial pronouncements have extended this scope by adding other class of cases which would fall in this exception. Cases of irretrievable injury, fraud, extraordinary special equities and invocation of bank guarantee being not in terms of the bank guarantee itself. It is very difficult to draw any straitjacket formula which would universally apply to all the cases. Suppression of facts made by the party against the beneficiary and prima facie there being evidence to show that there is truth in these allegations, would not entitle the party to straightaway invoke the bank guarantee. (See Synthetic Foams Ltd. vs. Simplex Concrete Piles (India) Pvt. Ltd. AIR 1988, Delhi 2007 and Hindustan Construction Co. Ltd. & Another vs. Satluj Jal Nigam Ltd. AIR 2006 Delhi 169. The judgment of Dwarikesh Sugar Industries Ltd. (supra) would have no application; facts of the said case being distinct as admittedly in that case there was no breach of contractual obligation. The ultimate decision of the Swiss Court and the GAFTA having been upheld, it was patently clear that the petitioner had abused his power by invoking the bank guarantee. 23. The petitioner had unjustly enriched himself; he not being entitled either to the guarantee amount or to the goods both of which were in his possession. The ultimate decision of the Swiss Court and the GAFTA having been upheld, it was patently clear that the petitioner had abused his power by invoking the bank guarantee. 23. The petitioner had unjustly enriched himself; he not being entitled either to the guarantee amount or to the goods both of which were in his possession. The Supreme Court in Sahakari Khand Udyog Mandal Ltd. (supra) has noted that where a party has "enriched" itself by "receipt of a benefit" which is at the expense of the non-applicant, restitution is justified. These payments had been disbursed to the petitioner in January, 1998. It was in these circumstances that a fair discretion was exercised in the impugned order to grant interest at the rate of 21.75% with monthly rests the transaction admittedly being commercial. ” (b) In Punjab National Bank Limited vs. Sri Bikram Cotton Mills Limited and another, AIR 1970 SC 1973 the Honourable Supreme Court has held thus:- “10. A promise to be primarily and independently liable for another person's conduct may amount to a contract of indemnity A contract of guarantee requires concurrence of three persons-the principal debtor, the surety and the creditor--the surety undertaking an obligation at the request express or implied of the principal debtor. The obligation of the surety depends substantially on the principal debtor's default; under a contract of indemnity liability arises from loss caused to the promisee by the conduct of the promisor himself or by the conduct of another person.” (c) In Edavan Kavungal Kelappan Nambiar vs. Moolakal Kunhi Raman and another, AIR 1957 Mad 164 it has been held as follows:- “7. In this connection it is necessary to draw a distinction between a contract of indemnity thus:- Section 124: A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person, is called a 'contract of indemnity. The rights of a promisee in a contract of indemnity are set out in the section following. The rights of a promisee in a contract of indemnity are set out in the section following. Section 125: The promisee in a contract of indemnity, acting within the scope of his authority, is entitled to recover from the promisor-- (1) all damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies; (2) all costs which he may be compelled to pay in any such suit if, in bringing or defending it, he did not contravene the orders of the promisor and acted as it would have been prudent for him to act in the absence of any contract of indemnity, or if the promisor authorised him to bring or defend the suit; (3) All sums which he may have paid under the terms of any compromise of any such suit, if the compromise was not contrary to the orders of the promisor, and was one which it would have been prudent for the promisee to make in the absence of any contract of indemnity, or if the promisor authorised him to compromise the suit." 14. Per contra, the learned Counsel for the Respondents, has referred to the claim letter dated 08.12.2014 and its annexures to contend that the Applicant was liable to make the payment. The learned Counsel has also pointed out to several infirmities on the part of the Applicant. The learned Counsel also relied upon Clauses 1.1.17 and 1.1.18 to contend that the completion date would be the date of purchase and since the shares were transferred on 14.01.2013 and the consideration was paid on 17.01.2013, the Bank Guarantee could be invoked till 17.01.2015. 15. Upon perusal of the documents, it is clear that the Bank Guarantee can be invoked only after 30 days from the date of claim notice. The claim letter dated 08.12.2014 was received by the Applicant only on 13.12.2014 and therefore, the Bank Guarantee could have been enforced only after 12.01.2015. 16. In Hindustan Construction Co. Ltd. vs. State of Bihar and Others, 1999 8 SCC 436 the Honourable Supreme Court considered the scope of unconditional as well as conditional Bank Guarantees and held in paragraph-14 as under:- "14. 