JUDGMENT : Heard Mr. G. Goswami, the learned counsel for the appellants and Mr. U.K. Nair, the learned senior counsel assisted by Mr. R. Singha, the learned counsel appearing on behalf of the Interim Resolution Professional, appointed for the respondent by the National Company Law Tribunal in CP(IB) No.10/2021. 2. This is an application under Section 37 (1) (b) of the Arbitration and Conciliation Act, 1996 (for short, the Act of 1996) challenging the order dated 04.011.2019, passed in Misc. (Arb) Case No. 56/2019 whereby the Court of the Additional District Judge, No. 1, (Kamrup (M) at Guwahati vide the said order had restrained the appellants herein from invoking or encashing the performance bank guarantee amounting to Rs.2,23,44,827/-furnished by the respondent and also from forfeiting the security deposit and earnest money deposited by it for the work allotted to it. 3. At this stage, it may be relevant herein to mention that the said order was passed ex-parte. It is also pertinent to mention that the appellants had also filed the written objection in the said Misc (Arb.) Case No. 56/2019 and the same is presently pending before the said Court of the Additional District Judge, No. 1, (Kamrup (M) at Guwahati 4. Mr. G. Goswami, the learned counsel for the appellants submits that till date, the said Misc. (Arb) Case No. 56/2019 is still pending before the court below and the order impugned and the delay in disposal of the said Misc. (Arb) Case has seriously affected the rights of the appellants. 5. As the said Misc. (Arb) Case No. 56/2019 is still pending adjudication before the Court of the Additional District Judge, No. 1, (Kamrup (M) at Guwahati, this Court would confine its adjudication to the legality and validity of the impugned order keeping the said aspect of the matter in mind. 6. The brief fact of the instant case is that pursuant to a tender process the respondent was entrusted with the work, namely, “Earthwork in cutting to form formation and in filling to form embankment including mechanical compaction for making proposed Tupul Terminal Yard (KM 96.700 to 97.800) and from KM 97.800 to KM 98.000 in between Noney to Tupul including construction of minor Bridges and other ancillary works in connection with construction of New Railway Line from Jiribam-Tupul (Two Packet System)”. The letter of acceptance was issued to the respondent on 07.07.2015 and the contract value was Rs.44,68,97,432.35. The performance guarantee in the form of a bank guarantee issued by the State Bank of India was submitted on 19.08.2015 for a value of Rs.2,23,44,872/-and the contract agreement was signed on 07.12.2015. The completion period was 9 months from the letter of acceptance. It may be relevant to mention that the said bank guarantee was extended from time to time and the last of such extension was given on 15.04.2019 whereby the validity was upto 10.04.2020. 7. It is the case of the appellants that the respondent failed to perform its part of the contract as per the terms of the contract and as such a termination notice was issued vide Letter No.W/60/CON/J-T/EMB/2014/12/2097 dated 01.11.2019 as per Clause 62 of the General Conditions of the Contract. 8. The respondent herein after receiving the termination notice dated 01.11.2019, filed an application under Section 9 of the Act of 1996 before the Court of the Additional District Judge, No. 1, (Kamrup (M) at Guwahati which was registered and numbered as Misc. (Arb) Case No. 56/2019 praying for grant of interim measure by way of injunction restraining the appellants from invoking the relevant clauses of the contract invoking the bank guarantee dated 15.04.2019 for an amount of Rs.2,23,44,872/- issued by the State Bank of India, Khanapara Branch and also from forfeiting the security deposit and earnest money deposited by the respondent till disposal of the petition. 9. The Court of the Additional District Judge, No. 1, (Kamrup (M) at Guwahati vide the impugned order dated 04.11.2019 issued notice to the appellants asking to appear before the Court and file objection against the application under Section 9 of the Act of 1996 and till disposal of the petition, the appellants herein, their servants, workmen, employees, agents etc. were restrained from invoking or encashing the performance bank guarantee amounting to Rs.2,23,44,827/-furnished by the respondent and also from forfeiting the security deposit and earnest money deposited by it for the work allotted to it. 10. It is against this order that the appellants are before this Court under Section 37 (1) (b) of the Act of 1996. 11. I have perused the said order impugned in the instant proceeding. 10. It is against this order that the appellants are before this Court under Section 37 (1) (b) of the Act of 1996. 11. I have perused the said order impugned in the instant proceeding. By the said order, the appellants were restrained from invoking or encashing the performance bank guarantee issued by the State bank of India and from forfeiting the security deposit and earnest money. The said order does not disclose any reason as to why the said order was passed. 