JUDGMENT Hon’ble Ritu Raj Awasthi, J.—Heard Sri Manish Kumar, learned counsel for the petitioner as well as Sri Mukund Tewari, learned Additional Chief Standing Counsel and perused the record. 2. The writ petition was initially filed challenging the letter dated 3.4.2010 issued by the Superintending Engineer, Sitapur-Kheri Circle, Public Works Department, Sitapur requesting opposite party No. 5, HDFC Bank limited to encash the enclosed bank guarantee and issue a bank draft in favour of the Executive Engineer, Construction Division, Public Works Department, Sitapur payable at Sitapur and restrain the bank from revoking the bank guarantee in favour of the opposite party. During the pendency of the writ petition by way of amendment application the petitioner has challenged the office order dated 3.4.2010 issued by the Superintending Engineer, Sitapur-Kheri Circle, Public Works Department, Sitapur opposite party No. 3 terminating the contract for fundamental breach of contract and imposing the recovery of 10% of the contractual amount. 3. A preliminary objection has been raised by Sri Mukund Tewari, learned counsel appearing for respondent Nos. 1 to 4 regarding maintainability of the writ petition on the ground that the disputes involved in the present writ petition are purely contractual and the writ petition on the present facts and circumstances is not maintainable. Moreover, as per clauses-24 and 25 of the General Conditions of Contract, the Dispute Redressal System has been provided and in case either of the party feeling not satisfied with the decision of the competent authority may invoke the arbitration clause and get the dispute decided through arbitration under the provisions of Arbitration and Conciliation Act, 1996. 4. The facts of the case in brief are that the tenders were invited by the Public Works Department for widening and strengthening of road from Kilometer-1 to Kilometer 30.60 in district Sitapur. The time allowed for completion of work was one year. The bid of the petitioner was accepted and the work of widening and strengthening the road from Km-1 to Km-25 was given to the petitioner. In this regard a letter of acceptance dated 2.7.2008 was issued. As per the said letter the petitioner was to submit a bank guarantee and sign the contract/bond, which was executed on 29.7.2008, having the date for completion of work as 28.7.2009. 5. In this regard a letter of acceptance dated 2.7.2008 was issued. As per the said letter the petitioner was to submit a bank guarantee and sign the contract/bond, which was executed on 29.7.2008, having the date for completion of work as 28.7.2009. 5. As per ‘Instructions to Bidders’ for the purposes of work costing above Rs.40 lac, issued by the Public Works Department, Government of Uttar Pradesh, a copy of which was provided to the petitioner before entering into the contract, the petitioner was required to submit bid security within 10 days after receipt of the letter of acceptance for the period of one year plus additional security in accordance with clause 27.3 and 27.4 of Instructions to Bid and clause 46 Part-1 of General Conditions of Contract. The performance security was to be in the form of a bank guarantee or a Fixed Deposit Receipt in favour of Superintending Engineer, Sitapur-Kheri, Public Works Department, payable at Sitapur from a scheduled Commercial Bank. The failure of complying with the requirement of submitting the performance security may amount to cancellation of award and forfeiture of earnest money. He may also be debarred to participate in future bids under public works department for one year. 6. It is relevant to mention here that as per the Condition No. 13 of the General Conditions of Contract, the contractor at his cost shall provide in the joint names of the Employers and the Contractor, insurance cover from the date of start of work to the date of completion, in the amounts as deductibles stated in the contract data for certain events (as provided in condition No. 13.1), which are due to the contractor’s risks. Further in case of any dispute Condition No. 24 of the General Conditions of Contract provides the mechanism of Dispute Redressal and Condition No. 25 provides the procedure for resolution of disputes, whereas Condition No. 44 provides liquidated damages. The relevant extract of Condition Nos. 24, 25 and 44 of the General Conditions of Contract are being quoted below: “24. Further in case of any dispute Condition No. 24 of the General Conditions of Contract provides the mechanism of Dispute Redressal and Condition No. 25 provides the procedure for resolution of disputes, whereas Condition No. 44 provides liquidated damages. The relevant extract of Condition Nos. 24, 25 and 44 of the General Conditions of Contract are being quoted below: “24. Dispute Redressal System 24.1 If any dispute or deference of any kind what-so-ever shall arise in connection with of arising out of this Contract or the execution of works or maintenance of the works