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IN THE HIGH COURT OF JUDICATURE AT PATNA
P.B. BAJANTHRI, ARUN KUMAR JHA, JJ.
M/s Kalika Swachchhanda Joint Venture Private Limited S/o-Bharat Prasad Lamichhane – Appellant
Versus
The State Of Bihar – Respondent
Civil Writ Jurisdiction Case No.3825 of 2018
Decided on : 24-03-2023
Bank Guarantee - Contract Termination - Clause 32.2 of SBD - [Clause 32.2 of SBD] - The court discussed the issue of non-furnishing of bank guarantee from a scheduled bank of Bihar by the petitioner against the specific terms of the contract. The Empowered Standing Committee rejected the claim of the petitioner based on the non-submission of the bank guarantee from a scheduled bank of Bihar as per Clause 32.2 of the SBD. The court upheld the decision, stating that the petitioner failed to abide by the specific terms of SBD, and therefore, the impugned order did not require any interference.
Fact of the Case:
The petitioner entered into an agreement for construction of road with the respondent. The agreement was terminated, and the petitioner challenged the termination. The Empowered Standing Committee rejected the petitioner's claim based on the non-submission of the bank guarantee from a scheduled bank of Bihar as per Clause 32.2 of the SBD. The petitioner then filed a writ petition challenging the rejection of the claim.
Finding of the Court:
The court found that the petitioner failed to abide by the specific terms of the SBD by not submitting the bank guarantee from a scheduled bank of Bihar as required by Clause 32.2. The court upheld the decision of the Empowered Standing Committee, stating that no illegality or irregularity was committed by the respondents in rejecting the claim of the petitioner.
Issues: The main issue was whether the non-furnishing of bank guarantee from a scheduled bank of Bihar by the petitioner could have been condoned by the official respondents against the specific terms of the contract. Other issues related to disputed questions of facts that were not amenable to writ jurisdiction.
Ratio Decidendi: The court held that the petitioner's failure to abide by the specific terms of the SBD, specifically Clause 32.2, warranted no interference with the decision of the Empowered Standing Committee. The court emphasized the principle of exercising restraint in interfering with administrative decisions and upheld the rejection of the petitioner's claim.
Final Decision: The writ petition was dismissed, reserving liberty to the petitioner to raise all other disputed issues before the competent authority in terms of the agreement, especially Clause 24 of the SBD.
JUDGMENT :
ARUN KUMAR JHA, J.
Heard learned counsel for the petitioner and the learned counsel for the respondents.
2. In the instant petition, the petitioner has prayed for the following relief:-
II. To issue a writ in the nature of certiorari for quashing of the order dated 18.12.2017 (Annexure-P/40) passed by the Respondent No. 6, by which the Respondent No. 6 in complete departure of the notice dated 17.12.2013, issued under the signature of the Respondent No. 5, by which the tender of the petitioner was rescind on the ground that the work assigned to the petitioner was not concluded within the time frame.
III. To issue a writ in the nature of certiorari for quashing of the order dated 18.12.2017 (Annexure P/40) passed by the respondent No. 6, by which the Respondent No. 6 failed to appreciate that the bank guarantee provided by the petitioner was duly accorded and approved by the Departmental Tender Committee in its meeting 27.02.2009 communicated through the letter dated 02.03.2009 bearing Memo No. 38 (Annexurep/5).
IV. To ask an explanation-cum-show cause from the Respondents No. 2 to 5, asking therein that under what statutory authorization, they use to change their stand in rescinding the work allotted to the petitioner.
V. To issue a writ in the nature of mandamus commanding the Respondents No. 2 to 5 to revalidate the agreement the agreement including the rate of tender work bearing S.B.D/PMGSY/1 of 2009-10 dated 16.05.2009, because the petitioner is still ready to complete the work subject to revision of rate.
VI. To stay the operational effect of the order dated 18.12.2017 passed by the Respondent No. 6 communicated through the letter dated 04.01.2018 bearing memo No. BRRDA(HQ)-PMGSY-304/2016-66 (Annexure -P/40), issued under the signature of the Respondent No. 7, because the Respondent Authorities are adamant to forfeit the bank guarantee of the petitioner.
VII. To issue a writ in the nature of mandamus commanding the Respondent Authorities from taking any coercive steps pertaining to the forfeiture of the bank guarantee provided by the petitioner.
VIII. Any other relief or reliefs.”
3. Brief facts of the case are that the petitioner entered into the agreement bearing agreement No. SBD/PMGSY/1 of 2009-10 dated 16.05.2009 with Respondent No. 5 for construction of road under the Bihar Rural Roads Development Agency in District-Sheohar. Pursuant to the deed of agreement, the petitioner provided the bank guarantee of Nepal Investment Bank bearing Bank Guarantee (BLD) Bond No. 001GAUPB090037 amounting to Rs. 9 lac only. The said guarantee was for performance guarantee. Thereafter, petitioner further provided bank guarantee from Laxmi Bank, Nepal towards advance mobilization. The aforesaid guarantee provided by the petitioner was approved and accorded by the Departmental Tender Committee in its meeting dated 27.02.2009, which was communicated through letter dated 02.03.2009 bearing Memo No. 1385. Meanwhile, the aforesaid agreement was terminated by the Respondents by their notice dated 17.11.2013 published in daily newspaper “Prabhat Khabar”. Thereafter, the petitioner moved before this Court in CWJC No. 6389 of 2014 challenging the termination of the aforesaid agreement. The learned Single Judge vide order dated 05.11.2015 disposed of the matter while recording the fact that Clause-24 in the agreement provides elaborate provision for Dispute Redressal System through Empowered Standing Committee consisting of three members. Taking into consideration the same, the Court granted liberty to the petitioner to approach the Empowered Standing Commi
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