Gmm Pfaudler Ltd vs M/S Kerala Minerals & Metals Ltd on 14 June, 2011

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Kerala High Court

Gmm Pfaudler Ltd vs M/S Kerala Minerals & Metals Ltd on 14 June, 2011

Bench: P.R.Ramachandra Menon

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

WP(C).No. 4679 of 2011(H)


1. GMM PFAUDLER LTD., 1001,
                      ...  Petitioner

                        Vs



1. M/S KERALA MINERALS & METALS LTD.,
                       ...       Respondent

2. CHIEF MANAGER, STATE BANK OF INDIA,

3. STATE OF KERALA, REPRESENTED BY

                For Petitioner  :SRI.N.N.SUGUNAPALAN (SR.)

                For Respondent  :M/S.B.S.KRISHNAN ASSOCIATES, SC. KMML

The Hon'ble MR. Justice P.R.RAMACHANDRA MENON

 Dated :14/06/2011

 O R D E R
                    P.R.RAMACHANDRA MENON, J.
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                           W.P(C) No.4679 of 2011
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                     Dated the 14th day of June, 2011

                                    JUDGMENT

The petitioner is a contractor, who was awarded a works contract by the first respondent, pursuant to which, an advance amount to a tune of Rs.14,45,354/- was released to the petitioner, who in turn executed a bank guarantee in this regard

2. The case of the petitioner is that, though the work was awarded in the year 2006 and the petitioner had invested much amounts for procuring raw materials and to complete the work, the same was intercepted by the respondents in the year 2008 and, the petitioner has not been told as to whether the petitioner should continue with the work or not, which made the petitioner to approach this court with the following prayers as given below:

"(i) To issue a writ of Mandamus or any other appropriate Writ, order or direction, directing the 1st respondent not to invoke the Bank Guarantee covered by Ext.P4 and the 2nd respondent not to encash the Bank Guarantee in favour of the 1st respondent as required by the 1st respondent.

(ii) To issue a Writ of Mandamus or any other appropriate Writ, order or direction, directing the 1st respondent to take a decision on the question of contract as to whether the contract is to continue or not and direct the 1st respondent to allow the petitioner to continue with the contract by paying the amount spent by the petitioner in furtherance of the execution of the contract."

W.P(C) No.4679 Of 2011 (H) -:2:-

3. The first respondent has filed a counter affidavit disputing the averments and allegations levelled against the respondents in the writ petition. It has been pointed out that, in spite of awarding the work to the petitioner, no work was actually carried out nor did the petitioner effect any supply of the materials to the respondents. It is also pointed out that some other contract was also awarded to the petitioner, wherein also the petitioner was stated to be a defaulter. The matter was taken note of by the Government and based on a Government Order, a "stop memo" was issued by the first respondent to the petitioner on 27.03.2008. The learned counsel for the first respondent submits that, because of the lapse on the part of the petitioner, the entire contract work has been cancelled and that the petitioner is not entitled to get any relief. It is also stated that the first respondent is having every right to proceed with the Bank Guarantee furnished by the petitioner.

4. After considering the rival pleadings, this Court finds that, it is purely a civil matter, which requires to be adjudicated based on the pleadings and evidence to be let in, which is not possible in a proceeding under Article 226 by this Court and the petitioner has necessarily to be relegated to avail other alternative remedy.

5. The learned counsel for the petitioner submits that the W.P(C) No.4679 Of 2011 (H) -:3:- petitioner is ready and willing to work out the remedies in accordance with the relevant provisions of law by invoking the Arbitration clause provided in the agreement and to seek for appropriate relief to direct the respondents to keep the bank guarantee in tact, without being encashed, for a reasonable time. The learned counsel for the first respondent submits that such a course could be pursued, if the petitioner agrees to renew the bank guarantee, the validity of which, as it stands now expires on 2.07.2011.

In the above circumstances, the petitioner is relegated to avail other appropriate alternate remedy, in accordance with the relevant provisions of the law. The encashment of the bank guarantee shall be kept in abeyance for a period of 'three months', on a condition that the petitioner renews the bank guarantee for a further period not less than three months. The encashment of the bank guarantee will however, depend upon the orders to be passed in the proceedings, if any, as above.

Writ Petition is disposed of.

Sd/-

P.R.RAMACHANDRA MENON JUDGE //TRUE COPY// P.A. TO JUDGE krj

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