16. In Hindustan Construction Co. Ltd. vs. State of Bihar and Others, 1999 8 SCC 436 the Honourable Supreme Court considered the scope of unconditional as well as conditional Bank Guarantees and held in paragraph-14 as under:- "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 mobilisation 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 mobilisation 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 mobilisation loan". It is in these circumstances that the aforesaid clause would operate and the whole of the amount covered by the "mobilisation advance" would become payable on demand. The Bank Guarantee thus could be invoked only in the circumstances referred to in clause 9, where under 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 to 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." 17. The above judgment would be squarely applicable to the present facts of the case. Upon consideration of Clause 15.3, this Court is of the view that the Bank Guarantee is conditional on two grounds, namely (a) it is not for any breach of the terms, but only to make good the loss, as the Bank Guarantee is towards the indemnity and (b) the invocation is possible only after the expiry of 30 days from the date of receipt of the claim. The judgments relied upon by the learned Counsel for the Applicant are squarely applicable to the present facts of the case. The judgments relied upon by the learned Counsel for the Applicant are squarely applicable to the present facts of the case. The guarantee in the present case, is towards the indemnity. To stake the claim, the respondents must have suffered the loss. The alleged losses have been disputed by the Applicant. Hence, the same can only be decided by the Arbitrator after looking into the evidence. The invocation in the present case is before 30 days from the date of claim and is, therefore, contrary to the terms of First SPA. 18. With regard to the plea that the Bank Guarantee stood expired on 08.01.2015, as the completion certification was issued on 08.01.2013, the Clauses 1.1.17 and 1.1.18 of the First SPA give a different picture. However, the validity of the completion certificate will have to be decided only by the Arbitrator. 19. In Adhunik Steels Ltd. vs. Orissa Manganese and Minerals Pvt. Ltd. AIR 2007 SC 2563 , the Hon'ble Apex Court has held as follows: “10. It is true that Section 9 of the Act speaks of the court by way of an interim measure passing an order for protection, for the preservation, interim custody or sale of any goods, which are the subject matter of the arbitration agreement and such interim measure of protection as may appear to the court to be just and convenient. The grant of an interim prohibitory injunction or an interim mandatory injunction are governed by well known rules and it is difficult to imagine that the legislature while enacting Section 9 of the Act intended to make a provision which was de hors the accepted principles that governed the grant of an interim injunction. Same is the position regarding the appointment of a receiver since the Section itself brings in, the concept of 'just and convenient' while speaking of passing any interim measure of protection. The concluding words of the Section, "and the court shall have the same power for making orders as it has for the purpose and in relation to any proceedings before it" also suggest that the normal rules that govern the court in the grant of interim orders is not sought to be jettisoned by the provision. The concluding words of the Section, "and the court shall have the same power for making orders as it has for the purpose and in relation to any proceedings before it" also suggest that the normal rules that govern the court in the grant of interim orders is not sought to be jettisoned by the provision. Moreover, when a party is given a right to approach an ordinary court of the country without providing a special procedure or a special set of rules in that behalf, the ordinary rules followed by that court would govern the exercise of power conferred by the Act. On that basis also, it is not possible to keep out the concept of balance of convenience, prima facie case, irreparable injury and the concept of just and convenient while passing interim measures under Section 9 of the Act. 14. In Nepa Limited vs. Manoj Kumar Agrawal, AIR 1999 MP 57 , a learned judge of the Madhya Pradesh High Court has suggested that when moved under Section 9 of the Act for interim protection, the provisions of the Specific Relief Act cannot be made applicable since in taking interim measures under Section 9 of the Act, the court does not decide on the merits of the case or the rights of parties and considers only the question of existence of an arbitration clause and the necessity of taking interim measures for issuing necessary directions or orders. When the grant of relief by way of injunction is, in general, governed by the Specific Relief Act, and Section 9 of the Act provides for an approach to the court for an interim injunction, we wonder how the relevant provisions of the Specific Relief Act can be kept out of consideration. For, the grant of that interim injunction has necessarily to be based on the principles governing its grant emanating out of the relevant provisions of the Specific Relief Act and the law bearing on the subject. Under Section 28 of the Act of 1996, even the arbitral tribunal is enjoined to decide the dispute submitted to it, in accordance with the substantive law for the time being in force in India, if it is not an international commercial arbitration. So, it cannot certainly be inferred that Section 9 keeps out the substantive law relating to interim reliefs. 