Karnataka High Court
Nhdpl South Private Limited vs Sri. Goyal Pranay Harivansh on 16 October, 2025
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WA No. 237 of 2025
C/W CCC No.185 of 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF OCTOBER, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C M JOSHI
WRIT APPEAL NO. 237 OF 2025 (GM-RES)
C/W CIVIL CONTEMPT PETITION NO. 185 OF 2025
IN WRIT APPEAL NO. 237 OF 2025
BETWEEN:
1. UNION BANK OF INDIA
VILE PARLE (W) BRANCH
SHIV SHAKTI, 11
VITHAL NAGAR COOP. HOUSING SOCIETY
10TH ROAD, J.V.P.D SCHEME
VILE PARLE (W), MUMBAI - 400 049
NOW SHIFTED TO
UNION BANK OF INDIA
STRESSED ASSET MANAGEMENT BRANCH
Digitally signed
by PRABHAKAR MUMBAI, 104, GROUND FLOOR
SWETHA BAHART HOUSE, M S MARG
KRISHNAN FORT, MUMBAI - 400 001
Location: High REPRESENTED BY ITS
Court of
Karnataka CHIEF MANAGER
MRSIDHARTHA S. MHADE
...APPELLANT
(BY SRI DHYAN CHINNAPPA, SENIOR ADVOCATE FOR
SMT. DIVYA PURANDAR, ADVOCATE)
AND:
1. M/S NHDPL SOUTH PRIVATE LIMITED
(FORMERLY KNOWN AS
NHDPL PROPERTIES PVT. LTD.
AND PREVIOUSLY KNOWN AS
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WA No. 237 of 2025
C/W CCC No.185 of 2025
NITESH HOUSING
DEVELOPERS PRIVATE LIMITED
HAVING ITS OFFICE AT NO. 110, LEVEL 1
ANREWS BUILDING, M.G. ROAD
BENGALURU - 560 001
ALSO HAVING OFFICE AT NO. 7
7TH FLOOR, NITESH TIMES SQAURE
M.G. ROAD
BENGALURU - 560 001
REPRESENTED BY ITS
AUTHORISED OFFICER
2. THE RESERVE BANK OF INDIA
NEW CENTRAL OFFICE BUILDING
SHAHID BHAGAT SINGH ROAD
FORT MUMBAI
MAHARASHTRA - 400 001
REPRESENTED BY DIRECTOR
3. THE BANKING OMBUDSMEN MUMBAI
C/O RESERVE BANK OF INDIA
4TH FLOOR, RBI BYCULLA
OFFICE BUILDING
OPPOSITE MUMBAI
CENTRAL RAILWAY STATION
BYCULLA-MUMBAI - 400 008
...RESPONDENTS
(SRI UDAYA HOLLA, SENIOR ADVOCATE FOR
SRI SIDDHARTH SUMAN, ADVOCATE FOR C/R-1)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
IMPUGNED ORDER DATED 27.01.2025 PASSED BY THE LEARNED
SINGLE JUDGE IN W.P. No. 2193/2021 (GM-RES) BY ALLOWING
THIS APPEAL AND TO PASS SUCH OTHER AND FURTHER ORDERS
AS MAY BE DEEMED JUST AND PROPER IN THE FACTS AND
CIRCUMSTANCES OF THE CASE.
IN CCC NO. 185 OF 2025 (CIVIL)
BETWEEN:
1. NHDPL SOUTH PRIVATE LIMITED
(NOW KNOWN AS NORTHROOF
VENTURES PVT LTD.,
-3-
WA No. 237 of 2025
C/W CCC No.185 of 2025
FORMERLY KNOWN AS NHDPL
PROPERTIES PRIVATE LIMITED EARLIER
NITESH HOUSING DEVELOPERS PVT LTD.,)
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT AND HAVING
REGISTERED OFFICE AT
NO.110, LEVEL 1, ANDREWS BUILDING
M.G. ROAD, BENGALURU - 560 001
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
VASUMATI H.K.
...COMPLAINANT
(BY SRI UDAYA HOLLA, SENIOR ADVOCATE FOR
SRI SIDDHARTH SUMAN, ADVOCATE)
AND:
1. SRI. GOYAL PRANAY HARIVANSH
CHIEF MANAGER / BRANCH MANAGER
UNION BANK OF INDIA
VILE PARLE (W) BRANCH, SHIV SHAKTI
II VITHAL NAGAR, CO-OP. HOUSING SOCIETY
10TH ROAD, J.V.P.D. SCHEME
VILE PARLE (W), MUMBAI - 400 049
...ACCUSED
THIS CCC IS FILED UNDER SECTION 11 AND 12 OF THE
CONTEMPT OF COURTS ACT, 1971 R/W ARTICLE 215 OF THE
CONSTITUTION OF INDIA, PRAYING TO INITIATE CONTEMPT
PROCEEDINGS UNDER THE PROVISIONS OF THE CONTEMPT OF
COURTS ACT AGAINST THE ACCUSED FOR HAVING WILLFULLY
DISOBEYED THE ORDERS ORDER DATED 27.01.2025 IN W.P.