there under, whether before its commencement or during the progress of works or after the termination, abandonment or breach of the Contract it shall, in the first instance, be referred for settlement to the competent authority, described alongwith their power in the Contract Data, above the rank of the Engineer, the competent authority shall, within a period of forty-five days after being requested in writing by the Contractor to do so, convey his decision to the Contractor, such decision in respect of every matter so referred shall, subject to review as hereinafter provided, be final and binding upon the Contractor. Lin case the Works is already in progress, the Contractor shall proceed with the execution of the Works, including maintenance thereof, pending receipt of the decision of the competent authority as aforesaid, with all due diligence. 24.2 Either party will have the right of appear, against the decision of the competent authority, to the arbitration if the amount appealed exceeds one lakh. 25. Procedure for Resolution of Disputes. 25.1 The competent Authority mentioned in clause 24.1 shall give a decision in writing within 45 days of receipt of a notification of a dispute. 25.2 Either party may refer a decision of the competent authority to Arbitration within 28 days of the Competent Authority’s written decision. Arbitration shall be under the Arbitration and Conciliation Act, 1996, if neither party refers the dispute to Arbitration within the above 28 days, the Competent Authority’s decision will be final and binding. 44. Liquidated Damages. 44.1 The Contractor shall pay liquidated damages to the Employer at the rate per week or part there of stated in the Contract Data for the period that the Completion Date is later than the intended Completion Date. 44. Liquidated Damages. 44.1 The Contractor shall pay liquidated damages to the Employer at the rate per week or part there of stated in the Contract Data for the period that the Completion Date is later than the intended Completion Date. Liquidated damages at the same rate shall be withheld if the Contractor fails to achieve the milestones prescribed in the Contract Date. However, in case the Contractor achieves the next milestone the amount of the liquidated damages already withheld shall be restored to the Contractor by adjustment in the next payment certificate. The total amount of liquidated damages shall not exceed the amount defined in the Contract Data. The Employer may deduct liquidated damages from payments due to the Contractor. Payment of liquidated damages shall not affect the Contractor’s other liabilities. 44.2 If the intended Completion Date is extended after liquidated damages have been paid, the Engineer correct any over payment of liquidated damages by the Contractor by adjusting the next payment certificate.” 7. Sri Manish Kumar, learned counsel for the petitioner vehemently argued that in most arbitrary, unreasonable and illegal manner the opposite party No. 3 sent impugned letter dated 3.4.2010 by adopting pressure tactics just to harass the petitioner and to cause injury without there being any fault on the part of the petitioner. The reason for revocation/encashment of bank guarantee was not due to any fault of the petitioner but due to the reason that the petitioner had not given his consent for extra work, which is not part of the bond executed between the parties. 8. It is further submitted that the petitioner had not breached any of the terms of the conditions of the contract/bond. No show-cause notice or any opportunity was provided to the petitioner before issuance of the impugned letter. Moreover, no dues are pending against the petitioner; rather it is admitted case that the respondents are supposed to pay a sum of Rs.21,91,000/- to the petitioner and this undisputed amount has been calculated and approved after due verification of the work done by the petitioner. The opposite parties had themselves established that they are not in a position to provide required mobilization amount to the petitioner to complete the work. They were themselves not sure as to when funds would be made available by the State Government. The opposite parties had themselves established that they are not in a position to provide required mobilization amount to the petitioner to complete the work. They were themselves not sure as to when funds would be made available by the State Government. However, the petitioner was being pressurized to get the work done from his own resources and also accept the extra work. He was asked to accept the extra work of road widening and strengthening from 26 Km to 30.60 Km, which was not covered under the work contract. On refusal by the petitioner the opposite parties have adopted pressure tactics and therefore, issued the impugned letter to invoke the bank guarantee. 