abs IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION (L) NO. 428 OF 2008 V. Krishnamurthy .. Petitioner V/s Divisional Railway Manager (Commercial) Mumbai Central & Ors. .. Respondents Mr.M.P.S. Rao i/b Sreeji & Lal for the petitioner. Mr.Suresh Kumar for the respondents no.1 and 2. CORAM : D.G. KARNIK, J. DATE : 12TH JUNE 2008 P.C. P.C. P.C. : 1. By consent, the petition is heard finally. 2. By this petition, the petitioner seeks injunction restraining the respondents no.1 and 2 by an order of injunction from invoking the bank guarantees and restraining the respondent no.3 bank from making payment under the bank guarantees. 3. Learned counsel for the respondents no.1 and 2 by way of a preliminary objection submits that the respondent no.3 Bank is not a party to the arbitration agreement and therefore the arbitration petition is not maintainable. The objection is upheld. No injunction - 2 - can be granted against the respondent no.3 as it is not a party to the arbitration agreement and the petition is not maintainable qua the respondent no.3. 4. By five different contracts, the petitioner was granted licence by the respondents no.1/2 to exhibit and display advertisements at various railway stations on the Western Railway. Each of the contracts provided for payment of security deposit as also payment of licence fee. Clause 55 of the contracts provides for arbitration. According to the respondents 1/2, the petitioner did not pay the licence fee and thereby committed breach of the contracts. The respondents 1/2 have therefore invoked the bank guarantees in question. 5. The bank guarantees were given by the petitioner for due performance of his obligations under the contract. Clause 2 of each of the bank guarantees reads: "2. We, Indian Bank, do hereby undertake to pay the amount due and payable under this guarantee without any demur, merely on a demand from the Government stating that the amount claimed by the Government by reason of breach by the said Contractor(s) failure to perform the said - 3 - Agreement. Any such demand made on the bank shall be conclusive as regards the amount due and payable by the Bank under this Guarantee. However, our liability under this guarantee shall be restricted to an amount not exceeding Rs.16,11,000/- (Rs. Sixteen lakhs and eleven thousand only)." 6. Bare perusal of clause 2 shows that the bank guarantees ere unconditional and the respondent no.3 had agreed to pay to the respondents 1/2 merely on demand by the government stating that the amount was due by way of loss or damage caused or would be caused or suffered by the government by reason of breach of the contractor’s failure to perform the agreement. 7. My attention was invited to the letter of demand dated 8th May 2008, copy of which was handed over by the learned counsel for the respondents 1/2. The letter refers to the breach committed by the petitioner by nonpayment of licence fee. The bank guarantees were invoked for breach of non-payment of licence fee by the petitioner. In my view, the bank guarantees were invoked in accordance with clause 2 of the bank guarantees and no injunction can be granted. - 4 - 7. In the circumstances, the petition is dismissed. (D.G. KARNIK, J.)