NO.2193/2021 PASSED BY THE HON'BLE HIGH COURT OF
KARNATAKA, BENGALURU I.E. ANNEXURE-A AND TO PUNISH THE
ACCUSED FOR WILLFULLY AND DELIBERATELY DISOBEYING THE
SAID ORDERS PASSED BY THE HON'BLE HIGH COURT OF
KARNATAKA AND FURTHER ENFORCE THE ORDER PASSED BY
THE HON'BLE HIGH COURT OF KARNATAKA IN ACCORDANCE
WITH LAW; AND ALSO AWARD COSTS OF THESE PROCEEDINGS.
THIS WRIT APPEAL AND CCC, HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT
THIS DAY, JUDGMENT WAS PRONOUNCED AS UNDER:
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WA No. 237 of 2025
C/W CCC No.185 of 2025
CORAM: HON'BLE MR. VIBHU BAKHRU ,CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C M JOSHI
CAV JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. The appellant - Union Bank of India [hereafter UBI] - is a
scheduled bank. It has filed the present appeal impugning an order
dated 27.01.2025 [hereafter the impugned order] passed by the
learned Single Judge in Writ Petition No.2193/2021 (GM-RES)
captioned M/s NHDPL South Private Limited v. Union Bank of
India & Ors. Respondent No.1, M/s NHDPL South Private Limited
[hereafter NSPL], had filed the aforementioned writ petition
impugning the order dated 21.12.2020 passed by respondent No.3
(the Banking Ombudsman Mumbai) rejecting its complaint.
Additionally, NSPL had also sought an order directing UBI to make
payments against the Bank Guarantees bearing
Nos.408101GL0001716 [BG-1] and 408101GL0001816 [BG-2]
both dated 20.7.2016 [hereafter collectively referred to as 'the
BGs'], furnished by it. The learned Single Judge allowed the said
writ petition in terms of the impugned order and, inter alia, directed
UBI to make payment against the said BGs along with interest at
the rate of 18% per annum from the date when they were invoked,
that is, with effect from 29.03.2019 in respect of BG-1 and with
effect from 26.04.2019 in respect of BG-2. The court further
directed that the said payments be made within a period of seven
days from the date of receipt of the order.
2. There is no dispute that UBI had furnished the BGs for the
benefit of NSPL. There is also no cavil that BGs were
unconditional and UBI was liable to make payment against the
same without protest or demur on NSPL invoking the same. The
only ground on which UBI has declined to honour its obligation
under the BGs is that invocation of the BGs was not as per their
terms.
3. NSPL had invoked the BGs by sending the letter of
invocation electronically and had thereafter served the hard copies
of the letters at the office of UBI. According to UBI, invocation of
BGs through e-mail was not compliant with the condition of
invoking the BGs "in writing". And, the hard copies of the letters of
invocation were received after the time for invoking the BGs had
expired. The learned Single Judge found that invocation of the BGs
through e-mail was in terms of the BGs and UBI's stand that the
same were not in writing is unsustainable.
4. Thus, the principal question that arises for consideration of
this court was whether the BGs were invoked in accordance with
their terms.
PREFATORY FACTS
5. The company named M/s Alfara'a Infraprojects Private
Limited [the Borrower] had availed certain financial assistance
from UBI including the non-fund assistance by issuance of BGs.
UBI had sanctioned an amount of `70 crores by letter dated
11.02.2015 to the borrower, which comprised of Cash Credit limit of
`10 crores, Inland/Import Letter of Credit for a value of `20 crores,
and bank gurantee facility to the extent of `40 crores.
Subsequently, by a letter dated 28.06.2017, the said limits were
significantly enhanced to `50.5 crores for Cash Credit Limit; `30
crores for Term Loan; `45 crores against Inland/Import Letter of
Credit; and `130.05 crores towards BGs limits.
6. At the instance of the Borrower, UBI had issued the BGs
(BG-1 for a sum of `2,78,75,127/- and BG-2 for a sum of
`5,57,50,254/-) within the aforesaid sanctioned limits. BG-1 was
renewed up to 31.03.2019 and BG-2 was renewed up to
30.04.2019. There is no dispute that term of BG-1 and BG-2 would
expire on 31.03.2019 and 30.04.2019, respectively.
7. On 29.03.2019, NSPL sent an e-mail to UBI enclosing
therewith the copy of a letter seeking renewal of BG-1. NSPL
further stated that the hard copy of the letter communicated
through e-mail was being separately sent through speed post /
courier.
