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Bijnor, Uttar Pradesh towards the invocation amount."

As on 28th November 1995 respondent no.1 had already obtained and ex parte injunction restraining the encashment of bank guaranteee, no payment was made to the appellant by the bank.

Respondent no.1 then filed another injunction application dated 12th January, 1996 with regard to the second bank guarantee dated 24th November, 1994 which was for a sum of Rs.33 lacs. It obtained an Ex parte injunction in respect thereto on the same day. Being ignorant of this the appellant wrote a letter dated 16th January, 1996 to the respondent bank invokeing the said bank guarantee no. 40/47. In the said letter it was stated that respondent no.1 had failed to deliver the equipment as per the terms of the agreement and that the appellant had bought equipment from various markets due to which the advance amount which had been paid to respondent no.1 in respect of which this bank guarantee had been issued, remained unadjusted. The bank was accordingly required to pay the said amount of Rs.33 lacs.

The appellant on 22th August, 1996 again approached the respondent bank for the encashment of the bank guarantees, but without success.

Respondent no.1 then filed revision petition on. 257 of 1996 on 10th September. 1996 before the Allahabad High Court challenging the order dated 20th August, 1996 of kthe tial court. single judge of the Allahabad High Cout took up the revision petition and disposed it of on the same day and after setting aside the order dated 20th August, 1996 it remanded thre matter back to the trial court for a fresh decision but, at the same time, directed that till the disposal of injunction application the bank guarantees in question shall not be invoked or cencashed. The trial court was directec to hear the prties within fifteen days of the receipt of the order and to dispose of the injunction application lwithin fifteen days thereafter. Needless to dtate, due to rdilatory tactics adopted by fespondent no1 which is evident from the documents available on the record of this case, the said injunction application have not been disposed of the till with the result that the injunction granted by the single judge of the High court vide order dated 10th September, 1996 still continues.

The letter of invocation issued by the appellant demanding the payment ot Rs.26,15000/- was in accordance with the terms of bank guarantee No. 40/51 and the bank was, threfore, under an obligation to honour its undertaking and to make the payment . It, however, chose not to fulfil its obligation. If the bank could not in law avoid the payment, as the demand had bneen made in terms of the banjk guarantee, as has been done in the present case, then the court ought not to have issued an injunction which had the effect of restraining the bank from fulfilling its contractual obligation in terms of the bank guarantee. An injunction of the court ought not to be an instrument which is used in nullifying the terms of a contrant, agreement or undertaking which is used in nullifying the terms of contract, agreement or undertaking which is lawfully enforceable. In its aforesaid letter dated 24th November, 1995 respondent no.1 had clearly admitted that entire supply had not been made. In view of this also the High court was not justified in granting an injunction.

Coming to the allegation of fraud, it is an admitted fact that in the plant itself, there was no such allegation was initially only in the first application for the grant of injunction that in a paragraph it has been mentioned that the appellant therein had invoked the bank guarantee arbitrarity. this application contains no facts or particulars in support of the allegation of fraud. A similar bald averment alleging fraud is also contained in the second application for injunction relating to bank guarantee No. 40/47. This is not a case where defendant no. 1 had at any time alleged fraud prior to the filing of injunction application. The main contract, pursuant to which the bank guarantees were issued, was not sought to be avoided by alleged fraud, nor was it at any point of time alleged that the bank guarantee was issued because any fraud had been played by the appellant. We have no manner of doubt that the bald assertion of fraud had been made solely with a view to obtain an order of injunction . In the absencce of established fraud and not a mere allegation of fraud and that also having been made only in the injunction application , the court could not, in the present case have granted an injunction relating to the encashment of the bank guarantees.