the killing of two other policemen without premeditation and without any motive whatsoever was an act done out of panic reaction and in a state of frenzy and it was not one of the rarest of rare cases where death sentence could be awarded.

Reportable IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL No. 1436 of 2010 Absar Alam @ Afsar Alam ...... Appellant Versus State of Bihar ...... Respondent J U D G M E N T A. K. PATNAIK, J. This is an appeal by way of special leave under Article 136 of the Constitution of India against the judgment and order dated 16.07.2009 of the Patna High Court in Death Reference No. 7 of 2008 with Criminal Appeal (DB) No.169 of 2008. On 18.01.2010, this Court issued notice in the Special Leave Petition confined to the question of sentence only and on 02.08.2010 after hearing learned counsel for the parties, granted leave. Hence, the only question that we have to decide in this appeal is whether the High Court was right in confirming the death sentence of the appellant imposed by the trial court. 2 2. For deciding this question, the relevant facts as have been found by the trial court are that in the midnight of 14/15.02.2007, the appellant killed his mother by cutting her neck and severing her head and thereafter fled from the house with the head of his mother leaving behind her body. The trial court, after convicting the appellant under Sections 302 and 201 of the Indian Penal Code (for short `IPC'), held that the appellant committed the murder of his mother in an extremely brutal, grotesque, diabolical and revolting manner and hence it is one of those rarest of the rare cases calling for a death sentence on the appellant. The High Court, while upholding the conviction, confirmed the death sentence relying on the decision of this Court in Machhi Singh and others v. State of Punjab [(1983) 3 SCC 470]. In the aforesaid case of Machhi Singh, this Court has inter alia held that the manner of commission of murder and the personality of the victim of murder have to be taken into consideration while making the choice of the sentence to be imposed for the offence under Section 302, IPC : life 3 imprisonment or death sentence. The High Court has taken a view that considering the abhorrent, dastardly and diabolical nature of the crime committed by the appellant on none other than his mother, who had given birth to him, the penalty of death has been rightly awarded by the trial court. 3. At the hearing of this appeal, learned counsel for the appellant, relying on the decision of this Court in Swamy Shraddananda (2) alias Murali Manohar Mishra v. State of Karnataka [(2008) 13 SCC 767], submitted that even if it is a case of a son beheading his mother, this is not one of the rarest of rare cases in which the death penalty should have been imposed because the offence had been committed by the appellant in a fit of passion and not after pre-meditation. 4. Learned counsel for the State, on the other hand, submitted that considering the law laid down by this Court in Prajeet Kumar Singh v. State of Bihar [(2008) 4 SCC 434], Surja Ram v. State of Rajasthan [(1996) 6 SCC 271] and Atbir v. Government of NCT of Delhi 4 [(2010) 9 SCC 1], the imposition of death sentence on the appellant for the cruel act of beheading his mother was proper. 5. We find on reading the FIR lodged by the brother of the appellant on the morning of 15.02.2007 at 09:45 hours marked as Ext.2 that the appellant's wife Sakerun Nisha had run away to her maternal house three or four days before the incident and the appellant had been accusing his mother to have been the cause of his wife running away from this house and out of anger and excitement the appellant severed the neck of his mother and fled with the head. The appellant was an illiterate rustic and was a cultivator residing in a village with virtually no control over his emotions and has over-reacted impulsively to the situation and has severed the neck of his mother. On these facts, the appellant is no doubt guilty of the offence under Section 302, IPC, and has to suffer the punishment of imprisonment for life normally awarded for the offence, but should not be condemned to death. We may cite a few authorities in support of this view. 5 6. In Lehna v. State of Haryana [(2002) 3 SCC 76], the facts were that there was a quarrel between the accused and other members of his family, namely, his father, his brother and sister-in-law, over a piece of land and in the assaults that followed the quarrel, the accused killed his mother, his brother and sister-in- law. While upholding the conviction of the accused under Section 302, IPC, this Court held that the mental condition of the accused, which led to the assault, cannot be lost sight of and while such mental condition of the accused may not be relevant to judge culpability, it is certainly a factor while considering the question of sentence. This Court further held that the factual scenario gave impressions of impulsive act of the accused and not of planned assaults and in this peculiar background, death sentence would not be proper. 7. In Gyasuddin Khan alias Md. Gyasuddin Khan v. State of Bihar [(2003) 12 SCC 516], the facts were that in the morning hours of 09.04.1996, in the precincts of a 6 police camp stationed near a village in Bihar, a policeman deployed in the police picket to contain the terrorist activities, unleashed terror by indulging in a firing spree, killing three of his colleagues instantaneously and this Court, relying on Shamshul Kanwar v. State of U.P. [(1995) 4 SCC 430], Lehna v. State of Haryana (supra) and Om Prakash v. State of Haryana [(1999) 3 SCC 19], held that the mental condition or state of mind of the accused is one of the factors that can be taken into account in considering the question of sentence and in the facts of the case, the killing of two other policemen without premeditation and without any motive whatsoever was an act done out of panic reaction and in a state of frenzy and it was not one of the rarest of rare cases where death sentence could be awarded. 8. For the aforesaid reasons, we convert the sentence of death to one of life imprisonment for the offence under Section 302, IPC, committed by the appellant and allow the appeal in part. 7 .............................J. (A. K. Patnaik) .............................J. (Swatanter Kumar) New Delhi, February 07, 2012.

