Calcutta High Court (Appellete Side)
Eastern Coalfields Limited And Another vs M/S. Ucc-Rla-Sta (Jv) And Others on 27 September, 2024
Author: T.S. Sivagnanam
Bench: T.S. Sivagnanam
MAT NO. 719 OF 2024
REPORTABLE
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
RESERVED ON: 18.09.2024
DELIVERED ON:27.09.2024
CORAM:
THE HON'BLE MR. CHIEF JUSTICE T.S. SIVAGNANAM
AND
THE HON'BLE MR. JUSTICE HIRANMAY BHATTACHARYYA
MAT NO. 719 OF 2024
WITH
I.A. NO. CAN 1 OF 2024
+
I.A. NO. CAN 2 OF 2024
+
I.A. NO. CAN 3 OF 2024
+
I.A. NO. CAN 4 OF 2024
EASTERN COALFIELDS LIMITED AND ANOTHER
VERSUS
M/S. UCC-RLA-STA (JV) AND OTHERS
Appearance:-
Mr. Jishnu Chowdhury, Adv.
Mr. Syed Nurul Arefin, Adv.
Mr. Rahul Singh, Adv.
Mr. Syed Moyeenul Arefin
......For the Appellants
Mr. Subhabrata Datta, Adv.
Mr. Subhojit Seal, Adv.
Mr. Aranya Saha, Adv.
......For the Respondent Nos 1 & 2
Page 1 of 37
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JUDGMENT
(Judgment of the Court was delivered by T.S. Sivagnanam, CJ.)
1. This intra court appeal by the respondents in WPA No. 26622 of 2023
is directed against the judgment and order dated 13.03.2024 by which the
writ petition filed by the respondent herein was allowed in part directing the
appellants to pay the writ petitioners the amount of Rs. 2,96,94,618/-
within April 12, 2024 together with interest at 8% per annum on half of the
amount that is on Rs. 1,41,47,309/- from November 30, 2022 till the date of
payment and interest at the same rate to be paid on the balance amount of
Rs. 1,48,47,309/- from May 30, 2023 till date of payment. In so far as the
rest of the claim of the writ petitioners with regard to the contract in
question, including final bills and the purported additional performance
security as well as other components, the writ petitioners were granted
liberty to make such claim by instituting a civil suit before the competent
board having jurisdiction and if so instituted the same to be decided on its
own merits in accordance with law by the said court.
2. The appellants who are the respondents in the writ petition are
aggrieved by such direction and have preferred the present appeal. The facts
leading to the filing of the writ petition could be briefly stated as hereunder:-
3. The first writ petitioner is a Joint Venture Partnership constituted
under the relevant provision of the Indian Partnership Act, 1932 and the
second writ petitioner is the constituted attorney of the Joint Venture by
virtue of a power of attorney executed in his favour. The writ petitioner
participated in a e-tender called for by the appellants as published by a
Notice Inviting Tender (NIT) dated November 25, 2014 for a estimated
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contract value of Rs. 190,47,08,700.00/- ps. The appellant issued a letter of
approval to the first writ petitioner dated May 04, 2015 in respect of the
awarded work and work order and subsequently the work order dated June
26, 2015 was issued. The writ petitioner's would state that during the
execution of the project the appellant's required the Joint Venture to submit
a modified offer for the project and accordingly the same was made by offer
dated March 10, 2019 which was duly approved by the appellants by
issuing a supplementary work order dated June 21, 2019.
4. The writ petitioners submitted an Additional Performance
Security/Security Deposit (TSD) of an amount of Rs. 3,03,600/-. The writ
petitioners would state that they had successfully completed the project to
the satisfaction of the appellants. By letter dated May 31, 2022, the Joint
Venture had requested the appellant's for final measurement of the contract
as per NIT. Subsequently, a supplementary work order dated June 21, 2019
was issued for an additional quantity of OB and coal. The writ petitioner
would state that they completed the entire work awarded which could be
seen from the measurement done by the appellant on October 12, 2021 and
certified by the appellant by their letter dated January 29/31, 2022. On a
request made by the writ petitioner final measurement was done on June
09, 2022 and the same was certified on June 24, 2022. By letter dated June
24, 2022 the writ petitioner requested the appellant for final of OB and coal
and finalised total excavation duly done by the writ petitioner as per the NIT
followed by the work order, supplementary work order and further work
order so that the contract can be closed as per the extant terms and
conditions. By memo dated November 19, 2022 the appellant issued job
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completion certificate in favour of the writ petitioner certifying that the writ
petitioner duly executed and completed the project work. The writ petitioner
by letter dated April 28, 2023 requested the appellant to take steps for
closure of the contract and to release all dues/payments to the writ
petitioner namely Performance Security cum Additional Performance
Security and retention monies at the earliest. Since the request was not
complied with a legal notice dated November 27, 2023 was issued to the
appellant calling upon them to take immediate steps for closure of the
contract and release all payments to the writ petitioner. Since the demand
made by the writ petitioners were not complied with, they had filed the writ
petition.
5. In the writ petition, the appellant prayed for a direction upon the
appellant to issue closure of contract and release pending dues, as detailed
in the Annexure P14 to the writ petitioner along with interest cost etc; to
issue a writ of prohibition prohibiting the appellant from withholding the
pending dues of the writ petitioner as detailed in Annexure P14 to the writ
petition. The respondent contended that the action of the appellant in
denying the writ petitioner for closure of the contract is wholly arbitrary,
unreasonable and illegal and completely malafide and unsustainable in the
eye of law.
6. It was contended that in the absence of any allegations against the writ
petitioner in regard to the execution of the project and no defect was also
notified by the appellant to the writ petitioner in respect of the execution of
the project work and also the defect liability period from the date of
completion of the project was also over hence the action of the appellant is
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arbitrary and unreasonable. By referring to the memo dated November 19,
2022, the writ petitioner contended that the appellants having accepted that
the writ petitioners satisfactorily completed the project which was also
recorded in the memo dated January 18, 2023, there was no justification for
not releasing the pending payment etc. The appellants filed their affidavit-in-
opposition in the writ petition denying and disputing the allegations made in
the writ petition. It was contended that it is incorrect to state that there are
no dues/recovery to be made from the writ petitioner and on scrutiny which
has to be ascertained and other recovery are to be made from the writ
petitioner. Various other details were also set out alleging that various sums
have to deducted.