9. The learned counsel for the petitioner submitted that on 7.4.2010, he has been served with a copy of the office memorandum dated 3.4.2010 by which the opposite parties in most arbitrary, unreasonable and illegal manner have terminated the contract and have also passed the order for recovery from the petitioner which has been done by violating all norms of principles of natural justice and without giving any opportunity to the petitioner. 10. It is submitted that the arbitrariness and ulterior motives of the opposite parties are writ large on the face and evident from the fact that instead of providing the copy of the impugned office memorandum to the petitioner, the opposite parties had sent it directly to the bank with a request to encash the bank guarantee of Rs.92,78,000/- submitted by the petitioner. The reasons assigned by the opposite parties for terminating the contract are wholly incorrect, against the material on record and due to high handedness of the authorities concerned. 11. It is further submitted that clause-13 of General Conditions of Contract is not generally enforced and till date no contractor was ever required to submit insurance cover for any of the contracts. Moreover, the public works department is itself empowered to deduct the insurance amount, which the opposite parties in the present case had not done nor the petitioner was ever asked to submit insurance. 12. So far as clause 44 of the General Conditions of Contract is concerned, it has been submitted that the same is not applicable in the case of the petitioner reason being that clause-44 deals with the liquidated damages due to incomplete work. 12. So far as clause 44 of the General Conditions of Contract is concerned, it has been submitted that the same is not applicable in the case of the petitioner reason being that clause-44 deals with the liquidated damages due to incomplete work. It is not applicable in the present case because, firstly, work has not been abandoned by the petitioner and rather the petitioner had been continuously requesting the opposite parties to get the funds collected, so that he may be able to complete the work in time. However, the opposite parties themselves were not having any fund. In this regard the petitioner had continuously writing letters to the opposite parties and requested the opposite parties to provide the fund. Secondly, the petitioner was always willing and ready to perform his part of obligation as defined in the bond but it was due to non-availability of funds with the opposite parties which had delayed the work. It is submitted by the counsel for the petitioner that the petitioner was always willing to perform the work and had, therefore, extended the bank guarantee for a further period of three months in compliance of the letter dated 26.3.2010. 13. In support of his argument learned counsel for the petitioner has relied upon the judgment of the Hon’ble Supreme Court in the case of Hindustan Construction Co. Ltd. and State of Bihar and others, 1999 (8) SCC page 436. Para-14 of the judgment is being reproduced below for the purpose: “14.This condition clearly refers to the original contract between HCCL and the defendants and postulates that if the obligations, expressed in the contract, are not fulfilled by HCCL giving to the defendants the right to claim recovery of the whole or part of the “advance mobilisation loan”, then the Bank would pay the amount due under the guarantee to the Executive Engineer. By referring specifically to clause 9, the Bank has qualified its liability to pay the amount covered by the guarantee relating to “advance mobilisation loan’, to the Executive Engineer only if the obligations under the contract were not fulfilled by HCCL or HCCL has misappropriated any portion of the “advance mobilisation loan”. It is in these circumstances that the aforesaid clause would operate and the whole of the amount covered by the “mobilisation advance” would become payable on demand. It is in these circumstances that the aforesaid clause would operate and the whole of the amount covered by the “mobilisation advance” would become payable on demand. The bank guarantee thus could be invoked only in the circumstances referred to in clause 9 where-under the amount would become payable only if the obligation are not fulfilled or thee is misappropriation. That being so, the bank guarantee could not be said to be unconditional or unequivocal in terms so that the defendants could be said to have had an unfettered right to invoke that guarantee and demand immediate payment thereof from the Bank. This aspect of the matter was wholly ignored by the High Court and it unnecessarily interfered with the order or injunction, granted by the Single Judge, by which the defendants were restrained from invoking the bank guarantee.” 