Paripoornan, J. - (1.) Special leave granted.
(2.) The appellant herein was the respondent in Matter No. 1268 of 1984, an application filed by the respondent in this appeal under Section 41 of the Arbitration Act. The appellant and the respondent entered into 11 contracts dated 21-8-1979 whereby the respondent herein was to construct 11 schools in Nalut, Libya at a cost of LD 2,437,525.000. The United Commercial Bank, Calcutta (hereinafter referred to as 'Bank') gave two Bank Guarantees to the appellant on behalf of the respondent. The first is dated 16-8-1979 for a sum of Rs. 6.50 lacs (No. 350/79) renewed on 4-5-1982, 10-5-1983 and 3-5-1984 whereby the original date expiring on 15-5-1982 was extended from time to time. The other Bank Guarantee is for a sum of Rs. 32.50 lacs (No.399/79) dated 10-10-1979, renewed on 10-6-1981, 9-7-1982, 22-2-1983 and 7-7-1983, whereby the date of expiry, 10-7-1981, was extended from time to time. The Bank renewed the Guarantees on the instructions of the repondent.
(3.) It is seen that disputes arose between the appellant and respondent regarding the performance of the contract resulting in a reference to arbitration. It is further seen that the reference is still pending. While so, the respondent prayed to Court for the issue of a grant of injunction to restrain the appellant from encashing the Bank Guarantees aforesaid. By an order dated 29-8-1988 reported in AIR 1989 Cal 184, a learned singal Judge of the Calcutta High Court restrained the appellant by an order of injunction from encasing the Bank Guarantees, bearing No. 350/79 dated 16-8-1979 (Rs. 6.50 lacs) and No. 399/79 dated 10-10-1979 (Rs. 32.50 lacs). furnished by the Bank to the appellant. The learned single Judge took the view that as against the agreement between the respondent and the Bank, that the Guarantee No. 399/79 will be for only mobilisation advance, the bank had issued the Mobilisation Advance-cum-Performance guarantee in favour of the appellant in a standard form, which is unjustified. The learned single Judge also took the view that Guarantee No. 350/79 dated 16-8-1979 is a Performance Guaranted and before invoking the same the appellant should assess the quantum of loss and damages and should mention the ascertained figure in the letter of invocation and, if it is not so done, the Guarantee could not be invoked. The appellant has come up in appeal from the aforesaid order after obtaining special leave.;