Container Corporation Of India vs Devi Engineering And ...
2021 Latest Caselaw 885 AP

       IN THE HIGH COURT OF ANDHRA PRADESH : AMARAVATI


     HON'BLE MR. JUSTICE ARUP KUMAR GOSWAMI, CHIEF JUSTICE
                                          &
                 HON'BLE MR. JUSTICE C. PRAVEEN KUMAR



                        WRIT APPEAL No.65 of 2021

                     (Taken up through video conferencing)

Container Corporation of India,
CONCOR Bhavan, C-3, Mathura road,
New Delhi -110076 and another.

                                                            .. Appellants.
        Versus


Devi Engineering & Construction Private Limited,
A company incorporated under the provisions of
the Companies Act, 1956, having its registered office
at Plot No.20, Flat G1, JVY Grand Ground Floor,
Narasanna Nagar, Suryarao Peta, Kakinada-534004
and another.

                                                            ..Respondents.

Counsel for the Appellants        : Mr. J. Prabhakar

Counsel for respondent No.1        : Mr. Naumene Suraparaj Karlapalem




                               ORAL JUDGMENT

                                Dt: 17.02.2021

per Arup Kumar Goswami, CJ


        Heard Mr. J. Prabhakar, learned Counsel for the appellants.            Also

heard    Mr.     Naumene      Suraparaj       Karlapalem,   leaned   Counsel    for

respondent/writ petitioner.

2. This writ appeal is directed against the order dated 03.02.2021

passed by learned single Judge in W.P.No.23282 of 2020.

HCJ & CPK, J W.A.No.65 of 2021

3. The operative portion of the aforesaid order reads as follows:

"In these circumstances, the present writ petition is

dismissed, leaving it open to the petitioner to avail of such

remedies, as are available to the petitioner. As far as bank

guarantee dated 01.06.2018 drawn on the 3rd respondent is

concerned, there shall be an injunction restraining the

respondent Nos.1 and 2 from invoking the said bank

guarantee for a period of three (3) weeks. There shall be no

order as to costs."

4. At the outset, it will be relevant to take note of the essential facts for

the purpose of disposal of this writ appeal. Appellant No.1 had invited

tenders for construction of Ware House, retaining Wall cum Compound

Wall, CC Pavement, RCC Kerb Wall, Chain Link Fencing, Approach Road and

Bridge, Electrical Sub-Station and Admin Building in connection with

development of MMLP at Kakinada, vide notification dated 27.02.2018. It is

to be noted that initial estimate of the contract was Rs.32,67,22,247.97. As

the writ petitioner had emerged as the lowest bidder, a Letter of

Acceptance (LOA) was issued to the writ petitioner. As per the terms of the

contract, the contract was to commence on 15.05.2018 and was to be

completed in 18 months, and thus, the scheduled date of the completion of

the original contract was 14.11.2019. As per Clause 16.4 of the General

Conditions of the Contract (GCC), the writ petitioner had submitted a

Performance Bank Guarantee for an amount of Rs.1,63,36,113/-. As the

execution of the contract was not completed within the stipulated date,

extensions were granted from time to time and thereafter, a notice of

termination dated 20.11.2020 was issued requiring the writ petitioner to

HCJ & CPK, J W.A.No.65 of 2021

complete the execution of contract within seven days from the date of the

notice, failing which, it was indicated that the contract would be terminated.

Thereafter, another termination notice, dated 04.12.2020, was issued

directing the writ petitioner to complete the balance works within 48 hours,

failing which, it was indicated that the contract shall be rescinded, Security

Deposit shall be forfeited and the Performance Bank Guarantee shall be

encashed. Being aggrieved, the writ petitioner approached this court by

filing the writ petition.

5. By an order dated 07.12.2020, the learned single Judge restrained

respondents No.1 and 2 (appellants herein) from invoking the bank

guarantee dated 01.06.2018. The said interim order was extended from

time to time.

