JUDGMENT : 1. “In rejecting the applications of the appellant for grant of temporary injunction, whether the trial Court exercised its discretion contrary to Order XXXIX Rules 1 and 2 of the Code of the Civil Procedure, 1908 (for short, CPC) ?” is the question involved in this case. 2. Appellant company is incorporated under the Companies Act, 1956 engaged in coal beneficiation (washing raw coal) services. Respondent No.1 is State owned Corporation engaged in generation and distribution of power in the State of Karnataka and in India. 3. Respondent No.1 has one such thermal power generation station in Raichur which is called as Raichur Thermal Power Station (for short ‘RTPS). Respondent No.1 secures coal which is called Raw coal/Run of mine coal (for short ‘RoM Coal) and gets that beneficiated through washery contractors and then use such washed coal for generation of power at RTPS. 4. For the purpose of beneficiation of raw coal for utilization at RTPS, in the year 2015, respondent No.1 called tender and awarded the said tender to the appellant by following the tender process. In this regard, appellant and respondent No.1 entered into the agreement dated 14.10.2015. As per Clause2 of the said agreement, the tenure of the contract was for the period of one year from the date of commencement of supply of beneficiated coal which was extendable for another two years subject to satisfactory performance of the agency during first and second year. 5. As per the said contract, appellant had to lift to its washing unit, the raw coal purchased by respondent No.1 from Western Coalfields Limited (for short ‘WCL’), wash the same and transmit the washed coal to RTPS. It was agreed that WCL shall appoint Third Party Agency (for short ‘TPA’) for sampling and analysis of RoM coal at colliery end. Respondent No.1 shall appoint Independent Inspection Agency (for short ‘IIA’) at its cost for sampling and analysis of RoM coal at washery end. The contract covered lifting of approximately 2.00 Lakh metric tons per month or any additional quantity allocated by the WCL. 6. Under Clause 9.05 of the agreement, it was agreed that in case the RoM coal received by the washery contractor is RoM G12 (37014000) band, the minimum normative yield of the washed coal shall be 85%. 7. The contract covered lifting of approximately 2.00 Lakh metric tons per month or any additional quantity allocated by the WCL. 6. Under Clause 9.05 of the agreement, it was agreed that in case the RoM coal received by the washery contractor is RoM G12 (37014000) band, the minimum normative yield of the washed coal shall be 85%. 7. As per Clause 10 of the agreement, in case of coal of G13 (34013700) band, the ash contents of the beneficiated coal shall not exceed 33% and the moisture shall not exceed 1% and the minimum normative yield shall be 80% of the RoM coal. 8. Appellant washery contractor furnished bank guarantee dated 07.10.2015 issued by respondent No.1 for a sum of Rs.4.06 Crores towards security deposit for the loss or damages if any on account of non fulfillment of the obligation under the contract. 9. As per Clause13 of the agreement, cost of raw coal shall be paid directly by respondent No.1 company. As per Clause13.01, the appellant washery contractor furnished the following bank guarantees issued by respondent No.2 towards costs of raw coal: Sl. No. Bank Guarantee No. Date of issue Amount in Crores Valid upto 1. 0713615BG0000196 3.10.2015 3.36 30.01.2017 2. 0713615BG0000201 8.10.2015 5.01 11.01.2017 3. 0713615BG0000202 8.10.2015 11.86 11.01.2017 4. 0713615BG0000203 8.10.2015 5.00 11.01.2017 Total 25.23 10. As per Clause5 of the agreement, reject coal was the property of respondent No.1 and the appellant had to sell the reject coal and adjust/recover the sale proceeds of the reject coal in its running bills. As per Clause 5.01 read with Annexure-III to the agreement, reserve price of the reject coal was Rs.650/per metric ton. 11. As per Clause 14.01 of the agreement, if the appellant fails to commence execution of the contract by the agreed date, respondent No.1 had the right to terminate the contract without any notice. Under Clause 14.02 of the agreement, respondent No.1 reserved right of termination of contract in full or in part by giving one month written notice if the performance of the appellant was not satisfactory. Agreement contained other clauses regarding payment etc. Respondent No.1 had extended the said agreement upto 31.08.2017 or till completion of dispatch of 12 washed coal rakes whichever was earlier. 