The court affirmed that bank guarantees are independent contracts, enforceable irrespective of disputes, and the invocation was valid as it fell within the claim period, with no evidence of fraud or irretrievable injustice.

JUDGMENT :

The petitioner has instituted the present writ petition under Article 226 of the Constitution of India seeking the following reliefs/directions :-

[a] Certiorari shall not be issued to set aside and quash the impugned letter bearing No. APDCL/CGM[PP&D]/NRE-146/2019-20/787 dated 01.11.2023 issued by the CGM [NRE], APDCL [Annexure-10] whereby the bank guarantees of the petitioner is sought to be liquidated and

[b] Certiorari shall not be issued to set aside and quash the impugned letter dated 04.11.2023 vide which it has been decided to encash the petitioner’s bank guarantees despite extension of time granted and

[c] Mandamus shall not be issued directing the respondent authorities comply with the extension of time granted vide letter No. APDCL/CGM[PP&D]/NRE-146/2019-20/789 dated 02.11.2023 [Annexure-12] and,

[d] Mandamus directing the respondent authorities to refrain from invoking the Bank guarantees of the petitioner during the pendency of the present petition and, upon causes being shown be further pleased to make the Rule absolute and/or pass such other order[s] as Your Lordships may deem fit and proper to grant adequate relief to the petitioner

-AND-

Pending disposal of the Rule be further pleased to pass appropriate interim order[s] so as to give adequate interim relief to the petitioner by staying the operation of letter dated 01.11.2023 and 04.11.2023 and by further directing the authorities to maintain status quo in the matter and/or pass any other orders as Your Lordships may deem fit and proper.

2. When the writ petition was moved on 08.11.2023, the Court while issuing notice, had provided, as an ad-interim measure, that if the Bank Guarantees furnished by the petitioner had already expired on the dates indicated in a letter dated 29.01.2021 and the validity of the same had not been extended, then in that event, the same shall not be encashed without the leave of the Court. Seeking vacation/modification of the said Order dated 08.11.2023, the respondent Assam Power Distribution Company Limited [‘the APDCL’, for short] authorities have preferred an interlocutory application, which has been registered and numbered as I.A.[C] no. 3499/2023. In the course of the proceedings, the respondent APDCL authorities have preferred another interlocutory application seeking a direction to the petitioner and the respondent no. 5 in the writ petition, W.P.[C] no. 6446/2023, that is, Federal Bank Ltd. to extend the validity of the three Bank Guarantees or to provide adequate alternative security and the said interlocutory application has been registered and numbered as I.A.[C] no. 163/2024.

3. The parties have exchanged a number of pleadings and the learned counsel for the parties have submitted that the exchange of pleadings between the parties is complete.

4. In order to understand the nature of challenges made and to appreciate the issues raised and involved in the writ petition, a narration of facts in sequence, shorn of unnecessary details, appears necessary at this stage.

4.1. The office of the Chief General Manager [PP&D], APDCL, Guwahati [the respondent no. 3] published a Request for Proposal [RFP] on 18.06.2020 to invite interested Bidders to participate in an online bidding process for procurement of power from Grid Connected Solar Photovoltaic [PV] Power Projects through Tariff Based Competitive Bidding Process for total 25 MWAC capacity for a number of Regions including Region-2 [hereinafter referred to as ‘the Region-2 Project’, for easy reference], in the State of Assam on ‘Build-Own-Operate’ basis. It was informed that the bidder would be selected through an Open Competitive Bidding process in accordance with the procedure set out in the Request for Selection [RFS] and it would be the responsibility of the Successful Bidder[s] to supply power to the Procurer as per the terms and conditions of the RFS Document. One of such Regions is Region-2, covering the districts of Goalpara, Bongaigaon, Barpeta, Nalbari, Kamrup – Me