Varghese Kalliath, J. - (1.)DEFENDANTS 2 and 3 are the appellants. The suit was one for injunction restraining the first defendant from encashing or parting with any amount under Bank Guarantee Nos. 31/30 dated 9-1-1991 and 31/23 dated 20-10-1990 furnished to the second and third defendants pursuant to the demand of the third defendant in his letter dated 2-11-1992 and for an order of injunction restraining the second and third defendants and their officers from pressing the demand for encashing the bank guarantees or recovering any loss without a fiat from a competent court. Plaintiff filed IA. No. 5930 of 1992 for an order of temporary injunction restraining the first defendant - Bank from parting with any amount under Bank guarantee Nos. 31/30 dated 9-1-1991 and 31/23 dated 20-10-1990 issued by the first defendant, to the third defendant, pending disposal of the suit. In this la. defendants 2 and 3 were parties. The Court below passed an ad interim order of temporary "injunction against encashing BG" (Bank Guarantee) and also ordered "inj. & Notice".
(2.)THIS order of interim injunction was made absolute by the impugned order in this appeal. Now, facts:
For the purpose of construing buildings for the regional Science Centre at Kozhikode, first appellant invited tenders. The estimated cost of the work was Rs. 55 lakhs. Time for carrying out the work was 12 months from the date of issue of letter of intent with an additional period of three months for piling work. Plaintiff was one of the tenderers pursuant to the invitation for tenders. Plaintiff s tender was accepted. By Ext. B 36, an agreement was executed between the plaintiff and the National Council of science Museum through the second defendant on 4-1-1991. Ext. A2 is the notice inviting tenders. One of the conditions in the notice is that the tenderers should furnish, among others, an earnest money deposit amounting to rs. 1,10,000/- in cash/bankdraft/bank guarantee bond from a nationalised bank. By Ext. A1, letter of intent plaintiff had to execute an agreement on a stamp paper, avail mobilisation advance of 10% of the tender amount on furnishing bank guarantee recoverable from running bills at the rate of 10%. Ext. A3 is the Bank Guarantee-furnished by the plaintiff pursuant to Ext. Al letter of intent and Ext. A4 is the Bank Guarantee furnished by the plaintiff pursuant to ext. A2 notice inviting tenders.

The construction work carried on by the plaintiff was found to be not up to the expectation of defendants 2 and 3. Ext. B3. 3 letter dated 11th October, 1992 was issued to the plaintiff informing him that the plaintiff has neither the capacity nor the infrastructure to complete the work and therefore, the stipulation of the contract provision would have to be operated upon. The third defendant, by Ext. B2 letter dated 2-1-1992 (addressed to the first defendant) invoked the two Bank Guarantees Exts. A3 and A4 and demanded the Bank, the amounts due under the Bank Guarantee.

(3.)THE Bank did not reply to Ext. B1 and so, a reminder was sent on 18-11-1992. In Ext. B1 (a) it was pointed put that more than a fortnight has elapsed after the request made in Ext. BI invoking the Bank guarantee No. 31/30 dated 9-1-1991 extended upto 9-1-1993 and 31/23 dated 20-10-1990 extended upto 20-1-1993 respectively, amounting to Rs. 6,28,746/-and that they have neither received the requisite Demand Draft nor any official communication. Further, it was noted that the matter is urgent and so, the bank was asked to forward the necessary crossed demand draft drawn in favour of the national Council of Science Museums, payable at Calcutta immediately in terms of the subject Bank Guarantees.
The Bank informed defendants 2 and 3 that the plaintiff has filed a suit O. S. No. 910 of 1992 and in la. No. , 5930/92, an order of injunction was passed by the court on 10-4-1992 restraining the Bank from encashing the Bank guarantee. It is stated that the appellants-defendants 2 and 3 came to know about the impugned order when the bank informed about the order. Immediately, defendants 2 and 3 moved the court for vacating the order. The court, after hearing the plaintiff and defendants, made the order of injunction absolute. This order of injunction is now challenged in this C. M. A.

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