12. Some disputes arose between the parties regarding the quantity of the coal supplied and the rate of reject coal etc. Agreement contained other clauses regarding payment etc. Respondent No.1 had extended the said agreement upto 31.08.2017 or till completion of dispatch of 12 washed coal rakes whichever was earlier. 12. Some disputes arose between the parties regarding the quantity of the coal supplied and the rate of reject coal etc. Respondent No.1 by its resolution passed in the meeting of its Officers dated 06.12.2017 resolved that the appellant failed to account for the deficit coal of 1,72,172.20 metric ton. It was further resolved that the total sum payable to it by way of recoveries, penalties, damages etc. was Rs.57,01,70,406.53 and resolved to enforce the bank guarantees. Pursuant to such resolution, respondent No.1 issued letter dated 06.12.2017 to respondent No.2 to make arrangements to encash the aforesaid five bank guarantees and to furnish proceeds of the same to it by demand draft. 13. Appellant filed O.S.No.8433/2017 before the trial Court against the respondents for permanent injunction restraining respondent No.1 from enforcing the bank guarantees issued by respondent No.2. In the suit, the appellant contended that though it performed its part of contract to avoid the payment of sum due to it, respondent No.1 has fraudulently sought to encash the bank guarantees. The appellant further contended that such unilateral invocation of the bank guarantee is illegal and causes irretrievable injury to the appellant. 14. Appellant filed I.A.No.2/2017 in the suit seeking temporary injunction restraining respondent No.2 from enforcing the bank guarantees. On that application, the trial Court had granted exparte temporary injunction against respondent No.2. Later, the appellant filed I.A.No.5/2018 seeking temporary injunction against respondent No.1 from taking any recovery action pursuant to the resolution dated 06.12.2017. 15. Respondent No.1 opposed both the applications. Appellant filed I.A.No.2/2017 in the suit seeking temporary injunction restraining respondent No.2 from enforcing the bank guarantees. On that application, the trial Court had granted exparte temporary injunction against respondent No.2. Later, the appellant filed I.A.No.5/2018 seeking temporary injunction against respondent No.1 from taking any recovery action pursuant to the resolution dated 06.12.2017. 15. Respondent No.1 opposed both the applications. The trial Court after hearing both parties and referring to several judicial precedents relied upon by both parties, by the impugned order dismissed I.A.No.2/2017 and I.A.No.5/2018 on the following grounds: (i) The bank guarantees executed by the plaintiffappellant are all unconditional bank guarantees; (ii) As per the law laid down by the Hon’ble Supreme Court, no injunction can be granted against enforcement of the bank guarantees unless the plaintiff makes out the case of fraud and that egregious loss will be caused to it if bank guarantees are invoked; (iii) The plaintiff has failed to make out case of fraud or egregious loss to it; (iv) Since bank guarantees were independent contracts, mere reference to the underlying contract in the bank guarantees has no relevance. The Court cannot grant injunction against the enforcement of such Bank guarantees on the ground that the dispute between the parties arising out of the underlying contract needs adjudication; & (v) The judgments relied upon by the plaintiff’s Counsel were not applicable to the facts of the case. 16. Sri S.S.Naganand, learned Senior Counsel appearing for Sri Chintan Chinnappa, learned Counsel for the appellant reiterating the grounds of the appeal seeks to assail the impugned order on the following grounds: (i) Since the bank guarantees were furnished to enable respondent No.1 to recover the damages incurred by it if any out of the contract, unless there was adjudication on breach of contract and the damages suffered, respondent No.1 could not have resorted for invocation of the bank guarantees; (ii) According to respondent No.1, the appellant failed to supply washed coal proportionate to the raw coal received by it and the short fall of coal was misappropriated by the appellant. According to the appellant, it accounted for entire coal supplied for washing. The agreement contained periodical joint reconciliation of the stock. Respondent No.1 failed to turn up for joint reconciliation, despite several requests of the appellant. According to the appellant, it accounted for entire coal supplied for washing. The agreement contained periodical joint reconciliation of the