18. So, it cannot certainly be inferred that Section 9 keeps out the substantive law relating to interim reliefs. 18. It is true that the intention behind Section 9 of the Act is the issuance of an order for preservation of the subject matter of an arbitration agreement. According to learned Counsel for Adhunik Steels, the subject matter of the arbitration agreement in the case on hand, is the mining and lifting of ore by it from the mines leased to O.M.M. Private Limited for a period of 10 years and its attempted abrupt termination by O.M.M. Private Limited and the dispute before the arbitrator would be the effect of the agreement and the right of O.M.M. Private Limited to terminate it prematurely in the circumstances of the case. So viewed, it was open to the court to pass an order by way of an interim measure of protection that the existing arrangement under the contract should be continued pending the resolution of the dispute by the arbitrator. May be, there is some force in this submission made on behalf of the Adhunik Steels. But, at the same time, whether an interim measure permitting Adhunik Steels to carry on the mining operations, an extraordinary measure in itself in the face of the attempted termination of the contract by O.M.M. Private Limited or the termination of the contract by O.M.M. Private Limited, could be granted or not, would again lead the court to a consideration of the classical rules for the grant of such an interim measure. Whether an interim mandatory injunction could be granted directing the continuance of the working of the contract, had to be considered in the light of the well-settled principles in that behalf. Similarly, whether the attempted termination could be restrained leaving the consequences thereof vague would also be a question that might have to be considered in the context of well settled principles for the grant of an injunction. Therefore, on the whole, we feel that it would not be correct to say that the power under Section 9 of the Act is totally independent of the well known principles governing the grant of an interim injunction that generally govern the courts in this connection. So viewed, we have necessarily to see whether the High Court was justified in refusing the interim injunction on the facts and in the circumstances of the case.” 20. So viewed, we have necessarily to see whether the High Court was justified in refusing the interim injunction on the facts and in the circumstances of the case.” 20. It is relevant to consider the scope and ambit of Section 9 of the Arbitration and Conciliation Act, which reads as under:- “9. Interim measures etc. by Court.- A party may, before, or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court- (i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure or protection in respect of any of the following matters, namely:- (a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement; (b) securing the amount in dispute in the arbitration; (c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; (d) interim injunction or the appointment of a receiver; (e) such other interim measure of protection as may appear to the Court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it. 21. As held by the Honourable Supreme Court, the above provision empowers the Court to grant such interim measures of protection, by use of the words “Just” and “Convenient”. 21. As held by the Honourable Supreme Court, the above provision empowers the Court to grant such interim measures of protection, by use of the words “Just” and “Convenient”. It is to be noted herein that the Courts, while hearing an application under Section 9 of the Arbitration and Conciliation Act, are empowered to grant prohibitory orders against a garnishee, even though the third party, against whom, the relief is sought for, is not a party to the arbitration agreement, as the relief is in the nature of securing the claim of the Applicants, if the requirements under Civil Procedure Code for grant of interim orders are satisfied. It is also pertinent to mention here that the Applicant has approached this Court before encashment. 22. The learned Counsel for the Respondents relied upon the following judgments to contend that unless it is established that fraud and irretrievable injustice would be caused, there cannot be any injunction:- (a) BSES Limited (Now Reliance Energy Limited) vs. Fenner India Limited and another, AIR 2006 SC 1148 it is held as under:- “The Rule and its Exceptions 9. Mr.Rohtagi, learned Senior Counsel for the Appellant, urged that the settled law in this country is that a Bank Guarantee is an independent contract between the bank and the beneficiary thereof. Accordingly, irrespective of any dispute between the beneficiary and the party at whose instance the bank has given the guarantee, the bank is obliged to honour its guarantee, as long as the guarantee is unconditional and irrevocable. Our attention was drawn to the judgment of this Court in U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd. (hereinafter "U.P. Cooperative Federation"). It was pointed out in that case that a Bank Guarantee must be honoured in accordance with its terms as the bank, which gives the guarantee, is not concerned with the relations between the supplier and the customer. Neither is the bank concerned with the question whether any of them have failed in their contractual obligations or not. In other words, the bank must pay according to the tenor of its guarantee, on demand, without proof or condition. 