7. Clause 4.7 of the general terms and conditions of the contract was
referred to and contended that the refund of security deposit shall be
subject to the appellant right to deduct/appropriate its dues against the
contractor under the subject contract or under any other contract. The
averments made by the writ petitioner that they have no other alternate
efficacious remedy except to move the writ petition under Article 226 of the
Constitution of India was denied.
8. The learned Single Bench classified the claim made by the writ
petitioner under two heads namely the final bills raised by the writ
petitioners being the first component and the performance security and
retention bills which were put in by way of security deposit as a second
component. So far as the first component is concerned, the writ petitioners
were non suited and it was held that such claim cannot be adjudicated in
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the writ petition and the writ petitioner be best relegated to the competent
civil court.
9. With regard to the second component namely security deposits, the
learned writ court took into consideration the averments made by the
appellants in paragraph 20 of the affidavit-in-opposition wherein they have
stated that the writ petitioner/contractor had submitted Performance
Security Deposit and retention money however Additional Performance
Security Deposit was denied on the ground that there is no such clause in
the agreement. Therefore, the learned writ court held that the limited scope
of the writ petitioner claims can be decided within the scope of the writ
petition is the entitlement of the writ petitioners to be refunded the admitted
performance security deposit and retention money.
10. Further it held that since there is no dispute regarding the said
amounts having been paid by the writ petitioners in the first place, no
detailed adjudication by calling for evidence is required and what is
necessary is only to interpret the provisions of the contract and come to a
conclusion as to whether the appellants have arbitrarily and without any
reasonable excuse withheld such components of the writ petitioners claimed
which can very well be done within the confines of a writ petition. For such
limited purpose the learned Single Bench referred to clause 4.7 of the
general terms and conditions.
11. The learned Single Bench held that there is no dispute that the writ
petitioner completed the work in question and in terms of clause 4.7 half of
the security deposit was to be immediately refunded to the writ petitioner on
completion of the entire work. The entitlement petitioners to the other half of
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the security deposit was on expiry of six months performance guarantee
period from the date of completion. Thus, it was held that the appellants are
mandated since the term "shall be refunded" has been used to refund the
entire security deposit, half immediately on the completion of the work and
other half within 6 months thereof. The right of the appellant to
deduct/appropriate its dues has to be read not in isolation but in the
context of clause 4.7 as a whole. So construed such deduction or
appropriation had to be done within the outer limit of six months. However,
in the case on hand, no claim was raised by the appellants, admittedly
within the said six months.
12. Further it was held that the work was concluded on June 01, 2022
and the job completion certificate was issued on November 19, 2022 and
even if it is assumed that the entitlement of the writ petitioners to half of the
security deposit on certification, the date of issuance of the job completion
certificate is relevant date and hence half of the security deposit had to be
paid immediately after November 19, 2022 and the other half with or
without deductions within a further six months. With regard to the
maintainability of the writ petition both the writ petitioner as well as the
appellant relied upon the decision of the Hon'ble Supreme Court in M.P.
Power Management Company Limited Versus Sky Power Southeast
Solar India Private Limited and Others 1, it was held that going by the
said judgment, the principle that in the case of non-statutory contract, the
rights are governed only by the terms of the contract may not continue to
hold. Further it was held that the mere fact that the relief is sought under a
(2023) 2 SCC 703
MAT NO. 719 OF 2024
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contract which is not statutory, will not entitle the state to ward off scrutiny
of its action or inaction under the contract. Further if the complaining party
is able to establish that the action/inaction, is perceived, arbitrary, the state
can indeed be called upon to honour its obligations of making payments
unless it be that there is a serious and genuine dispute raised regarding the
liability of the state to make the payment. Further the learned writ court
held that as per the language of clause 4.7, the appellant have the right to
deduct/appropriate its dues under the present or any other contract or from
that security deposit and not from the bill. Since clause 4.7 itself provides
that the security deposit has to be refunded within the outer limit of six
months performance guarantee period from the date of completion as such,
no such deduction/appropriation can be made after the said period. With
the above reasoning and certain other observations/findings, the writ
petition was partly allowed as indicated above.
13. The appellant is before us, contended that the prayer for recovery of
money in the writ petition enforcement of a contractual dispute of the
present nature is not permissible. The contract is non-statutory, the dispute
under reference are contractual disputes which arose in the course of
performance of a contract which is in the nature of the commercial contract
interference in writ jurisdiction that too for a money claim is not
maintainable. The claim of the writ petitioner is a matter of arbitration
before the civil court. In this regard reliance was placed on the decision in
State of Uttar Pradesh and Others Versus Bridge and Roof Company
MAT NO. 719 OF 2024
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(India) Limited 2. Further the contract does not become a statutory
contract merely because it relates to construction of a public utility or has
been awarded by the statutory body. The ordinary principles of law of
contract would apply and dispute pertaining to a covenant in a contract or
its enforceability are to be determined according to the usual principles and
in support of such contention reliance was placed on the decision in Kerala
State Electricity Board and Another Versus Kurien E. Kalathil and
Others 3.
14. By referring to the decision in M.P. Power Management Company
Limited (supra), it is submitted that in the said decision, it has been held a
dressed up and disguise matter involving breach of contract cannot be said
to be arbitrary state action. It has also been held that mere allegations of
breach of contract would not suffice but there must be palpable,
unreasonable or absolutely irrational action/inaction part of any principle,
which is absent in case. Therefore, it is submitted that interference in
respect of non-statutory contract on a conspectus of the above decisions
leaving a very narrow ambit. Even if in the judgment of M.P. Power
Management Company Limited (supra) is followed there must be absolute
irrational act or an act bereft of reason. It is contended that in the present
case when the contract permits appropriation of dues arising under other
contract, this cannot be said to exists. It was further contended that
whether payment is required to be done or not requires interpretation of
clause 4.7 of the contract read with the other provision. Such interpretation
(1996) 6 SCC 22
(2000) 6 SCC 293
MAT NO. 719 OF 2024
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would then be applicable to the facts of the case. The question of
interpretation of a commercial contract is not permissible in writ
jurisdiction. Relying upon the judgment in Bridge and Roof Company
India Limited (supra) it is submitted that in the said decision it has been
held that dispute relating to interpretation of the terms and conditions of a
contract cannot be agitated and could not have been agitated in a writ
petition.
