- (1.)By this petition the petitioners had sought a declaration that an arbitral dispute exists between the petitioners and the respondents and during the pendency of the arbitral dispute prayed that the respondent No. 1 be restrained from invoking the advance bank guarantee as also another bank guarantee. This Court by order dated 18th February, 1998 was pleased to direct the parties to maintain status quo. By order dated April 15, 1998 this Court decided the issue. Considering the terms of the contract, as to whether this Court would have jurisdiction over the subject matter. The Court answered in the affirmative that this Court has jurisdiction. The Court further directed that the status quo ante as granted earlier to continue until further orders. The respondents against the said order preferred a Special Leave Petition before the Supreme Court of India. The said Special Leave Petition was disposed of on August 17, 1998 by the following order :---
ORDER

"Leave granted.

Heard Counsel on both sides.

The High Court should not have allowed the order of status quo to continue indefinitely, it ought to have considered whether the ad-interim order passed earlier on 23-2-1998 deserved to be continued or not. We, therefore, direct that the application for interim relief be heard and decided within four weeks from today. If it is not decided within that time, the order passed by the High Court will stand vacated. The appeal is disposed of accordingly. No order as to costs."

(2.)The matter was placed before this Court in view of the directions of the Apex Court in its order dated August 17, 1998. That is how the matter was placed for hearing today.
(3.)At the hearing of the petition Counsel for the petitioners contends that the respondent company has been declared to be a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985. It is, therefore, contended that the respondent herein could not have invoked the bank guarantee. Reliance for that purpose is placed on a judgment of the Division Bench of the Allahabad High Court in the matter of (Comet Filaments (India) Ltd. v. Pradeshya Industrial and Investment Corporation of U.P. Ltd.)1, 66 Company Cases 124.
Secondly, it is contended that there was an agreement between the parties as reflected in the minutes. It is contended that in terms of the minutes the respondents herein agreed not to invoke the bank guarantee. It is, therefore, contended in the light of that also the respondents could not have invoked the bank guarantee.