M/s Sri Gopikrishna Infrastructure Private Limited v. South Bihar Power Distribution Company Limited

Judgment

1. South Bihar Power Distribution Company Limited registered office-Vidyut Bhawan, Bailey Road, Patna through its Managing Director.

2. The Chairman-cum-Managing Director, South Bihar Power Distribution Company Limited, Vidyut Bhawan, Bailey Road, Patna.

3. The Managing Director, South Bihar Power Distribution Company Limited, Vidyut Bhawan, Bailey Road, Patna.

4. The Sr. Manager (F and A), South Bihar Power Distribution Company Limited, registered office Vidyut Bhawan, Bailey Road, Patna.

5. The Branch Manager, Union Bank of India, Banjarahills Branch, D. No. 8- 246/2/1 Road No. 4, Opp. GVK Mall, Banjarahills, Hyderabad.

6. The Branch Manager, HDFC Bank, Bank House Road No. 1, Banjarahills, Hyderabad. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s

Mr. Mrigank Mauli, Sr. Advocate : Mr.Brisketu Sharan Pandey, Advocate Mr. Sanket, Advocate Mr. Abhishek Kumar, Advocate For the Respondent Nos. 1 to 4 : Mr. Umesh Prasad Singh, Sr. Advocate Mr. Kunal Tiwary, Advocate Mr. Vaibhava Veer Shanker, Advocate Mr. Sameer Sawarn, Advocate ====================================================== CORAM: HONOURABLE MR. JUSTICE SANJEEV PRAKASH SHARMA Patna High Court CWJC No.2278 of 2023 dt.19-04-2023 ORAL JUDGMENT Date : 19-04-2023 The matter come up on Interlocutory Application No. 2 of 2023 seeking vacation of the interim order dated

14.02.2023 passed by this Court whereby the respondents were directed not to encash the bank guarantee.

2. Mr. Umesh Prasad Singh, learned Sr. Counsel appearing for the respondents-South Bihar Power Distribution Company submits that the order of restraining from invoking bank guarantee ought not to have been passed by this Court while exercising powers under Article 226 of the Constitution of India. It is stated that four bank guarantees for four packages of work allotted to the petitioner which have not been finalized and the contract has not been closed nor the final bill has been prepared. As the closure proposal of the project has not been finalized, the petitioner was asked to extend the bank guarantee but they rushed to this Court and an order has been passed to restrain against the respondents. It is further stated that the closure of the project could not be done because of the revised bill of quantity vis-a-vis rate has not been determined by the petitioner.

2.1 Learned counsel also relies on the provisions of the Commercial Courts Act, 2015 (hereinafter referred to as ‘the Patna High Court CWJC No.2278 of 2023 dt.19-04-2023 Act of 2015) to submit that efficacious alternative remedy exists in terms of the Act and the writ petition would itself not lie. He also relies on a judgment passed by a Co-ordinate Bench of this Court while hearing an appeal against the order passed by the District Judge under the Act of 2015 in the case of South Bihar Power Distribution Company Limited vs. Bhagalpur Electricity Distribution reported in 2019 (3) PLJR 18.

2.2 Learned counsel also relies on a judgment passed by the Hon’ble Supreme Court in the case of Gujarat Maritime Board Vs. Larsen and Toubro Infrastructure Development Projects Limited and Anr., reported in (2016) 10 SCC 46 to submit that there can be no occasion for the High Court to interfere into the contractual matters under Article 226 of the Constitution of India especially when there are disputed questions involved.

3. Per contra, Mr. Mrigank Mauli, learned Sr. counsel appearing for the petitioner opposes the prayer made by the respondents and submits that there are closure certificates which have already been issued in favour of the petitioner and the period of performance has also expired and completion certificate has also been issued and, therefore, Bank Guarantees could not bee allowed to be encashed. Patna High Court CWJC No.2278 of 2023 dt.19-04-2023

3.1 On the question of alternative remedy, learned counsel submits that the definition of commercial dispute as laid down under the Act would not take into account the issues which have been raised in the present petition and, therefore, the same need not be referred to the commercial court. He further relies on a judgment in the case of M. P. Power Management Company Limited Jabalpur Vs. Sky Power Southeast Solar India Private Limited and Ors., reported in (2023) 2 SCC 703 to submit that the writ petition would lie against the action of the State which has a duty to act fairly and to eschew arbitrariness in all its actions.

3.2 Learned counsel, therefore, submits that there is no occasion to relegate the matter to the alternative forum, more so, as there is no dispute that there is already a closure of the contract and proposal thereto has already been submitted and report has also been received by the respondents about the agreement having closed.