registration with the Pharmacy Council of the State of Rajasthan (respondent No.1 herein - `Rajasthan Council' for short) under Section 32 of The Pharmacy Act, 1948 (hereinafter referred to as `the Act'). =The purpose of a welfare statute cannot be permitted to be defeated by the methods such as the one employed by the appellant. As stated earlier, the Act is passed for making better provisions for the regulation of the profession and practice of pharmacy. As is seen, the primary qualification for such a person is to have a degree or diploma in pharmacy. It is only as an alternative qualification that some other degree with three years experience is permitted. The last alternative qualification is that of five years experience in dispensing drugs which has to be in the concerned State. This is because under Section 31 of the Act, the person who wants to be registered as a pharmacist has to be of 18 years of age, and he has to reside and carry on the business or profession of pharmacy in that particular state. The State Pharmacy Council which issues the certificate of registration ought to satisfy itself that the person concerned did have atleast five years of experience, and which experience has obviously to be in that State for the State Council to assess it. In the instant case, the appellant did not reside or carry the business or profession of pharmacy or dispensing of drugs in Sikkim for more than five years. If any such method, as adopted by the appellant is permitted, persons who claim to have experience of five years in one State, will go to another State for a few months only to obtain registration in that State, and thereafter seek transfer of that registration to their own state. In the instant case, the first respondent did not have any opportunity to examine as to whether the appellant did have the

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No. 6895 OF 2008 Rajendra Prasad Bagaria ... Appellant Versus Pharmacy Council of State of Rajasthan & Anr. ... Respondents J U D G E M E N T H.L. Gokhale J. This appeal by special leave is directed against the judgment and order dated 8.6.2006 passed by a Division Bench of the High Court of Rajasthan, Jaipur Bench, in D.B. Special Appeal (Writ) No. 507/2006 arising out of S.B. Civil Writ Petition No. 4309/2005, whereby the Writ Petition filed by the appellant was dismissed. Short facts leading to this appeal are as follows:- 2. The appellant claims that after passing the Secondary School Examination in 1986, he worked in a Medical Store named as `Todi Medicals' at Sikar in the state of Rajasthan from October 1991 to March 1997. It is his case that though on the basis of his experience, he was otherwise eligible to be enrolled as a pharmacist in Rajasthan, he could not get so enrolled since by the 2 time he could apply, the registration of pharmacists in Rajasthan was closed. He claims that thereafter he shifted to Sikkim in August, 2001, where he worked for about two months in a medical store at Gangtok. On the basis of the certificate issued by his employer in Sikkim, he applied for registration as a pharmacist with the Sikkim State Pharmacy Tribunal (Sikkim Tribunal for short), and he was so registered over there on 5.12.2001. 3. The purpose of his sojourn to Sikkim having been achieved, the appellant returned to Kherli in the State of Rajasthan towards the beginning of January 2002. On the basis of this registration from Sikkim, he applied on 8.4.2002 for his registration with the Pharmacy Council of the State of Rajasthan (respondent No.1 herein - `Rajasthan Council' for short) under Section 32 of The Pharmacy Act, 1948 (hereinafter referred to as `the Act'). 4. It is the further case of the appellant that the Rajasthan Council made necessary enquiries with the Sikkim Tribunal, and thereafter enrolled him as a registered pharmacist by their registration certificate dated 4.6.2002. It however, appears that some complaints were received by the Government of Rajasthan (respondent No.2) with respect to functioning of a large number of in- eligible pharmacists in the State. Consequently, on being informed about the same, the Rajasthan Council decided to look into such cases. On 22.7.2004, a notice was issued by the first respondent to the appellant informing him that Enquiry Committee constituted by the Rajasthan Council had found his registration to be irregular, and therefore, he should appear before the Executive 3 Committee of the Council on 2.8.2004, to explain as to why his name should not be removed from the Register of Pharmacists of Rajasthan by invoking its powers under Section 36 of the Act. The appellant did not care either to reply, or to remain present before the Executive Committee. The Executive Committee, therefore, considered the material on record, and took the decision to cancel his registration. This decision was approved by the Full Council on 16.3.2005 and the appellant was informed to surrender his certificate of registration by the Council by its further communication dated 12.4.2005. 5. The appellant filed a Writ Petition to challenge this decision of the first respondent. The said Writ Petition bearing No. 4309/2005 was heard by a Single Judge of the Rajasthan High Court. The appellant did not dispute the fact that he did not appear before the Executive Committee, nor did he dispute any of the aforesaid facts. The learned Single Judge accepted the submission of the respondents that the appellant had an alternative remedy to file an appeal under section 36(4) of the Act which he had not exhausted. That apart, he also noted that though the appellant was given an opportunity of personal hearing by the Executive Committee, he did not place any convincing proof of his registration having been done as per provisions of the Act by the Sikkim Tribunal. The learned Single Judge also noted that no such documents were produced before him also, which would indicate that the appellant had acquired necessary experience in Sikkim, before obtaining the registration over there. The learned Single Judge therefore, dismissed the said Writ Petition by his judgment and order dated 7.4.2006. 4 6. Aggrieved by this decision, the appellant filed a D.B. Special Appeal (Writ) No. 507/2006. It was submitted on behalf of the appellant that the State Government had no business to make an enquiry about the validity of appellant's registration, nor the Executive Committee had any authority to cancel his registration with the Rajasthan Council which had issued the same to him on the basis of his registration in another State. As far as the first submission is concerned, the Division Bench took the view that the State Government did have the authority to look into the complaints, which it received from the citizens. It had merely brought those complaints to the notice of the Rajasthan Council. Ultimately, it is the Executive Committee of the Rajasthan Council which had taken necessary decision after calling upon the appellant to attend an enquiry, which he did not. As far as the decision of the Rajasthan Council is concerned, it was held that the appellant had failed to prove that his registration in Sikkim could be considered to be a valid one for Rajasthan since he had not worked for requisite period in Sikkim. The Division Bench, therefore, held that the decision of the Executive Committee of the first respondent could not be faulted. The appeal was accordingly dismissed. 7. Being aggrieved by this judgment and order, the present appeal has been filed. The principle submission of the appellant's counsel is that the first respondent having granted registration to the appellant after making an initial enquiry with the Sikkim Tribunal, could not review its decision, and secondly, in any case, the appellant had the necessary qualification for his registration with the first respondent under Section 31 of the Act, and therefore 5 the orders of the Executive Committee, as well as the two judgments and orders, are required to be set aside. The counsel for the respondents, on the other hand, defended the decision of the first respondent as well the two judgments and orders, as being perfectly justified. Consideration of the rival submissions 8. Now, if we see the Preamble of The Pharmacy Act, 1948, it states, that it is an Act to make better provisions for the regulation of the profession and practice of pharmacy, and for that purpose to constitute the Pharmacy Councils. The Act provides for entry of the names in the Register of Pharmacists in three stages: (i) The first stage is entry of names in the first register under Section 30 of the Act. Qualifications for such entry are given in Section 31 of the Act. Under Section 30(2), the State Government is required to fix a date by notification, and applications for registration must be made by the appointed date. (ii) The second stage is where people fail to apply for entry in First register, they can apply for registration u/s 32(1) if they satisfy the requisite qualifications. (iii) The third stage is for registration u/s 32 (2) of the Act as per education regulations, or as a registered pharmacist in another state. The qualifications for entry in the first register are provided under Section 31 of the Act which reads as follows:- 6 "31 - Qualifications for entry on first register [A person who has attained the age of eighteen years shall be entitled] on payment of the prescribed fee to have his name entered in the first register if he resides, or carries on the business or profession of pharmacy, in the State and if he-- (a) holds a degree or diploma in pharmacy or pharmaceutical chemistry or a chemist and druggist diploma of an Indian University or a State government as the case may be, or a prescribed qualification granted by an authority outside {The words "the Provinces of" omitted by the A.O.1950.