A Guarantee Corporation of India Ltd. and Others, (2004) 3 SCC 553, Santosh Hegde, J. has exhaustively dealt with the maintainability of writ petition under Article 226 in contractual matters. In the said case, contract of insurance was executed between ABL International ltd. and Another and Export Credit B Guarantee Corporation of India Ltd. and Others. Having failed to persuade the first respondent therein, to adhere to the contract of insurance between it and the appellant, the appellant filed a writ petition before a learned Single Judge of the Calcutta High Court, inter alia, praying for quashing of the letters of C repudiation issued by the first respondent. It also consequentially prayed for a direction to the first respondent to make payment of the dues to it under the contract of insurance. The learned Single Judge, after hearing the parties, came to the conclusion that though the dispute between the parties arose D out of a contract, the first respondent being a 'State' for the purpose o.f Article 12, was bound by the terms of the contract, therefore, for such non-performance, a writ was maintainable and after considering the arguments of the parties in regard to the liability under the contract of insurance, allowed the writ E petition and issued the writ and directions as prayed for by the appellants in the writ petition. In an appeal filed by the first respondent before the Appellate Bench of the same High Court, the Division Bench reversed the findings of the learned Single Judge and held that the claim of the appellant involving F disputed questions of fact cannot be adjudicated in a writ proceeding under Article 226 of the Constitution, hence, set aside the judgment of the learned Single Judge. In the course of its judgment the Appellate Bench also incidentally came to the conclusion that the first respondent had not committed any G violation of the clauses or the terms of the insurance contract. On the contrary, it observed that as per proviso (d) to clause (xi) of the said insurance contract, by refusing to accept the barter of goods, the first appellant had violated the terms of the contract disentitling it to raise any claim on the first respondent.
