IN THE HIGH COURT OF JUDICATURE AT PATNA LPA No.1411 of 2009 1. THE UNION OF INDIA THROUGH THE GENERAL MANAGER EAST CENTRAL RAILWAY, HAJIPUR 2. THE SENIOR DIVISIONAL ENGINEER (2) EAST CENTRAL RAILWAY, DANAPUR DIVISION, DANAPUR 3. THE SENIOR D.F.M. E.C. RAILWAY, DANAPUR DIVISION, DANAPUR 4. THE ASSISTANT ENGINEER E.C. RAILWAY, MOKAMAH, DISTT.- PATNA Versus 1. M/S JAI MAA SHARDEY CONSTRUCTION AT AND P.O.- BIHAT, DISTT.- BEGUSARAI THROUGH ITS PARTNER RAM UDAY SINGH ----------- 3 19.1.2011 The present L.P.A. arises out of an order dated 6.10.2009 passed in C.W.J.C. No.16229 of 2008. The respondent herein has filed the writ application for quashing the cancellation of the contract as communicated to the respondent-writ petitioner by the Senior Divisional Engineer (2), East Central Railway, Danapur, by communication dated 3.10.2008 on the ground of non performance of contract within the stipulated period and against the consequential invocation of performance guarantee and forfeiture of earnest money as well as subsequent re-tender of the same work at the risk and cost of the petitioner. The learned Single Judge has held that the penal action on the part of the Railways is not justified and the same is uncalled for. The learned Single Judge has further directed that the money are to be refunded to the respondent- writ petitioner forthwith and the re-tender process would now proceed but will not be at the risk 2 and cost of the petitioner. Being aggrieved by the said order, the General Manager, East Central Railway and others have filed this L.P.A. It has been contended by the counsel appearing on behalf of the appellants that the learned Single Judge would not have interfered with the invocation of performance guarantee and forfeiture of earnest money as the letter of acceptance was issued to the respondent- writ petitioner but he did not come forward to execute the work in accordance with the conditions as was stipulated in the agreement and therefore writ petition itself was not maintainable as there is an arbitration clause which is part of the agreement. It has further been contended that the learned Judge ought not to have interfered with the consequential order with regard to invocation of performance guarantee and forfeiture of earnest money and the re-tender by upholding the action of the Railways in executing the contract. Per contra, learned counsel for the respondent has contended that the situation which was beyond the capacity of the respondent in which work could not been done cannot be decided in terms of the agreement, inasmuch as, there cannot be a binding rule against the respondent-writ petitioner by which he would be forced to avail the arbitration clause in absence of any agreement. It has further been contended that the findings of the learned Single Judge to the effect that the Railways was committed error in law in invocation of performance guarantee, forfeiture of 3 earnest money and re-tender should be upheld by this Court. We are of the opinion that the letter of acceptance has to be treated as part of the agreement. In that view of the matter, even though there is no agreement in writing but the letter of acceptance has to be read as part of the agreement. Having heard counsel for the parties and on a perusal of the materials available on record, we are of the opinion that as in the agreement between the parties, an arbitration clause had been provided and the respondent writ petitioner had moved this Court without availing the remedy of arbitration clause, the writ petition itself was not maintainable. The refusal of writ jurisdiction in a case where the parties are bound by an earlier agreement providing for arbitration by now a well settled law in view of judgment of the Apex Court in the case of ‘State of U.P. Vs. Bridge & Roof Co. (India) Ltd’ reported in (1996) 6 SCC 22. The same view in fact has been reiterated by the Apex Court even in the case of ‘ABL International Ltd. and another Vs. Export Credit Guarantee Corporation of India Ltd and others’ reported in (2004) 3 SCC 553. In the light of the settled law, we are of the firm view that the writ application was itself not maintainable. Under the above circumstances, we have no hesitation in setting aside the order passed by the leaned Single Judge with a liberty to the respondent herein to agitate the matter before the Arbitrator in accordance with the terms of the agreement. 4 With the above observation, this L.P.A. is allowed and the order of the learned Single Judge is set aside. Abhay Kumar (T. Meena Kumari, J.) ( Mihir Kumar Jha, J.)