} India, or (b) holds a degree of an Indian University other than a degree in pharmacy or pharmaceutical chemistry, and has been engaged in the compounding of drugs in a hospital or dispensary or other place in which drugs are regularly dispensed on prescriptions or medical practitioners for a total period of not less than three years, or (c) has passed an examination recognised as adequate by the State Government for compounds or dispensers, or (d) has been engaged in the compounding of drugs in a hospital or dispensary or other place in which drugs are regularly dispensed on prescriptions of medical practitioners for a total period of not less than five years prior to the date notified under sub-section (2) of section 30." As the Section itself shows, that to be a pharmacist, importance is given to have a degree or diploma in pharmacy, failing which any other degree is permitted with three years experience of dispensing medicines, or passing of an examination recognised by the State Government, or having an experience of not less than five years of working in a hospital or dispensary in which drugs are regularly dispensed on prescriptions of medical practitioners. 9. Section 32 of the Act provides for subsequent registration, which also includes amongst the qualified categories, a registration on the basis of 7 being a registered pharmacist in another State. The submission of the appellant was that he was already registered in Sikkim, which registration was accepted by the first respondent, and therefore, the first respondent issued him its registration certificate on 5.12.2001. The Executive Committee of the first respondent could not review the decision once taken, since there was no provision for review in the Act. In support of this proposition, he relied on the judgment of this Court in Patel Narshi Thakershi and Ors. Vs. Shri Pradyumansinghji Arjunsinghji reported in 1971(3) SCC 844. 10. In this behalf, what is material to note is that the first respondent has taken the action against the appellant under Section 36 of the Act. This Section reads as follows:- "36 - Removal from register (1) Subject to the provisions of this section, the Executive Committee may order that the name of a registered pharmacist shall be removed from the register, where it is satisfied, after giving him a reasonable opportunity of being heard and after such further inquiry if any, as it may think fit to make.-- (i) that his name has been entered in the register by error or on account of misrepresentation or suppression of a material fact, or (ii) that he has been convicted of any offence or has been guilty of any infamous conduct in any professional respect which in the opinion of the Executive Committee, renders him unfit to be kept in the register, or (iii) that a persons employed by him for the purposes of his business of pharmacy. {Ins. by s.13, ibid.(w.e.f.1-5-1960).} [or employed to work under him in connection with any business of pharmacy] has been convicted of any such offence or has been guilty of any such infamous conduct as would, if such person were a registered pharmacist, render him liable to have his name removed from the register under clause (ii) : 8 Provided that no such order shall be made under clause (iii) unless the Executive Committee is satisfied-- (a) that the offence or infamous conduct was instigated or connived at by the registered pharmacist, or (b) that the registered pharmacist has at any time during the period of twelve months immediately preceding the date on which the offence or infamous conduct took place committed a similar offence or been guilty of similar infamous conduct, or (c) that any person employed by the registered pharmacist for the purposes of his business of pharmacy [or employed to work under him in connection with any business of pharmacy] has at any time during the period of twelve months immediately preceding the date on which the offence or infamous conduct took place, committed a similar offence or been guilty of similar infamous conduct, and that the registered pharmacist had, or reasonably ought to have had, knowledge of such previous offence or infamous conduct, or (d) that where the offence or infamous conduct continued over a period, the registered pharmacist had, or reasonably ought to have had, knowledge of the continuing offence or infamous conduct, or (e) that where offence is an offence under the.{ Substitute. by Act 70 of 1976, s.18, for "Drugs Act, 1940" (w.e.f.1-9- 1976).} [Drugs and Cosmetics Act, 1940] (23 of 1940), the registered pharmacist has not used due diligence in enforcing compliance with the provisions of that Act in his place of business and by persons employed by his [or by persons under his control] (2) An order under sub-section (1) may direct that the person whose name is ordered to be removed from the register shall be ineligible for registration in the State under this Act either permanently or for such period as may be specified. (3) An order under sub-section (1) shall be subject to confirmation by the State Council and shall not take effect until the expiry of three months from the date of such confirmation. (4) A person aggrieved by an order under sub-section (1) which has been confirmed by the State Council may, within thirty days from the communication to him of such confirmation, appeal to the State Government, and the order of the State Government upon such appeal shall be final. 9 (5) A person whose name has been removed from the register under this section or under sub-section (2) of section 34 shall forthwith surrender his certificate or registration to the Registrar, and the name so removed shall be published in the Official Gazette." 11. Section 36 (1) (i) provides for removing the name of a registered pharmacist in the event there is an error in his registration, or where it is registered on account of misrepresentation or suppression of a material fact. In our view, this sub-section gives sufficient power to the Executive Committee to recall its decision. In the instant case obviously, there was an error on the part of the first respondent in accepting the registration from Sikkim as a valid registration for transfer of the appellant as a pharmacist in Rajasthan. Ultimately, it is the State Pharmacy Council which is responsible for having well- equipped pharmacists in the State who have the requisite qualifications and/or experience. The fact is that the second respondent had received complaints with respect to a large number of in-eligible persons functioning as pharmacists. Therefore, when this fact was brought to the notice of the first respondent, a notice was given to the appellant affording him a personal opportunity as required under Section 36 (1) of the Act. However, the appellant did not avail of this opportunity. Hence, all that the Executive Committee had done was to consider the material on record and to cancel his registration in Rajasthan. The Executive Committee of the first respondent had not cancelled his registration in Sikkim. It cannot, therefore, be said that the Executive Committee had exercised the power of review without being empowered for the same under the statute or that it had exercised it erroneously. 