Dismissed

K. Padmaja v. Union of India

Telangana HC8 Jun 2023WP/13667/2023

Case brief

AI extract

What is this about?

The High Court dismissed the petitioner's writ petition and interim application seeking a stay on the issuance of a letter for encashment of a bank guarantee. The court held that since an arbitration clause was invoked in the underlying contract and no fraud was alleged, the dispute must be adjudicated under the Arbitration Act as alternative remedy existed, precluding judicial review of the contr

What did the court decide?

The writ of mandamus and interim stay were refused, and the writ petition and miscellaneous petitions were dismissed.

K. Padmaja Vs Union of India — Contract and Commercial Disputes | Telangana HC (2023)

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[³²⁵⁶ ]

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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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(Special Original Jurisdiction)

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IHURSDAY,THE EIGHTH DAY OF JUNE TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE SRI JUSTICE MUMMINENI SUDHEER KUMAR

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WRIT PETITION NO: 13667 OF 2023

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Between:

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K. Padmaja, W/o Jaya Reddy, age 54 years, Occ. Railway Contractor, Rl/o H.No. 30-64011144, Chandragiri Colony, Neredmet, tValkajigiri, Dist. RangaReddy, Hyderabad- 500047.

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...PETITIONER

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AND

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Union of lndia, Ministry of Railways, Rep. by its Chairman and Chief Executive Officer, Rail Bhavan, Raisina Road, New Delhi 110001-

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The General Manager, Central Railway Annex Building, Chhatrapati Shivaji Terminus Area, Fort, Mumbai, lVlaharashtra 400001

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J. The Senior Divisional Commercial Manager, Railway Divisional Office, Pune, Central Railway.

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The Senior Divisional Finance lVanager, Railway Divisional Office, Pune, Central Railway.

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The lVlanager, State Bank of lndia,^'18-21, Prasantnagar, Near Jagruti Degree College, Malkajigiri, Hyderabad 500047

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...RESPONDENTS

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Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue the WRIT or ORDER or DIRECTION one in the nature of WRIT OF MANDAMUS by directing the 5th Respondent to not to proceed with the letter issued for Encashmant of Bank Guarentee vide No. AC/EA/Expl/Bg/Encashi2023-2410512023 by declaring it as illegal, arbitrary, u nconstitutiona l, consequently prayed to direct the Respondents to refund the Bank Guarantee of successfully completed Pune Pay and Use Toilets contract by vide LOA No. PA/C/I6/PA(All PF - 09 location)/P and U/TDR/17- dt.15111l 2017

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lA NO: 1 OF 2023

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Petition under. Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to

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grant stay on the operation of the letter^{issued by Respondentsvide vide No.} AC/EA/Exp-l/BgtEncasht2023-241.Ost2023'^{issued toenchash theBank} guarantee of Rs. 36,00,0021^{pending disposalof the abovewrit petitionand} pass such other order or orders may deem^{fit and properin the circumstancesof} the case.^{pending disposalof the abovewrit petition}

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Counsel for the Petitioner:^{SRl. P. RAMCHANDER RAO}

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Counsel forthe^{Respondent Nos.1 to 4: SRl. GADI PRAVEEN KUMAR} (Dy. SOLICITOR GENERAL OF INDIA)

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Counsel for the^{Respondent No.5: SRl. KALYAN}

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The Court made the^{following:ORDER}

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,-7

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THE HON'BLE SRI JUSTICE MUMMINENI SUDHEER^KUMAR

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WRIT PETITION No.13667 OF 2023

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ORDER:

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Heard learned counsel for the petitioner,

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Sri Gadi Praveen Kumar, learned Deputy Solicitor General^of India for respondent Nos.1 to 4 and Sri Kalyan, learned counsel for respondent No.5

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This Writ [)etition is filed seeking a Writ of Mandamus to direct respondent No. 5 not to permit Encashment of Bank guarantee pursuant to letter No.AC/PA/ Exp-1/BG/Encashl2023, dated 24.O5.2023 and for a consequential direction to refund the Bank guarantee No.PA/C/16/PA(All PF-09 location)/P&U/TDR/17, dated 15. I 1.20 17