8. UBI responded to the said e-mail on 30.03.2019 informing
NSPL that the renewal or extension of the Bank Guarantee would
be done only after receiving original letter through post or courier.
Thereafter, NSPL sent a reminder on 05.04.2019, inter alia, stating
that it had sent hard copy of the letter as required on 30.03.2019
through speed post and requested that extension letter be provided
urgently. Thereafter, on 09.04.2019, NSPL once again sent an
e-mail requesting a scanned copy of the extension letter and that a
hard copy be sent to its office. On 17.04.2019, NSPL sent an
e-mail stating that since it had not received any response regarding
extension of the BG-1, they were revoking [sic] BG-1 and the hard
copy of revocation letter would be forwarded to the office.
9. However, NSPL did not receive any response to the said
e-mail. Accordingly, it sent another e-mail on 30.04.2019
complaining that it had not received any response to its letter dated
29.03.2019 requesting for extension of the BG-1 or its request for
crediting its bank account with the proceeds. NSPL informed the
Bank that if it did not send any response on or before 04.05.2019, it
would be constrained to initiate action. Thereafter, on 03.05.2019,
NSPL sent an e-mail to the Banking Ombudsman, Reserve Bank
of India requesting that UBI be instructed to credit the proceeds of
the BGs into their account. This was followed by another e-mail
dated 13.05.2019 to the similar effect.
10. Similarly, NSPL sent an e-mail dated 26.04.2019 enclosing
therewith a letter for BG-2 extension/invocation. The said letter
was in similar terms as the letter dated 29.03.2019 sent in respect
of BG-1.
11. Hard copies of the letters dated 29.03.2019 and 26.04.2019
invoking BG1 and BG2, respectively, were received by the UBI at
its office on 01.04.2019 and 02.05.2019, respectively.
12. Since UBI had failed to make payments against BGs, NSPL
attempted to lodge a complaint with the Banking Ombudsmen, RBI
(respondent No.3) during March/ April, 2020 but was unable to do
so. NSPL finally lodged its complaint with respondent No.3 on
03.10.2020. Respondent No.3 rejected the complaint by
communication dated 21.12.2020. Aggrieved by the rejection of
the complaint and failure on the part of UBI to make payments
against the BGs, NSPL filed the writ petition, being W.P
No.2193/2021 praying that the order dated 21.12.2020 issued by
respondent No.3 rejecting its complaint be set aside and directions
be issued to UBI to invoke the BGs. The said petition was allowed
by the impugned order.
SUBMISSIONS
13. Mr.Dhyan Chinnappa, learned Senior Counsel appearing for
UBI advanced submissions on two fronts. First, he submitted that
the words "in writing" would necessarily have to be construed as
physically written. Thus, an electronic communication would not be
compliant with the requirement of the invocation of the BGs.
Second, he submitted that invocation was required to be received
by UBI and the receipt of invocation must be construed to mean
physically received at the office and not an e-mail sent to UBI.
Additionally, he submitted that the said invocation is also required
to be made by an authorized officer of NSPL and the e-mails sent
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by NSPL were not through its authorized officer. He also contended
that the learned Single Judge had erred in awarding interest on
delayed payment. He submitted that there was no such prayer
made in the writ petition and, therefore, the direction to pay interest
at the rate of 18% is unsustainable
14. Mr.Udaya Holla, learned Senior Counsel appearing for NSPL
countered the aforesaid submissions.
REASONS AND CONCLUSIONS
15. The controversy in the present appeal lies in a narrow
compass. There is no dispute that the BGs were required to be
invoked in their terms and UBI was entitled to decline payment
against the BGs if the invocation was not compliant with its terms.
The controversy centers around the question whether invocation of
the BGs by the e-mail sent by NSPL on 29.03.2019 for invoking
BG1 and 26.04.2019 for invoking BG2 could be ignored as
non compliant with the terms of the BGs.
16. There is no dispute that the UBI had received the e-mails
dated 29.03.2019 and 24.06.2019 enclosing therewith copies of the
letters of invocation. We consider it relevant to set out the said
letter dated 29.03.2019. The same is reproduced below:
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"The Manager,
Union Bank of India,
10th Road, J V P D Scheme Branch
Shiv Shakti, 11, Vithal Nagar Co-op. Hsg. Soc.,
Vile-Parle (West)
Mumbai - 400 049.
Dear Sir,
Sub: Extension Bank Guarantee against Mobilization Advance.
Ref: BG No-408101GL001716 Issued Date-20.07.2016 -
Expiry on 31.03.2019
We refer to the Bank Guarantee issued by you in our favour for
Rs.2,78,75,127/- (Rupees Two Crores Seventy Eight Lakhs
Seventy Five Thousand One Hundred and Twenty Seven only)
on behalf of M/s Alfaraa Infraprojects Pvt Ltd having its
registered office at 101/102, Baba House, Near Cinemax
Theatre, Chakala, Andheri (East), Mumbai - 400 093. The
Bank Guarantee is expiring on 31.03.2019. Kindly arrange to
renew the same and send us the renewal letter.