stock. Respondent No.1 failed to turn up for joint reconciliation, despite several requests of the appellant. Unless there was joint reconciliation, respondent No.1 was not entitled to arrive at the conclusion that there was short supply or misappropriation; (iii) As per the agreement, respondent No.1 was entitled to adjust sale proceeds of the reject coal at the rate of Rs.650/per metric ton only, even if the appellant sold the said reject coal at a higher price; (iv) Respondent No.1 adjusts such proceeds of the said reject coal at Rs.900 per metric ton which was unjustifiable; (v) During the tenure of the contract, respondent No.1 unilaterally changed I.I.A. from K.C.Sharma & Co. to CIMFR and came to the conclusion that beneficiated coal fell short of the standard of 85%, though agreed rate was 80%; & (vi) The working capital of the appellant itself is around Rs.30,00,00,000/. If the bank guarantees are invoked, whole organization of the appellant will be shattered, thereby causing irretrievable injury. 17. In support of his arguments, he relied upon the following judgments: 1. Gangotri Enterprises Ltd. v. Union of India [ (2016) 11 SCC 720 ] 2. Hindustan Construction Co. Ltd. v. State of Bihar [ (1999) 8 SCC 436 ] 3. M/s. EMTA Coal Limited & Anr. Vs. M/s Karnataka Power Corporation Ltd. [ILR 2016 KAR 2025] 4. Vishnu Prakash R. Punglia Ltd. v. State of Rajasthan [2016 SCC OnLine Raj 716] 5. M/s Greenhills Exports (P) Ltd., v. Coffee Board [ILR 2001 KAR 2950] 18. Sri Pramod Nair, learned Counsel for respondent No.1 seeks to justify the impugned order on the following grounds: (i) No injunction can be granted against invocation of bank guarantees unless the applicant establishes the fraud and irretrievable injury. M/s Greenhills Exports (P) Ltd., v. Coffee Board [ILR 2001 KAR 2950] 18. Sri Pramod Nair, learned Counsel for respondent No.1 seeks to justify the impugned order on the following grounds: (i) No injunction can be granted against invocation of bank guarantees unless the applicant establishes the fraud and irretrievable injury. Even such fraud and irretrievable injury is with reference to the bank/guarantor and not the party who furnishes such bank guarantee; (ii) Even assuming that fraud and irretrievable injury is with reference to the plaintiff, plaintiff hopelessly failed to make out the primafacie case of such fraud and injury; (iii) The subject bank guarantees being independent contracts, the dispute between the parties under the underlying contract has nothing to do with the invocation of the bank guarantees; (iv) The appellant was guilty of breach of contract, committed default in supplying the agreed washed coal within the agreed time; (v) There were reasons for first respondent to believe that the appellant has misappropriated the coal of the first respondent; (vi) Price of Rs.650/per metric ton of reject coal specified in the contract was a reserve price and not a final price. Admittedly, the reject coal was the property of first respondent and the appellant had sold back at Rs.900/per metric ton. Therefore, the first respondent rightly adjusted that in the running account bill of the appellant; (vii) It was the appellant who did not cooperate for joint reconciliation despite several written requests and demands of the first respondent. Therefore, the allegations that first respondent did not cooperate for joint reconciliation is per se false; (viii) I.I.A was changed in view of the notification of the Coal Ministry of Government of India and that was duly communicated to the appellant which was not objected then. The said act was not unilateral; (ix) The judgments cited by the learned Counsel for the appellant were not applicable and the trial Court on weighing the material on record and the law on the point has rightly rejected the applications and there are no grounds to interfere in such discretionary order. 19. In support of his contentions, he relies upon the following judgments: 1. Centax (India) Ltd. v. Vinmar Impex Inc. [ (1986) 4 SCC 136 ] 2. Himadri Chemicals Industries Ltd. V. Coal Tar Refining Co. (2007) 8 SCC 110 ] 3. Hindustan Steel Workers Const. Ltd. v. G.S.Atwal & Co. 19. In support of his contentions, he relies upon the following judgments: 1. Centax (India) Ltd. v. Vinmar Impex Inc. [ (1986) 4 SCC 136 ] 2. Himadri Chemicals Industries Ltd. V. Coal Tar Refining Co. (2007) 8 SCC 110 ] 3. Hindustan Steel Workers Const. Ltd. v. G.S.Atwal & Co. [ (1995) 6 SCC 76 ] 4. National Thermal Power Corprn. Ltd. v. Flowmore Pvt. Ltd. (1995) 4 SCC 515 ] 5. UP State Sugar Corporation v. Sumac International Ltd. [ (1997) 1 SCC 568 ] 6. Vinetec Electronics Private. Ltd. v. HCL Infosystems Ltd.