10 12. There is no dispute that the appellant was given a notice of hearing. There is also no dispute that the appellant did not produce any evidence as to how his registration in Sikkim was a valid registration. This is because there was no dispute that he stayed in Sikkim just for a few months, and he has himself contended that he did not have any documentary evidence to claim that he stayed in Sikkim for five years, or that he had the necessary experience of not less than five years of work in dispensing medicines in Sikkim. This is because at the highest, his case with respect to his qualification was one under Section 31 sub-clause (d) of the Act. 13. It is true that section 32 of the Act does entitle a registered pharmacist in one State to have his name entered in the register of another State. Section 33 of the Act, however, gives the power of scrutiny to the State Council and every enrolment is subject to the scrutiny. Thereafter, if the State Council receives any complaint concerning the eligibility of a person to function as a pharmacist, the Executive Committee of the Council does have the power to make necessary enquiry under Section 36 of the Act, and if satisfied, to remove the name of such a registered pharmacist though after giving him a reasonable opportunity of being heard. Sub-section (i) of Section 36 (1) gives the grounds on which a name can be removed from the register. In the instant case, the Executive Committee was satisfied that there was an error in enrolling the appellant as a registered pharmacist. At that stage, the appellant has been called upon to give his explanation. In this enquiry, one State Council can certainly look into the prima-facie material on the basis of which registration was granted in another 11 State. This is because the State Council is given the power to scrutinize such applications, and if such registration has been permitted by any error to that extent, it can certainly take the corrective step. Such a decision cannot amount to sitting in appeal over the decision of another State's Council. This is because the concerned State Council is answerable to the persons purchasing the medicines from the pharmacists in the State. It is its duty to see that pharmacists do have necessary educational qualifications or the experience as required. In a country where there is so much illiteracy, the requirements concerning educational qualifications or experience of the pharmacist have to be scrupulously scrutinized. If the registration of the concerned pharmacist obtained from another state does not appear to be a justified registration, the transferee State Council can certainly decline to accept that registration for the purpose of carrying on the profession of a pharmacist in the transferee State, or cancel such registration once effected. Such scrutiny is permissible at the time of initial registration, and also later when complaints are received, leading to the enquiry for the purpose of removal from their register. 14. It was submitted on behalf of the appellant that in the instant case, the act did not provide a solution to this type of problem. The appellant relied upon the judgment of this Court in Maruti Wire Industries Pvt. Ltd. Vs. S.T.O. 1st Circle, Mattancherry reported in 2001 (3) SCC 735 to submit that where the Legislature was silent about any particular aspect, the same could not be supplied by judicial interpretative process. As seen above, in the instant 12 case, the provisions of the Act are sufficiently clear, and therefore, the actions of the respondent could not be faulted. 15. The purpose of a welfare statute cannot be permitted to be defeated by the methods such as the one employed by the appellant. As stated earlier, the Act is passed for making better provisions for the regulation of the profession and practice of pharmacy. As is seen, the primary qualification for such a person is to have a degree or diploma in pharmacy. It is only as an alternative qualification that some other degree with three years experience is permitted. The last alternative qualification is that of five years experience in dispensing drugs which has to be in the concerned State. This is because under Section 31 of the Act, the person who wants to be registered as a pharmacist has to be of 18 years of age, and he has to reside and carry on the business or profession of pharmacy in that particular state. The State Pharmacy Council which issues the certificate of registration ought to satisfy itself that the person concerned did have atleast five years of experience, and which experience has obviously to be in that State for the State Council to assess it. In the instant case, the appellant did not reside or carry the business or profession of pharmacy or dispensing of drugs in Sikkim for more than five years. If any such method, as adopted by the appellant is permitted, persons who claim to have experience of five years in one State, will go to another State for a few months only to obtain registration in that State, and thereafter seek transfer of that registration to their own state. In the instant case, the first respondent did not have any opportunity to examine as to whether the appellant did have the 13 experience of five years in Rajasthan. The only submission of the appellant is that the papers which concerned the so-called experience were submitted to the Sikkim Tribunal alongwith the certificate of employer of the appellant in Sikkim where he worked for just two months. The consequences of accepting appellant's plea will mean that the transferee State will have to accept a person as a pharmacist when it did not have the opportunity to examine the material with respect to his experience of more than five years. The requirement of five years experience in the registering State will be defeated if any such methods are permitted. 16. In the circumstances, we do not find any error in the decision of the first respondent in canceling registration of the appellant, nor the decision of the Single Judge as well that of the Division Bench approving the same. 17. We therefore, pass the following order: (a) The Civil Appeal is, hereby dismissed. (b) There will be no order as to costs. ........................................J. ( P. Sathasivam ) ..................... ....................J. ( H.L. Gokhale ) New Delhi Dated: February 6, 2012

Since the validity of the bank guarantee expired on 17 August 2010 the aforesaid amount should have been deposited by bank concerned in terms of the aforesaid clause. Accordingly, we direct the concerned Chief Manager (COCS), CAG Branch, Kolkata to show cause as to why appropriate order should not be passed making the bank liable for not paying the aforesaid amount in terms of the bank guarantee clause. It would be open for the concerned Chief Manager on behalf of the bank to appear before this Court, if so advised and to show cause as to why such appropriate order should not be passed.

GA No. 1952 OF 2011 WITH APO 343 of 1998 AC 98 of 1993 IN THE HIGH COURT AT CALCUTTA Civil Appellate Jurisdiction ORIGINAL SIDE EASTERN COALFIELDS LTD. Versus UNITED ENTERPRISES (INDIA) BEFORE: The Hon'ble JUSTICE KALYAN JYOTI SENGUPTA The Hon'ble JUSTICE JOYMALYA BAGCHI Date : 9th August, 2011. The Court :-The department has reported that in terms of the order of the Court the bank guarantee was furnished and the said original bank guarantee was valid till 16 August, 2010. In the bank guarantee there has been a clause to the effect in case of the appellant fails to renew the bank guarantee within 14 days before the date of its expiry or before the date of expiry of any subsequent renewal thereof then and in that event the bank shall forthwith and of its own accord without any further order of this Court of without any demand deposit with the Registrar, Original Side, High Court, Calcutta the said sum of Rs.4,31,972.59 being the amount secured under this Bond along with a sum of Rs.4319.72 being the amount of commission payable on the said sum of Rs.4,31,972.59 to the Registrar, Original Side, High Court under the Rules of this Hon’ble Court totalling to a sum of Rs.4,36,292.31. Since the validity of the bank guarantee expired on 17 August 2010 the aforesaid amount should have been deposited by bank concerned in terms of the aforesaid clause. Accordingly, we direct the concerned Chief Manager (COCS), CAG Branch, Kolkata to show cause as to why appropriate order should not be passed making the bank liable for not paying the aforesaid amount in terms of the bank guarantee clause. It would be open for the concerned Chief Manager on behalf of the bank to appear before this Court, if so advised and to show cause as to why such appropriate order should not be passed. Needless to mention, Registrar, Original side will communicate this order to the concerned Chief Manager, State Bank of India, CAG Branch Kolkata. Let the Renewal Bank guarantee be returned to the Learned Counsel for the petitioner, who shall keep it for the time being. 2 Let the original bank guarantee lying with the Registrar, Original Side be placed before this Court on the next date of hearing. Let this matter appear Wednesday week. Registrar, Original Side, all parties including concerned Chief Manager CAG Branch, Kolkata are to act on a photostat signed copy of this order on the usual undertakings. (KALYAN JYOTI SENGUPTA, J.) (JOYMALYA BAGCHI, J.) GH.

Bank Guarantee =In rare cases when a Court interferes and restrains invocation of 4 bank guarantee, ordinarily a direction is issued for renewal of the bank guarantee if its validity is likely to expire in the near future. In the present case, however, the validity of the bank guarantee had expired prior to the order of injunction being made but the claim period was valid till 21.4.2009. The petitioner, in the considered view of this Court, took advantage of the omission in the order dated 19.3.2009 as well as in the subsequent order dated 23.3.2009 and attempted to steal a march by flatly refusing to give consent in respect of extension of bank guarantee. In all fairness, he should have consented to such extension having obtained an interim order by invoking the equity jurisdiction of this Court. This is a case where the maxim actus curiae nemenim gravabit would apply with full force. In the event the writ petition filed by the petitioner ultimately fails, the Corporation would find itself in a difficult position in the absence of any security.

