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Karnataka High Court
Executive Engineer vs Abhiram Infra Projects Private Limited on 28 November, 2025
-1-
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WA No. 1549 of 2024
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF NOVEMBER, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
WRIT APPEAL NO. 1549 OF 2024 (GM-TEN)
BETWEEN:
1. EXECUTIVE ENGINEER
KARNATAKA URBAN WATER SUPPLY
AND DRAINAGE BOARD
(KUWS & DB)
M.G. ROAD, RAVINDRA NAGAR
HASSAN - 573 202
KARNATAKA
2. KARNATAKA URBAN WATER
SUPPLY AND DRAINAGE BOARD
(KUWS & DB)
M.G. ROAD, RAVINDRA NAGAR
Digitally HASSAN - 573 202
signed by
AMBIKA H B ALSO AT:
Location: #5, JALABHAVAN, 1ST STAGE
High Court 1ST PHASE, BTM LAYOUT
of Karnataka BANNERGHATTA ROAD
BANGALORE - 560 029
(REPRESENTED BY EXECUTIVE ENGINEER)
...APPELLANTS
(BY SRI VEERESH R. BUDIHAL, ADVOCATE)
AND:
1. ABHIRAM INFRA PROJECTS PRIVATE LIMITED
A COMPANY INCORPORATED UNDER
-2-
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WA No. 1549 of 2024
HC-KAR
THE COMPANIES ACT, 1956
HAVING ITS OFFICE AT
C-81, FLAT No.402
SRI JYOTHI NILAYAM
MADHURA NAGAR
HYDERABAD - 500 038
TELANGANA INDIA
(REPRESENTED BY ITS AUTHORIZED
REPRESENTATIVE
S. VENKATA RAMANA REDDY)
2. M/S AXIS BANK LIMITED
HAVING BRANCH AT:
6-3-879/B, G. PULLA REDDY BUILDING
GREENLANDS
BEGUMPET ROAD
HYDERABAD - 500 016
(REPRESENTED BY ITS
BRANCH MANAGER)
...RESPONDENTS
(SRI. ROHAN VEERANNA TIGADI, ADVOCATE FOR C/R-1)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER DATED 27.08.2024 PASSED BY THE LEARNED SINGLE
JUDGE OF THIS HON'BLE COURT IN WRIT PETITION No.18245/2021
(GM-TEN) AND FURTHER TO DISMISS THE SAID WRIT PETITION &
ETC.
THIS APPEAL, COMING ON FOR ORDERS, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C.M. POONACHA
ORAL JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. For the reasons stated in the application - I.A No.1/2025, the
same is allowed. The delay in filing the recall application is
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condoned. Since the office objections have been cured, the order
dated 24.04.2025 dismissing the appeal is recalled. The appeal is
restored to its file. Accordingly, I.A No.2/2025 is allowed.
2. Issue notice. Mr. Rohan Veeranna Tigadi, learned counsel
accepts notice for respondent No.1.
3. The appellants have filed the present appeal impugning an
order dated 27.08.2024 passed by the learned Single Judge in
Writ Petition No.18245/2021 (GM-TEN).
4. The said petition was preferred by respondent No.1 [the
Contractor] seeking return of the original Performance Bank
Guarantee dated 28.06.2019 for a sum of Rs.1,41,25,600/- and
the original Additional Performance Bank Guarantee dated
28.06.2019 for a sum of Rs.52,20,000/-. Additionally, the
Contractor also prayed for refund of the bid security amount of
Rs.35,32,000/- along with interest at the rate of 18% per annum
from 04.01.2019 till the date of realisation.
5. The controversy involved has arisen in the following factual
context:
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6. The appellants had invited tender on 01.03.2014 for the
purpose of executing the work of laying of sewer network with
construction of manhole chambers, construction of 2.64 MLD
capacity Sewerage Treatment Plant and 0.15 KLD capacity septic
tank with allied components, providing and laying of sewer lines
across railway track and national highway under the Underground
Development Scheme at Birur Town, Hassan, [hereafter referred
to as "Birur Project"]. The Contractor has furnished his bid
pursuant to the said notice. The said bid was accepted in terms of
a letter of acceptance dated 03.11.2014 and the contract for
executing the said work was awarded to the Contractor at a price
of Rs.23,54,25,125/-. Thereafter, on 01.12.2014, the parties
entered into a formal agreement setting out the terms and
conditions of the contract.
7. There is no dispute that the Contractor successfully executed
the Birur Project and discharged his performance and obligations.
The appellants also cleared the Contractor's final bill. However,
the appellants failed to return the bank guarantees and refund the
bid security amount. Admittedly, the said amount was required to
be refunded to the Contractor as it had successfully completed the
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Birur Project. The concerned officers of appellant No.2 authority
had also recommended return of the bank guarantees and the bid
security furnished by the Contractor.
8. Notwithstanding the above, by a letter dated 06.09.2019, the
appellants communicated their decision not to release the bank
guarantees on the ground that the Contractor had been awarded
another contract in respect of UGD scheme to be constructed by
the Contractor at Chikkamagaluru [Chikkamagaluru Project]. It is
stated that in terms of the said contract, the Contractor was
required to furnish a bank guarantee which the Contractor had
furnished but, the same had expired on 14.11.2014. The
appellants thus, decided to withhold return of the Performance
Bank Guarantees and the bid security furnished in relation to the
Birur Project on the ground that the bank guarantee given for
Chikkamagaluru Project had expired.
9. It is the appellant's case that in terms of the contract entered
into between the parties in respect of the Chikkamagaluru Project,
the appellants could retain the said bank guarantees. The
appellants relied on clause 49.4 of the contract relating to
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Chikkamagaluru Project. The said clause as set out in the
impugned judgment is reproduced below:
"49.4 Contractor's Failure to Carry out Instructions
In case of default on the part of the Contractor in
carrying out such instructions within a reasonable
time, the Employer shall be entitled to employ and pay
other persons to carry out the same and if such work
is work which, in the opinion of the Engineer, the
Contractor was liable to do at his own cost under the
Contract, then all costs consequent thereon or
incidental thereto shall, after due consultation with the
Employer and Contractor, be determined by the
Engineer and shall be recoverable from the Contractor
by the Employer and may be deducted from any
monies due or to become due to the Contractor and
the Engineer shall notify the Contractor accordingly,
with a copy to the Employer."
10. The learned Single Judge found that recourse to clause 49.4
was not available as there was no material placed on record to
substantiate that any amount was determined as recoverable from
the Contractor by the Engineer.
11. The learned counsel appearing for the appellants specifically
contends that the only question to be considered is whether the
appellants could withhold any amount payable to a person under a
contract on account of debts owed by the said person in relation to
another contract. He submits that the impugned judgement would
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set an erroneous precedent, which would curtail the right of the
appellants to withhold the amounts notwithstanding that the person
to whom the amounts are payable owes a debt to the appellants.
12. In our view, the said question does not arise in the present
appeal. The learned Single Judge has allowed the writ petition on
the finding that there was no material to indicate that any
determined debt was owed by the Contractor to the appellants.
The petition was not allowed on the basis of any general
proposition as canvassed by the learned counsel for the
appellants.
13. The learned counsel for the appellants fairly states that the
same be clarified that the impugned order has been rendered in
the facts of the present case. We have no hesitation in accepting
the said request.
14. In view of the above, we dispose of the present appeal by
clarifying that the impugned order has been rendered by the
learned Single Judge in the given facts of the present case.
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15. The pending interlocutory applications also stand disposed
of.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C.M. POONACHA)
JUDGE
AHB