15. Reliance was placed on the decision in ABL International Limited
and Another Versus Export Credit Guarantee Corporation of India
Limited and Others 4 wherein the Hon'ble Supreme Court held that a plain
interpretation of the clause itself was sufficient and it does not require any
aid much less the oral evidence to interpret the clause and therefore in the
said case, where the court found that what was required was a pure
interpretation of contract and no traverse to the facts of the case or anything
would effect. However, this is not the case of the writ petitioners as
interpretation of clause 4.7 and its applicability would require travelling to
the facts of the case namely dates when the claim arose, dates when cause
of action for recovery arose or all factual matters and therefore such
interpretation in a writ petition was not permissible.
16. Clause 4.7 is clear and unambiguous permitting a right of recovery
and courts will not permit rewriting or would not rewrite its contract. In
support of such proposition, reliance was placed on the decision in Orix
Auto Finance (India) Limited Versus Jagmander Singh and Another 5
(2004) 3 SCC 553
(2006) 2 SCC 598
MAT NO. 719 OF 2024
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and Orissa State Financial Corporation Versus Narsingh Ch. Nayaki
and Others 6.
17. It is further submitted that there are two parts to clause 4.7. The first
part require that security deposit would be refunded, subject to the
company's right to deduction and appropriate its dues against the
contractor, under this contract or under any other contract. The second part
states that on completion of the entire work and certified as such by the
engineer in charge one half of the security deposit would be refunded and
the other half would be refunded after expiry of six months. The two parts of
the same clause are separate and the time limit prescribed in the second
part cannot be read into the first part and it would mean adding to the
clause which is impermissible; Clause 4.7 has no time limit; until the time
the payment is made by the appellant to the writ petitioners, its rights to
forfeit on account of the claim made under this contract or any other
contract remains enforce and cannot be curtailed. If the time limit is to be
read into such power of the appellant, the same would be adding to or
rewriting of contract, which the Hon'ble Court have said is impermissible.
Literal interpretation of a reasonable person is what is required for the
purpose of ascertainment of meaning. Arguments on contra proferentem may
not be accepted. There is no ambiguity in the contract without which this
principle has no application. There is no foundation for the argument of
unconscionable bargain a term has been made.
18. With regard to the findings rendered by the learned Single Bench
more particularly in paragraphs 29 to 31 and 36, it is contended that Order
(2003) 10 SCC 261
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8 Rule 6A CPC cannot be a bar. There was no opportunity in the writ
petition to file a counter claim. Therefore a analogy of filing the affidavit-in-
opposition to a writ petition, to a written statement, thereby preventing a
counter claim from being filed latter, is with respect in opposite. Further
even such provision allow an extension by court. Further the cause of action
has arisen in favour of the appellant and that would only merge in the
judgment. Just because the writ petition was filed, would not prevent the
appellant to proceed before the Civil Court and the analogy of the appellant
rights being barred because it has filed the affidavit-in-opposition, may be
an incorrect finding.
19. Further it is contended that clause 4.7 requires the security deposit to
be paid within six months along with the retention money. However, even if
it is not paid in time, because the accounts could not be finalised, if claims
arise prior to the payment which would entail recovery, the right of recovery
would not be abrogated. It was further contended that the claim and counter
claim of the present nature arising out of a commercial contract should
never be decided on affidavits and this prejudices the rights of parties
available before the civil court. In support of such contention, reliance was
placed on the decision in the State of Bihar Versus Jain Plastics and
Chemicals Limited 7. Therefore, it is submitted that the cause of action of
the appellant to recover in respect of the other contract accrued prior to
expiry of six months time from the date of certifications of Bills. In this
regard, the dates and events concerning the other Joint Venture's namely
ST- CC and STA-DGM (JV) were referred to.
(2002) 1 SCC 216
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20. It is further submitted that in respect of the other two contracts loss
and damages for breach were being constantly suffered from the date of
auction and therefore notice of demand is not relevant but what is relevant
is the date of sufferance of loss which gives the cause of action to recover. It
is submitted that the documents concerning the other two Joint Ventures
were enclosed along with CAN 2 of 2024 and leave was sought for to rely on
the documents and since both parties have referred to those documents it is
prayed that CAN 2 of 2024 may be allowed.
21. The learned advocate appearing for the respondent/writ petitioner
submitted that the appellants have broadly raised three issues for
consideration namely (i) whether the writ petition is maintainable owing to
the disputed question of facts and interpretations of the clauses of the
contract? (ii) whether the act on the part of the appellants in not disbursing
the security deposit can be termed as arbitrary, unfair and unreasonable
action or not? (iii) whether interpretation of clause 4.7 of the condition of
contract by the Hon'ble Single Bench while passing the impugned order can
be construed as rewriting of condition of the contract or not? and (iv)
whether the order impugned is sustainable or not?
22. The learned advocate appearing for the respondent referred to the
dates and event as to when they had completed the work, the date of
issuance of the job completion certificate, the date of completion of the
period since the date of obtaining the job completion certificate and the
dates of notice of termination and other contracts. It is submitted that in the
writ petition it had been clearly stated as to the what are the amounts
payable to the writ petitioner and for examining these issues in a proper
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perspective the interpretation of clause 4.7 is required to be made in the
light of text and context of the factual aspect of the matter. It is submitted
that a plain reading of clause 4.7, the following rights and obligations of the
parties to the contract are discernible. (a) A right has been conferred upon
the appellant to deduct/appropriate its dues against the writ petitioner
under this contract or any other contract from the security deposit of the
writ petitioner (b) the appellant are obliged to refund 50% of the security
deposit on the completion of the entire work certified by the engineer-in-
charge (c) the appellants are entitled to deduct/appropriate its dues against
the contract from the 50% of the security deposit lying with them within the
period of six months from the date of completion. Therefore, the appellant is
not obliged to refund the 50% of the security deposit within the six months
period from the date of completion. (d) the writ petitioner being the
contractor is entitled to refund on the remaining 50% of the security deposit
on expiry of six months performance guarantee period. (e) In the case on
hand, admittedly the appellant did not refund 50% of the security deposit on
completion of the entire work as certified or by the engineer-in-charge on
November 20, 2022. Therefore, non-payment of the 50% of the security
deposit in consonance of clause 4.7 is an arbitrary action of the appellants.
So far as the remaining 50% of the security deposit is concerned, the
appellant is under an obligation to ascertain whether there is any dues
against the contract under the present contract or any other contract to be
deducted/appropriated till May 30, 2023. In the case on hand, there were
no dues till May 30, 2023 and the appellant was not authorised to
deduct/appropriate any sum from the remaining 50% of the security
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deposit. Therefore, as on June 01, 2023, the writ petitioner is entitled to get
his refund of his security deposit which the appellants were obliged to
release and the remaining of the security deposit on June 01, 2023. Meres
issuance of show cause notice does not ipso facto be termed as dues to be
deducted/appropriated as no financial liability was accrued by issuance of a
show cause notice to any of the constituent parties of the joint ventures. (g)
the Hon'ble Single Bench carefully considered the attendant facts and
circumstances in construing clause 4.7 of the conditions of the contract.