10. There are, however, two exceptions to this rule. The first is when there is a clear fraud of which the bank has notice and a fraud of the beneficiary from which it seeks to benefit. In other words, the bank must pay according to the tenor of its guarantee, on demand, without proof or condition. 10. There are, however, two exceptions to this rule. The first is when there is a clear fraud of which the bank has notice and a fraud of the beneficiary from which it seeks to benefit. The fraud must be of an egregious nature as to vitiate the entire underlying transaction. The second exception to the general rule of non-intervention is when there are "special equities" in favour of injunction, such as when "irretrievable injury" or "irretrievable injustice" would occur if such an injunction were not granted. The general rule and its exceptions has been reiterated in so many judgments of this Court, that in U.P. State Sugar Corporation v. Sumac International Ltd., (hereinafter "U.P. State Sugar Corporation") this Court, correctly declared that the law was "settled" . (b) Himadri Chemicals Industries Limited vs. Coal Tar Refining Company, AIR 2007 SC 2748 it has been held thus:- “10. The law relating to grant or refusal to grant injunction in the matter of invocation of a Bank Guarantee or a Letter of Credit is now well settled by a plethora of decisions not only of this court but also of the different High Courts in India. In U.P. State Sugar Corporation vs. Sumac International Ltd. (1997) 1 SCC 568 , this court considered its various earlier decisions. In this decision, the principle that has been laid down clearly on the enforcement of a Bank guarantee or a Letter of Credit is that in respect of a Bank Guarantee or a Letter of Credit which is sought to be encashed by a beneficiary, the bank giving such a guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. Accordingly this Court held that the courts should be slow in granting an order of injunction to restrain the realization of such a Bank Guarantee. It has also been held by this court in that decision that the existence of any dispute between the parties to the contract is not a ground to restrain the enforcement of Bank guarantees or Letters of Credit. However this court made two exceptions for grant of an order of injunction to restrain the enforcement of a Bank Guarantee or a Letter of Credit. However this court made two exceptions for grant of an order of injunction to restrain the enforcement of a Bank Guarantee or a Letter of Credit. (i) Fraud committed in the notice of the bank which would vitiate the very foundation of guarantee; (ii) injustice of the kind which would make it impossible for the guarantor to reimburse himself. 11. Except under these circumstances, the courts should not readily issue injunction to restrain the realization of a Bank Guarantee or a Letter of Credit. So far as the first exception is concerned, i.e. of fraud, one has to satisfy the court that the fraud in connection with the Bank Guarantee or Letter of Credit would vitiate the very foundation of such a Bank Guarantee or Letter of Credit. So far as the second exception is concerned, this court has held in that decision that it relates to cases where allowing encashment of an unconditional bank guarantee would result in irretrievable harm or injustice to one of the parties concerned. While dealing with the case of fraud, this court in the case of U.P. Coop. Federation Ltd. Vs. Singh Consultants and Engineers (P) Ltd. (1988) 1 SCC 174 held as follows:- “The fraud must be of an egregious nature such as to vitiate the entire underlying transaction. While coming to a conclusion as to what constitutes fraud, this court in the above case quoted with approval the observations of Sir John Donaldson, M.R. in Bolivinter Oil SA vs. Chase Manhattan Bank, (1984) 1 All ER 351 at p. 352 which is as follows, The wholly exceptional case where an injunction may be granted is where it is proved that the bank knows that any demand for payment already made or which may thereafter be made will clearly be fraudulent. But the evidence must be clear both as to the fact of fraud and as to the banks knowledge. It would certainly not normally be sufficient that this rests on the uncorroborated statement of the customer, for irreparable damage can be done to a banks Credit in the relatively brief time which must elapse between the granting of such an injunction and an application by the bank to have it charged. (Emphasis supplied)”. 