ORDER : Subodh Abhyankar, J. 1. This petition has been filed by the petitioner M/s. Chakra Dhar Construction, a Govt. Contractor through its proprietor under Art. 226 of the Constitution of India against the inaction on the part of the respondents to release the bank guarantee/security deposit of Rs. 41,71,838/- during the period of its validity. 2. The case of the petitioner is that it had entered into an agreement with the respondents Narmada Valley Development Authority on 29.03.2001 for construction of E/W of Indra Sagar Pariyojna Main Canal Group No. ME(B)RD 27.285 kms. to 29.419 kms. According to the petitioner, the work was also completed, however, as there was some measurement dispute between the parties pursuant to which contract was rescinded by the respondent on 5.1.2004, and subsequent to which the same was again reallocated to a third party and the cost incurred in the aforesaid process was sought to be recovered from the present petitioner as debitable amount. Hence, a case before M.P. Arbitration Tribunal was also filed by the State which was registered as case No. 28/2007 which came to be dismissed by the Tribunal vide its order dated 31.01.2009 on the ground that no demand notice was issued by the respondent for the recovery of debitable amount. This order was also challenged by the respondent in Arbitration Revision No. 14/2009 under Section 19 of the M.P. Madhyastam Adhikaran Adhiniyam, 1983 was also dismissed by the Division Bench of this Court vide order dated 20.09.2012 confirming the order passed by the Tribunal. 3. After passing of the aforesaid order by the Division Bench, the petitioner herein sought to release the Bank Guarantee submitted by them at the time of execution of the Agreement, but as the same was not responded to by the respondents, hence this petition against the inaction of the respondent to release the security deposit of Rs. 41,71,838/-. 4. Shri Umesh Tripathi, learned counsel for the petitioner has submitted that the claim of the Government has already been dismissed by the M.P. Administrative Tribunal vide order dated 31.01.2009 and which has also been affirmed by the Division Bench of this Court in AR No. 14/2009 vide order dated 20.09.2012 and as such no recovery can be effected from the petitioner and the bank guarantee furnished by the petitioner at the time of entering into the agreement has been wrongly withheld by the respondent. 5. 5. On the other hand, Shri R.B. Singh, counsel for the respondents has opposed the prayer and has submitted that no case for interference is made out as the case which was filed by the respondent/State before the Madhya Pradesh Administrative Tribunal was in respect of the debitable amount which, the respondent incurred while reallocating the work of construction to the other contractor. Thus, even if the aforesaid claim of the State has been dismissed, the respondent are still entitled to encash the bank guarantee as per Clause 4.3.3.1 of the agreement, a copy of which is also placed on record. 6. It is further submitted by the counsel that the aforesaid dismissal of the claim of respondent before the Arbitration Tribunal as well as before this Court was on account of technical error committed by the respondents in issuing proper notice to the petitioner for demand of their claim, which has led the Tribunal as well as the High Court to hold that the respondents are not entitled to recover debitable amount which they have suffered as the petitioner failed to perform his contract. It is further submitted that since the petitioner firm did not complete its work and the work was required to be completed through debitable agency i.e. Ms. Karan Development Private Limited, Gwalior, which performed the rest of the work, and the petitioner's agreement was rescinded by the respondents hence the petitioner is not entitled to repayment of the bank guarantee. While relying upon Condition No. 4.3.3.1 of the Agreement, counsel has assailed that the aforesaid condition in itself is more than sufficient to draw an inference that the respondents had total discretion to encash bank guarantee on account of non-performance of the contract by the petitioner. It is further submitted that pursuant to the aforesaid Clause 4.3.3.1 the security deposit has already been invoked by the respondents and the bank guarantee has been forfeited. 7. Heard the learned counsel for the parties and perused the record. 8. The sole question that falls for the consideration of this Court is that whether under the facts and circumstances of the case when the respondents' claim for debitable amount has already been rejected by the M.P. Arbitration Tribunal as well as by this Court in arbitration revision, whether they are still entitled to forfeit the bank guarantee submitted by the petitioner while entertaining into the agreement? 9. 