The relief under Article 226 of the Constitution of India is discretionary, and the court may decline to entertain a petition if it involves disputed questions of fact, contractual origins of the dispute, and has no public law element.

JUDGMENT

1. The present petition is filed under Article 226 of the Constitution of India by IDBI Bank Ltd., praying inter alia-(1) quashing of the invocation notice dated 15.10.2018 issued by the respondent no.1, wherein certain bank guarantees furnished by the petitioner have been invoked; and (2) a direction to the respondents to return the bank guarantees furnished by the petitioner.

2. The facts material to the present dispute are that in the year 2011, Uttar Pradesh Power Transmission Corporation Limited declared one Isolux Corsan Concesiones S.A. (hereinafter `Isolux') as the successful bidder for a project that, inter alia, was for providing transmission services to various long-term transmission customers in the State of Uttar Pradesh (hereinafter `said project'). Isolux, along with another company, formed respondent no.3 (a joint venture company) for the purposes of executing the said Project. The respondent no.3 in turn engaged the respondent no.2 for executing the said project.

3. On 10.02.2012, in order to define the terms of the work, three agreements were entered into between the respondent nos.2 and 3, viz., Civil Works Agreement, Supply Agreement and Services Agreement (hereinafter `Definitive Agreements'). The Definitive Agreements provided that the respondent no.3 was entitled to withhold as "retentions" part of the payments from the periodic payments after 30 days from the issuance of Taking Over Certificate/Service Completion Certificate/Supply Completion Certificate and the balance after expiry of the Defect Liability Period.

4. On 25.02.2014, all the Definitive Agreements were amended so as to provide that the retention amount would be released by the respondent no.3, if the respondent no.2, furnishes bank guarantee (hereinafter `BGs') for an amount equivalent to the retention amount in favour of the respondent no.3. On the other side of things, the respondent no.3 and the respondent no.1, along with some other parties, had entered into a Common Term Loan Agreement (hereinafter `term loan agreement') on 28.02.2014 for a total amount of Rs.3,713.25 crore.

5. Subsequently, the petitioner from 30.12.2014 to 30.10.2015 issued seven BGs at the instance of the respondent no.2 for a total amount of Rs.58.5 crore, in which the respondent no.3 was the beneficiary who thereafter assigned the BGs in favour of the respondent no.1, with the consent of the petitioner.

6. On 10.10.2018, the respondent no.1 issued a notice to respondent no.3 recalling the loan facility availed by the respondent no.3 under the term loan agreement and demanded that the respondent no.3 forthwith pays the outstanding amount. Thereafter, on 15.10.2018, the respondent no.1 sent an invocation notice to the petitioner invoking the BGs and calling upon the petitioner to pay forthwith the amounts so mentioned in the BGs. The petitioner being aggrieved by the invocation notice, filed the instant petition challenging the same.

7. Ms. Maninder Acharya, the learned senior counsel for the petitioner made the following broad submissions - firstly, that the BGs were in lieu of the retention monies as provided for in the Definitive Agreements, which in turn provided that the retention monies were to be released after the completion of the work. As the work has been completed, the petitioner is therefore discharged from its obligations under the BGs. She specifically places reliance on Clauses 2 and 3 of the BGs.

8. Secondly, after taking this court through Clause 3 of the BGs, the invocation notice and loan recall notice of the respondent no.1, learned senior counsel has contended that the BGs were issued for a specific purpose, that is, for the retention monies as provided for in the Definitive Agreements; and since the basis of the invocation of the BGs is failure of respondent no.3 to honour its obligations under the term loan agreement, the same is bad in law, as being contrary to the terms of the BGs itself.

9. Thirdly, the petitioner's agre