12. It would certainly not normally be sufficient that this rests on the uncorroborated statement of the customer, for irreparable damage can be done to a banks Credit in the relatively brief time which must elapse between the granting of such an injunction and an application by the bank to have it charged. (Emphasis supplied)”. 12. In Svenska Handelsbanken vs. Indian Charge Chrome, (1994) 1 SCC 502 , it has also been held that a confirmed Bank Guarantee/irrevocable Letter of Credit cannot be interfered with unless there is established fraud or irretrievable injustice involved in the case. In fact, on the question of fraud, this decision approved the observations made by this court in the case of U.P. Coop. Federation Ltd vs. Singh Consultants and Engineers (P) Ltd. (1988) 1 SCC 174 . 13. So far as the second exception is concerned, this court in U.P. State Sugar Corporation vs. Sumac International Ltd. (1997) 1 SCC as considered herein earlier, at para 14 on page 575 observed as follows:- “On the question of irretrievable injury which is the second exception to the rule against granting of injunctions when unconditional bank guarantees are sought to be realized the court said in the above case that the irretrievable injury must be of the kind which was the subject matter of the decision in the Itek Corpn. Case (566 Fed Supp 1210). In that case an exporter in USA entered into an agreement with the Imperial government of Iran and sought an order terminating its liability on stand by letter of credit issued by an American Bank in favour of an Iranian Bank as part of the contract. The relief was sought on account of the situation created after the Iranian revolution when the American Government cancelled the export licences in relation to Iran and the Iranian government had forcibly taken 52 American citizens as hostages. The US Government had blocked all Iranian assets under the jurisdiction of United States and had cancelled the export contract. The court upheld the contention of the exporter that any claim for damages against the purchaser if decreed by the American courts would not be executable in Iran under these circumstances and realization of the bank guarantee/letters of credit would cause irreparable harm to the Plaintiff. This contention was upheld. The court upheld the contention of the exporter that any claim for damages against the purchaser if decreed by the American courts would not be executable in Iran under these circumstances and realization of the bank guarantee/letters of credit would cause irreparable harm to the Plaintiff. This contention was upheld. To avail of this exception, therefore, exceptional circumstances which make it impossible for the guarantor to reimburse himself it he ultimately succeeds, will have to be decisively established. Clearly, a mere apprehension that the other party will not be able to pay, is not enough. In Itek case, there was certainty on this issue. Secondly, there was good reason, in that case for the Court to be prima facie satisfied that the guarantors i.e. the bank and its customer would be found entitled to receive the amount paid under the guarantee. (Emphasis supplied)”. 14. From the discussions 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. (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. (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.” (c) UP State Sugar Corporation vs. Sumac International Limited, AIR 1997 SC 1644 the Honourable Supreme Court has held as under:- “11. The law relating to invocation of such Bank Guarantees is by now well settled. When in the course of commercial dealings an unconditional Bank Guarantee is given or accepted, the beneficiary is entitled to realize such a Bank Guarantee in terms thereof irrespective of any pending disputes. The bank giving such a guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. The very purpose of giving such a Bank Guarantee would otherwise be defeated. The courts should, therefore, be slow in granting an injunction to restrain the realization of such a Bank Guarantee. The courts have carved out only two exceptions. A fraud in connection with such a Bank Guarantee would vitiate the very foundation of such a Bank Guarantee. Hence if there is such a fraud of which the beneficiary seeks to take advantage, he can be restrained from doing so. The second exception relates to cases where allowing the encashment of an unconditional Bank Guarantee would result in irretrievable harm or injustice to one of the parties concerned. Since in most cases payment of money under such a Bank Guarantee would adversely affect the bank and its customer at whose instance the guarantee is given, the harm or injustice contemplated under this head must be of such an exceptional and irretrievable nature as would override the terms of the guarantee and the adverse effect of such an injunction on commercial dealings in the country. The two grounds are not necessarily connected, though both may co-exist in some cases. The two grounds are not necessarily connected, though both may co-exist in some cases. In the case of U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd. 1988 (1) SCC 174 , which was the case of works contract where the performance guarantee given under the contract was sought to be invoked, this Court, after referring extensively to English and Indian cases on the subject, said that the guarantee