9. In this regard, it would be fruitful to refer to paras 4.3.3 and 4.3.3.1 of the Agreement which read as under:- "4.3.3 ACTION WHEN THE CONTRACTOR BECOMES LIABLE FOR LEVY OF PENALTY:- In any case in which under any clause or clauses of this contract the contractor shall have rendered himself liable to pay compensation amounting to the whole of his security deposit (whether paid in one sum or deducted by instalment) or committed a breach of any of the terms contained in clause 4.3.2 or in the case of abandonment of the work owing to the serious illness or death of the contractor or any other cause. Divisional Officer on behalf of the Governor of Madhya Pradesh shall have power to adopt any one of the following courses, as he may deem best suited to the interests of Government. 4.3.3.1 To rescind the contract (of which rescission notice in writing to the contractor under the hand of the engineer shall be conclusive evidence) and in which case the security deposit and performance security deposit of the contractor shall stand forfeited and be absolutely at the disposal of Government." (Emphasis supplied) 10. Thus, it is clear that it is only in those cases in which the contractor has rendered himself liable to pay compensation or has committed breach of any of the terms contained in Clause 4.3.2 or in case of abandonment of the work that the security deposit and performance security may be forfeited. Para 4.3.2 which relates to compensation for delay reads as under:- "4.3.2 COMPENSATION FOR DELAY The time allowed for carrying out work as entered in the tender shall be strictly observed by the contractor and shall be reckoned from the date on which the order to commence work is given to the contractor. Para 4.3.2 which relates to compensation for delay reads as under:- "4.3.2 COMPENSATION FOR DELAY The time allowed for carrying out work as entered in the tender shall be strictly observed by the contractor and shall be reckoned from the date on which the order to commence work is given to the contractor. The work shall throughout the stipulated period of the contract be proceeded with all due diligence (time being deemed to be the essence of the contract on the part of the contractor) and the contractor shall pay compensation an amount equal to one percent, or such smaller amount as Executive/Superintending Engineer may decide, on the amount of the estimated cost of the whole work as shown in the tender for every day that the work remains uncommenced, or unfinished after the proper dates and further, to ensure good progress during the execution of the work the contractor shall be bound in all cases in which the time allowed for any work exceeds one month to complete one fourth of the whole of the work, before one fourth of the whole time allowed under the contract has elapsed one half of before three fourth of such time has elapsed. In the event of the contractor failing to comply with this condition he shall be liable to pay as compensation an amount equal to one percent or such smaller amount as the Executive Engineer/Superintending Engineer may decide on the said estimated cost of the whole work for every day that the due quantity of work remains incomplete provided always that the entire amount of compensation to be paid under the provision of this clause shall not exceed eight percent, on the estimated cost of the work as shown in the tender." 11. On minute scrutiny of the aforesaid provisions namely Clauses 4.3.3 and 4.3.3.1, this Court is of the considered opinion that Clause 4.3.3 provides for levy of penalty and not recovery of loss and Clause 4.3.3.1 provides that no sooner the Contract is rescinded by the department, the security deposit and performance security deposit of the contractor shall stand forfeited and be absolutely at the disposal of the Government. There is clear distinction between recovery of loss or compensation and levy of penalty. 12. Thus, Clause 4.3.3 stipulates three contingencies viz. There is clear distinction between recovery of loss or compensation and levy of penalty. 12. Thus, Clause 4.3.3 stipulates three contingencies viz. (1) when under any clause or clauses of this contract, the contractor shall have rendered himself liable to pay compensation amounting to the whole of his security deposit, (2) if he has committed breach of any of the terms contained in Clause 4.3.2 or, (3) in case of abandonment of the work, that the security deposit and performance security may be forfeited. In view of the aforesaid, this Court is of the considered opinion that the claim of the petitioner to withdraw the security deposit to the tune of Rs. 41,71,838/- cannot be accepted as the same is liable to be forfeited under the penalty clause as aforesaid. 13. So far as the dismissal of the debitable claim of the respondent is concerned, this Court is of the considered opinion that the aforesaid amount was in addition to the security deposit furnished by the petitioner and as has already been observed, the forfeiture of the security deposit is towards levy of penalty and not of loss. Thus, even if the orders have been passed by the Arbitration Tribunal as well as the Division Bench of this Court in favour of the petitioner dismissing the claim of debitable amount of the respondent, the same is of no avail to the petitioner. 14. As a result, the petition being devoid of merit is hereby dismissed. 15. No costs.