12. The law as regards grant of interim measure under Section 9 of the Act of 1996 is well settled and the principles for granting of interim relief are:-(i) good prima-facie case; (ii) balance of convenience in favour of grant of interim relief and (iii) irreparable injury or loss to the applicant for interim relief. 13. However, the Court below in passing the impugned order has not at all taken into consideration the said aspects of the matter and only after recording the stand of the respondent, who was the applicant in the said proceeding, has passed the order. However, the Court below in passing the impugned order has not at all taken into consideration the said aspects of the matter and only after recording the stand of the respondent, who was the applicant in the said proceeding, has passed the order. The learned Court ought to have known that grant of interim measures could neither have been claimed as a matter of right nor that grant of interim measures was a charity. As already stated herein above, the Court while exercising the jurisdiction under Section 9 of the Act of 1996 is required to follow the principles well settled before the grant of interim measures. The satisfaction in respect to the aforesaid principles is a condition precedent for grant of interim measures, be it, pending disposal of the Section 9 proceedings. 14. At this stage, it is relevant to take note of the law as regards grant of injunction in respect to invocation of bank guarantee. The Supreme Court in the case of Andhra Pradesh Pollution Control Board Vs. CCL Products (India) Limited, reported in (2019) 20 SCC 669 had the occasion to deal with the aspect as regard to the invocation of bank guarantee. The Supreme Court in the case of Andhra Pradesh Pollution Control Board Vs. CCL Products (India) Limited, reported in (2019) 20 SCC 669 had the occasion to deal with the aspect as regard to the invocation of bank guarantee. The Supreme Court after relying upon the various judicial precedents had held that except the case of fraud, irretrievable injustice and special equities, the court should not interfere with the invocation or encashment of a bank guarantee so long as the invocation was in terms with the bank guarantee. Paragraph Nos. 16 to 20 of the said judgment, being relevant, are quoted herein below: “16. The principle which we have adopted accords with a consistent line of precedent of this Court. In Ansal Engg. Projects Ltd. v. Tehri Hydro Development Corpn. Ltd. a three-Judge Bench of this Court held thus: (SCC p. 454, paras 4-5) “4. It is settled law that bank guarantee is an independent and distinct contract between the bank and the beneficiary and is not qualified by the underlying transaction and the validity of the primary contract between the person at whose instance the bank guarantee was given and the beneficiary. Unless fraud or special equity exists, is pleaded and prima facie established by strong evidence as a triable issue, the beneficiary cannot be restrained from encashing the bank guarantee even if dispute between the beneficiary and the person at whose instance the bank guarantee was given by the bank, had arisen in performance of the contract or execution of the works undertaken in furtherance thereof. The bank unconditionally and irrevocably promised to pay, on demand, the amount of liability undertaken in the guarantee without any demur or dispute in terms of the bank guarantee. … 5. … The court exercising its power cannot interfere with enforcement of bank guarantee/letters of credit except only in cases where fraud or special equity is prima facie made out in the case as triable issue by strong evidence so as to prevent irretrievable injustice to the parties.” 17. The same principle was followed in SBI v. Mula Sahakari Sakhar Karkhana Ltd. where a two-Judge Bench of this Court held thus: “33. It is beyond any cavil that a bank guarantee must be construed on its own terms. It is considered to be a separate transaction. 34. The same principle was followed in SBI v. Mula Sahakari Sakhar Karkhana Ltd. where a two-Judge Bench of this Court held thus: “33. It is beyond any cavil that a bank guarantee must be construed on its own terms. It is considered to be a separate transaction. 34. If a construction, as was suggested by Mr Naphade, is to be accepted, it would also be open to a banker to put forward a case that absolute and unequivocal bank guarantee should be read as a conditional one having regard to circumstances attending thereto. It is, to our mind, impermissible in law.” 18. A bank guarantee constitutes an independent contract. In Hindustan Construction Co. Ltd. v. State of Bihar4, a two-Judge Bench of this Court formulated the condition upon which the invocation of the bank guarantee depends in the following terms: “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.” (emphasis supplied) 19. The settled legal position which has emerged from the precedents of this Court is that absent a case of fraud, irretrievable injustice and special equities, the Court should not interfere with the invocation or encashment of a bank guarantee so long as the invocation was in terms of the bank guarantee. 