1 1.4.2010 CAN 10274 of 2009 with W.P.No.5420 (W) of 2009 Sanjay Jhunjhunwalla …Petitioner Vs. Damodar Valley Corporation & ors. …Respondents Mr. M. Bose, Mr. S.G. Muskara …for the petitioner Mr. S. Pal …for the D.V.C. Mr. K. Dutta, Mr. P. Sinha, Mr. A. Mitra, Mr. D. Dasgupta, Mr. S. Shaw, Mr. S. Roy …for the respondent no.5 Alleging that Damodar Valley Corporation, respondent no.1, fraudulently invoked a conditional bank guarantee for Rs. 5,91,000/- furnished by IndusInd Bank Ltd., respondent no.5, the petitioner had moved this writ petition ex parte on 19.3.2009 before a learned Judge of this Court. His Lordship was satisfied that the bank was not liable to release payment merely on the demand of the Corporation being the beneficiary and that the beneficiary had to satisfy the bank that there had been a breach on the part of the petitioner, being the contractor. An order of injunction was passed restraining the Corporation from receiving any payment under the subject bank guarantee till the returnable date i.e. 23.3.2009. 2 On 23.3.2009, the Corporation made a prayer for vacating of the ex parte order dated 19.3.2009. Upon hearing the learned Advocate for the Corporation, His Lordship held that the terms of the guarantee were not unconditional and that the bank guarantee did not appear to provide for a mere assertion in such regard to be conclusive as to the bank’s liability under the guarantee. The order of injunction was directed to continue. Affidavits were called for and the writ petition was directed to be listed for hearing in the Monthly List of June, 2009. Since validity of the subject bank guarantee expired, the Corporation requested the bank to extend its validity suitably. Upon receipt of such request of the Corporation, the bank sought for consent of the petitioner for extension of the bank guarantee till 15.7.2009. The petitioner by his letter dated 6.4.2009 refused to give consent for extension of the bank guarantee. The petitioner thereafter noticed that an amount of Rs. 6,57,576.74p was debited from his current account. Feeling aggrieved by such action of the bank, the present application (CAN 10274 of 2009) has been filed praying for an order on the bank to forthwith credit the petitioner’s bank account with such sum and a further order has been prayed for on the bank not to act or take any further steps in terms of the request of the Corporation to extend the bank guarantee till 15.7.2009. 3 The bank has opposed the application by filing counter affidavit. According to it, the disputed amount has been debited from the petitioner’s current account by exercising banker’s lien and by renewing the fixed deposit maintained by the petitioner with the bank by opening another fixed deposit account. The bank justifies its action by referring to the agreement for accepting deposit as margin for bank guarantee/letter of credit executed by the petitioner in its favour. Mr. Bose, learned Advocate appearing for the petitioner, has contended that the bank has acted in a high-handed manner without seeking any clarification from the Court. The petitioner having denied consent for extension of the subject bank guarantee on the prayer of the Corporation, it had no business to open a further fixed deposit account and thereby debit the aforesaid sum from the petitioner’s current account. Mr. Bose is justified in his challenge to the impugned action of the bank in so far as it failed to obtain a prior clarification from the Court but that is not considered to be sufficient reason for granting relief as claimed in the application. By its order dated 19.3.2009, subsequently extended by order dated 23.3.2009, the Court had granted interim relief to the petitioner pending adjudication of the writ petition. It is well-known that interim order is passed in aid of the final relief. In rare cases when a Court interferes and restrains invocation of 4 bank guarantee, ordinarily a direction is issued for renewal of the bank guarantee if its validity is likely to expire in the near future. In the present case, however, the validity of the bank guarantee had expired prior to the order of injunction being made but the claim period was valid till 21.4.2009. The petitioner, in the considered view of this Court, took advantage of the omission in the order dated 19.3.2009 as well as in the subsequent order dated 23.3.2009 and attempted to steal a march by flatly refusing to give consent in respect of extension of bank guarantee. In all fairness, he should have consented to such extension having obtained an interim order by invoking the equity jurisdiction of this Court. This is a case where the maxim actus curiae nemenim gravabit would apply with full force. In the event the writ petition filed by the petitioner ultimately fails, the Corporation would find itself in a difficult position in the absence of any security. This Court, therefore, finds no reason to grant orders as prayed for in this application. The same stands rejected. The bank shall keep the fixed deposit for the sum of Rs.6,57,576.74p renewed till final disposal of the writ petition. Urgent photostat certified copy of the judgment and order shall be given to the applicants, if applied for, as early as possible. 5 (DIPANKAR DATTA, J.)

Bank Guarantee-Invocation of-Contract between parties-One of the parties furnishing Bank Guarantee in favour of the other Guarantor seeking injunction of invocation of the Guarantee as there existed a dispute between the contracting parties-Permissibility of-Held: In the facts of the case, the Guarantee was an unconditional one-Hence the same could be invoked by the beneficiary despite pendency of the dispute-Bank Guarantee is an independent contract between the Bank and the beneficiary-bank is obliged to honour its guarantee so long as it is unconditional and irrevocable-The case also does not fall under exceptions-Allegations of fraud and plea of `special equities' are vague and not supported by any evidence. Appellant entered into agreement with the respondent whereby respondent agreed to buy UPS systems from the appellant. Despite supply of all the equipments, respondent defaulted in making the full payment. Respondent agreed to pay the balance sum provided the performance Bank Guarantee of 10% value was furnished. The same was furnished. It was later amended making the same unconditional. Even after furnishing the Bank Guarantee, respondent did not make full payment. Appellant filed injunction application on the ground that respondent was not entitled to invoke the Bank Guarantee without paying the balance amount as the same had become inoperative as the condition precedent for is invocation was not complied with. Trial Court in view of the fact that the Bank Guarantee was made unconditional by its amendment, dismissed the application. Division Bench of High Court confirmed the order. Hence the present appeal. Dismissing the appeal, the Court HELD: 1.1. The bank guarantees which provided that they are payable by the guarantor on demand is considered to be an un-conditional bank guarantee. When in the course of commercial dealings, unconditional guarantees have been given or accepted the beneficiary is entitled to realize such a bank guarantee in terms thereof irrespective of any pending disputes. Bank guarantee is an independent contract between bank and the beneficiary thereof. The bank is always obliged to honour its guarantee as long as it is an unconditional and irrevocable one. [Paras 11 and 12] [902-A-B; 903-A] U.P. State Sugar Corporation v. Sumac International Ltd., [1997] 1 SCC 568; BSES Limited (Now Reliance Energy Ltd.) v. Fenner India Ltd. and Anr., [2006] 2 SCC 728; Himadri Chemicals Industries Ltd. v. Coal Tar Refining Company, (2007) 9 Scale 631 and Mahatama Gandhi Sahakra Sakkare Karkhane v. National Heavy Engg. Coop. Ltd and Anr., [2007] 6 SCC 417, relied on. Hindustan Construction Co. Ltd. and Ors. v. State of Bihar and Ors., [1999] 8 SCC 436, distinguished. 