DEBANGSU BASAK, J. - (1.) DEFENDANT No. 2 entered into two several contracts with the then State of Bihar to execute civil works at Palamu. At the request of the Defendant No. 2 the Defendant No. 1 furnished 18 several Bank guarantees in favour of the State of Bihar. Disputes and differences arose between the Defendant No. 2 and the State of Bihar with regard to the execution of the aforesaid two contracts. The validity of the 18 several Bank guarantees were to expire on October 31, 1992. Prior to the expiry of the validity of such Bank guarantees the State of Bihar called upon the Defendant No. 1 to extend the Bank guarantees and failing such extension requested encashment thereof.
(2.) ACCORDING to the plaintiffs the Defendant No. 1 extended the validity period of the 18 several Bank guarantees to October 31, 1993. According to the plaintiffs by suppressing the factum of extension, the Defendant No. 2 filed a writ petition being Matter No. 1163 of 1993 before this Hon'ble Court and prayed that the Defendant No. 1 ought not to renew the Bank guarantees. Several interim orders were passed in Matter No. 1163 of 1993. The plaintiff invoked the Bank guarantees by Notices dated December 14, 1993 and December 17, 1993. The Defendant No. 1 by a Letter dated December 16, 1993 contended that unless a suit or action to enforce the Bank guarantees was lodged against the Defendant No. 1 the right of the plaintiffs under the Bank guarantees would be forfeited and that the Defendant No. 1 would be discharged or released of all its liabilities thereunder.
(3.) ACCORDING to the plaintiffs the first writ petition of the Defendant No. 1 being Matter No. 1163 of 1993 was dismissed for default and all interim orders passed therein was vacated on November 15, 1994. By a letter dated November 17, 1994 the plaintiffs called upon the Defendant No. 1 to pay the entire amount under the Bank guarantees more so in view of the dismissal of the first writ petition and the vacating of the orders passed therein. According to the plaintiffs the first writ petition was restored by an Order dated February 8, 1995 subject to payment of costs. According to the plaintiffs cost awarded was not paid and the condition imposed by the order of restoration was not complied with by the Defendant No. 2. ;