must be honoured in accordance with its terms. The bank which gives the guarantee is not concerned in the least with the relations between the supplier and the customer; nor with the question whether the suppler has performed his contractual obligation or not, nor with the question whether the supplier is in default or not. The bank must pay according to the tenor of its guarantee on demand without proof or condition. There are only two exceptions to this rule. The first exception is a case when there is a clear fraud of which the bank has notice. The fraud must be of an egregious nature such as to vitiate the entire underlying transaction. Explaining the kind of fraud that may absolve a bank from honouring its guarantee, this Court in the above case quoted with approval the observations of Sir John Donaldson, M.R. in Bolivinter Oil SA vs. Chase Manhattan Bank NA, 1984 (1) AER 351 at 352): "The wholly exceptional case where an injunction may be granted is where it is proved that the bank knows that any demand for payment already made or which may thereafter be made will clearly be fraudulent. But the evidence must be clear both as to the fact of fraud and as to the bank's knowledge. It would certainly not normally be sufficient that this rests on the uncorroborated statement of the customer, for irreparable damage can be done to a bank's credit in the relatively brief time which must elapse between the granting of such an injunction and an application by the bank to have it charged". This Court set aside an injunction granted by the High Court to restrain the realisation of the Bank Guarantee. 12. The same question came up for consideration before this Court in Svenska Handelsbanken vs. M/s Indian Charge Chrome & Others, 1994 (1) SCC 502 . This Court set aside an injunction granted by the High Court to restrain the realisation of the Bank Guarantee. 12. The same question came up for consideration before this Court in Svenska Handelsbanken vs. M/s Indian Charge Chrome & Others, 1994 (1) SCC 502 . The Court once again reiterated that a confirmed Bank Guarantee/irrevocable letter of credit cannot be interfered with unless there is established fraud or irretrievable injustice involved in the case. Irretrievable injury has to be of the nature noticed in the case of Itek Corporation vs. The First National Bank of Boston etc. (566 Fed Supp. 1210). On the question of fraud this Court confirmed the observations made in the case of U.P. Cooperative Federation Ltd. (supra) and stated that the fraud must be that of the beneficiary, and not the fraud of anyone else. 13. On the question of irretrievable injury which is the second exception to the rule against granting of injunctions when unconditional Bank Guarantees are sought to be realised the court said in the above case that the irretrievable injury must be of the kind which was the subject-matter of the decision in the Itek Corporation case (supra). In that case an exporter in the U.S.A. entered into an agreement with the Imperial Government of Iran and sought an order terminating its liability on stand by letters of credit issued by an American bank in favour of an Iranian Bank as part of the contract. The relief was sought on account of the situation created after the Iranian revolution when the American Government cancelled the export licences in relation to Iran and the Iranian Government had forcibly taken 52 American citizens as hostages. The U.S. Government had blocked all Iranian assets under the jurisdiction of United States and had cancelled the export contract. The court upheld the contention of the exporter that any claim for damages against the purchaser if decreed by the American Courts would not be executable in Iran under these circumstances and realisation of the Bank Guarantee/Letters of credit would cause irreparable harm to the plaintiff. This contention was upheld. To avail of this exception, therefore, exceptional circumstances which make it impossible for the guarantor to reimburse himself if the ultimately succeeds, will have to be decisively established. Clearly, a mere apprehension that the other party will not be able to pay, is not enough. This contention was upheld. To avail of this exception, therefore, exceptional circumstances which make it impossible for the guarantor to reimburse himself if the ultimately succeeds, will have to be decisively established. Clearly, a mere apprehension that the other party will not be able to pay, is not enough. In the Itek case (supra) there was a certainty on this issue. Secondly, there was good reason, in that case for the court to be prima facie satisfied that the guarantors i.e. the bank and its customer would be found entitled to receive the amount paid under the guarantee. 