1.2. In the present case a conditional bank guarantee initially was furnished and the bankers were liable to pay the amounts only upon establishing the fact that the supplier was in default for the performance of their warranty obligations under the contract. But subsequent the relevant clause in bank guarantee was amended. The condition that the amounts shall be paid only upon establishing the supplier to be indefault for the performance of their warranty obligation under the contract has been specifically deleted. The bank guarantee as amended replacing relevant para of the original bank guarantee makes the bank guarantee furnished as unconditional one. The bankers are bound to honour and pay the amounts at once upon receipt of written demand from the respondent. [Para 19] [907-C, D, E, F] 1.3. The recitals in the preamble in the deed of guarantee do not control the operative part of the deed. After careful analysis of the terms of the guarantee the guarantee is found to be an unconditional one. The appellant, therefore, cannot be allowed to raise any dispute and prevent the respondent from encashing the bank guarantee. [Para 22] [909-A] 2.1. The case, therefore does not fall within the first exception i.e. there was a clear fraud of which Bank had the notice and a fraud of the beneficiary from which it seeks to benefit. Fraud, if any, must be of an egregious nature as to vitiate the underlying transaction. In the pleadings in the present case no factual foundation is laid in support of the allegation of fraud. There is not even a proper allegation of any fraud as such and in fact the whole case of the appellant centers around the allegation with regard to the alleged breach of contract by the respondent. The plea of fraud is vague and indefinite and such allegations do not satisfy the requirement in law constituting any fraud much less the fraud of an egregious nature as to vitiate the entire transaction. [Paras 23, 24 and 25] [909-B-C, D, E, F] 2.2 The plea that Whether encashment of the bank guarantee would cause "irretrievable injury" or "irretrievable injustice". There is no plea of any "special equities" by the appellant in its favour. There is no dispute that arbitral proceedings are pending. The appellant can always get the relief provided he makes his case before the Arbitral Tribunal. There is no allegation that it would be difficult to realize the amounts from the respondent in case the appellant succeeds before the Arbitral Tribunal. [Paras 26 and 28] [909-G; 910-B, C] Kailash Vasdev, Amita Rajora, Debarshi Bhadra and Shailendra Swarup for the Appellant. V.N. Koura, A. Mariarputham, Aruna Mathur and Paramjit Benipal (for Arputham, Aruna & Co.) for the Respondent.,= 2007(11 )SCR897 , 2008(1 )SCC544 , 2007(12 )SCALE692 , 2007(12 )JT480

CASE NO.: Appeal (civil) 5121 of 2007 PETITIONER: Vinitec Electronics Private limited RESPONDENT: HCL Infosystems Limited DATE OF JUDGMENT: 02/11/2007 BENCH: ALTAMAS KABIR & B.SUDERSHAN REDDY JUDGMENT: J U D G M E N T CIVIL APPEAL NO. 5121 OF 2007 [ARISING OUT OF SPECIAL LEAVE PETITION ( c ) NO.16098/2006] B.Sudershan Reddy, J. Leave granted. 2. The dispute between the parties relates to invocation of the bank guarantee furnished by the appellant to the respondent. 3. The appellant M/s. Vinitec Electronics Private Limited entered into agreement dated 10th May, 2000 with the respondent HCL Infosystem Limited under which the respondent agreed to buy UPS systems from the appellant for a consideration value of Rs.1,68,12,400/-. The method of payment and terms thereof are provided for in clause 15(a) and (d) in the said agreement. Clause 15: The payment terms will be : (a) 30% Advance against a Bank guarantee from a Scheduled Bank of equivalent value. The BG shall be valid till the date of final delivery at the Company location(s). (b) . . . . . ( c ) . . . . . (d) 10% after one year from the date of receipt of material at the customer site(s). 4. The case of the appellant was that it had supplied all the equipments to the respondent by 2nd August, 2000 but the respondent committed default in making the stipulated payment amounting to Rs.49,99,338/-. The said sum according to the appellant remained unpaid. The respondent agreed to pay the sum provided the performance bank guarantee of 10% value was furnished. That is how bank guarantee as required by the respondent was furnished which was amended on 20th August, 2001. The case of the appellant was that even after furnishing the bank guarantee the respondent made a payment of only Rs. 30 lakhs on 22nd August, 2001 and false assertion of payment of Rs.11,99,335/- was made. It was also alleged that a sum of Rs. 8 lakhs still remained unpaid. 5. The appellant s case before the trial court was that the respondent under no circumstances is entitled to invoke the bank guarantee without paying the balance amount of Rs.11,99,335/- or at least 8 lakhs which is admittedly liable to be paid. The bank guarantee had become inoperative as the condition precedent for its invocation was not complied with. 6. The case of the respondent was that the original contract value was Rs.1,68,12,400/- out of which Rs.1,60,12,400/- , i.e., 95% of the contract value stood paid and all the obligations pursuant to clause 15(a) to (c) of the contract have been fulfilled and it is only then the bank guarantee in question was furnished to the respondent upon payment of 30% of the contract value to the appellant. It was asserted that the bank guarantee furnished as it stands is an unconditional one. 7. The learned Single Judge after elaborate consideration of the matter found no merit in the injunction application filed by the appellant and accordingly dismissed the same. The Division Bench of the Delhi High Court affirmed the order of the learned Single Judge. 8. The learned senior counsel Sh.Kailash Vasdev mainly submitted that the High Court committed an error in interpreting Paragraph 4 of the amended bank guarantee in isolation and divorced from the terms and conditions of the contract dated May 10, 2000 entered between the parties. It was submitted that the High Court instead of relying upon the operative portion of the bank guarantee ought to have taken all the clauses which are material to arrive at a real intention of the parties. The submission was that the respondent did not make full payment of Rs.49,99,335/- to the appellant and therefore the pre-condition embodied in the performance bank guarantee dated 10th August, 2001 as amended on 20th August, 2001 was never satisfied and as such the performance guarantee did not come into being at all, remained ineffective and unenforceable and therefore could not be invoked. 9. The learned counsel for the respondent submitted that after the amendment of the bank guarantee substituting clause 4 on 20th August, 2001, the conditional bank guarantee furnished by the appellant became an unconditional one. 10. We have carefully considered the rival submissions made during the course of hearing of the appeal. 11. The law relating to invocation of bank guarantees is by now well settled by a catena of decisions of this court. The bank guarantees which provided that they are payable by the guarantor on demand is considered to be an un- conditional bank guarantee. When in the course of commercial dealings, unconditional guarantees have been given or accepted the beneficiary is entitled to realize such a bank guarantee in terms thereof irrespective of any pending disputes. In U.P. State Sugar Corporation vs. Sumac International Ltd. , this court observed that : The law relating to invocation of such bank guarantees is by now well settled. When in the course of commercial dealings an unconditional bank guarantee is given or accepted, the beneficiary is entitled to realize such a bank guarantee in terms thereof irrespective of any pending disputes. The bank giving such a guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. The very purpose of giving such a bank guarantee would otherwise be defeated. The courts should, therefore, be slow in granting an injunction to restrain the realization of such a bank guarantee. The courts have carved out only two exceptions. A fraud in connection with such a bank guarantee would vitiate the very foundation of such a bank guarantee. Hence if there is such a fraud of which the beneficiary seeks to take advantage, he can be restrained from doing so. The second exception relates to cases where allowing the encashment of an unconditional bank guarantee would result in irretrievable harm or injustice to one of the parties concerned. Since in most cases payment of money under such a bank guarantee would adversely affect the bank and its customer at whose instance the guarantee is given, the harm or injustice contemplated under this head must be of such an exceptional and irretrievable nature as would over ride the terms of the guarantee and the adverse effect of such an injunction on commercial dealings in the country. The two grounds are not necessarily connected, though both may coexist in some cases. 