20. In the present case, the bank undertook to the appellant that it would pay the guaranteed amount on demand, subject to the overall amount stipulated in each of the three bank guarantees. It was not for the bank to determine as to whether the invocation of the bank guarantees was justified so long as the invocation was in terms of the bank guarantee. A demand once made would oblige the bank to pay under the terms of the bank guarantee. It was not for the bank to determine as to whether the invocation of the bank guarantees was justified so long as the invocation was in terms of the bank guarantee. A demand once made would oblige the bank to pay under the terms of the bank guarantee. State Bank of India correctly understood its legal obligations and paid over the amount to the appellant. In this view of the matter and having regard to the terms of the bank guarantees, we are of the view that the principle of law which has been formulated by the Tribunal cannot be accepted as reflecting the correct legal position.” 15. From a reading of the above quoted paragraphs and applying the same to the facts of the instant case it would be seen that the bank guarantee is an independent and a distinct contract between the bank and the beneficiary and in the instant case between the State Bank of India and the Appellants herein. A perusal of the bank guarantee would show that it is not qualified by any underlying transaction and the validity of the primary contract between the person at whose instance the bank guarantee was given (the respondent herein) and the beneficiary. Unless fraud or special equity exists which is pleaded and prima-facie established by strong evidence as a triable issue, the beneficiary cannot be restrained from encashing the bank guarantee even if dispute between the beneficiary and the person at whose instance the bank guarantee was given by the bank, had arisen in performance of the contract or execution of the works undertaken in furtherance thereof. In the instant case, the bank unconditionally and irrevocably promised to pay, on demand, the amount of liability undertaken in the guarantee without any demur or dispute in terms of the bank guarantee provided the invocation is done in terms with the bank guarantee. 16. In the instant case, the bank guarantee in question dated 19.08.2015 which was subsequently extended by 15.04.2019 contained the following stipulations which is quoted herein below: “3. We State bank of India, Khanapara Branch do hereby undertake to pay to the Government any money as demanded notwithstanding any dispute or disputes raised by the Contracor(s) in any suit or proceeding pending before any court or Tribunal relating thereto out liability under this present being absolute and unequivocal. We State bank of India, Khanapara Branch do hereby undertake to pay to the Government any money as demanded notwithstanding any dispute or disputes raised by the Contracor(s) in any suit or proceeding pending before any court or Tribunal relating thereto out liability under this present being absolute and unequivocal. The payment so made by us under this bond shall be valid discharge of our liability for payment there under the Contractor(s) shall have no claim against us for making such payment. 4. We State bank of India, Khanapara Branch further agree that the Guarantee herein contained shall remain in full force and effect during eh period that would be taken for the performance of the said Agreement and that it shall continue to be inforceable till all the dues of the Government under or by virtue of the said Agreement have been fully paid and its claims satisfied or discharged of till Chief Engineer/Con./N.F. Railway, Maligaon, Guwahati-781011, certified that the terms and conditions of the said Agreement have been fully and properly carried out by the said Contractor(s) and accordingly discharge this Performance Guarantee. Unless a demand or claim under this Guarantee is made on us in writing on or before the 18.08.2016. We shall be discharged from all liability under this Guarantee thereafter. 5. We State Bank of India, Khanapara Branch further agree with the Government that the Government shall have the fullest liberty without our consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the said Agreement or to extent time of performance by the said Contractor(s) from time to time or to postpone for any time or from time to time any of the powers exercisable by the Government against the said contractor(s) and to forbear or enforce any of the terms and conditions relating to the said Agreement and we shall not be relieved from our liability by reason of any such variation or extension being granted to the said Contractor(s) or for any for-bearance act, or omission on the part of the Government or any indulgence by the Government to the said Contractor(s) or by any such matter or thing whatsoever which under the law relating to sureties