6. Mr. J. Prabhakar, learned Counsel for the appellants, has assailed the

order of the learned single Judge only on one count, which is to the effect

that once the writ petition was dismissed as not maintainable, the order of

injunction granted by the learned single Judge restraining the appellants

from invoking the bank guarantee for a period of three weeks, could not

have been passed. In support of his submission, the learned Counsel for

the appellants relies on a decision of the Constitution Bench of the Hon'ble

Supreme Court in the case of The State of Orissa v. Madan Gopal

Rungta, reported in AIR 1952 SC 12 and in the case of Bharat Coking

Coal Limited v. Indian Newspaper Society and others, reported in

(2011) 14 SCC 140.

7. Mr. Naumene Suraparaj Karlapalem, learned Counsel for

respondent/writ petitioner, on the other hand, submits that the writ petition

HCJ & CPK, J W.A.No.65 of 2021

was not dismissed as being not maintainable, but by the order impugned,

the writ petitioner was relegated to alternative remedy, and therefore, no

objections can be taken to the injunction order passed by the learned single

Judge. In support of his submission, he places reliance on the judgment of

the Hon'ble Supreme Court in the case of Indus Mobile Distribution

Private Limited v. Datawind Innovations Private Limited and

others, reported in (2017) 7 SCC 678 with particular reference to

paragraph No.20.

8. We have considered the submissions of the learned Counsel for the

parties and perused the material available on record.

9. Perusal of the order of the learned single Judge goes to show that

the appellants herein raised preliminary objections as to the maintainability

of the writ petition. No categorical finding, however, was given with regard

to the question of maintainability raised by the appellants. It was noted in

the order under appeal that there are questions of fact into which, the writ

Court cannot go into, in as much as such issues require a proper hearing

and that apart, it would be necessary to adduce evidence to that effect. It

was also observed that there is an adequate remedy to the writ petitioner

by way of Clause 17-B of the GCC, which provides for reference of all

disputes to arbitration.

10. Learned Counsel for the parties, however, submit that Clause 17-B

was wrongly quoted and it ought to have been Clause 63 and 64 of the

GCC.

HCJ & CPK, J W.A.No.65 of 2021

11. In the case of Indus Mobile Distribution Private Limited v.

Datawind Innovations Private Limited (supra), the Delhi High Court

issued notice on the interim application under Section 9 of the Arbitration

and Conciliation Act, 1996, and restrained the appellant before the Hon'ble

Supreme Court from transferring, alienating or creating any third party

interests in respect of the subject property. The Delhi High Court also

confirmed the order of injunction. It was opined by the Delhi High Court

that only the Courts of Delhi, Chennai and Amritsar would have jurisdiction

to entertain the dispute. The Hon'ble Supreme Court, taking note of the

fact that the juridical seat of arbitration is at Mumbai, held that the Mumbai

Courts alone have jurisdiction to the exclusion of all other Courts in the

country, and in that circumstance, while setting aside the impugned

judgment of the Delhi High Court, had directed that the injunction

confirmed by the impugned judgment will continue for a period of four

weeks from the date of pronouncement of the judgment, so that the

respondents may take necessary steps under Section 9 of the Arbitration

and Conciliation Act, 1996 in a Mumbai Court.

12. In the case of Bharat Coking Coal Limited (supra), the Hon'ble

Supreme Court observed as follows:

"We are of the view that since the writ petition itself

was not maintainable, no interim order for deposit or

payments, etc. could have been made and while dismissing

the writ petition as not maintainable, the High Court ought to

have restored the parties to their original position."

