Manipal Energy And Infratech Ltd v. State Of Karnataka
2019-06-18
ALOK ARADHE
body2019
DigiLaw.ai
JUDGMENT : Alok Aradhe, J. Mr.Aditya Sondhi, learned Senior counsel for Mr.Shyam Sundar H.V., learned counsel for the petitioner. Mr.Vijay Kumar A. Patil, learned Additional Government Advocate for respondent No.1. Smt.Maneesha Kongovi, learned counsel for respondent No.2. Mr.M.Sivappa, Learned Senior counsel for Mr.S.Anil Kumar for respondent No.3. 2. The writ petition is admitted for hearing. With consent of the learned counsel for the parties, the same is heard finally. 3. In this petition under Articles 226 and 227 of the Constitution of India, the petitioner inter alia seeks a writ in the nature of mandamus directing the respondent No.2 to consider the representations submitted by the petitioner to respondent No.2 dated 17.07.2018, 23.08.2013 and 10.12.2018. 4. Facts giving rise to the filing of the petition briefly stated are that the petitioner is a Infrastructure company which is engaged in the business of civil construction, mechanical structural work etc. For construction of High School, hostel block, kindergarten for police public school at Jalapuri, Mysore, a tender was floated by respondent No.2. The respondent No.3 was declared to be a successful bidder. Accordingly, respondent No.3 entered into a contract with respondent No.2 on 05.03.2014 for construction of High School, hostel block, kindergarten for police public school at Jalapuri, Mysore and construction of new office building of Commissioner of Police. It is the case of the petitioner that respondent No.3 could not continue with the construction work on account of financial difficulties and therefore, it requested the petitioner to take over the construction work as sub-contractor and arrange for a bank guarantee for mobilization advances which was taken by respondent No.3. Thereafter, a meeting was held on 15.03.2016 pursuant to which the petitioner agreed to take over the construction activities. Thereafter, a master agreement dated 26.03.2016 was executed by respondent No.3 in favour of the petitioner in respect of the work orders mentioned therein. 5. It is also averred in the writ petition that under Clauses 6.2 and 6.3 of the master agreement, amount payable to respondent No.3 was required to be deposited by the respondent No.2 in the designated account maintained by State Bank of Mysore. The petitioner in pursuance of the master agreement furnished a bank guarantee for a sum of Rs. 1,60,00,000/- (Rupees one crore and sixty lakhs only) in favour of respondent No.2 for mobilization advance.
The petitioner in pursuance of the master agreement furnished a bank guarantee for a sum of Rs. 1,60,00,000/- (Rupees one crore and sixty lakhs only) in favour of respondent No.2 for mobilization advance. It is also averred in the petition that the petitioner carried out the construction activity and work completion certificates were issued by the respondent No.2. The respondent No.3 sent a communication to Kaveri Grameena Bank requesting for change of authorized signatories without issuing any prior notice to the petitioner. The petitioner thereupon submitted an objection on 17.07.2018 to respondent No.2 and sent a notice to the Bank calling upon the Bank to permit the petitioner to operate the Bank account. The petitioner thereafter again sent a notice on 23.08.2018 to respondent No.2 not to accept any changes in Bank account without written consent from the petitioner. However, the representations submitted by the petitioner failed to evoke any response. In the aforesaid factual background, the petitioner has approached this Court. 6. Learned Senior counsel for the petitioner submitted that the petitioner has furnished a bank guarantee in favour of respondent No.2 to the tune of Rs. 1,60,00,000/- (Rupees one crore sixty lakhs only), which has admittedly been received by the respondent No.2. The attention of this Court has also been invited to the work completion certificates issued by respondent No.2 in favour of the petitioner namely, Annexures-J1 to J3, in support of the submission that the petitioner has completed the work in question. It is further submitted that the respondent No.2 having availed of the benefit of the contract, cannot be permitted to turn around and contend that there is no privity of contract between it and the petitioner. It is also urged that this Court in contractual matters also can interfere if the action of the State or its instrumentality is arbitrary. In support of aforesaid submission, reliance has been placed on the decision of the Supreme Court in 'ABL INTERNATIONAL LTD. AND ANOTHER Vs. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. AND OTHERS, (2004) 3 SCC 553 '. 7. On the other hand, learned counsel for the respondent No.2 submits that there is no privity of contract between it and the petitioner. It is pointed out that the respondent No.2 had entered into a contract with respondent No.3 on 05.03.2014.