would, but for this provision, have effect of so relieving us.” 17. In the backdrop of the above law, if this Court looks into the impugned order it would be seen that the learned Additional District Judge, No. 1, Kamrup (M) at Guwahati did not deal with the said aspect of the matter at all and it mechanically without any application of mind had passed the impugned order. It further astonishes and shocks this Court to see that while granting the interim measures, no condition such as extension of the validity of the bank guarantee or keeping the bank guarantee alive till disposal of the Section 9 proceedings were imposed although at paragraph No. 30 of the application under Section 9 of the Act of 1996, the respondent herein had given an undertaking to keep the bank guarantee in question valid for such further time as may be directed by the court. 18. At this stage, it may also be relevant to take note of the submission of Mr. U. K. Nair, the learned senior counsel for the Interim Resolution Professional who submits that the State Bank of India had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, the Code) the initiation of Corporate Insolvency Resolution Process in respect to the respondent herein. Vide an order dated 26.08.2021, the Section 7 application was duly admitted and the said adjudicating authority, i.e., the National Company Law Tribunal, Guwahati Bench at Guwahati had declared moratorium with effect from 26.08.2021 in terms with Section 14 of the Code. The learned senior counsel, therefore, submits that in view of the said moratorium the question of continuance with the instant proceeding is statutorily barred under Section 14 (1) (a) of the Code. He further submitted that any interference with the instant order would have an impact upon the corporate debtor’s (respondent herein) assets and the object behind enactment of Section 14 of the Code would be frustrated if during the Insolvency Resolution Process, the assets of the corporate debtor, i.e. the respondent herein is depleted on account of any proceeding. The learned senior counsel further submitted that even otherwise a perusal of the bank guarantee dated 19.08.2015 would show that the said bank guarantee has been only been extended upto 10.04.2020. 19. On the other hand, Mr. The learned senior counsel further submitted that even otherwise a perusal of the bank guarantee dated 19.08.2015 would show that the said bank guarantee has been only been extended upto 10.04.2020. 19. On the other hand, Mr. G. Goswami, the learned counsel appearing on behalf of the appellants submits that the moratorium declared in respect to Section 14 of the Code on 26.08.2021 by the adjudication authority has no relevance to the dispute involved in the instant proceedings inasmuch as Section 14 (1) of the Code is always subject to the provision of sub-section (2) & (3) of Section 14 of the Code. The learned counsel further submits that the bank guarantee as already held by the Supreme Court in CCL Products (India) Limited (supra) is an independent contract between the beneficiary and the bank, and as such, there arises no question of the moratorium affecting the invocation of the bank guarantee. 20. In order to consider the contentions of the learned counsels for the parties as regard the application of Section 14 of the Code and as to whether the moratorium announced vide the order dated 26.08.2021 would apply in the facts of the instant case, it would be seen that vide the impugned order the rights of the appellants to invoke the bank guarantee have been curtailed. The above quoted paragraphs of the judgment of the Supreme Court in the case of CCL Products (India) Limited (supra) clearly goes to show that the bank guarantee is an independent contract between the beneficiary and the bank. It is a different matter that the bank had issued the bank guarantee on behalf of the corporate debtor. On the basis of the bank guarantee being issued, the State Bank of India in the instant case, stands in the status of a surety. The proposed invocation of bank guarantee is on the basis of the termination of the contract under Section 62 of the GCC which as per the appellants entitles them to a particular amount from the principal debtor, i.e., the respondent herein. The State Bank of India had acted as a surety to the said amount by issuing the bank guarantee. Under such circumstances, the appellants had either the option of proceeding against the principal debtor or the surety. The State Bank of India had acted as a surety to the said amount by issuing the bank guarantee. Under such circumstances, the appellants had either the option of proceeding against the principal debtor or the surety. Section 128 of the Contract Act categorically mentions that the liability of the surety is co-extensive with that of the principal debtor and the creditor may go against either the principal debtor or the surety or both in no particular sequence. This provision of law has been sufficiently explained in various judgments of the Supreme Court of India including the judgment in