In the event if the BG is not renewed we here by invoke the BG
and we request you to kindly transfer the amount to below
mentioned account.
Account No. 002281400002792
Bank Name Yes Bank
Branch Kasturba Road Branch
IFS Code yesb0000022
In case the BG is renewed before the date of expiry, request
you to kindly send the original renewed BG to us.
Yours truly,
For Nitesh Housing Developers Pvt Ltd.
Sd/-
DGM-Finance, Banking & Treasure
CC: M/s. Alfaraa Infroprojects Pvt Ltd
101/102, Baba House, Near Cinemax Theatre,
Chakala, Andheri (East),
Mumbai - 400 093"
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17. The letter dated 26.04.2019 for invocation of BG2 was also in
similar terms.
18. There is no dispute that the BGs are unconditional BGs and
NSPL was not required to provide any reasons for invoking the
same or comply with any other conditions. UBL was required to
pay the amount as guaranteed without any "demur, cavil or
argument". The relevant extract of the BG1 which clearly indicates
that it is an unconditional BG is set out below:
"NOW THEREFORE we Union Bank of India having our
Head office at Union Bank Bhavan, 239, VidhanBhavan
Marg, Nariman Point, Mumbai - 400 021 and acting
through its branch office at Union Bank of India, 11,
Vithal Nagar Co.op.Hsg. Society, 10Th Road, JVPD
Scheme, Vile Parle (W) Mumbai - 400 049 (herein after
referred to as 'the Bank', which expression shall unless
repugnant to the context or meaning thereof, include its
successors and permitted assigns] hereby affirm that we
are the Guarantor and responsible for you, on behalf of
the Contractor up to a total of Rs.2,78,75,127/- (Rupees
Two Crore Seventy Eight Lakh Seventy Five Thousand
One Hundred Twenty Seven Only) and we irrevocably
and unconditionally undertake to pay you, upon your first
written demand and without any demur, cavil or
argument, any sum or sums within the limits of
Rs.2,78,75,127/- as aforesaid without your needing to
prove or to show grounds or reasons for your demand for
the sum specified therein."
19. It is also relevant to refer to clause 14 of the BG-1 as well as
the concluding portion of BG-1. The same are reproduced below.
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"14. Any notice by way of request, demand or other
communication given in connection with or required by
this Guarantee shall be made in writing (entirely in the
English language) may be sent by hand or post to the
Bank addressed as aforesaid.
xxx
Notwithstanding anything contained herein above.
a) Our Liability under this Bank Guarantee Shall not
exceed Rs.2,78,75,127/- (Rupees Two Crore Seventy
Eight Lakh Seventy Five Thousand One Hundred
Twenty Seven only)
b) This Bank Guarantee shall be valid upto and
including 30th September, 2018.
c) We Shall be liable to pay any amount under this Bank
Guarantee or part thereof only if we receive (if you serve
upon us) a written claim or demand under this
Guarantee on or before 30th September 2018 at Union
Bank of India, 11, Vithal Nagar Co.Op.Hsg. Society,
10Th Road, JVPD Scheme, Vile Parle (W) Mumbai -
400 049."
20. BG-1 was subsequently extended by UBI by letter dated
31.12.2018. The contents of the extension letter are set out below:
"At the request of our principal Alfara'a Infraprojects Pvt
Ltd., 101/102, 1st Floor, Baba House, Near Cinemax
Theatre, Chakala, Andheri (East) Mumbai - 400093 the
above mentioned performance guarantee is extended
as follows:
1. Extend the validity of the captioned guarantee
upto 31st March, 2019.
2. Extend the Claim period of the captioned
guarantee upto 31st March, 2019.
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All other terms and conditions remain unchanged.
This extension is as integral part of the above referred
guarantee and should be read with the original Bank
Guarantee issued on 21st June, 2016.
Notwithstanding anything contained herein above
1. Our maximum liability under this Bank Guarantee
shall not exceed INR 2,78,75,127/- (Rupees Two Crores
Seventy Eight Lakhs Seventy Five Thousand One
Hundred Twenty Seven Only).
2. This Bank Guarantee shall be valid only up to
st
31 March, 2019.
3. We are liable to pay the guaranteed amount or
any part thereof under this Bank Guarantee only and
only if we receive a written claim or demand on or
before 31st March, 2019."
21. The corresponding portions of BG-2 are identically worded
as the extract of BG-1 set out above, except the value of BG-2 is
`5,57,50,254/- and was valid till 30.04.2019.
22. It is material to note that the last portion of the BGs, as
extracted above are couched under a non-obstante provision.
Thus, notwithstanding anything contained in the BGs, UBI had
acknowledged its liability to pay the guaranteed amount or in part
thereof if it received "a written claim or demand" on or before the
expiry date.