Therefore, the appellant is obliged to release the security deposit on expiry of
six months performance guarantee period. (h) The interpretation and/or
construction of clause 4.7 cannot be said to be rewriting of the contract
rather using the work "within" in paragraph 24 of the impugned order while
construing clause 4.7 is mere error which is required to be
modified/rectified appropriately by this court. (i) Referring to the decision in
Subodh Kumar Singh Rathour Versus Chief Executive Officer and
Others 8 it is submitted that a decision has opened up a new vista where
each and every action of the instrument is the realm of contracts are tested
on the touchstone of justness, reasonableness and fairness and thus
ascertaining arbitrariness viewing through losses of the contracts and its
nuanced interpretation cannot be said to be outside the power of the judicial
review. (j) Reliance was placed on the decision in Nabha Power Limited
(NPL) Versus Punjab State Power Corporation Limited 9 for the
proposition that a commercial document must be interpreted in such a
2024 SCC Online SC 1682
(2018) 11 SCC 508
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manner as to give efficacy to the contract rather than to invalidate it. (k)
Reliance was placed on the decision in United India Insurance Company
Limited Versus Harchand Rai Chandan Lal 10 for the proposition that
terms and conditions of the contract has to be strictly read and natural
meaning be given to it. (l) Reliance was placed in DLF Universal Limited
and Another Versus Director, Town and Country Planning Department,
Haryana and Others 11 for the proposition that the contract is interpreted
according to its purpose (m) the interpretation of Clause 4.7 cannot be made
to invalidate the intendment of the parties to the contract (n) the Hon'ble
Single Bench while interpreting or construing clause 4.7 did not exercise its
discretion arbitrarily and nor capriciously. (o) the writ petition is
maintainable as the acts/omission on the part of the appellant in not
releasing the security deposit in both stages appears to be arbitrary. (p)
although the word used in paragraph 24 in the impugned order passed by
the learned Single Bench cannot be said to be correct, it cannot be termed
rewriting of the contract rather its mere error which needs to be
modified/rectified by this court in furthering the intendment of the parties
to the contract in construing clause 4.7 in the light of the attendant facts
and circumstances of the case.
23. By placing reliance on the decision in the case of Surya
Constructions Versus State of Uttar Pradesh and Others 12, it is
submitted that in the light of the principles propounded therein the writ
petitioners are entitled to get the refund of the security deposit along with
(2004) 8 SCC 644
(2010) 14 SCC 1
(2019) 16 SCC 794
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the interest awarded by the Hon'ble Single Bench. The learned Advocate
appearing for the appellant would submitted that the respondents have
relied on the decision in Subodh Kumar Singh Rathour (supra) and the
said decision will not assist the writ petitioner and in this regard, elaborately
referred to the facts of the said case more particularly the findings in the
paragraph 59 to 62 and 70 and wherein the Hon'ble Supreme Court came to
the conclusion that the decision to terminate the contract was beyond
purview of the clause of the contract.
24. It is further submitted in paragraph 69 of the said judgment the
Hon'ble Supreme Court has held that to ascertain whether the Act is
arbitrary or not the court must carefully attend to the facts the
circumstances of the case. It should be find out whether the impugned
decision is based on any principle. if not, it may unerringly point to
arbitrariness. If the act buttress or mere exhibition of the will of the
authority it would sufficiently bear the insignia of arbitrariness. Therefore it
is submitted that if the act of an authority is based on reason which is not
totally absurd and if it acts are based on a principle, the writ court would
not come to the conclusion of arbitrariness or caprice and would refuse to
interfere or go into the validity or legality of the decision leaving the same to
be done in a contractual forum or the civil court. In the case on hand,
decision to withhold is based on a principle that is clause 4.7 of the
contract. The writ court may not adjudicate whether the interpretation is
correct and leave the same for decision in an appropriate proceeding. Since
the action of the appellant is based on a contractual clause there is no
arbitrariness or capriciousness. Therefore it is submitted that the decisions
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relied on by the learned advocate appearing for the respondent does not
assist them in its endeavour to support money decree based on
interpretation of contract and the facts of the case and it cannot be called as
arbitrary action and the action of the appellant cannot be called as arbitrary
act.
25. Reliance was placed on the decision in State of Gujarat and
Another Versus Amber Builders 13 wherein it was held that the judgment
in Union of India Versus Raman Iron Foundry 14 was specifically
overruled on the issue on hand that the Government had no right to
appropriate the amount claimed without getting its first adjudicated was
overruled by three judge bench of the Hon'ble Supreme Court in H.M.
Kamalauddin Ansari and Company Versus Union of India 15. The
Hon'ble Supreme Court in the said case found that there was a general
condition which entitled the Government to recover the damages claimed by
appropriating any sum which may become due to the contractor under other
bills and the court disagree to the findings in Raman Iron Foundry and it
was held that the decision in Gangotri Enterprises Limited Versus Union
of India 16 is per incuriam because it relies upon Raman Iron Foundry
which has been specifically overruled by three judge bench in H.M.
Kamalauddin Ansari and Company.
26. We have heard Mr. Jishnu Chowdhury, learned Senior Advocate
assisted by Mr. Syed Nurul Arefin, Mr. Rahul Singh and Mr. Syed Moyeenul
Arefin learned advocates appearing for the appellants and Mr. Subhabrata
(2020) 2 SCC 540
(1974) 2 SCC 231
(1983) 4 SCC 417
(2016) 11 SCC 720
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Datta assisted by Mr. Subhojit Seal and Mr. Aranya Saha learned advocates
appearing for the respondents nos. 1 and 2.
27. The first issue to be decided is regards the maintainability of the writ
petition and to what extent the writ court can interfere in contractual
matters. In Bridge and Roof Company (India) Limited, the Hon'ble
Supreme Court pointed out that the contract which was subject matter of
the said case is a contract in the realm of private law; it is not a statutory
contract; it is the governed by the provisions of the Contract Act or may be,
also by certain provisions of the Sale of Goods Act. Any dispute relating to
the interpretation of the terms and conditions of such contract cannot be
agitated, and could not have been agitated in a writ petition, that is a matter
either for arbitration as provided by the contract or for the civil court as the
case may be.
