IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.5036 of 2009 Date of decision: 18th November, 2009 M/s Advik Laboratories Ltd. … Petitioner Versus State of Punjab and another … Respondents CORAM: HON’BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA Present: Mr. R.K. Chopra, Senior Advocate with Ms. Maninder, Advocate for the petitioner. Mr. Anil Kumar Sharma, Additional Advocate General, Punjab for the respondents. Mr. G.S. Sandhawalia, Advocate for respondent No.2. KANWALJIT SINGH AHLUWALIA, J. (ORAL) Present writ petition has been filed seeking quashing of impugned order (Annexure P-14) dated 19th March, 2009. A perusal of Annexure P-14 reveals that Punjab Health Systems Corporation had communicated to the Senior Manager, Indian Overseas Bank that bank guarantee furnished by the petitioner be revoked. To appreciate the controversy, it will be necessary to recapitulate the facts. Petitioner company manufacture drugs. Punjab Health Systems Corporation, an instrumentality of the State, floated tenders. Petitioner applied and was declared as a successful bidder and was awarded the contract. As per the contract, to secure the interest of the Corporation, petitioner had submitted bank guarantee. According to counsel for the respondent Corporation, petitioner failed to perform his part of the contract, therefore, they had proceeded to encash the bank guarantee. Civil Writ Petition No. 5036 of 2009 Mr.R.K. Chopra, assisted by Ms.Maninder, appearing for the petitioner, controverts this assertion and states that the breach of the contract has been on the part of the Corporation. Mr. Chopra states that due to the recession in market and delayed payment on the part of the respondents, petitioner was not able to adhere to the schedule of supply of drugs. Whether the act of the respondent Corporation to encash the bank guarantee can be made subject matter of the writ jurisdiction or not ? Who is the defaulter ? Who has made breach of contract ? and as to why the contract could not be adhered to ?, are all disputed questions of fact, which cannot be gone into in the writ jurisdiction. In the present case, performance of the contract is sought by invoking the writ jurisdiction. Counsel for the respondents relies upon ‘National Highway Authority of India v. M/s Ganga Enterprises’ 2003 (7) SCC 410. Para 7 of the judgment read as under: “7. The Respondent then filed a Writ Petition in the High Court for refund of the amount. On the pleadings before it, the High Court raised two questions viz. (a) whether the forfeiture of security deposit is without authority of law and without any binding contract between the parties and also contrary to Section 5 of the Contract Act and (b) whether the writ petition is maintainable in a claim arising out of a breach of contract. Question (b) should have been first answered as it would go to the root of the matter. The High Court instead considered question (a) and then chosen not to answer question (b). In our view, the answer to question (b) is clear. It is settled law that disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India. It has been so held in the case of Kerala State Electricity Board v. Kurien E.Kalathil reported in 2000(4) S.C.T. 242 : (2000) 6 SCC 293, State of U.P. v. Bridge & Roof Co. (India) Ltd. reported in (1996) 6 SCC 22 and B.D.A. v. Ajai Pal Singh reported in (1989) 2 SCC 116. This is settled law. The dispute in this case was regarding the terms of offer. They 2 Civil Writ Petition No. 5036 of 2009 were thus contractual disputes in respect of which a Writ Court was not the proper forum. Mr.Dave however relied upon the cases of Verigamto Naveen v. Government of A.P. reported in (2001) 8 SCC 344 and Harminder Singh Arora v. Union of India reported in (1986) 3 SCC 247. These however are cases where the Writ Court was enforcing a statutory right or duty. These cases do not lay down that a Writ Court can interfere in a matter of contract only. Thus on the ground of maintainability the Petition should have been dismissed.” Therefore, this Court cannot come to the rescue of the petitioner. Hence, the present writ petition is dismissed. However, petitioner will be at liberty to take recourse to the alternative remedy available to him under provisions of law. [KANWALJIT SINGH AHLUWALIA] JUDGE November 18, 2009 rps 3