1. The petitioner is a Central Government Public Sector undertaking and is a Company registered under the Companies Act. The 1st respondent - Company is owned and managed by the Government of Kerala and the said Company was incorporated with the object of optimal utilization of mineral wealth found along the sea coast of Alappuzha-Kollam District to achieve large scale generation of employment in the State and to propel the overall and development of the local area and the State of Kerala in general.

2. On 29.1.2024, based on tenders invited by the 1st respondent, the petitioner Company was awarded with the work of consultancy for the purposes of expansion of the existing Titanium Dioxide Plant at Kollam (Phase-II) upto a capacity of 60,000 TPA, from the previous capacity of 40,000 TPA, and as Phase-III, the capacity was proposed to enhance from 60,000 TPA to 1,00,000 TPA. Exhibit P1 is the agreement executed between the petitioner and the 1st respondent in this regard. As per Article 3 of Ext.P1, the petitioner’s scope of services for Phase-II projects was to be completed within 24 months from 29.1.2004 and as per Article 3.2, the time schedule for completion of Phase-III projects was 39 months from 29.1.2004. Clause 4 of Ext.P1 dealt with the manner in which, the fees and terms of payment for services to be provided by the petitioner are to be reckoned and paid. Based on the terms and conditions in the said agreement, the petitioner had furnished an advance bank guarantee for an amount of Rs.3,72,60,000/-, the copy of which was produced as Ext.P2. The said bank guarantee is dated 15.11.2003 and against the said bank guarantee, the 1st respondent had released an amount equal to 15% as the advance payment.

3. As per clause 4.1(b)(1), the value of the advance bank guarantee shall be reduced on a half yearly basis, in proportion to the value of the work carried out by the petitioner. According to the petitioner, it had carried out the work based on Ext.P1 agreement, raised invoices for an amount of Rs.16,31,45,107/- and the said payments were already made as well. However, as per Ext.P3 dated 12.7.2006, the 1st respondent informed the petitioner that the General Manager of the 1st respondent informed the petitioner that the Board of Directors of the 1st respondent had decided to review the expansion of projects in view of the enhanced capital requirement as per the updated DPR and the petitioner was informed that, the services have been kept under suspension until further orders.

4. After receipt of the said communication, as per Ext.P4 letter dated 17.7.2006, the petitioner informed the 1st respondent that, the petitioner would continue with the engineering activity and quantity certification for various contractors engaged at site except for desalination projects. According to the petitioner, for the engineering works the petitioner had done as of now, invoices for an amount of Rs.1,21,64,539/- have been raised in the year, 2006 but the same remain unpaid even now. Apart from the above, despite the fact that, the project was suspended as early as on 12.7.2006, the petitioner is required by the 1st respondent, to keep Ext.P2 bank guarantee renewed from year to year. It is the grievance of the petitioner that, even though the petitioner was repeatedly requesting the respondents, to release the petitioner from the obligations of renewing the bank guarantee in view of the fact that, no decision has been taken by the 1st respondent to revive  the  project  so far,  the  said requests  were  not considered. A series of communications exchanged between the parties in this regard is produced as Ext.P5 to Ext.P16.

5. Ultimately, on 6.11.2013, as per Ext.P17 communication issued by the Principal Secretary to Government, the petitioner was informed that, since there are various issues either by way of Arbitration or otherwise pending, the Government have decided to continue the bank guarantee till the entire issues are settled. Apparently, the aforesaid communication was issued in view of the fact that the contractors and the suppliers engaged by the petitioner, in fulfilment of the obligations under Ext.P1, had initiated certain legal proceedings against the 1st respondent and the petitioner, by way of Arbitration proceedings and otherwise, for settling their claims, and as per Ext.P17 communication, the Government intended to keep the bank guarantee furnished by the petitioner alive, until those issues are settled. According to the petitioner, despite the fact that, those issues are settled in the year, 2013, even now the project is not revived nor the bank guarantee is released and instead the petitioner is compelled to renew the bank guarantee from year to year. Besides, the payments covered by the invoices raised by the petitioner towards the value of engineering services rendered by the petitioner was also not honoured so far. It was in these circumstances that this writ petition was submitted seeking the following reliefs:

                  “i) To issue in the nature of mandamus or any other appropriate writ(s)/ order(s)/, direction(s) directing the Respondents either to release the Ext.P2 advance bank guarantee and not insist the Petitioner Company for renewal of the said bank guarantee as the contract has been kept in abeyance since last more than 18 years at the instance of the Respondent Company;

                  ii) To issue appropriate writ(s)/ order(s)i, direction(s) directing the Respondent No.l to pay to the Petitioner the undisputed sum of Rs.1,2I,64,5371- in terms of the pending invoices as per the details referred to in Ext.P16, along with interest @ 12 per annum from the respective due date till the date of realisation; and

                  iii) To pass such other and further order or orders as may be deemed just and necessary in the facts and circumstances of the case.”