AND ANOTHER Vs. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. AND OTHERS, (2004) 3 SCC 553 '. 7. On the other hand, learned counsel for the respondent No.2 submits that there is no privity of contract between it and the petitioner. It is pointed out that the respondent No.2 had entered into a contract with respondent No.3 on 05.03.2014. Thereafter, as per the averments made in the petition itself, a subcontract has been executed between the petitioner and respondent No.3 to which respondent No.2 is not a party. It is also urged that there is no material on record to show that the respondent No.2 has entered into an agreement with the petitioner. In support of her submissions, learned counsel for respondent No.2 has relied on the decisions in the case of 'MR.N.HEMANTH KUMAR GOWDA Vs. THE STATE OF KARNATAKA AND OTHERS' in W.P.No.11383/2015 dated 20.08.2015, 'PARSHAVANATHA PADMAVATHI Vs. STATE OF KARNATAKA AND ANOTHER' in W.P.No.14752/2011 dated 23.05.2011, 'TAMIL NADU STATE CONSTRUCTION CORPORATION LTD. Vs. J.BANU AND ORS, (1996) AIR Madras 466' and 'ASSISTANT EXCISE COMMISSIONER and Others. Vs. ISSAC PETER AND ORS, (1994) 4 SCC 104 '. 8. Learned Senior counsel for the respondent No.3 has submitted that the bank guarantees were furnished on behalf of the petitioner and in the absence of any legal right in favour of the petitioner, a writ of mandamus cannot be issued. It is also pointed out that the agreement executed between the petitioner and respondent No.3 provides that dispute, controversy or claims arising out of or relating to this agreement or breach, termination or invalidity thereof, shall be tried by the Courts at Udupi. In support of his submissions, learned Senior counsel for respondent No.3 has relied on the decisions in the case of 'UNION OF INDIA AND OTHERS Vs. MURALIDHARA MENON AND ANOTHER, (2009) 9 SCC 304 ', 'ORIENTAL BANK OF COMMERCE Vs. SUNDER LAL JAIN AND ANR, (2008) AIR SC 1339', 'TIRUMALA TIRUPATI DEVASTHANAMS Vs. K.JOTHEESWARA PILLAI (D) BY LRS. AND ORS, (2007) AIR SC 1771', 'MANI SUBRAT JAIN Vs. STATE OF HARAYANA AND OTHERS, (1977) AIR SC 276', 'STATE OF HARAYANA Vs. SUBASH CHANDER MARWAHA AND OTHERS, (1973) AIR SC 2216', DR.UMAKANT SARAN Vs. STATE OF BIHAR AND OTHERS, (1973) AIR SC 964 AND DR.RAI SHIVENDRA BAHADUR Vs. GOVERNING BODY OF THE NALANDA COLLEGE, BIHAR SHARIF AND OTHERS, (1962) AIR SC 1210. 9.
STATE OF HARAYANA AND OTHERS, (1977) AIR SC 276', 'STATE OF HARAYANA Vs. SUBASH CHANDER MARWAHA AND OTHERS, (1973) AIR SC 2216', DR.UMAKANT SARAN Vs. STATE OF BIHAR AND OTHERS, (1973) AIR SC 964 AND DR.RAI SHIVENDRA BAHADUR Vs. GOVERNING BODY OF THE NALANDA COLLEGE, BIHAR SHARIF AND OTHERS, (1962) AIR SC 1210. 9. I have considered the submissions made by both the sides and have perused the record. Admittedly, the respondent No.3 and the respondent No.2 entered into an agreement on 05.03.2014. Thereafter, a separate agreement was executed between the petitioner and respondent No.3 on 26.03.2016. Admittedly, the respondent No.2 is not a party to the aforesaid agreement. Clause 12.8 of the agreement executed between the petitioner and the respondent No.3 reads as under: "12.8 Jurisdiction Any dispute, controversy or claims arising out of or relating to this Agreement or the breach, termination or invalidity thereof, shall be exclusive jurisdiction of Courts at Udupi, Karnataka." 10. A person can be said to be aggrieved only when a person is denied a legal right by someone who has a legal duty to do something or abstain from doing something (See Halsbury's Laws of England 4th Edition Vol.1 Para 122). The aforesaid proposition was quoted with approval by the Supreme Court in STATE OF HARAYANA, supra and MANI SUBRAT JAIN, supra. Similar view has been taken in ORIENTAL BANK OF COMMERCE, supra. In other words, existence of a legal right as well as existence of a legal duty to do something or to abstain from doing something is a condition precedent for issuance of a writ of mandamus. In the instant case, there is no privity of contract between the petitioner and respondent No.2. The petitioner does not have any legally enforceable right against the respondent No.2. The bank guarantee has been furnished on behalf of the respondent No.3. The mere issuance of work completion certificate does not create any legal relationship between the parties. In the absence of any privity of contract between the petitioner and respondent No.2, no writ of mandamus can be issued against respondent No.2. Therefore, I do not find any merit in the petition. However, needless to state that the petitioner shall be at liberty to take recourse to remedy provided to them under Clause 12.8 of the agreement executed between the petitioner and respondent No.3. With the aforesaid liberty, the petition is disposed of. 11.
Therefore, I do not find any merit in the petition. However, needless to state that the petitioner shall be at liberty to take recourse to remedy provided to them under Clause 12.8 of the agreement executed between the petitioner and respondent No.3. With the aforesaid liberty, the petition is disposed of. 11. In view of the disposal of the writ petition, the pending interlocutory application does not survive for consideration and is accordingly disposed of.