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It is the case of the petitioner that respondent Nos. 1 to 4 have entrusted the work of maintaining the Pay arrd Use toilcts at Pune Railway Station under a contract, dated t 5. I L2O17 and in terms of the said contract, the peLitioner lras fttrnishcci a Bank guarantee for Rs.36,00 ,OO2l - vide B.G.No.3746n933191, dated 11.01.2018 artd thereafter,

N4 SK,J wP D667 2023

certain disputes arose betrveen the parties to the contract and the period of contract has a_lso come to an end. It is also the case of the petitioner that because of disputes that arose between the parties, the contract in question was terminated by an order, dated 13.07.201g, resulting in fiting different Writ Petitions before this Court as well as before the High Court of Bombay and Ii.a[y, the petitioner has invoked the Arbitration Clause contained in the contract vide Clause No.21 and made a request for appointment of the Arbitrator for resolving the disputes. But, in the meanwhile the respondents, instead of appointing the Arbitrator for resolving the disputes, issued the impugned letter, dated 24.O5.2023, requiring respondent No.5 to Encash the Bank guarantee, dated 1 1.01.201g ar_rd to remit the amount of Rs.36,00,002/_.

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Admittedly, there are disputes between the petitioner and respondent Nos.l to 5 in connection with the contract, dated 15. 11.2OlT, entered into between the parties. The said contract also contains an Arbitration Clause vide Clause No.21. Whether the action of the respondents in addressing the letter, dated 24.05.2023, to respondent No.5 requesting for Encashment of the Bank guarantee is in terms of the said

MSK,] wP 13667 2023

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contract or not is a matter to be^decided upon^{institutionof} appropriate proceedings either under the^{provisions of the} Arbitration and Conciliation Act, 1996^(for short the^Act, 1996'l or otherwise.

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In the instant case, except alleging that there is^a breach of terms of the conditions^{of contract committed by the} respondents, there is no allegation of fraud, etc., raised by the petitioner. Whether the action of the respondents in Encashing the Bank guarantee in question by issuing the letter, dated 24.05.2023, is in accordance with the terms^of the contract^or not cannot be adjudicated by this Court in exercise of its jurisdiction under Article 226 of the Constitution of India. If at atl, the petitioner is of the view that such Encashment is contrary to the terms of the contract, the petitioner is always at liberty to avail the remedy by fiIing appropriate application seeking interim protection under Section 9 of the Act, 1996.

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As seen from the affidavit filed in support of the Writ Petition, the petitioner has already invoked the Arbitration Clause and made a request for appointment of an Arbitrator in terms of Clause 21 ol the contract. Therefore, this Court is of the considered vier.r, that the relief sought for by the petitioner

M SK..I \ r, i.1667 2021

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in the present Writ Petition calnot be granted as the petitioner has an effective alternative remedy as noted hereinabove and the issues that are raised in the present Writ petition carnot be effectively adjudicated by this Court.

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Accordingly, the Writ petition is dismissed leaving it open to the petitioner to avail the remedies that are available to him under law including under the Act, 1996. In case, if the petitioner invoke aly such remedies the same shal1 be dealt with in accordalce with law, without being influenced by the observations if any made in this order.

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As a sequel, miscellareous petitions, pending if any in this Writ Petition, shall stand dismissed. No costs.

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sDl N. GHANDRA SEKHAh^RAO ASSISTANT REGISTRAR //rRUE COPY// al SECTION OFFICER

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To, 1 One CC to SRl. P. RAMCHANDER^RAO ,Advocate [OPUC] 2 o;; aC io snr. cnot^{PRAVEENKUIMAR(Dv.SoLICIToRGENERALoF} rNDrA) [OPUC] 3. One CC-to SRl. KALYAN,^Advocate [OPUC] 4. Two CD Copies

BM GJPw

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HIGH COURT

DATED:0810612023

ORDER

WP.No.13667 of 2023

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DISMISSING THE WRIT PETITION WITHOUT COSTS

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Gc,f&} (t'{"\a9r

K. Padmaja v. Union of India

Case brief

What is this about?

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K. Padmaja v. Union of India

Case brief

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