[ (2008) 1 SCC 544 ] 7. Svenska Handels Banken v. Indian Charge Chrome & others[ (1994) 1 SCC 502 ] 8. National Insurance Company Limited v. Pranay Sethi and ors. (Manu/SC/1366/2017) 9. Pradip Chandra Parija v. Pramod Chandra Patnaik (2002) 1 SCC 1 10. Jai Kaur @ Jas Kaur and Others v. Sher Singh and others ( AIR 1960 SC 1118 ) 11. Era Infra Engineering Ltd. v. Central Public Works Department (2017 SCC Online Del 8349) 12. JPC Infrastructure and Constructions Pvt. Ltd. v. Alstom Systems India Pvt. Ltd. – (2017) SCC OnLine Del 8020) 13. Shapoorji Pallonji Energy (Gujarat) Private Limited v. Gujarat Electricity Regulatory Commission & Anr. (2017) SCC Online APTEL 35 14. H.M.Kamaluddin Ansari and Co. v. Union of India [ (1983) 4 SCC 417 ] 15. ONGC Ltd. v. Saw Pipes Ltd. [ (2003) 5 SCC 705 ] 16. Larsen & Toubro Limited v. Mangalore Refinery and Petrochemical Limited and Ors. Manu/KA/0993/2018 17. State Bank of India v. Sun Pharmaceuticals Industries Ltd. and Ors. Manu/WB/2271/2019 18. State of Gujarat Through Chief Secretary and another v. Amber Builders [2020 SCC OnLine SC 13] 20. In the light of the rival contentions, this Court has to examine the sustainability of the impugned order. An order under Order XXXIX Rules 1 and 2 of CPC being discretionary order can be interfered by the Appellate Court, only if it is shown that the discretion was exercised arbitrarily or in a perverse manner. 21. In the light of the rival contentions, this Court has to examine the sustainability of the impugned order. An order under Order XXXIX Rules 1 and 2 of CPC being discretionary order can be interfered by the Appellate Court, only if it is shown that the discretion was exercised arbitrarily or in a perverse manner. 21. To claim temporary injunction under Order XXXIX Rule 1 and 2 of CPC, the applicant has to establish the following three essential factors: (i) Primafacie case of right of the applicant and injury to such right; (ii) Balance of convenience lies in favour of the applicant; & (iii) If temporary injunction is not granted, applicant will be put to irreparable injury. Reg. Primafacie case: 22. Appellant admits execution of the agreement dated 14.10.2015 between itself and the first respondent for beneficiation of the coal. Except for the interpretation of the term reserve price of the reject coal, the appellant admits all other terms of the contract. This Court has already narrated above what were the terms of the contract and the repetition of the same again in this context is not required. 23. At the instance of the appellant, respondent No.2 had issued five bank guarantees in question in favour of respondent No.1 as the guarantor/obligator. Out of the five bank guarantees, the bank guarantee for a sum of Rs.4.06 crores was for security cum performance bank guarantee. Other four bank guarantees were furnished towards the cost of raw coal. 24. The first and foremost contention of the appellant’s Counsel is that since the bank guarantees were corelated to the underlying contract between the appellant and the first respondent, unless the dispute between the parties regarding the breach of the terms of the underlying contract was adjudicated, respondent No.1 cannot seek invocation of the same. Therefore, it was contended that the trial Court ought to have granted temporary injunction against invocation of those bank guarantees pending adjudication of such dispute. Whereas respondent No.1 contends that the bank guarantees were independent agreements between it and respondent No.2 and could be enforced at any time. 25. In view of such contentions, this Court has to firstly examine whether contract of bank guarantees were independent of underlying contract and adjudication of the dispute between the parties to the underlying contract was a precondition for invoking those bank guarantees. 26. 25. In view of such contentions, this Court has to firstly examine whether contract of bank guarantees were independent of underlying contract and adjudication of the dispute between the parties to the underlying contract was a precondition for invoking those bank guarantees. 26. Clause 1 of all the five bank guarantees refer to the purpose of issuing the same and the sum for which they were issued. They state that the bank guarantees are issued as security against any loss or damage caused or suffered or would be caused or suffered under the terms and conditions of letter of award dated 18.09.2015 (main contract) between the first respondent and the appellant. Relying on such clause, it was argued that the bank guarantees were intertwined with the principal agreement, therefore, they were not independent contracts. 