28. It was further held that whether any money is due to the respondent
therein from the appellant Government therein under the contract and, if so,
how much and the further question whether retention or refusal to pay any
amount by the Government is justified or not are all matters which cannot
be agitated in or adjudicated upon in a writ petition. Further it was held
that the prayer in the writ petition to restrain the Government from
deducting a particular amount from the writ petitioner's bills was a prayer
which cannot be granted by the High Court under Article 226 of the
Constitution. Further whether there has been reduction in the statutory
liability on account of a change in law within the meaning of certain clauses
of the contract is again not a matter to be agitated in the writ petition. A
matter relating to interpretation of the terms of the contract should be
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agitated before the arbitrator or the civil court as the case may be; if any
amount is wrongly withheld by the Government, the remedy of the
respondent is to raise the dispute as provided by the contract or approach
the civil court as the case may be according to law. Similarly, if the
Government says that if any over payment has been made to the
respondent, the remedy is also the same.
29. In Kerala State Electricity Board, the Hon'ble Supreme Court held
that the interpretation and implementation of a clause in a contract cannot
be subject matter of a writ petition. Whether the contract envisages actual
payment or not is a question of construction of contract. If a term of a
contract is violated, ordinarily the remedy is not the writ petition under
Article 226. A contract would not become statutory simply because it is for
construction of public utility and it has been awarded by the statutory body.
Obligations imposed by the contract on the contracting parties come within
the purview of the Contract Act, that would not make the contract statutory.
It was further held that the disputes about the meaning of covenant in a
contract or its enforceability have to be determined according to the usual
principles of Contract Act. Every Act of a statutory body need not necessarily
involve an exercise of statutory power. Statutory bodies, like private parties,
have power to contract or deal with property. Such activities may not raise
any issue of public law. The contract being not a statutory contract the
dispute relating to the interpretation of the terms and conditions of such
contract could not have been agitated in a petition under Article 226 of the
Constitution of India.
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30. In ABL International Limited while considering the matter
pertaining to interpretation of a clause in the contract, the Hon'ble Supreme
Court held that a plain interpretation of the clause was sufficient and it does
not require any aid, much less oral evidence to interpret the clause.
31. In Jain Plastics and Chemical Limited, it was held that the writ is
not remedy for enforcing contractual obligations; writ petition under Article
226 is not the proper proceeding for adjudication of such disputes; the
existence of alternate remedy does not affect the jurisdiction of the court to
issue writ, but ordinarily that would be a good ground in refusing to exercise
the discretion under Article 226. In the facts of the said case, it was found
that many matters could be decided after referring to the contention raised
in the affidavits and counter affidavits, but that would hardly be the ground
to exercise of the extraordinary jurisdiction under Article 226 of the
Constitution in case of alleged breach of contract.
32. In The Union of India Versus D.N. Revri and Company and Others
17 it was held that the contract being a commercial document between
parties, it must be interpreted in such a manner as to give efficacy to the
contract rather than to invalidate it. It would not be right while interpreting
a contract entered into between two lay parties to apply strict rules of
construction which are ordinarily applicable to a conveyance and other
formal documents. The meaning for such a contract must be gathered by
adopting a common sense approach and it must not be allowed to be
thwarted by a narrow pedantic and realistic interpretation.
(1976) 4 SCC 147
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33. In United India Insurance Company Limited, the Hon'ble Supreme
Court held that it is a settled law that the terms of the contract have to be
strictly read and natural meaning to be given to it. No outside aid should be
sought unless the meaning is ambiguous.
34. In DLF Universal Limited, the Hon'ble Supreme Court while
considering how a contract should be interpreted held as follows"-
It is settled principle in law that a contract is
interpreted according to its purpose. The
purpose of a contract is the interests, objectives,
values, policy that the contract is designed to
actualize. It comprises joint intent of the parties.
Every such contract expresses the autonomy of
the contractual parties' private will. It creates
reasonable, legally protected expectations
between the parties and reliance on its results.
Consistent with the character of purposive
interpretation, the court is required to determine
the ultimate purpose of a contract primarily by
the joint intent of the parties at the time the
contract so formed. It is not the intent of a
single party; it is the joint intent of both parties
and the joint intent of the parties is to be
discovered from the entirety of the contract and
the circumstances surrounding its formation.
As is stated in Anson's Law of Contract,
"a basic principle of the Common Law of
Contract is that the parties are free to
determine for themselves what primary
obligations they will accept.... Today, the
position is seen in a different light. Freedom of
contract is generally regarded as a reasonable,
social, ideal only to the extent that equality of
bargaining power between the contracting
parties can be assumed and no injury is done
to the interests of the community at large."
The Court assumes:
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"that the parties to the contract are reasonable
persons who seek to achieve reasonable
results, fairness and efficiency.... In a contract
between the joint intent of the parties and the
intent of the reasonable person, joint intent
trumps, and the Judge should interpret the
contract accordingly. A party who claims
otherwise, violates the principle of good faith.
(See Purposive Interpretation in Law by Aharon
Barak: 2005 Princeton University Press).
35. The legal principle that could be culled out from the above decisions is
that in matter relating to the interpretation of the term of a contract it
should be agitated before the arbitrator or civil court as the case may be. If
the contractor alleges that the Government has wrongfully withheld certain
sums then the remedy is to approach the civil court and invoking Article
226 is not the proper remedy. External aids are not required to be applied
while interpreting the terms and conditions of a contract. The subsisting
contract cannot be rewritten in a writ proceeding. When serious disputed
questions or rival claims arising out of breach of contract are required to be
investigated and determined on the basis of evidence led in the civil court,
the writ petition is not maintainable. While interpreting a contract it must
be interpreted in such manner as to give efficacy to the contract rather than
to invalidated it. The terms of the contract have to strictly read and natural
meaning to given to it, no outside aid should be sought unless meaning is
ambiguous.
36. Consistent with the character of purposive interpretation, the court is
required to determine, the ultimate purpose of a contract primarily by the
joint venture of the parties at the time the contract so formed; it is not the
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intent of a single party; it is the joint intent of both parties and the joint
intent of the parties is to discover from the entirety of the contract and the
circumstances surrounding its formation.
37. If the above legal principle is applied to the facts of the case, we have
to necessary hold that a writ petition for enforcement of the terms and
conditions of a contract was not maintainable. Equally interpretation of the
terms and contract of a contract would also fall outside the jurisdiction of a
petition under Article 226 of the Constitution.