4. I have considered the submissions. In order to examine whether this Court should exercise its powers under Article 226 of the Constitution of India for adjudicating the issues raised by the petitioner, it would be apposite to quote the prayers made by the petitioner in the writ petition which are Patna High Court CWJC No.2278 of 2023 dt.19-04-2023 manifold as under :- (I) For issuing a writ of mandamus or any other appropriate writ quashing/ setting aside the letter dated 19.01.2023 bearing Memo No.112 passed by Respondent No. 4 whereby and whereunder the Respondent Bank (Respondent No.5/6) has been directed to encash the Bank Guarantee furnished by the petitioner against LOA No.581 dated 25.02.2014 in case, extension of the Bank Guarantee (worth Rs.2,29,38,073/-) is not granted on or before 02.02.2023; (ii) For issuing a writ of mandamus or any other appropriate writ quashing/ setting aside the letter dated 19.01.2023 bearing Memo No.113 passed by Respondent No. 4 whereby and whereunder the Respondent Bank (Respondent No. 5/6) has been directed to encash the Bank Guarantee furnished by the petitioner against LOA No.721 dated 29.03.2014 in case, extension of the Bank Guarantee (worth Rs.46,93,326/-) is not granted on or before 02.02.2023; (iii) For issuing a writ of mandamus or any other appropriate writ quashing/ setting aside the letter dated 19.01.2023 bearing Memo No.114 passed by Respondent No. 4 whereby and whereunder the Respondent Bank (Respondent No. 5/6) has been directed to encash the Bank Guarantee furnished by the petitioner against LOA No.581 dated 25.02.2014 in case, extension of the Bank Guarantee (worth Rs.2,29.38,073/-) is not granted on or before 15.02.2023; (iv) For issuing a writ of mandamus or any other appropriate writ quashing/ setting aside the letter dated 19.01.2023 bearing Memo No.115 passed by Respondent No. 4 whereby and whereunder the Respondent Bank (Respondent No. 5/6) has been directed to encash the Bank Guarantee furnished by the petitioner against Patna High Court CWJC No.2278 of 2023 dt.19-04-2023 LOA No.581 dated 25.02.2014 in case, extension of the Bank Guarantee (worth Rs.7,10,30,186/-) is not granted on or before 19.02.2023; (v) For issuing a writ of mandamus or any other appropriate writ directing the Respondent No.5 and 6 not to credit the amount and also not to encash the Bank Guarantee in favour of Respondent No.1 until the pendency of the present writ application. (vi) For issuing appropriate writ including writ of mandamus directing the Respondents No.1 to 3 to issue letter regarding Acceptance of Closure proposal submitted by the petitioner way back in the year 2018. (vii) For holding that it is illegal on the part of Respondents No. 1 to 3 to have invoked the Bank Guarantee without there being any default on part of the petitioner. (viii) For holding that it is illegal on the part of the Respondents No.1 to 3 to have kept be acceptance of closure proposal submitted by petitioner on hold and simultaneously encashing the Bank Guarantee on the ground of non-extension of the earlier Bank Guarantee even though the defect liability period for the projects handled by the petitioner has already passed and completion certificate have already been issued. (ix) For issuing appropriate writ of mandamus directing thereby Respondents No.1 to 3 to issue letter communicating closure proposal and release of Bank Guarantee held by Respondent No.1 to 3, furnished by the petitioner in relation to Letter of Award(s) i.e. LOA No.581 dated 25.02.2014, 721 dated x) 29.03.2014 towards the projects (i for supply of materials and equipment's for composite work of supply of materials and equipment's, erection, testing and commissioning of 33/11 KV line, New 33/11 KV Power Sub-station, Installation of Patna High Court CWJC No.2278 of 2023 dt.19-04-2023 New DSS and augmentation of DT, R&M of DSS, new LT line and R&M of LT line, 33 KV line of TURNKEY basis in Nalanda, Nawada & Banka District under Special Plan (BRGF) Phase-II and Balance Work of Phase-I; and (I) erection of materials & equipment's for composite work of supply of materials and equipment, commissioning of 33/11 KV line, New 33/11 KV Power Sub-station, Installation of New DSS and augmentation of DT, R&M of DSS, new LT line and R&M of LT line, 33 KV line of TURNKEY basis in Nalanda, Nawada & Banka District under Special Plan (BRGF) Phase-II and Balance Work of Phase-1. erection, testing For passing any such other order/orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.

5. In M.P. Power Managing Committe Vs. Sky Power (supra), after having noticed the principles reiterated in Joshi Technologies International Inc. vs. Union of India and Ors. reported in (2015) 7 SCC 728, the Apex Court observed as under :- “82. We may cull out our conclusions in regard to the points, which we have framed:

82.1. 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.

82.2. The principle laid down in Bareilly Authority [Bareilly Development Development Authority v. Ajai Pal Singh, (1989) 2 SCC 116] 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 [Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCC 457] , may not continue to hold good, in the light of what has been laid down in ABL [ABL International Ltd. v. Export Patna High Court CWJC No.2278 of 2023 dt.19-04-2023