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2007 DIGILAW 569 (JHR)

Rites Ltd. v. Bank Of India

2007-07-18

N.N.TIWARI

body2007
ORDER N.N. Tiwari, J. 1. In this writ petition, the petitioner has prayed for a direction on the respondent Nos. 1 to 3 to forthwith encash/release the total amount of Rs. 2 crores payable against five Bank Guarantees all dated 28.6.2005 in favour of the petitioner, either by remitting the said amount in the petitioners Bank Account No. 106010200007160 of UTI Bank, Main Road, Ranchi or by issuing an account payee cheque in favour of the petitioner for the said sum, for which the petitioner requested the respondent Nos. 1 to 3 by various letters of different dates, but with no consequence. 2. It has been stated that the petitioner is a Government Company, under the Ministry of Railway, Government of India. 3. The Jharkhand State Electricity Board had invited a tender in the month of August, 2003 for the work of Rural Electrification on turn key basis in the State of Jharkhand. The petitioner participated in the said tender and was ultimately awarded the said contract by virtue of the agreements all dated 16.3.2004. The petitioner, thereafter, entered into ten sub-agreement with different persons. One M/s. Ramjee Power Construction Ltd. submitted 27 Bank Guarantees of Rs. 32.71 crores obtained from Bank of India to the petitioner towards Security Deposit declaring the petitioner as the sole beneficiary of the Bank Guarantees, subject to the terms and conditions mentioned in the said Bank Guarantees. The petitioner had written a letter to the respondent-Bank on 22.7.2005 enclosing Bank Guarantees and requested to confirm the same. The respondent-Bank replied to the same by letter dated 23.7.2005 confirming the aforesaid Bank Guarantees. By letter dated 25.7.2005, the respondent-Bank while re-confirming issuance of five Bank Guarantees, stated that photo copies of five Bank Guarantees issued by respondent No. 2 appears to be forged and, as such, those Bank Guarantees will be encashed only on submission of originals of the Bank Guarantees, issued in favour of the petitioner. The petitioner requested several time to encash those Bank Guarantees, but the respondent-Bank refused to encash the same on the said arbitrary ground. 4. A counter-affidavit has been filed on behalf of the respondent-Bank stating, inter alia, that the Bank Guarantees were issued by the Bank but the photo copies of five Bank Guarantees, which were produced and were sought to be encashed, appeared to be forged and fabricated. 4. A counter-affidavit has been filed on behalf of the respondent-Bank stating, inter alia, that the Bank Guarantees were issued by the Bank but the photo copies of five Bank Guarantees, which were produced and were sought to be encashed, appeared to be forged and fabricated. The respondent-Bank, therefore, insisted for production of the original Bank Guarantees. The Bank is always ready to encash the Bank Guarantees, if the originals of the same are produced before the Bank. It has been stated that the respondent-Bank had given a letter to the petitioner clearly stating that the Bank assumes no liability against fake and forged Bank Guarantees. The respondents are, thus, not bound to encash the Bank Guarantees on the basis of any forged document and unless the original documents are produced before the Bank. 5. Mr. B. Poddar, learned senior Counsel appearing on behalf of the petitioner submitted that the respondent-Bank, once having entered into an agreement giving Bank Guarantees, is bound to pay the amount to the beneficiary even without insisting the petitioner for producing the original Bank Guarantees. Learned Counsel submitted that the documents, which were produced, are the genuine documents and it is falsely stated that the same are forged and fabricated. The said objection has been raised only in order to deny the genuine payment to the petitioner, which the respondent-Bank is bound to pay in accordance with the contractual obligation. 6. Learned Counsel appearing on behalf of the respondent-Bank, on the other hand, submitted that the petitioner on their own had produced the documents claiming payment on the basis of the said documents. The said documents of Bank Guarantees were examined and found forged by the Bank officials. In that circumstance, the respondent-Bank is unable to make payment on the basis of forged and fabricated documents. 7. It has been submitted that the petitioner has sought adjudication of the disputed facts, which give rise to the issue as to whether the documents produced by it are forged or genuine. Such disputed issues cannot be adjudicated upon and decided in the writ jurisdiction of this Court. Further, the dispute is regarding contractual obligation arising out of a concluded contract and the petitioner has got efficacious alternative remedy elsewhere and this Court cannot enter into such issue in its writ jurisdiction. 8. Such disputed issues cannot be adjudicated upon and decided in the writ jurisdiction of this Court. Further, the dispute is regarding contractual obligation arising out of a concluded contract and the petitioner has got efficacious alternative remedy elsewhere and this Court cannot enter into such issue in its writ jurisdiction. 8. After hearing the learned Counsel for the parties and considering the materials appearing on record, I find that there were several communications between the petitioner and the respondent-Bank regarding the encashment of the said Bank Guarantees. The petitioner claimed encashment of the Bank Guarantees, whereas the respondent-Bank refused the same stating that the documents produced by the petitioner are forged and fabricated and no payment shall be made unless the original documents are produced before the Bank. 9. Now, the issue before this Court is two fold; (1) whether the documents, produced by the petitioner before the Bank, are genuine or forged documents and (2) whether the Bank is obliged to encash the Bank Guarantees even in absence of the original document of the Bank Guarantees in view of the terms of the agreement. Both the said issues are the factual issues and the same are disputed. The said issues of contractual obligations arise out of the concluded agreement between the parties. The said disputed issues cannot be adjudicated upon and decided in the writ jurisdiction of this Court. Reference may be made to the decision of the Supreme Court in State of Bihar and Anr. v. Jain Plastics and Chemicals Ltd. . 10. In view thereof, relief prayed for by the petitioner in this writ petition, cannot be granted in exercise of extraordinary writ jurisdiction of this Court. This writ petition is, accordingly, dismissed. 11. However, the petitioner is at liberty to seek remedy before the appropriate Forum.