M. H. S. ANSARI, J.

( 1 ) BRIEF facts as can be gathered from the averements made in the affidavit filed in support of the Writ Petition are as under :the petitioner is a Registered firm and was entrusted the construction of Polytechnic Hostel and Staff Quarters including internal and external amenities and Campus development under L. S. Agreement No. 10/94-95 dated 30-7-1994.

( 2 ) THE site of work is said to have been handed over to the petitioner on 10-9-1994 and time stipulated for completion of the work is 12 months and as such the due date of completion of the work was 9-9-1995. The contract value is Rs. 1,90,74,948. 00. The petitioner claims that in spite of earnest efforts made by the petitioner, the work could not progress as contemplated due to causes beyond petitioner s control and some of the cause are attributable to the Respondent-Department for which the Department is solely responsible, according to the petitioner. It is further alleged that by a letter dated 8-7-1995, the petitioner was informed that the Respondent-Corporation has decided for terminating the Contract under Clause 30 (1) of Section 3 (Special Conditions of the Agreement ). The petitioner, therefore, initiated action to disband the establishment and settle accounts at which stage again by letter dated 5-8-1995, the petitioner was informed that the termination orders issued by letter dated 8-7-1995 are withdrawn and the petitioner was called upon to complete the balance work within scheduled time stipulated. The petitioner was also required to accept unconditional confirmation for completing the balance work. In reply thereto, the petitioner by their- letter dated 21-8-1995, stipulated certain conditions and also indicated therein that they would be entitled to prefer certain claims. The petitioners offer was not accepted and the contracl was terminated by a letter dated 4-9-1995 with immediate effect. The grievance of the petitioner is that even though the contract was terminated w. e. f. , 4-9-1995, accounts have not been settled and no payment was made. On the other hand, the respondents got extended the Bank Guarantee upto 26-10-1995 and again by a letter dated 29-10-1995, the Respondent-Corporation requested the Bank authorities to extend the Bank Guar rantee upto 27-1-1996 failing which the letter be treated as invoking the Bank Guarantee On account of the pressure brought by the Bank on the petitioner on the insistence of the Respondent Corporation for remitting the amounts, the petitioner consented for ex-tending the Bank Guarantee upto 30-5-1996; By another letter dated 25-5-1996, the Respondent-Corporation invoked the Bank Guarantee No. 35/94-95 dated 27-7-1994 which according to the Respondent-Corporation was renewed upto 31-5-1996 and requested the Bank to remit the sum of Rs. 9,53,748. 00 being the value of the Bank Guarantee. However, prior thereto, by a letter dated 3-5-1996, the Respondent-Corporation asked the petitioner to attend the office of the Senior Manager, Andhra Pradesh Industrial Infrastructure Corporation Limited for concluding supplemental agreement and for signing Release and Discharge Certificate for finalising the bill. It was intimated to the petitioner by the said letter that the bill was kept ready in full shape and the same had been prepared on the basis of oral acceptance given by the petitioner for finalising the accounts. The petitioner has assailed this action of the Respondent-Corporation as well as the action of the Respondent in invoking the Bank Guarantee. The petitioner has vide its letter dated 29-4-1996, made a claim for the amounts specified therein and sought payment of the sum of Rs. 48,29,230. 00 (Rupees Forty eight lakhs, twenty nine thousand, two hundred and thirty only) for the claims listed therein and intimated that if the claim is not settled and" payment is not arranged, the petitioner would invoke Clause 67 of the Agreement which provides for settlement of disputes by Arbitration. The pet

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