<xsl:stylesheet version="2.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output omit-xml-declaration="yes" indent="yes"/>
<xsl:strip-space elements="*"/>
 <xsl:param name="XMLMerge2" select="document('input2.xml')"/>
<xsl:key name="kBymail" match="clientname" use="Email"/>
<xsl:template match="ClientInfo">
    <ClientInfo>
        <xsl:for-each select="clientname">
            <xsl:variable name="Email_from_merge1" select="Id"/>
            <xsl:choose>
                <xsl:when test="$XMLMerge2 = ''">
                    <xsl:copy>
                        <xsl:copy-of select="node() | @*"/>
                    </xsl:copy>
                </xsl:when>
                <xsl:when
                    test="exists($XMLMerge2/ClientInfo/clientdata[name = $Email_from_merge1])">
                    <xsl:copy>
                        <xsl:copy-of select="node() | @*"/>
                    </xsl:copy>
                </xsl:when>
            </xsl:choose>
        </xsl:for-each>
    </objects>
</xsl:template>
<xsl:template match="Contact[Email = following-sibling::Contact/Email]"/>

<?xml version="1.0" encoding="UTF-8"?>
<ClientInfo>
<clientname>
    <Id>003f40000049yJYAAY</Id>
    <Email>gbc@gmail.com</Email>
 </clientname>
<clientname>
    <Id>003f40000049z3iAAA</Id>
    <Email>gbc@gmail.com</Email>
 </clientname>
<clientname>
    <Id>003f40000049z3nAAA</Id>
    <Email>gbc@gmail.com</Email>
 </clientname>
<clientname>
    <Id>003f40000048uLLAAY</Id>
    <Email>gar@gmail.com</Email>
 </clientname>
 <clientname>
    <Id>003f40000049t38AAA</Id>
    <Email>gad@gmail.com</Email>
 </clientname>
 </objects>

  Input2.xml in below:

 <?xml version="1.0" encoding="UTF-8"?>
 <ClientInfo>
  <clientdata>
    <name>003f40000048uLLAAY</name>
  <clientnameReference>
       <Email>gar@gmail.com</Email>
    </clientnameReference>
   </clientdata>
  <clientdata>
    <name>003f40000049t38AAA</name>
  <clientnameReference>
       <Email>gad@gmail.com</Email>
    </clientnameReference>
 </clientdata>
  <clientdata>
    <name>003f40000049yJYAAY</name>
  <clientnameReference>
       <Email>gbc@gmail.com</Email>
     </clientnameReference>
   </clientdata>
</objects>


 Expectedoutput:

<?xml version="1.0" encoding="UTF-8"?>
<ClientInfo>
<clientname>
    <Id>003f40000049yJYAAY</Id>
    <Name>barcode11</Name>
    <Email>gbc@gmail.com</Email>
 </clientname>
 <clientname>
    <Id>003f40000048uLLAAY</Id>
    <Name>Bob Robben</Name>
    <Email>gar@gmail.com</Email>
 </clientname>
 <clientname>
    <Id>003f40000049t38AAA</Id>
    <Name>ADVT4</Name>
    <Email>gad@gmail.com</Email>
 </clientname>
 </objects>