12. It is equally well settled in law that bank guarantee is an independent contract between bank and the beneficiary thereof. The bank is always obliged to honour its guarantee as long as it is an unconditional and irrevocable one. The dispute between the beneficiary and the party at whose instance the bank has given the guarantee is immaterial and of no consequence. In BSES Limited (Now Reliance Energy Ltd.) vs. Fenner India Ltd. And anr. this court held : 10. There are, however, two exceptions to this Rule. The first is when there is a clear fraud of which the Bank has notice and a fraud of the beneficiary from which it seeks to benefit. The fraud must be of an egregious nature as to vitiate the entire underlying transaction. The second exception to the general rule of non- intervention is when there are special equities in favour of injunction, such as when irretrievable injury or irretrievable injustice would occur if such an injunction were not granted. The general rule and its exceptions has been reiterated in so many judgments of this court, that in U.P. State Sugar Corpn. V. Sumac International Ltd. (1997) 1 SCC 568 (hereinafter U.P. State Sugar Corpn ) this Court, correctly declare that the law was settled . 13. In Himadri Chemicals Industries Ltd. V. Coal Tar Refining Company , this court summarized the principles for grant of refusal to grant of injunction to restrain the enforcement of a bank guarantee or a letter of credit in the following manner : 14.. . . . . (i) While dealing with an application for injunction in the course of commercial dealings, and when an unconditional bank guarantee or letter of credit is given or accepted, the Beneficiary is entitled to realize such a Bank Guarantee or a Letter of Credit in terms thereof irrespective of any pending disputes relating to the terms of the contract. (ii) The Bank giving such guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. (iii) The courts should be slow in granting an order of injunction to restrain the realization of a bank guarantee or a Letter of Credit. (iv) Since a Bank Guarantee or a Letter of Credit is an independent and a separate contract and is absolute in nature, the existence of any dispute between the parties to the contract is not a ground for issuing an order of injunction to restrain enforcement of Bank Guarantees or Letters of Credit. (v) Fraud of an egregious nature which would vitiate the very foundation of such a Bank Guarantee or Letter of Credit and the beneficiary seeks to take advantage of the situation. (vi) Allowing encashment of an unconditional Bank Guarantee or a Letter of Credit would result in irretrievable harm or injustice to one of the parties concerned. 14. In Mahatama Gandhi Sahakra Sakkare Karkhane vs. National Heavy Engg. Coop. Ltd and anr. , this court observed : Para 22. If the bank guarantee furnished is an unconditional and irrevocable one, it is not open to the bank to raise any objection whatsoever to pay the amounts under the guarantee. The person in whose favour the guarantee is furnished by the bank cannot be prevented by way of an injunction from enforcing the guarantee on the pretext that the condition for enforcing the bank guarantee in terms of the agreement entered between the parties has not been fulfilled. Such a course is impermissible. The seller cannot raise the dispute of whatsoever nature and prevent the purchaser from enforcing the bank guarantee by way of injunction except on the ground of fraud and irretrievable injury. Para 28. What is relevant are the terms incorporated in the guarantee executed by the bank. On careful analysis of the terms and conditions of the guarantee in the present case, it is found that the guarantee is an unconditional one. The respondent, therefore, cannot be allowed to raise any dispute and prevent the appellant from encashing the bank guarantee. The mere fact that the bank guarantee refers to the principle agreement without referring to any specific clause in the preamble of the deed of guarantee does not make the guarantee furnished by the bank to be a conditional one. [Emphasis supplied] 15. Keeping these principles in mind we shall now proceed to apply the same to the facts of this case. 16. Shorn of all the embellishments the question that really arises for our consideration is as to whether bank guarantee furnished is an unconditional and irrevocable one or a conditional one? It may not be necessary to refer in detail the terms and conditions of the contract except to analyse the original clause of the bank guarantee dated August 10, 2001 and as well as the subsequent amendment of the relevant clause in the said bank guarantee on 20th August, 2001. 17. The relevant clause in the bank guarantee dated 10th August, 2001 furnished by the appellant is to the following effect : Whereas M/s Vinitec Electronics Pvt. Ltd. H-33, Bali Nagar, New Delhi(hereinafter called the Supplier ) supplied their Vinitec on- line UPS systems of various capacities pursuant to their Agreement dated 10th May, 2000 & P.O.No.4500011730 dated 30.05.00 (hereinafter called the Company ) for the final Purchaser President of India through the Director, National Crime Records Bureau, Ministry of Home Affairs, Government of India, New Delhi(hereinafter called the Purchaser ). Whereas in terms of Clause No.15 of the Agreement for receiving the entire balance payments of Rs.49,99,335/- from the company, the supplier have agreed to provide a Performance Bank Guarantee equivalent to Rs.16,81,238.50 as 10% of the value of the contract to be kept valid till the warranty period during which times the Supplier is required to perform their warranty obligations to the Purchaser; and Whereas pursuant to the application made by the supplier, we Oriental Bank of Commerce, Kirti Nagar, New Delhi (hereinafter called the Bank ) have accordingly agreed to give the supplier a bank guarantee for the aforesaid purpose. Therefore, we, the bank, hereby affirm that we are guarantors and responsible on behalf of the supplier upto a total of Rs.16,81,238.50(Rupees sixteen lacs eighty one thousand two hundred thirty eight and paise fifty only) and we undertake to pay any sum or sums within the limit of Rs.16,81,238.50(Rupees sixteen lacs eighty one thousand two hundred thirty eight and paise fifty only) as aforesaid upon receipt of written demand from the purchaser and Company within the validity of this Bank Guarantee establishing the supplier to be in default for the performance of their warranty obligations under the contract. We, the bank, affirm that our liability under this guarantee is limited to the total amount of Rs.16,81,238.50(Rupees sixteen lacs eighty one thousand two hundred thirty eight and paise fifty only) and it shall remain in full force upto and including 31st August,2003 and shall be extended from time to time for such further period(s) as desired by the purchaser, Company and supplier on whose behalf this Guarantee has been given." 18. Thereafter by a letter dated 20th August, 2001, the bank guarantee was amended and Paragraph 4 of the bank guarantee dated 10th August, 2001 was substituted and the same reads as under : Therefore, we, the Bank, hereby affirm that we are Guarantors and responsible on behalf of the supplier upto a total of Rs.16,81,238.50 (Rupees sixteen lacs eighty one thousand two hundred thirty eight and paise fifty only) and we undertake to pay any sum or sums within the limit of Rs.16,81,238.50 (Rupees sixteen lacs eighty one thousand two hundred thirty eight and paise fifty only) as aforesaid upon receipt of written demand from the Company within the validity of this Bank Guarantee. 