38. The learned advocate appearing for the respondent writ petitioner
placed heavy reliance on the decision in M.P. Power Management
Company Limited. The learned Advocate for the appellant endeavour to
distinguish the decision by referring to the various paragraphs. Thus, we are
required to consider as to whether the decision in M.P. Power Management
Company Limited would assist the case of the appellant or that of the
respondent. Paragraph 82 of the judgment would be relevant:-
We may cull out our conclusions in regard to the
points, which we have framed:
i. It is, undoubtedly, true that the writ
jurisdiction is a public law remedy. A matter, which
lies entirely within a private realm of affairs of
public body, may not lend itself for being dealt with
under the writ jurisdiction of the Court.
ii. The principle laid down in Bareilly
Development Authority (supra) that in the case of a
non-statutory contract the rights are governed only
by the terms of the contract and the decisions,
which are purported to be followed, including
Radhakrishna Agarwal (supra), may not continue
to hold good, in the light of what has been laid
down in ABL (supra) and as followed in the recent
judgment in Sudhir Kumar Singh (supra).
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iii. The mere fact that relief is sought under a
contract which is not statutory, will not entitle the
Respondent-State in a case by itself to ward-off
scrutiny of its action or inaction under the contract,
if the complaining party is able to establish that the
action/inaction is, per se, arbitrary.
iv. An action will lie, undoubtedly, when the
State purports to award any largesse and,
undoubtedly, this relates to the stage prior to the
contract being entered into [See R.D. Shetty
(supra)]. This scrutiny, no doubt, would be
undertaken within the nature of the judicial review,
which has been declared in the decision in Tata
Cellular v. Union of India MANU/SC/0002/1996
MANU/SC/0002/1996 : (1994) 6 SCC 651.
v. After the contract is entered into, there can be
a variety of circumstances, which may provide a
cause of action to a party to the contract with the
State, to seek relief by filing a Writ Petition.
vi. Without intending to be exhaustive, it may
include the relief of seeking payment of amounts
due to the aggrieved party from the State. The State
can, indeed, be called upon to honour its
obligations of making payment, unless it be that
there is a serious and genuine dispute raised
relating to the liability of the State to make the
payment. Such dispute, ordinarily, would include
the contention that the aggrieved party has not
fulfilled its obligations and the Court finds that
such a contention by the State is not a mere ruse or
a pretence.
vii. The existence of an alternate remedy, is,
undoubtedly, a matter to be borne in mind in
declining relief in a Writ Petition in a contractual
matter. Again, the question as to whether the Writ
Petitioner must be told off the gates, would depend
upon the nature of the claim and relief sought by
the Petitioner, the questions, which would have to
be decided, and, most importantly, whether there
are disputed questions of fact, resolution of which
is necessary, as an indispensable prelude to the
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grant of the relief sought. Undoubtedly, while there
is no prohibition, in the Writ Court even deciding
disputed questions of fact, particularly when the
dispute surrounds demystifying of documents only,
the Court may relegate the party to the remedy by
way of a civil suit.
viii. The existence of a provision for arbitration,
which is a forum intended to quicken the pace of
dispute resolution, is viewed as a near bar to the
entertainment of a Writ Petition (See in this regard,
the view of this Court even in ABL (supra)
explaining how it distinguished the decision of this
Court in State of U.P. and Ors. v. Bridge & Roof Co.
MANU/SC/0969/1996MANU/SC/0969/1996 :
(1996) 6 SCC 22, by its observations in paragraph-
14 in ABL (supra)].
ix. The need to deal with disputed questions of
fact, cannot be made a smokescreen to guillotine a
genuine claim raised in a Writ Petition, when
actually the resolution of a disputed question of
fact is unnecessary to grant relief to a writ
applicant.
x. The reach of Article 14 enables a Writ Court to
deal with arbitrary State action even after a
contract is entered into by the State. A wide variety
of circumstances can generate causes of action for
invoking Article 14. The Court's approach in dealing
with the same, would be guided by, undoubtedly,
the overwhelming need to obviate arbitrary State
action, in cases where the Writ remedy provides an
effective and fair means of preventing miscarriage
of justice arising from palpably unreasonable
action by the State.
xi. Termination of contract can again arise in a
wide variety of situations. If for instance, a contract
is terminated, by a person, who is demonstrated,
without any need for any argument, to be the
person, who is completely unauthorised to cancel
the contract, there may not be any necessity to
drive the party to the unnecessary ordeal of a
prolix and avoidable round of litigation. The
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intervention by the High Court, in such a case,
where there is no dispute to be resolved, would
also be conducive in public interest, apart from
ensuring the Fundamental Right of the Petitioner
Under Article 14 of the Constitution of India. When
it comes to a challenge to the termination of a
contract by the State, which is a non-statutory
body, which is acting in purported exercise of the
powers/rights under such a contract, it would be
over simplifying a complex issue to lay down any
inflexible Rule in favour of the Court turning away
the Petitioner to alternate Fora. Ordinarily, the
cases of termination of contract by the State, acting
within its contractual domain, may not lend itself
for appropriate redress by the Writ Court. This is,
undoubtedly, so if the Court is duty-bound to arrive
at findings, which involve untying knots, which are
presented by disputed questions of facts.
Undoubtedly, in view of ABL Limited (supra), if
resolving the dispute, in a case of repudiation of a
contract, involves only appreciating the true scope
of documentary material in the light of pleadings,
the Court may still grant relief to an applicant. We
must enter a caveat. The Courts are today reeling
under the weight of a docket explosion, which is
truly alarming. If a case involves a large body of
documents and the Court is called upon to enter
upon findings of facts and involves merely the
construction of the document, it may not be an
unsound discretion to relegate the party to the
alternate remedy. This is not to deprive the Court of
its constitutional power as laid down in ABL
(supra). It all depends upon the facts of each case
as to whether, having regard to the scope of the
dispute to be resolved, whether the Court will still
entertain the petition.
xii. In a case the State is a party to the contract
and a breach of a contract is alleged against the
State, a civil action in the appropriate Forum is,
undoubtedly, maintainable. But this is not the end
of the matter. Having regard to the position of the
State and its duty to act fairly and to eschew
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arbitrariness in all its actions, resort to the
constitutional remedy on the cause of action, that
the action is arbitrary, is permissible (See in this
regard Kumari Shrilekha Vidyarthi and Ors. v.
State of U.P. and Ors.