HCJ & CPK, J W.A.No.65 of 2021

13. In the case of The State of Orissa v. Madan Gopal Rungta

(supra), the Hon'ble Supreme Court at paragraph No.6 observed as follows:

"On behalf of the appellant, it was urged that the Court

had no jurisdiction to pass such orders under Article 226,

under the circumstances of the case. This is not a case where

the Court before finally disposing of a petition under Article

226 gave directions in the nature of interim relief for the

purpose of maintaining the status quo. The question which we

have to determine is whether directions in the nature of

interim relief only could be granted under Article 226, when

the Court expressly stated that it refrained from determining

the rights of the parties on which a writ of mandamus or

directions of a like nature could be issued. In our opinion,

Article 226 cannot be used for the purpose of giving interim

relief as the only and final relief on the application as the High

Court has purported to do. The directions have been given

here only to circumvent the provisions of Section 80 of the

Civil Procedure Code, and in our opinion that is not within the

scope of Article 226. An interim relief can be granted only in

aid of and as ancillary to the main relief which may be

available to the party on final determination of his rights in a

suit or proceeding. If the Court was of opinion that there was

no other convenient or adequate remedy open to the

petitioners, it might have proceeded to investigate the case on

its merits and come to a decision as to whether the petitioners

succeeded in establishing that there was an infringement of

HCJ & CPK, J W.A.No.65 of 2021

any of their legal rights which entitled them to a writ of

mandamus or any other directions of a like nature; and

pending such determination it might have made a suitable

interim order for maintaining the status quo ante. But when

the Court declined to decide on the rights of the parties and

expressly held that they should be investigated more properly

in a civil suit, it could not, for the purpose of facilitating the

institution such suit, issue directions in the nature of

temporary injunctions, under Article 226 of the Constitution.

In our opinion, the language of Article 226 does not permit

such an action. On that short ground, that judgment of the

Orissa High Court under appeal cannot be upheld."

14. Perusal of the above mentioned paragraph No.6 of the judgment of

the Hon'ble Supreme Court would go to show that when the Court declined

to decide on the rights of the parties and expressly held that they should be

investigated more properly in a civil suit, it could not, for the purpose of

facilitating the institution of such suit, issue directions in the nature of

temporary injunctions, under Article 226 of the Constitution. In other

words, the Hon'ble Supreme Court had decided that when the Court

expressly stated that it refrained from determining the rights of the parties

on which a writ of mandamus or directions of a like nature could be issued,

in the exercise of powers under Article 226 of the Constitution, no interim

relief would have been granted.

15. At paragraph No.9 in the order under appeal, the learned single

Judge observed as follows:

HCJ & CPK, J W.A.No.65 of 2021

"However, since the petitioner is being relegated to an

alternative remedy, it would only be appropriate to grant an

opportunity to the petitioner to raise such issues, as may be

permissible, to protect the interest of the petitioner relating to

the invocation of the bank guarantee."

Having observed so, the learned single Judge passed the order as extracted

in paragraph No.3 of this judgment.

16. We are of the considered opinion that that the judgment in the case

of The State of Orissa v. Madan Gopal Rungta (supra) is squarely

applicable to the present case. The learned single Judge had not gone into

the adjudication of the lis between the parties and had relegated the writ

petitioner to avail alternative remedy. In that view of the matter, while

dismissing the writ petition, no injunction could have been issued

restraining the appellants from invoking the bank guarantee for a period of

three weeks.

17. In view of the above discussion, we set aside the order of the

learned single Judge to the extent of issuance of injunction restraining the

appellants herein from invoking the bank guarantee.

18. Accordingly, the Writ Appeal is allowed to the extent indicated

above. No costs. Pending miscellaneous applications, if any, shall stand

closed.

ARUP KUMAR GOSWAMI, CJ                             C. PRAVEEN KUMAR, J


                                                                               Nn

                                                       HCJ & CPK, J
                                                  W.A.No.65 of 2021

HON'BLE MR. JUSTICE ARUP KUMAR GOSWAMI, CHIEF JUSTICE & HON'BLE MR. JUSTICE C. PRAVEEN KUMAR

WRIT APPEAL No.65 of 2021

(per Arup Kumar Goswami, CJ)

Dt: 17.02.2021

Nn