6. A detailed counter affidavit was submitted by the respondents 1 and 2, in response to the averments contained in the writ petition. The preliminary objection raised by the respondents 1 and 2 is that, as the relief sought by the petitioner arises from the contractual obligations between the parties, the writ petition is not maintainable. According to the respondents 1 and 2, it is a pure private contract and there is no public element involved in this dispute. Apart from the above, the circumstances under which, a decision was taken to suspend the project and later to abandon the same. were also explained in the counter affidavit. According to the respondents 1 and 2, there was substantial delay on the part of the petitioner, in executing and implementing the terms and conditions of the contract. It was pointed out that, the detailed project report (DPR), which is one of the preliminary steps for the project covered by Ext.P1, itself was submitted after more than 30 months from the date of the agreement., whereas, the agreement envisaged that the entire Phase-II expansion was required to be completed within 24 months. It is also the case of the respondents 1 and 2 that, owing to the huge delay caused in the execution of the project, the cost of the project escalated and it exceeded to Rs.1115/- crores, whereas, the Government sanctioned limit was Rs.760/- crores. Therefore, the 1st respondent was forced to abandon the project and withdraw the power of attorney given to the petitioner with effect from 12.7.2006.

7. Apart from the above, due to the delay on the part of the petitioner  and  the  consequential  abandoning  of  the  project,  the contractors and suppliers engaged by the petitioner had initiated legal proceedings against the 1st respondent and the petitioner. Therefore, the bank guarantee submitted by the petitioner is liable to be kept alive and a decision in this regard was taken in that circumstances, it was pointed out. As regards the claim of the amounts towards invoices raised as remuneration for the engineering works, it is averred in the counter affidavit that no certification for the work has been done by the 1st respondent and in the absence of any certification, no amount could be released. Respondents 1 and 2 also contended that, as the claim of the respondent in this regard is disputed, it cannot be decided in a writ jurisdiction and it is upto the respondents to invoke the civil remedies available to it. The respondents also raised a question of limitation as against the claim raised by the petitioners.

8. learned Senior Counsel appearing for the petitioner assisted by Advocate Arun Krishna Dhan, Smt. Latha Anand, the learned counsel appearing for the respondents 1 and 2 and Smt. K.G. Sarojini, the learned Senior Government Pleader appearing for the 3rd respondent-State.

9. As regards the relief sought by the petitioners, it is to be noted that, the same is based on the terms and conditions in Ext.P1 agreement. The claim of the petitioner is two fold; one relates to the insistence for keeping the bank guarantee alive despite the fact that, the project is abandoned and secondly, the claim of Rs.1,21,64,537/- which is for the engineering works the petitioner had carried out.

10. When it comes to the question of amounts payable towards work the petitioner’s claimed to have carried out, there is a serious dispute from the part of the respondents. According to them, those works are not certified as of now and hence the petitioner does not have any right to claim the said amount. Besides, it was also contended that, such a relief being related to a monetary claim that is disputed by the respondents 1 and 2, it cannot be enforced by invoking the writ jurisdiction of this Court. The question of limitation was also raised.

11. After carefully going through the materials placed on records, I find some merit in the said objection raised by the learned counsel for the petitioner. Evidently, the claim is based on terms and conditions in Ext.P1 contract and there are serious disputes with respect to the said claim. Therefore such a claim cannot be adjudicated in a proceeding under Art.226 of the Constitution of India, as it is a disputed question of fact, arising from the contractual obligations between the parties. Moreover, Art.14 of Ext.P1 agreement contains provisions for arbitration and therefore it is for the petitioner to invoke such remedies. Therefore, I am of the view that, the said claim cannot be entertained.

12. Now when it comes to the question of insistence to keep the bank guarantee alive, it is seen that, such a stipulation was made by the 3rd respondent in Ext.P17 communication dated 6.11.2013. The reasons stated therein is that several issues either by way of arbitration or otherwise are pending and hence the Government have decided to continue the bank guarantee furnished by the petitioner. It is also an admitted position that several litigations are indeed pending in connection with goods purchased and services availed by the petitioner when implementing Ext.P1 agreement. It was in those circumstances, the Government had decided to require the petitioner to continue the bank guarantee. The details of the stages and the status thereof are not discernible from the records produced before this Court. Moreover, respondents 1 and 2 have a specific case that those claims from the third parties had arisen on account of the abandoning of the project which was due to the lapses on the part of the petitioner in continuing the timely execution of the contract and therefore, the 1st and 2nd respondents attributed responsibilities upon the petitioner, for such litigations. Thus, these being disputed questions of fact, are beyond the scope of writ jurisdiction, and hence it is for the petitioner to invoke the remedies available to them by way of civil proceedings or arbitration, to get these grievances redressed. As rightly pointed out by the respondents, since the claims are directly related to the contractual obligations of the parties arising from Ext.P1 agreement and there are serious disputes with respect to the sustainability of those claims, an adjudication of the same cannot be done under Art.226 of the Constitution of India.

13. However, it is a fact that Ext.P17 communication requiring the petitioner to keep the bank guarantee alive from time to time has been issued as early as on 6.11.2013 and as of now more than 12 years have elapsed and therefore some decisions will have to be taken on this issue by the Government in this regard and it cannot be kept pending indefinitely.

                  Therefore, this writ petition is disposed of directing that, in case the petitioner is submitting a representation before the 3rd respondent highlighting its grievances in relation to the matter of renewal of bank guarantee, within a period of three weeks from the date of receipt of a copy of this judgment, such representation shall be considered by the 3rd respondent and appropriate decision in accordance with law shall be taken by the 1st respondent, after hearing the petitioner and authorized representatives of the 1st respondent and such a decision shall be taken within a period of three months from the date of receipt of the said representation.