MANU/SC/0504/1991MANU/SC/0504/1991 :
(1991) 1 SCC 212)). However, it must be made
clear that every case involving breach of contract
by the State, cannot be dressed up and disguised
as a case of arbitrary State action. While the
concept of an arbitrary action or inaction cannot be
cribbed or confined to any immutable mantra, and
must be laid bare, with reference to the facts of
each case, it cannot be a mere allegation of breach
of contract that would suffice. What must be
involved in the case must be action/inaction, which
must be palpably unreasonable or absolutely
irrational and bereft of any principle. An action,
which is completely malafide, can hardly be
described as a fair action and may, depending on
the facts, amount to arbitrary action. The question
must be posed and answered by the Court and all
we intend to lay down is that there is a discretion
available to the Court to grant relief in appropriate
cases.
xiii. A lodestar, which may illumine the path of
the Court, would be the dimension of public interest
subserved by the Court interfering in the matter,
rather than relegating the matter to the alternate
Forum.
xiv. Another relevant criteria is, if the Court has
entertained the matter, then, while it is not tabooed
that the Court should not relegate the party at a
later stage, ordinarily, it would be a germane
consideration, which may persuade the Court to
complete what it had started, provided it is
otherwise a sound exercise of jurisdiction to decide
the matter on merits in the Writ Petition itself.
xv. Violation of natural justice has been
recognised as a ground signifying the presence of a
public law element and can found a cause of action
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premised on breach of Article 14. [See Sudhir
Kumar Singh and Ors. (supra)].
39. In the above decision the judgment in Radhakrishna Agarwal and
Others Versus State of Bihar 18 was held not to continue to hold good in
the light of the decision in ABL International Limited. Equally it has been
said that mere fact that the relief is sought under the contract, it is non
statutory, will not be entitle the respondent state in a case by itself to ward
off scrutiny of its action or inaction under the contract, if the complaining
party is able to establish that the action/inaction as per-se arbitrary.
Therefore, the scope of the interference in a matter where relief is sought for
in a non-statutory contract is available when the complaining party is able
to establish that the action/inaction is per-se arbitrary. It has also been held
that the state can be called upon to honour its obligations of making
payment however this will not be done when there is serious and genuine
dispute raised relating to the liability of the state to make payment and such
dispute ordinarily would include the contention that the aggrieved party has
not fulfilled its obligations and the court finds such a contention by the
state is a mere ruse or pretence. Ultimately it has been held that exercise of
jurisdiction depends upon the facts of each case as to whether having regard
to the scope of the dispute to be resolved, whether the court will still
entertain the petition under Article 226 of the Constitution. Therefore, the
respondent writ petitioner has to bring the relief sought for in the writ
petition which admittedly pertains to interpretation and a claim arising out
(1977) 3 SCC 457
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of non-statutory contract, within anyone of the parameters pointed out
above.
40. The learned Single Bench has interpreted clause 4.7 of the General
Terms and Conditions of the contract which reads as follows:-
For such limited enquiry, Clause 4.7 of the
GTC is required to be set forth below:
"4.7 Refund of Security Deposit : The refund of
Security deposit shall be subject to company's
right to deduct/appropriate its dues against
the contractor under this contract or under any
other contract. On completion of the entire
work and certified as such by the Engineer-In-
Charge, one half of the security deposit
remaining with the company shall be
refunded. The other half shall be refunded to
the contractor on the expiry of six months
performance guarantee period from the date of
completion as certified by the Engineer-In-
Charge, subject to the following conditions:
a) Any defect/defects in the work, if detected
after issue of completion certificate is/are
rectified to the satisfaction of the engineer-In-
Charge within the said defect liability period
of six months or on its due extension till
completion of the rectification work as
required.
b) In the case of building work or other work of
similar nature the refund shall be made on the
expiry of the said six months period or at the
end of one full monsoon period i.e. June to
September. Whichever is later in point of time
and any defects such as leakages in roof
effloresces in walls, dampness, defects in
drainage etc. should be rectified to the
satisfaction of the Engineer-In-Charge.
c) (i) In case of supply, installation and
commissioning of equipment for electrical and
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mechanical works the refund shall be made
on the expiry of defect liability period which
will be one year from the date of
commissioning of the equipment/completion of
the work and/or rectification of any defect
which may be detected in the individual
equipment or the whole system under the
contract, whichever is later.
(ii) All types of Manufacture's
guarantee/warranty wherever applicable are
to be issued/revalidated in the name of the
owner by the Contractual agency and will be
covered with relevant counter guarantee."
41. The writ petitioner has not challenged the above condition/clause nor
they are entitled to challenge after having participated in the tender and
come out successful. As pointed out above, the terms and conditions of the
contract have to be interpreted without applying any externally aids bearing
in mind that there are two parties to the contract and the question of
unilateral interpretation to favour one to be desisted. Furthermore, the
intention of the parties has to be culled out from the entirety of the contract
and the circumstances surrounding its formation.
42. The learned Single Bench was of the view that the right of the
appellant to deduct / appropriate its dues against the contractor under this
contract or under any other contract is exercisable within a period of 6
months. The question would be whether the Court would be justified in
reading the terms and conditions of the contract dehors than what has been
stated in the contract. Admittedly, the writ petitioner has accepted the
condition and performed the work allotted. Clause 4.7 consists of three
limbs, the first of such is that the refund of security deposit shall be subject
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to the company's right (appellant's right) to deduct / appropriate its dues
against the contractor under this contract or under any other contract. The
clause / sentence terminates with a "full stop".
43. The second limb is on completion of the entire work and certified as
such by the Engineer-in-charge one half of the security deposit remaining
with the company shall be refunded. A simple and natural meaning to be
given to the clauses that the second limb would be subject to the first limb,
if the appellant exercises its right to deduct/ appropriate its dues against
the contractor under this contract or under any other contract the second
limb will not come into operation. If the second limb does not come into
operation, it goes without saying that the third limb of the condition also
would not come into operation. Therefore, in our view the learned Single
Bench could not have super imposed the condition of 6 months which is
present in the second limb of Clause 4.7 into the first limb. This clearly
amounts to rewriting the contract which is impermissible.
