IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.8675 of 2007 Abdul Mateen, son of Late Shekh Abdul Azij, resident of Q.No. C-677, New Friends Colony, P.S.- New Friends Colony, New Delhi, Director of Unicure India (Pvt.) Ltd. …….. Petitioner. VERSUS 1. The State of Bihar, through Secretary, Department of Health, New Secretariat, Patna. 2. The Director, ICDS, Indira Bhawan, 2nd Floor, P.C. Singh Path, P.S.- S.K. Puri, Town & District-Patna. ……. Respondents. ----------- Counsel for the Petitioner : Mr. Badri Narayan Singh. Counsel for the State : Mr. Rajesh Kumar Verma, J.C. to SC XI -------------- 06 27.02.2009 The petitioner had agreed to supply certain drugs and medicines for the World Bank project of Integrated Child Development Scheme (ICDS-III). Pursuant to tender issued and its acceptance an agreement was entered into, which is Annexure-2. It is not in dispute that the petitioner had undertaken to supply certain medicines manufactured by a particular manufacturer. As per the contract and the supply order he was to furnish “performance security” of 5% of the contract value which comes to Rs. 10.20 lacs before entering into the agreement. While supplies were being made petitioner requested for change of manufacturers in respect of three items, after about 2 months the request was declined. Petitioner being unable to make the supplies the agreement was terminated. Notices having being issued to petitioner, petitioner not having responded, petitioner’s security was forfeited and petitioner was black listed. Before these steps were taken petitioner had filed a writ petition before this Court being CWJC No. 15323 of 2004, which was disposed of by this Court on 09.05.2005. This Court noticed that 2 initially the writ petition was filed for change of manufacturers but as in the course of writ proceedings his security has been forfeited and he has been black listed, additional pleadings were there. This Court has in the said proceeding observed thus: “Subsequently he wanted to change the same which was against the terms of the contract and rightly it was not accepted by respondents.” Thus, the question of change of supplier was not interfered with by this Court. This Court further noticed that petitioner had been given adequate notice but had not responded. In spite of that this Court took a lenient view of the matter and permitted the petitioner to file a further show cause which was disposed of by the authorities accordingly. This Court decline to pass any other order in this case. In my view, in view of the aforesaid observation of this Court on earlier occasion there is no scope to interfere in the matter any more. Mr. Badri Narayan Singh, learned senior counsel appearing for the petitioner submits that as per agreement there is no specific term which empowers the State to forfeit the security. He submits that unless in an agreement provision of forfeiture of security, security cannot be forfeited. In this connection he has relied on two decisions of the Apex Court in the case of Security Printing and Minting Corporation of India Limited and another Vs. Gandhi Industrial Corporation since reported in (2007) 13 Supreme Court cases 236 and in the case of BSNL Vs. BPL Mobile Cellular Limited since reported in (2008) 13 Supreme Court Cases 597. In my view, the submissions cannot be accepted in the 3 facts of the case and the judgments as relied are clearly distinguished. Firstly, It is not in dispute that the petitioner was required to deposit by way of “performance security” 5% of the contract value. Performance security has now acquired a technical meaning, so far as contractual law is concerned. It clearly means a security for due performance of contract, failure to perform visits with the consequences of forfeiture of security. The very use of expression performance security brings about such obligations as amongst the parties. The writ petitioner has not annexed the full agreement because the agreement as annexed as Annexure-2, itself speaks that the general terms and conditions of contract and special conditions of contract which are separate documents would form part of the agreement, those have not been annexed. Correspondences clearly show that performance security was to be given pursuant to conditions 7 of the general conditions of contract. In that view of the matter, it cannot be held that while the State had authority to demand performance security it has no authority to forfeit the same on failure to perform the contract. The argument is misconceived and cannot be accepted. So far as two cases are concerned, in the first case, the Apex Court has held that the conditions as are covered in the written contract are final. There cannot be dispute to the said proposition but surely it has no application to the facts of the present case. Here, State has not been shown to be acting contrary to any written terms of the contract. In the second case, the Apex Court has rightly noticed that the 4 parties are bound by the terms expressly or by implications provided in a contract. Even if we accept this proposition to apply to the case at hand the very use of expression performance security implies the rights of parties therein and once such right being the right to forfeit otherwise giving performance security had no value. Thus, in fact and in law the writ petition is fit to be dismissed and is dismissed as such. Trivedi/ (Navaniti Prasad Singh, J.)