27. But Clause 2 of all the five bank guarantees refer to the nature of the agreement between the bank/respondent No.2 and respondent No.1 the beneficiary of the bank guarantees. Clause 2 in all the bank guarantees were identical and read as follows: “2. We, State Bank of India, Industrial Finance Branch, Nagpur, 5, Sai complex, Bharat Nagar, Amravati Road, Nagpur do hereby undertake to pay the amounts due and payable under this guarantee without any demur, merely on a demand from the Corporation stating that the amount claimed is due by way of loss or damage caused to or would be caused to or suffered by the Corporation by reason of any breach by the said Contractor of any of the terms or conditions contained in the said Agreement or by reason of the Contractor’s failure to perform the said Agreement. Any such demand made on the Bank shall be conclusive as regards the amount due and payable by the Bank under this guarantee. However, our liability under this guarantee shall be restricted to an amount not exceeding ……………………………....................................................” 28. The recital in Clause2 that the bank undertakes to pay the amount without any demur merely on a demand of the beneficiary and the statement of the beneficiary that the amount claimed is due by way of damages out of the contract shall be conclusive as regards the amounts due itself indicates that the bank guarantees were independent agreements between the bank and the beneficiary. 29. 29. If para1/preamble of the agreement intended to make the adjudication of the dispute precondition to enforce the bank guarantee there was no need to incorporate Clause 2 referred to above in the bank guarantee. The recital attaching conclusiveness to the demand of the beneficiary regarding the claim for the enforcement of the bank guarantee coupled with the term “without any demur, merely on a demand” indicate that the bank guarantees were unconditional. 30. To advance the contention of the appellant that that reference in the bank guarantees to the underlying contract itself makes the bank guarantees supplementary to the underlying contract and adjudication of the dispute under contract is a precondition for invoking the bank guarantees, reliance was placed heavily on the judgments of the Hon’ble Supreme Court in Hindustan Construction Co. Ltd. and Gangotri Enterprises Ltd. cases and the judgment of this Court in M/s. Emta Coal’s case referred to supra. 31. The judgment in Hindustan Construction Co. Ltd. and Gangotri Enterprises Ltd. cases were rendered by the Bench consisting of two judges. But the larger Bench of the Supreme Court in H.M.Kamaluddin Ansari’s case referred to supra in para 21 of the judgment meeting the similar arguments with reference to the judgment in Raman Iron Foundary's case held as follows: "The learned Counsel, Shri Kacker, however, strongly relied on the following observations of the Court in Union of India v. Raman Iron Foundary (SCC p.238, para 6)": But here the order of interim injunction made by the learned Judge does not, expressly or by necessary implication, carry any direction to the appellant to pay the amounts due to the respondent under other contracts. It is not only in form but also in substance a negative injunction. It has no positive content. What it does is merely to injunct the appellant from recovering, suo motu, the damages claimed by it from out of other amounts due to the respondent. It does not direct that the appellant shall pay such amounts to the respondent. The appellant can still refuse to pay such amounts if it thinks it has a valid defence and if the appellant does so, the only remedy open to the respondent would be to take measures in an appropriate forum for recovery of such amounts where it would be decided whether the appellant is liable to pay such amounts to the respondent or not. No breach of the order of interim injunction as such would be involved in nonpayment of such amounts by the appellant to the respondent. The only thing which the appellant is interdicted from doing is to make recovery of its claim for damages by appropriating such amounts in satisfaction of the claim. That is clearly within the power of the Court under Section 41(b) because the claim for damages forms the subject matter of the arbitration proceedings and the Court can always say that until such claim is adjudicated upon, the appellant shall be restrained from recovering