44. We find from the pleadings in the writ petition that no such case was
canvassed by the writ petitioners themselves. Therefore, going by the
manner in which contracts have to be interpreted, the Court ought not to
add or substitute any words in a commercial contract which has been
entered into by both parties fully conscious of their rights and obligations. If
this is the correct interpretation to be given to Clause 4.7, then the
appellant has the right to deduct or appropriate its dues against the
respondent writ petitioner under any other contract and no time limit has
been prescribed for exercise of such right. Admittedly, there were two other
joint ventures in which the respondent is a party namely, STA-CC(JV) and
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STA-BGM(JV). So far as STA-CC(JV) is concerned, the last date for
completion of the work as per the NIT was 1.6.2022. Breach was committed
and notice was issued to the JV on 18.7.2022. On 19.1.2023 appellant
issued a letter to STA-CC(JV) to commence work failing which informed
them that in terms of Clause 6.1 of the GTC forfeiture of the security deposit
will be made. The said joint venture filed a writ petition before this Court
and the Court by order dated 15.5.2023 directed commencement of work
failing which the appellant is entitled to take penal action. The said JV did
not comply with the direction and ultimately notice of termination was
issued on 26.6.2023 and the matter is now pending before the Arbitration
Tribunal. So far as STA-BGM (JV) show-cause notice was issued on
18.7.2022 informing them that if they do not adhere to the terms and
conditions penal action will be taken as per the NIT. The contract was
terminated by notice of termination dated 1.1.2024 and damages of Rupees.
29,61,32,571/- has been claimed. We are informed that a suit was filed by
the said joint venture, the plaint was rejected and appeal is pending. The
contention of the respondent writ petitioner is that on the date when the
completion certificate was issued to the writ petitioner JV i.e. 19.11.2022
there was no enforceable demand. In our view, this would be and incorrect
manner in which the power of the appellant for deduction or appropriation
of its dues can be interpreted. Clause 4.7 does not give any such leverage. It
is plain and simple conferring power on the appellant to deduct /
appropriate its dues against the contractor under any other contract and the
refund of security deposit is subject to such exercise of power. Therefore, the
respondent writ petitioner cannot be heard to be said that on the date of
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issuance of completion certificate or on the expiry of the 6 months period
there was no crystallized demand and therefore such right cannot be
exercised at this juncture is an incorrect interpretation which would
frustrate the object of the contract. The notice of termination of the contract
should not be read in isolation but should be read along with the chain of
events which preceded the termination. Therefore, the date on which the
breach occurred at the first instance would be relevant for all purposes and
the same cannot be ignored. The document has to be interpreted in a
manner that conveys the proper meaning to a reasonable man.
Undoubtedly, the writ petitioner is a corporate entity and not an individual
and it is not the first time the writ petitioner have entered into contract with
the appellant and in respect of the two other joint ventures they are
defaulters and claims are pending. Therefore, we are of the view that the
appellant would be entitled to exercise its powers under Clause 4.7 and
withhold the payment under any other contract to which the writ petitioner
is a party and this alone will be the correct interpretation of the terms and
conditions of the contract as has been understood by the parties themselves
and acted upon.
45. The decision in Subodh Kumar Singh Rathour was heavily relied on
by the learned advocate appearing for the respondent writ petitioner. In fact,
a careful reading of the judgment would lend support to the case of the
appellant rather than the respondent. The Hon'ble Supreme Court after
referring to a catena of decisions some of which we have referred above held
that although disputes arising purely out of contracts are not amenable to
writ jurisdiction yet keeping in mind the obligation of the State to act fairly
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and not arbitrarily or capriciously, it is settled that when contractual power
is being used for public purpose, it is certainly amenable to judicial review.
After having rendered such a finding, the Hon'ble Supreme Court examined
the facts of the case and found that the cancellation of the tender in the said
case was influenced by extraneous consideration. The cancellation of the
tender fell outside the purview of the terms and conditions of the contract.
The Hon'ble Supreme Court on facts found that the matter is not purely a
contractual; it is not a breach of contract, rather a plain and simple exercise
of executive power. It was further held that the question whether an
impugned action is arbitrary or not is ultimately to be answered on the facts
and in the circumstances of a given case. The Court carefully attain to the
facts and circumstances of the case; it should find out whether the
impugned decision is based on any principle; if the act is capricious or
exhibits whims of the authority. then it would bear the insignia of
arbitrariness. The Court to assess whether an action complained of should
be termed as arbitrary is by way of scrutinizing the reasons that have been
assigned to such an action. Therefore, the Court had interfered in the said
matter because it was a mala fide and whimsical exercise of power and
admittedly exercise outside the scope of the contract. In the instant case the
appellant seeks to enforce its powers under clause 4.7 of the GTC which is
well within the scope of the contract.
46. Therefore, we are of the view that the power exercised by the appellant
to withhold the money is within the scope of the contract and therefore, the
learned writ Court could not have allowed the writ petition in part, could not
have interpreted the terms and conditions of the contract as has been done
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and eventually passed a money decree in a writ petition when admittedly the
power exercised by the appellant to deduct / appropriate its dues under any
other contract was in exercise of powers conferred under Clause 4.7 and
such exercise is neither extraneous nor arbitrary nor mala fide. As has been
held above, the learned Writ Court could not have imported the time period
of 6 months found in the second limb of Clause 4.7 to the first limb which is
independent of the second limb. In other words the second limb could come
into operation only if there are no circumstances warranting exercise of the
power by the appellant under the first limb of Clause 4.7.
47. Therefore, we have no hesitation to hold that the action of the
appellant is neither unfair nor unjust nor unreasonable nor arbitrary but an
exercise done under the terms and conditions of the contract. The Court
cannot fix a time limit within which period the deduction or forfeiture can be
done by the appellant either under the subject contract or under any other
contract and if such interpretation is made it would undoubtedly amount to
rewriting a contract which is impermissible under Article 226 of the
Constitution.
48. As mentioned above, the sufferance of loss is relatable to the date of
breach of other joint venture, and the question of a crystallized liability to be
in place on the date of issuance of completion certificate in the subject
contract is not required and if such interpretation is given, it would frustrate
the terms and conditions of the contract which cannot be done.
49. For all the above reasons, the appeal is allowed and the order and
direction issued by the learned Single Bench is set aside. The above decision
will not prevent the respondent with petitioner from availing other remedies
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before the appropriate forum in the appropriate manner and the findings
rendered above will not prejudice the rights of the respondent in such
proceedings that the appellant may avail. No costs.
50. CAN 4 of 2024 has been filed by the appellant on 26.09.2024 praying
for a direction upon the respondent writ petitioner to extend the bank
guarantee which was filed by the respondent writ petitioner.
51. In the light of the judgment allowing this appeal, no further orders are
required in CAN 4 of 2024 and the same stands disposed of along with the
connected applications.
(T.S. SIVAGNANAM, CJ.)
I Agree.
(HIRANMAY BHATTACHARYYA, J.)
(P.A.- SACHIN/PRAMITA)