the case of Bank of Bihar vs. Damodar Prasad and Another , reported in AIR 1969 SC 297 . The Supreme Court in the case of State Bank of India vs. V.Ramakrishnan and Others, reported in AIR 2018 SC 3876 dealt with the scope and ambit of Section 14 of the Code and held that a plain reading to Section 14 of the Code, leads to the conclusion that the moratorium referred to in Section 14 of the Code can have no manner of application to personal guarantors of a corporate debtor. While dealing with the difference between the scope and ambit of Section 22 (1) of the Sick Industrial Company (Special Provisions) Act, 1985 and Section 14 (3) of the Code, the Supreme Court took into consideration the report dated 26.03.2018 of the Insolvency Law Committee appointed by the Ministry of Corporate Affairs wherein certain key recommendations were made to clear the confusion regarding the treatment of assets of guarantors of the corporate debtor vis-à-vis the moratorium on the assets of the corporate debtor. In the report, it was mentioned that Section 14 of the Code does not intent to bar action against the assets of the guarantors to the debts of the corporate debtor and recommended that an explanation to clarify this may be inserted in Section 14 of the Code. It was further observed by the Supreme Court in the said judgment that the report of the Committee makes it clear that the object of the amendment was to clarify and set at rest what the Committee thought was an overbroad interpretation of Section 14 of the Code. 21. It was further observed by the Supreme Court in the said judgment that the report of the Committee makes it clear that the object of the amendment was to clarify and set at rest what the Committee thought was an overbroad interpretation of Section 14 of the Code. 21. In view of the said judgment in the case of V. Ramakrishnan and Others (supra) and taking into consideration that the State Bank of India stood as a surety to the amount to which the appellants were entitled to claim from the respondent and the appellants had a right to proceed against the surety this Court is of the opinion that the moratorium in respect to the respondent would not affect the rights of the appellants to invoke the bank guarantee issued by the State Bank of India. 22. Consequently, therefore, this Court is of the opinion that the submission so made by the learned counsel for the Interim Resolution Profession in so far as the instant proceedings cannot proceed in view of Section 14 (1) (a) of the Code is misplaced and misconceived. However, it is also relevant to take note of that the earnest money and the security deposit are assets of corporate debtor and taking into consideration that the object behind the enactment of Section 14 (1) of the Code which is that the assets of the corporate debtor is preserved during the Insolvency Proceedings, this Court is of the opinion that the said earnest money and security deposit cannot be forfeited by the appellants till the resolution process stands concluded in the manner as envisaged under law. 23. In that view of the matter, this Court sets aside the order dated 04.11.2019, passed in Misc. (Arb) Case No. 56/2019 in so far as the restraint upon the appellants to invoke the bank guarantee is concerned. However, in view of the mandate of Section 14 of the Code and the order dated 26.08.2021, passed by the National Company Law Tribunal in CP (IB) No.10/2021 the appellants shall not forfeit the earnest money and the security deposit. 24. However, in view of the mandate of Section 14 of the Code and the order dated 26.08.2021, passed by the National Company Law Tribunal in CP (IB) No.10/2021 the appellants shall not forfeit the earnest money and the security deposit. 24. Taking into consideration that the matter is still pending before the Court of the Additional District Judge, No. 1, (Kamrup (M) at Guwahati, the parties are directed to appear before the said court on 14.07.2022 and thereupon the court shall proceed with the adjudication of the matter as expeditiously as possible and preferably within a period of 30 (thirty) days from the date of appearance of the parties before it. 25. The above adjudication is only as regards the order impugned in the instant proceeding and the court below shall not be influenced by the observations made herein above while finally deciding the proceeding under Section 9 of the Act of 1996. It is further clarified that vide this order, this Court has only gone into the legality and validity of the impugned order which relates to curtailment of the right to invoke the Bank Guarantee by the Appellants by way of an injunction and no observations have been made as regards the rights of the appellants to invoke the bank guarantee via-a-vis the State Bank of India in question. The question as regards the undertaking given by the respondent in paragraph No.30 of the application is left open for the court below to decide in the final outcome of the Section 9 proceedings. 26. In view of the above observation and direction the instant appeal stands disposed of.