it by appropriating other amounts due to the respondent. The order of interim injunction made by the learned Judge cannot, therefore, be said to be outside the scope of his power under Section 41(b) read with the Second Schedule. With profound respect we find that the aforesaid observation is incongruous with the proposition of law laid down by this Court just before this observation. We find it difficult to agree with the observation of the Court that the impugned order in form and substance being the negative the respondent could refuse to pay such amounts if it thinks it has a valid defence, and if it chooses to do so there would be no breach of the injunction order." (Emphasis supplied) 32. The Hon'ble Supreme Court in the judgments in Centax (India) Limited, Himadri Chemicals Industries Ltd., U.P. State Sugar Corporation cases referred to supra held that an injunction against invocation of the bank guarantees cannot be issued unless in clear and established cases of fraud to the notice of the banks and egregious injury. Referring to several earlier judgments, the larger bench of the Supreme Court in Svenska's case referred to supra held that injunction against enforcement of the bank guarantees can be granted only in case of established fraud and irretrievable injury. 33. This Court has to follow the ratio laid down by the larger Bench of the Supreme Court in Svenska's case and H.M.Kamaluddin Ansari's case referred to supra. Apart from that in Gangotri Enterprises Ltd.’s case no ratio was laid down that reference to the underlying contract makes the bank guarantee conditional. It was held that the Court has to decide the said issue depending upon facts of each case. As already observed the bank guarantees in this case were primafacie unconditional one. Apart from that in Gangotri Enterprises Ltd.’s case no ratio was laid down that reference to the underlying contract makes the bank guarantee conditional. It was held that the Court has to decide the said issue depending upon facts of each case. As already observed the bank guarantees in this case were primafacie unconditional one. Therefore, the judgments in Gangotri Enterprises Ltd.’s case, Hindustan Constructions Co. Ltd.’s case and M/s. Emta Coal’s case cannot be justifiably applied to uphold the claim of the appellant that the bank guarantees were conditional one and adjudication of the disputes arising out of the underlying contract was a precondition to invoke the bank guarantees. Though innumerable judgments were relied upon by both Counsel, in the light of the ratio of the judgments of larger Benches of the Supreme Court in H.M.Kamaluddin Ansari’s case and Svenska’s case detailed reference to each of those judgments is not required. Reg. Fraud: 34. Having regard to the above referred legal position, the question is whether the plaintiff has made out any such case of fraud and irretrievable injury. It is needless to say that whenever party pleads fraud, he has to plead particulars of fraud. The entire pleadings of the appellant with regard to fraud is in para 13 of the plaint which reads as follows: “13. It is necessary to state that as per the earlier letter of correspondence by the defendant no.1 and as per the joint analysis nothing was payable. However, with an ulterior motive, malafide intention and with an intention to play fraud upon the plaintiff company, the defendant No.1 company falsely and fabricatedly sent the bank guarantees for encashment. It is stated that the bank guarantee cannot be invoked since there is no breach. Similarly, the defendant no.1 has themselves issued a joint statement about no dues, etc. Thus, changing their stand thereafter is not justified. There is no reason whatsoever for encashment of bank guarantee and the act of the defendant no.1 is no less than a nature of fraud. It is on account of such fraud played upon the plaintiff by the defendant no.1 company, the plaintiff has no other alternative efficacious remedy then to approach this Hon’ble Court seeking permanent injunction as against the encashment of bank guarantee.” (Emphasis supplied) 35. It is on account of such fraud played upon the plaintiff by the defendant no.1 company, the plaintiff has no other alternative efficacious remedy then to approach this Hon’ble Court seeking permanent injunction as against the encashment of bank guarantee.” (Emphasis supplied) 35. Thorough reading of the above para makes it very clear that allegations regarding fraud were as bald as possible and not in conformity with the provisions of Order VI Rule 4 of CPC. At the most what can be gathered from para 13 of the plaint is that, there was no breach of contract by the plaintiff, respondent No.1 despite issuing joint statement, changing its stand has sent the bank guarantees for enforcement with ulterior motive and that amounts to fraud. 