19. In the unamended bank guarantee the bank affirmed that they are guarantors and responsible on behalf of the supplier upto a total of Rs. 16,81,238.50 (Rupees sixteen lakhs eighty one thousand two hundred thirty eight and fifty paise only) and had undertaken to pay any sum or sums within that limit upon receipt of written demand from the purchaser within the validity of bank guarantee provided it is established the supplier to be indefault for the performance of their warranty obligations under the contract. This makes it abundantly clear that what was furnished was a conditional bank guarantee and the bankers were liable to pay the amounts only upon establishing the fact that the supplier was in default for the performance of their warranty obligations under the contract. But by the subsequent letter dated 20th August, 2001, the relevant clause in bank guarantee was amended whereunder the banks stood as guarantor and responsible on behalf of the supplier upto a total of Rs.16,81,238.50 (Rupees sixteen lakhs eighty one thousand two hundred thirty eight and fifty paise only) and had undertaken to pay any sum or sums within that limit upon receipt of written demand from the Company within the validity of this bank guarantee . This amended clause makes it abundantly clear that the bank had undertaken to pay amounts upto a total of Rs.16,81,238.50. The condition that the amounts shall be paid only upon establishing the supplier to be indefault for the performance of their warranty obligation under the contract has been specifically deleted. In our considered opinion, the bank guarantee as amended replacing Paragrah 4 of the original bank guarantee makes the bank guarantee furnished as unconditional one. The bankers are bound to honour and pay the amounts at once upon receipt of written demand from the respondent. 20. The learned senior counsel however relying upon the decision of this court in Hindustan Construction Co. Ltd.and ors. vs. State of Bihar and ors contended that the bank guarantee could not said to be unconditional or unequivocal in terms so that the respondent could claim any unfettered right to invoke the bank guarantee and demand immediate payment thereof from the bank. We find no substance in the submission so made by the learned senior counsel on behalf of the appellant. In Hindustan Construction (supra), the appellant Company was awarded a contract by the State of Bihar for construction of a dam. Clause 9 of the contract between the parties provided that the State would make an advance loan to the Company for the costs of mobilisation in respect of the works on furnishing of a bank guarantee by the appellant for an amount equal to the advance loan. The advance loan was required to be used exclusively for mobilisation expenditure. In case of misappropriation of the advance loan the loan at once shall become due and payable immediately. In terms of this clause bank guarantee was furnished by the bank agreeing unconditionally and irrevocably to guarantee payment on demand without any objection but with the qualification that such payment shall be only in the event the obligations expressed in Clause 9 of the original contract have not been fulfilled by the contractor giving the right of claim to the employer for recovery of the whole or part of the advance mobilisation loan. Clause 9 of the main contract was thus incorporated and made part of the bank guarantee furnished by the banker. It is under those circumstances this court took the view that the bank guarantee furnished was not an unconditional one. Clause 9 in the bank guarantee refers to the terms and conditions of the contract between the parties. The bank guarantee thus could be invoked only in the circumstances referred to in Clause 9 wherein the amount would become payable only if the obligations are not fulfilled or there is misappropriation. 21. In the present case the amended clause does not refer to any of the clauses specifically as such but on the other hand the bank had undertaken responsibility to pay any sum or sums within the guaranteed limit upon receipt of written demand from the Company. The operative portion of the bank guarantee furnished by the bank does not refer to any of the conditions for payment under the bank guarantee. It is true that the bank guarantee furnished makes a reference to the principal agreement between the parties in its preamble. Mere fact that the bank guarantee refers to the principal agreement in the preamble of the deed of guarantee does not make the guarantee furnished by the bank to be a conditional one unless any particular clause of the agreement has been made part of the Deed of Guarantee. 22. The recitals in the preamble in the deed of guarantee do not control the operative part of the deed. After careful analysis of the terms of the guarantee we find the guarantee to be an unconditional one. The appellant, therefore, cannot be allowed to raise any dispute and prevent the respondent from encashing the bank guarantee. 23. The next question that falls for our consideration is as to whether the present case falls under any of or both the exceptions namely whether there is a clear fraud of which the bank has notice and a fraud of the beneficiary from which it seeks to benefit and another exception whether there are any special equities in favour of granting injunction. 24. This Court in more than one decisions took the view that fraud, if any, must be of an egregious nature as to vitiate the underlying transaction. We have meticulously examined the pleadings in the present case in which no factual foundation is laid in support of the allegation of fraud. There is not even a proper allegation of any fraud as such and in fact the whole case of the appellant centers around the allegation with regard to the alleged breach of contract by the respondent. The plea of fraud in appellant s own words is to the following effect: That despite the respondent, HCL being in default of not making payment as stipulated in the Bank Guarantee, in perpetration of abject dishonesty and fraud, the respondent, HCL fraudulently invoked the Bank Guarantee furnished by the applicant and sought remittance of the sums under the conditional Bank Guarantee from the Oriental Bank of Commerce vide letter of invocation dated 16.12.2003. 25. In our considered opinion such vague and indefinite allegations made do not satisfy the requirement in law constituting any fraud much less the fraud of an egregious nature as to vitiate the entire transaction. The case, therefore does not fall within the first exception. 26. Whether encashment of the bank guarantee would cause any irretrievable injury or irretrievable injustice . There is no plea of any special equities by the appellant in its favour. So far as the plea of irretrievable injustice is concerned the appellant in its petition merely stated: That should the respondent be successful in implementing its evil design, the same would not only amount to fraud, cause irretrievable injustice to the applicant, and render the arbitration nugatory and infructuous but would permit the respondent to take an unfair advantage of their own wrong at the cost and extreme prejudice of the applicant. 27. The plea taken as regards irretrievable injustice is again vague and not supported by any evidence. 28. There is no dispute that arbitral proceedings are pending. The appellant can always get the relief provided he makes his case before the Arbitral Tribunal. There is no allegation that it would be difficult to realize the amounts from the respondent in case the appellant succeeds before the Arbitral Tribunal. 29. In this view of the matter, we see no merit in this appeal. 30. We make it clear that this order and as well as the order passed by the Delhi High Court shall have no bearing on the merits of the case pending before the Arbitral Tribunal. 31. The appeal is accordingly dismissed. We make no order as to costs.