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23. Thus, the quintessential question is whether the demand
made by the communication sent through electronic mail to UBI
constituted a "written claim or demand".
24. A plain reading of the letters dated 29.03.2019 and
26.04.2019 indicate that BGs stood invoked as the same were not
extended. NSPL had stated in unambiguous terms that in the
event the BG is not renewed, it invokes the same. This is clear
from the plain reading of the sentence "in the event if the BG is not
renewed, we hereby invoke the BG and we request you to kindly
transfer the amount to the below mentioned account."
25. The contention that the letters dated 29.03.2019 or
26.04.2019 could not be construed as invocation of respective BGs
is clearly unmerited. We may note that although UBI has made
averments to the aforesaid effect in the memorandum of appeal,
Mr.Chinnappa did not advance any submissions in support of the
said stand.
26. Mr. Chinnappa had advanced submissions on essentially
three fronts. The first that the demand made by an electronic
communication could not be construed as "a written claim or
demand". The second that the term of the Bank Guarantee, which
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expressly provided that UBI would be liable to pay only if it receives
a written claim or demand at the office address of UBI ought to be
construed as physical service of a written claim at the office of UBI.
The said condition would not be complied by an e-mail sent
electronically. He contended that an electronic communication
could not be construed as a service at the given address of UBI.
And, thirdly, he submitted that reference made by the learned
Single Judge to the provisions of the Information Technology Act,
2000 [the IT Act] to construe an electronic communication as a
written demand under the Bank Guarantee, was misplaced. He
submitted that under the provisions of IT Act, electronic
communications could be substituted as written communications as
required under any law. However, the provisions could not be read
to substitute the terms of a contract between the parties.
27. The principal contention that the demand made through an
electronic communication cannot be considered as a written
demand, is premised on the assumption that an e-mail or a
communication that is sent electronically is not a communication 'in
writing'. Thus, the controversy essentially boils to the question
whether the expression 'written demand' is confined only to a
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demand, which is either hand written or typed on a physical
medium.
28. We find no reason to confine the expression "written
demand'' as a demand written in hand on paper or physically
engrossed on any other medium. The word 'written demand' must
necessarily be construed as a demand, which is made in a
language by words and alphabets that are visible to the eye and
not an oral communication or a communication by other means.
For instance, a demand communicated through morse code, by
signals such as beat of drums or made through gestures by hand
would clearly not qualify as a written demand or a communication
'in writing'. The expression "written" would necessarily imply
expression by words and letters, which is visible to the eye.
29. The Black's Law Dictionary defines expression 'writing' as
"expression of ideas by letters visible to the eye". It also refers to
the decision in case of Calson v. Bailey, 14 Johns (N.Y.) 491. In
that case, the Memorandum which was written in lead pencil was
called into question on the ground that it was written with a lead
pencil and not in ink. It is relevant to refer to the following extract of
the said decision:
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"The statute requires a writing. It does not
undertake to define with what instrument, or
with what material the contract shall be written.
It only requires it to be in writing, and signed,
&c.; the verdict here finds that the
memorandum was written, but it proceeds
further, and tells us with what instrument it was
written, viz. with a lead pencil. But what have
we to do with the kind of instrument which the
parties employed, when we find all that the
statute required, viz. a memorandum of the
contract in writing, together with the names of
the parties?
To write is to express our ideas by letters
visible to the eye. The mode or manner of
impressing those letters is no part of the
substance or definition of writing. A pencil is an
instrument with which we write without ink. The
ancients understood alphabetic writing as well
as we do, but it is certain that the use of paper,
pen, and ink, was, for a long time, unknown to
them. In the days of Job they wrote upon lead
with an iron pen. The ancients used to write
upon hard substances, as stones, metals,
ivory, wood, See. with a style or iron
instrument. The next improvement was writing
upon waxed tables; until, at last, paper and
parchment were adopted; when the use of the
calamus or reed was introduced, The common
law has gone so far to regulate writings, as to
make it necessary that a deed should be
written on paper or parchment, and not on
wood or stone. This was for the sake of
durability and safety; and this is all the
regulation that the law has prescribed. The
instrument, or the material by which letters
were to be impressed on paper or parchment,
has never yet been defined; This has been left
to be governed by public convenience and
usage; and as far as questions have arisen on
this subject, the courts have, with great latitude
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and liberality, left the parties to their own
discretion. It has, accordingly, been admitted,
(2 Black. Com. 297. 2 Bos. fy Pull. 238. '3 Esp.