14. It is the admitted fact that the petitioner was awarded the contract by the opposite parties for execution of certain works relating to widening and strengthening of road from Km-1 to Km-25 on Sidhauli Kalli Namisharanya Road, District Sitapur. As per the requirement given under the Instructions to the Bidders, the petitioner had furnished the performance security in the form of a bank guarantee to the tune of Rs.92,78,000/- through the HDFC Bank limited, Lucknow. The petitioner had also executed contract/bond with the opposite parties in regard to the aforesaid work and had fully agreed with the terms and conditions of the contract. The said contract envisages that in case of any dispute or differences of any kind whatsoever arising in connection with or arising out of this contract regarding the execution or maintenance of work, whether before its commencement or during the progress or even after the termination or suspension or breach of contract shall be in the first instance referred for settlement to the competent authority, who shall give the decision within a period of 45 days after being requested in writing by the contractor to do so. It is further provided that either of the party not being satisfied with the decision of the competent authority may request for arbitration within 28 days of the decision of the competent authority. The arbitration shall be done under the provisions of Arbitration and Conciliation Act, 1996. It is further provided that either of the party not being satisfied with the decision of the competent authority may request for arbitration within 28 days of the decision of the competent authority. The arbitration shall be done under the provisions of Arbitration and Conciliation Act, 1996. If neither of the party refers the dispute within 28 days, the decision of the competent authority shall be treated to be final and binding. 15. The legal position with regard to the maintainability of writ petition in contractual matters is very clear. Ordinarily this Court in exercise of powers under Article 226 of the Constitution would not interfere in the contractual matters. 16. In the case of Orissa State Financial Corporation v. Narsing Ch. Nayak, 2003 (1) SCC 261, it has been held by the Hon’ble Supreme Court that the High Court can neither ignore the scope of writ petition before it nor the nature of dispute presented therein. It cannot enter into the area of contractual obligations between the parties and issue directions annulling an existing contract and introducing a new contract. 17. In the case of Rajsthan Housing Board v. G.S. Investments, 2007 (1) SCC 477 , it has been held by the Hon’ble Supreme Court that even if some defect was found in the ultimate decision resulting in cancellation of the auction, the Court should exercise its discretionary power under Article 226 of the Constitution with great care and caution and should exercise it only in furtherance of public interest. 18. In the case of Empire Jute Co. Ltd. v. Jute Corporation of India Ltd., 2007 (14) SCC 680 , it has been held by the Hon’ble Supreme Court that the power of judicial review vested in the superior Courts undoubtedly has wide amplitude but when there exists an arbitration agreement, the writ Court ordinarily would not exercise its discretionary jurisdiction to enter into the dispute. 19. In the present case, the dispute is admittedly contractual. The perusal of the impugned order dated 3.4.2010 terminating the contract clearly indicates that the order has been passed for alleged fundamental breach of contract. Under the General Conditions of Contract a dispute redressal system is provided and under clause-25, procedure for resolution of dispute has been given which clearly envisages arbitration clause. The perusal of the impugned order dated 3.4.2010 terminating the contract clearly indicates that the order has been passed for alleged fundamental breach of contract. Under the General Conditions of Contract a dispute redressal system is provided and under clause-25, procedure for resolution of dispute has been given which clearly envisages arbitration clause. As per petitioner’s own case during the pendency of the writ petition the opposite parties have already encashed the bank guarantee, as such the relief with regard to restraining the bank from revoking the bank guarantee in favour of the opposite parties cannot be granted to the petitioner at this stage. 20. We have given our thoughtful consideration to the various pleas raised by the petitioner. There is a complete code provided under the Arbitration and Conciliation Act, 1996 for redressal of disputes relating to the contractual matters. The petitioner had himself agreed for the redressal of disputes arising out of the said contract through mechanism as envisaged under the said contract, which also provides arbitration clause. In this view of the matter we are of the considered opinion that the writ petition in the facts and circumstances of the present case is not maintainable. 21. The writ petition is devoid of any merit and it is accordingly dismissed. 22. However, liberty is given to the petitioner to raise his grievances in any other forum as may be provided under the law. It is also made clear that we have not touched the merits of the dispute raised in the writ petition. —————