36. Though it was contended that bank guarantees were sought to be invoked with ulterior motive, malafide intentions, it was not stated what was that ulterior motive and malafide intentions. 37. It was contended that respondent No.1 contrary to the terms of the contract changed I.I.A, the price of reject coal and agreement with regard to joint reconciliation, that amounts to fraud. 38. Then the question is whether breach of contract amounts to fraud. As per MerriamWebster’s legal dictionary, definition of fraud is as follows: “1a: specifically: intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right was accused of credit card fraud b: an act of deceiving or misrepresenting : 2a: a person who is not what he or she pretends to be : IMPOSTOR He claimed to be a licensed psychologist, but he turned out to be fraud. also : one who defrauds : CHEAT b: one that is not what it seems or is represented to be The UFO picture was proved to be a fraud” 39. Further, Section 17 of the Indian Contract Act, 1872 defines fraud as follows: “17. also : one who defrauds : CHEAT b: one that is not what it seems or is represented to be The UFO picture was proved to be a fraud” 39. Further, Section 17 of the Indian Contract Act, 1872 defines fraud as follows: “17. ‘Fraud’ defined.—‘Fraud’ means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:— (1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact; (3) a promise made without any intention of performing it; (4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent. Explanation.—Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence, is, in itself, equivalent to speech." 40. Thus it is clear that the breach of the terms of the contract in itself does not constitute an act of fraud in terms of definition in MerriamWebster’s dictionary and Section 17 of the Indian Contract Act. It was not the contention of learned Counsel for the appellant that such alleged breach constitutes fraud under any other special law as contemplated under Section 17(5) of the Indian Contract Act. Therefore no primafacie case of fraud much less the established fraud was made out. If there is any breach of contract on the part of defendant No.1 leading to damages to the plaintiff, its remedy may be for recovery of damages or other reliefs in appropriate proceedings not by way of suit for bare injunction as claimed. Reg. Egregious Injury 41. So far as egregious injury, the appellant contended that the amount of bank guarantees constitutes its entire working capital, if they are enforced, appellant's whole business comes to a grinding halt causing irretrievable injury. Reg. Egregious Injury 41. So far as egregious injury, the appellant contended that the amount of bank guarantees constitutes its entire working capital, if they are enforced, appellant's whole business comes to a grinding halt causing irretrievable injury. While considering the application for injunction, the Court has to examine who will be put to irretrievable injury and the balance of convenience lies in whose favour. 42. According to respondent No.1, the appellant is due to pay around Rs.57,00,00,000/towards missing coal, interest, penalty etc. If appellant’s whole working capital itself is Rs.30,00,00,000/and if respondent No.1 succeeds, then it will be left with nothing to recover its due. Contrary to that, respondent No.1 is a public sector undertaking. It is not even the case of the appellant that respondent No.1 is likely to shut down its establishment and run away. Under such circumstances, even if relief of interim injunction is declined, the appellant has remedy to sue respondent No.1 for appropriate relief. 43. As discussed above, no case of established fraud or egregious loss was made out by the appellant. Therefore, the appellant had no primafacie case of right or injury to its right. When no primafacie case was made out, the question of considering the balance of convenience does not arise. Even otherwise, balance of convenience was in favour of respondent No.1. 44. It is clear that that the trial Court exercised its discretion in rejecting the injunction applications on sound appreciation of the material on record and the legal position. The impugned order does not suffer any arbitrariness or perversity warranting the interference of this Court. Therefore, the appeal is dismissed.