Rep. 180.) that printing was writing, within the
statute, and (2 Bro. 585.) that stamping was
equivalent to. *496signing, and (8 Vesey, 175.)
that making a mark was subscribing within the
act. I do not find any case in the courts of
common law in which the very point now
before us has been decided, viz. whether
writing with a lead pencil was sufficient; but
there are several-cases in which such writings
were produced, and no objection taken. The
courts have impliedly admitted that writing with
such an instrument, without the use of any
liquid, was valid. Thus in a case in Comyrt's
Reports, (p. 451.) the counsel cited the case of
Loveday v. Claridge. in 1730, where Loveday,
intending to make his will, pulled a paper out of
his pocket, wrote some things down with ink,
and some with a pencil, and it was held a
good' will. But we have a more full and
authentic authority in a late case decided at
doctors commons, (Rymes v. Clarkson, 1
Phillim. Rep. 22.) where the very question
arose on the validity of a codicil written with a
pencil. It was a -point over which the
prerogative court had complete jurisdiction,
and one objection taken to the codicil was the
material with which it was written, but it was
contended, on the other side, that a man might
write his will with any material he pleased,
quocunque modo velit, quocunque modo
possit, and it was ruled by Sir John Nicholl,
that a will or codicil written in pencil was valid
in law."
30. Although the said decision was rendered more than a
century ago, it illuminates the expression 'written'. The said
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decision brings into focus that the meaning of the word 'written' is
essentially to express ideas by letters that are visible to the eye.
The manner in which the letters are impressed, is not relevant. It
also recalls that instruments used for impressing letters and the
medium used have evolved over the period of time. The use of
pen and paper and writing in one's hand has over the years yielded
to printing by using a typewriter. The communications are
commonly written by keying the letters electronically in virtual
medium and the record of the written word is maintained in digital
files. But in our view, the instruments, the manner, and the medium
in which words or letters are impressed and recorded would, to
borrow the expression be "no part of substance or definition of
writing".
31. It is also relevant to refer to Section 3(65) of the General
Clauses Act, 1897 [the 1897 Act], which reads as under:
"Expressions referring to "writing" shall be
construed as including references to printing,
lithography, photography and other modes of
representing or reproducing words in a visible
form."
32. It is clear from the above that the aforesaid definition is an
inclusive definition and an expression 'writing' includes references
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to printing, lithography, photography and other modes of
representing or reproducing words in a visible form.
33. Although the meanings of the words and expressions as
defined under the 1897 Act are used for interpretation of the words
and expressions in Central Acts, Regulations and Statutes; in given
cases, they are also instructive for understanding the meaning of
those words and expressions as used in common parlance.
34. In Rup Chand v. Mahabir Prasad : AIR 1956 Punj 173, the
Court had construed the expression 'in writing' as used in Section
145 of the Indian Evidence Act, 1872. The Court rejected the
contention that the conversation on a tape-recorder could be
regarded as a statement in writing or as reduced into writing. In the
aforesaid context of the same, the Court observed as under:
"The expression "writing" appearing in Section
145 refers to the tangible object that appeals to
the sense of sight and that which is susceptible
of being reproduced by printing, lithography
photography etc. It is not wide enough to
Include a statement appearing on a tape which
car be reproduced through the mechanism of a
tape recorder."
35. The Black's Law Dictionary, 9th edition 2009 also defines the
expression 'writing' as under:
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"Any intentional recording of words that may
be viewed or heard with or without mechanical
aids.
This includes documents, hard-copy electronic
documents on computer media, audio and
videotapes, e-mails, and any other media on
which words can be recorded."
36. With the extensive use of electronic medium for writing
communications, it would be erroneous to accept that the
expression 'writing' or 'written' is confined to impressing words and
letters on a physical medium and the expression excludes recordal
of words or letters on a virtual medium.
37. Illustratively, we may consider the practice of lawyers
furnishing written submissions electronically. It is not uncommon to
find that the advocates read out their written submission from an
electronic device. If one were to accept the contention that the
words 'written' must necessarily be in physical form, it would be
erroneous to accept submissions communicated electronically as
'written submissions'. However, in a common parlance, the words
and alphabets keyed on digital files are understood to constitute
'writing'. And, the communications of the soft files or digital files
would amount to communicating 'written' documents.
- 23 -
38. In the aforesaid context, the learned Single Judge had also
referred to Section 4 of the IT Act. We consider it relevant to
reproduce the same.
"4. Legal recognition of electronic records.--
Where any law provides that information or
any other matter shall be in writing or in the
typewritten or printed form, then,
notwithstanding anything contained in such
law, such requirement shall be deemed to
have been satisfied if such information or
matter is-
(a) rendered or made available in an electronic
form; and
(b) accessible so as to be usable for a
subsequent reference."
39. As noted above, it is the appellant's contention that reference
to Section 4 of the IT Act is misplaced as the same is merely an aid
for interpretation of statutes, which provide that any matter should
be 'in writing'. It is contended that Section 4 of the IT Act would not
control the ambit of the contract or the agreement between the
parties. It is thus argued that if the agreement between the parties
required a demand to be made in writing, the expression 'in writing'
could not be construed with reference to Section 4 of the IT Act.
