- (1.) Though the plaintiff seeks an extension of the subsisting interim order in this application, all three interlocutory applications in the suit can be disposed of. Accordingly, G.A. No. 3568 of 2008 and GA No. 3594 of 2008 are taken on board by consent of the appearing parties.
(2.) The plaintiff caused a bank guarantee to be furnished by the first defendant in favour of the second defendant. The bank guarantee of July 18, 2007, in its material terms, provided as follows: "1. We hereby undertake and agree with you that if default shall be made by the 'Contractor' in performing any of the terms and conditions of the tender or in payment of any money payable to ECIL, we shall on demand pay to you in such manner as you may direct the amount upon your assessing to the extent the Contractor is in default or otherwise maximum amount of Rs. 45,32,250/- (Rupees forty-five lacs thirty-two thousand two hundred fifty only) or such portion of the guaranteed amount in that case we shall not be liable to pay the said sum, but only the defaulted amount. "2. You will have the full liberty without reference to us and without affecting this guarantee, postpone for any time or from time to time the exercise of any of the powers and rights conferred on you under the contract with the said contractor and to enforce or force or to forbear from endorsing any power or rights or by reason of time being given to the said contractor which under law relating to the sureties would but for provisions have the effect of releasing us."
(3.) It was an unconditional bank guarantee in the sense that the bank could not question any demand that was made by the beneficiary thereunder. However, the bank's obligation to pay was subject to the beneficiary asserting that default had been committed by the plaintiff in performing any of the terms and conditions of the tender or in payment of any money payable to the beneficiary. The beneficiary was also required to assess the extent to which the plaintiff was in default. In addition, the liability under the guarantee was limited to Rs. 45,32,250/- and it was valid till March 31, 2008. The guarantee stipulated that the bank was liable to pay the amount thereunder "only and only if the beneficiary served the bank a written claim or demand on or before March 31, 2008.;