Central Mines Planning and Design Institute Limited vs Bank of Baroda and others

Hon''ble Mr. Abhay Manohar Sapre, J.—The challenge in this writ petition by the writ petitioner under Article 226/227 of the Constitution of India is to a letter dated 16.3.2012 (Annexure P-1 ) issued by the Respondent No. 1 -Bank which reads as under:-

(Vernacular matter deleted) Bank of Baroda

Korba/Adv/BG/2012

16.03.2012

The Regional Director, CMPDIL Regional Institute-V SECL Complex, Seepat Road, BILASPUR

Dear Sir,

Re: Encashment of Bank Guarantee no. 8/2005 dated 11.04.2005 since expired on 10.04.2006.

We refer to your letter no. CMPDI/RD- 5/Civil/12/4415 dated 03.03.2012 and like to inform you that as per the guarantee deed executed bank in favour of you has been expired on 10.04.2006 and you have not claimed the amount secured under the guarantee letter within the validity period, therefore at present there is no obligation on part of the Bank to oblige the said guarantee.

We also like to quote that the Hon''able Chhattisgarh High Court has adjudicated the matter between the CMPDIL and Mr Saurav Agrawal and others, the Bank was not party to the dispute. On perusal of Copy of Judgment there is no direction given by the court in reference to the honour of the expired Bank Guarantee by the Bank, therefore in terms of guarantee deed the bank''s liability has been absolved.

Yours faithfully,

(K. Narendra) Sr. Br. Manager

The writ petitioner further seeks issuance of writ of mandamus against the respondent -Bank directing them to renew one Bank Guarantee which the Bank had furnished on behalf of respondent No. 3 in writ petitioner''s favour for fulfillment of some commercial contract which the writ petitioner had entered into with respondent No. 3 for execution of some work and such bank guarantee has now expired due to efflux of time mentioned in it.

So the question that arises for consideration in this writ petition is whether such writ petition for issuance of writ of certiorari for quashing the impugned letter and mandamus for the renewal of such Bank Guarantee against the respondent - the Bank is entertain able on such facts?

Having heard the learned counsel for the writ petitioner and on perusal of the record of the case, we are inclined to dismiss the writ petition as in our opinion; it is misconceived in nature and is incapable of being entertained for issuance of twin writs claimed by the writ petitioner on such facts.

At the out set, we may mention that the dispute sought to be raised by the writ petitioner being purely in the nature of contractual one and arise out of contracts executed between the three parties namely writ petitioner on the one side and respondents on the other, no writ petition either for issuance of writ of certiorari or for issuance of writ of mandamus as claimed by the writ petitioner lies on such facts.

It appears from the case of the writ petitioner that in compliance to certain terms of commercial contract which they had with respondent No. 3 for execution of some work, some performance guarantee was furnished by the respondent No. 3 through respondent No. 1 - Bank in writ petitioners favour and before it could be encashed by the writ petitioner for the alleged breaches committed by the respondent no 3 in its execution, its validity period has expired.

In a situation like the one faced by the writ petitioner against the respondents in execution of such contract, the High Court under Article 226 and 227 of the Constitution of India can not direct any party much less to the respondents either jointly or/and severally to extend the period of Bank Guarantee which is essentially in the nature of contract. In such case, it is for the contracting parties to the contract to alter, amend, rescind or terminate their contract or extend its period or/and validity for ensuring its performance depending upon their volition and if they do not do it than the parties to such contract are at liberty to work out their rights flowing from such contract by taking recourse to remedies available in civil law by filing a suit or taking recourse to the remedies provided in the court in domestic forum as the case may be. The Bank guarantee being in the nature of tri partite contract between the three parties, it can be amended or/and extended only when all the parties agree for such amendment or extension. If the Court steps in and directs for its extension dehores the party''s choice then it will virtually amount to Court becoming contracting parties to the private contract against their wishes. It is not permissible much less in writ proceedings because a contractual disputes are not entertain able in writ jurisdiction.

Learned counsel for the writ petitioner then referred to some court proceedings and contended that keeping in view the said proceedings; this Court should issue a writ of mandamus. To say the least, the submission has no force. In the first place, those were the arbitration proceedings. Secondly, such proceedings do not arise out of writ proceedings nor can they be taken at par with writ proceedings and lastly such proceedings themselves show that the issue arose out of contractual proceedings and in such matter, the writ petition is not entertain able but remedy lay in some domestic forum.

In the light of foregoing discussion, we leave the parties including the writ petitioner to take recourse to any other remedies in civil law for enforcement of their contractual rights as against the respondents and obtain orders as may be permissible to them in law and in consequence dismiss the writ petition in limine as being misconceived and not entertainable under Article 226 and 227 of the Constitution of India. To conclude, the writ petition fails and is dismissed in limine.