40. There is no cavil that import of Section 4 of the IT Act is to
expressly clarify that where any law provides that information or
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any other matter shall be (i) "in writing"; or (ii) in the typewritten
form; or (iii) in printed form, it would be sufficient that if the
information or matter is rendered or made available in an electronic
form and is accessible so as to be useable for a subsequent
reference. The said definition cannot necessarily be imputed to the
expressions used in a contract between the parties, if the terms of
the contract indicate otherwise. However, Section 4 of the IT Act
does aid in understanding as to how the meaning of the
expressions "in writing" or "typewritten" are now understood.
Section 4 merely recognizes the meaning of the said expressions.
Thus, unless the terms of the agreement indicate otherwise, the
meaning of the given expressions under Section 4 of the IT Act can
inform our understanding of those expressions.
41. It is relevant to refer to the statement of objects and reasons
of the IT Act, which reads as under:
"New communication systems and digital
technology have made dramatic changes in
the way we live. A revolution is occurring in the
way people transact business. Businesses and
consumers are increasingly using computers
to create, transmit and store information in the
electronic form instead of traditional paper
documents. Information stored in electronic
form has many advantages. It is cheaper,
easier to store, retrieve and speedier to
communicate. Although people are aware of
- 25 -
the these advantages, they are reluctant to
conduct business or conclude any transaction
in the electronic form due to lack of appropriate
legal framework. The two principal hurdles
which stand in the way of facilitating electronic
commerce and electronic governance are the
requirements as to writing and signature for
legal recognition. At present many legal
provisions assume the existence of paper
based records and documents and records
which should bear signatures. The Law of
Evidence is traditionally based upon paper
based records and oral testimony. Since
electronic commerce eliminates the need for
paper based transactions, hence to facilitate e-
commerce, the need for legal changes have
become an urgent necessity. International
trade through the medium of e-commerce is
growing rapidly in the past few years and many
countries have switched over from traditional
paper based commerce to e-commerce."
42. A plain reading of statement of the 'objects and reasons'
indicated that the Parliament had recognized that there was a
change in the manner in which the business was being transacted.
Undeniably, International trade, through the medium of
e-commerce, has grown rapidly. It is thus apparent that Section 4
of the IT Act does not impute any artificial definition of the
expression 'in writing', it merely recognizes the manner in which the
trade understands it.
- 26 -
43. In the given circumstances, we find no fault with the learned
Single Judge referring to the IT Act for understanding whether the
electronic documents could be considered as documents 'in
writing'.
44. We may also refer to Section 7 of the Arbitration and
Conciliation Act, 1996 [A&C Act]. Sub-section (3) of Section 7
expressly provides that an arbitration agreement shall be in writing.
This condition is satisfied if the arbitration agreement can be
inferred by exchange of letters, telex, telegrams or other means of
telecommunication which provided a record of the agreement.
45. In Trimex International FZE Limited, Dubai v. Vedanta
Aluminium Limited, India: (2010) 3 SCC 1, the Supreme Court
examined a set of e-mails exchanged between the parties and
concluded that the existence of an arbitration agreement in writing
is satisfied, as the terms of the agreement were discernible from
the exchange of e-mails.
46. Sub-section (4) of Section 7 of the A&C Act expressly
provides that an arbitration agreement is in writing if it is contained
in an exchange of letters, telex, telegrams or other means of
telecommunication including electronic means. In our view, the
- 27 -
same merely recognizes that contracts contained in electronic form
are well accepted as written contracts. The expression a
communication made 'in writing' has to be understood as opposed
to a communication made orally, in sign language, by conduct or
other means. The principal feature of writing is maintenance of
record in the form of written language in visual form. The essential
feature of communication in writing is a record by written words; the
medium on which the alphabets or written words are engrossed
would not be determinative of the question whether the record is in
writing. Once a record written in words and alphabets is
maintained, either in physical or in electronic form, the record of
such language is considered as one in writing.
47. P Ramanatha Aiyar, The Major Law Lexicon, 4th Edition 2010
Volume 6 also sets out the meaning of "written contract" drawn
from the commentary on Section 95 of the Restatement (Second)
of Contracts. The relevant extract from the said definition is
reproduced below:
"Written contracts are also commonly signed,
but a written contract may consist of an exchange
of correspondence, of a letter written by the
promisee and assented to by the promisor without
signature, or even of a memorandum of printed
document not signed by either party."
- 28 -
48. We reject the contention that the demand for invocation of
BGs sent through e-mails was not a "written claim or demand" or a
demand lodged "in writing (entirely in English language)".