14. Our attention was invited to a number of decisions on this issue -- among them, to Larsen & Turbro Ltd. vs. Maharashtra State Electricity Board & Others, 1995 (6) SCC 58 and Hindustan Steel Workers Construction Ltd. vs. G.S. Atwal& Co. (Engineers) Pvt. Ltd. 1995 (6) SCC 76 as also to National Thermal Power Corporation Ltd. vs. Flowmore Pvt. Ltd. & Another, 1995 (4) SCC 515 . The latest decision is in the case of State of Maharashtra & Another vs. M/s National Construction Company, Bombay & Another, JT 1996 (1) SC 156 where this Court has summed up the position by stating, "The rule is well established that a bank issuing a guarantee is not concerned with the underlying contract between the parties to the contract. The duty of the bank under a performance guarantee is created by the document itself. Once the documents are in order the bank giving the guarantee must honour the same and make payment ordinarily unless their is an allegation of fraud or the like. The courts will not interfere directly or indirectly to withhold payment, otherwise trust in commerce internal and international would be irreparably damaged. But that does not mean that the parties to the underlying contract cannot settle the disputes with respect to allegations of breach by resorting to litigation or arbitration as stipulated in the contract. The remedy arising ex-contract is not barred and the cause of action for the same is independent of enforcement of the guarantee." The other recent decision is in Hindustan Steelworks Construction Ltd. vs. Tarapore & Co. & Another, JT 1996 (6) SC 295. Clearly, therefore, the existence of any dispute between the parties to the contract is not a ground for issuing an injunction to restrain the enforcement of Bank Guarantees. & Another, JT 1996 (6) SC 295. Clearly, therefore, the existence of any dispute between the parties to the contract is not a ground for issuing an injunction to restrain the enforcement of Bank Guarantees. There must be a fraud in connection with the Bank Guarantee. In the present case we fail to see any such fraud. The High Court seems to have come to the conclusion that the termination of the contract by the appellant and his claim that the time was of the essence of the contract, are not based on the terms of the contract and, therefore, there is a fraud in the invocation of the Bank Guarantee. This is an erroneous view. The disputes between the parties relating to the termination of the contract cannot make invocation of the Bank Guarantees fraudulent. The High Court has also refereed to the conduct of the appellant in invoking the Bank Guarantees on an earlier occasion on 12th of April, 1992 and subsequently withdrawing such invocation. The court has used this circumstance in aid of its view that the time was not of the essence of the contract. We fail to see how an earlier invocation of the Bank Guarantees and subsequent withdrawal of this invocation make the Bank Guarantees or their invocation tainted with fraud in any manner. Under the terms of the contract it is stipulated that the respondent is required to give unconditional Bank Guarantees against advance payments as also a similar Bank Guarantee for due delivery of the contracted plant within the stipulated period. In the absence of any fraud the appellant is entitled to realise the Bank Guarantees.” 23. Relying upon the judgments, the learned Counsel for the Respondents contended that the respondents have not committed any fraud and no irretrievable injustice would be caused. Though there is no quarrel with regard to the ratio laid down by the Hon'ble Apex Court, this Court is unable to accept the contentions of the learned Counsel for the Respondents. 24. This Court has already held that the Bank Guarantee can be invoked only after 30 days from the date of the claim. Further, a completion certificate has been issued on 08.01.2013, the validity of which can be decided only by the Arbitrator. Though the certificate and the first phase of transfer happened in January 2013, the claim was made by the respondents only in December 2014. Further, a completion certificate has been issued on 08.01.2013, the validity of which can be decided only by the Arbitrator. Though the certificate and the first phase of transfer happened in January 2013, the claim was made by the respondents only in December 2014. As rightly pointed out by the learned Counsel for the Applicant, though the Applicant resigned only on 30.06.2015, Form 23 has been submitted by Mr.Sriram Ramakrishnan and not by the Applicant. The Applicant has also pleaded mala fide on the part of the respondents. Fraud is an act. Mala fide intention is a state of mind. Every act of fraud would have mala fides attached to it. 25. In view of the above, this Court is prima facie satisfied that the respondents have not acted in good faith and that irretrievable injustice would be caused to the Applicant. Further, the respondents have raised a claim just a few days before the expiry of the Bank Guarantee. Therefore, it could only be termed as an act aimed at taking advantage of the situation. This Court has already held that the Applicant has established a prima facie case. It is also evident that the balance of convenience and irreparable injustice would be caused to the Applicant, who has already transferred all his shares. Therefore, this Court is of the view that the Applicant is entitled to interim protection. The Applicant has already extended the Bank Guarantee till January 2016. The Arbitrator is yet to be appointed. The parties shall take immediate steps to appoint an Arbitrator as per the agreement. The Applicant shall keep the Bank Guarantee alive till the disposal of the arbitration proceedings. 26. With the above directions, the Original Application is allowed. No costs.