49. The next question to examine is whether decision of the
learned Single Judge in awarding interest can be faulted. It is
material to note that the BGs were furnished as a part of the
commercial transaction. And, compensation by way of interest for
withholding money in commercial transaction is the norm. Thus,
unless there are reasons to deny interest on amounts due to a
party under a commercial contract, interest as a rule ought to be
granted to compensate the time value of the money to the party so
denied of its dues.
50. In Union of India v. Tata Chemicals Ltd.: (2014) 6 SCC
335, the Supreme Court granted interest on excess income tax
paid to the Government notwithstanding that the portion of it was
not covered under any statutory provision. The Supreme Court
observed thus:
"The Government, there-being no express
statutory provision for payment of interest on the
refund of excess amount/tax collected by the
Revenue, cannot shrug off its apparent obligation
to reimburse the deductors lawful monies with the
accrued interest for the period of undue retention
- 29 -
of such monies. The State having received the
money without right, and having retained and used
it, is bound to make the party good, just as an
individual would be under like circumstances. The
obligation to refund money received and retained
without right implies and carries with it the right to
interest. Whenever money has been received by a
party which ex ae quo et bono ought to be
refunded, the right to interest follows, as a matter
of course." (emphasis added)
51. In Authorised Officer, Karnataka Bank v. M/s. R.M.S.
Granites Pvt. Ltd. and Ors. : Civil Appeal No.12294/2024, the
Supreme Court observed as under:
"It may be mentioned that there is misconception
about interest. Interest is not a penalty or
punishment at all, but it is the normal accretion on
capital. For example if A had to pay B a certain
amount, say ten years ago, but he offers that
amount to him today, then he has pocketed the
interest on the principal amount. Had A paid that
amount to B ten years ago, B would have invested
that amount somewhere and earned interest
thereon, but instead of that A has kept that amount
with himself and earned interest on it for this period.
Hence equity demands that A should not only pay
back the principal amount but also the interest
thereon to B. [See: Alok Shanker Pandey v. Union
of India: AIR 2007 SC 1198]"
52. In Dr. Poornima Advani and Anr. v. Government of NCT
and Anr.: 2025 INSC 262, the Supreme Court referred to the
decision of the Authorised Officer, Karnataka Bank (supra) and
observed as under:
- 30 -
"Thus, when a person is deprived of the use of his
money to which he is legitimately entitled, he has
a right to be compensated for the deprivation
which may be called interest or compensation.
Interest is paid for the deprivation of the use of
money in general terms which has returned or
compensation for the use of retention by a person
of a sum of money belonging to other."
53. In a recent decision in I.K. Merchants Pvt. Ltd. and Ors. v. .
State of Rajasthan and Ors. : 2025 SCC OnLine SC 692, the
Supreme Court referred to a catena of decisions and observed as
under:
"Thus, it is abundantly clear that the Courts have
the authority to determine the appropriate interest
rate, considering the totality of the facts and
circumstances in accordance with law. That apart,
the Courts have the discretion to decide whether
the interest is payable from the date of institution
of the suit, a period prior to that, or from the date
of the decree, depending on the specific facts of
each case."
54. It is well recognized that in commercial disputes the award of
interest on money legitimately due, must be granted as a matter of
course.
55. We also note that the NSPL has been pursuing its grievance
before the Banking Ombudsman since 03.10.2020. Writ Petition
- 31 -
No.2193/2021 was instituted on 30.01.2021 and was pending
before the learned Single Judge till its disposal on 27.01.2025.
56. We may also note that it is equally well settled that award of
pendente lite interest is at the discretion of the Court. The following
observations of the Supreme Court in Clariant International Ltd.
v. Securities & Exchange Board of India, (2004) 8 SCC 524, are
of some significance:
"Interest can be awarded in terms of an agreement
or statutory provisions. It can also be awarded by
reason of usage or trade having the force of law or
on equitable considerations. Interest cannot be
awarded by way of damages except in cases where
money due is wrongfully withheld and there are
equitable grounds therefor, for which a written
demand is mandatory."
57. In view of the above, we find no fault with the decision of the
learned Single Judge in awarding interest on the amounts withheld
by the UBI in disregard of its obligations under the BGs. However,
we find that the rate of interest of 18% per annum is high. There is
no material to justify the said rate of interest as reasonable.
58. We also note that the interest awarded by the Supreme
Court in the recent decision in Dr. Poornima Advani (supra) is
ranging from 6% to 9% per annum. We, accordingly, consider it
- 32 -
apposite to reduce the rate of interest awarded by the learned
Single Judge from 18% to 9% per annum. UBI shall pay the
amount due within a period of two weeks from date. The impugned
order is modified to the aforesaid extent.
59. The appeal is disposed of in the aforesaid terms.
60. Since the impugned order is modified, the complaint‒CCC
No.185 of 2025 ‒ is closed. The complainant is at liberty to initiate
appropriate proceedings if the impugned order as modified is not
complied with.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C M JOSHI)
JUDGE
AHB/KPS
