Chhattisgarh High Court: Sam Koshy J. partly allowed the petition and partly disposed of the petition expressing no opinion on the termination notice issued against the petitioner.

The present writ petition was filed against the action on the part of the respondents in issuing document dated 13.01.2022 whereby the respondent-NTPC had issued correspondence to the HDFC Bank for invocation of the bank guarantee.

Counsel for the petitioner took the court to the agreement entered into between the parties. It was further submitted that the petitioner in the initial phase of the contract has been able to discharge his duties to the satisfaction of the management of NTPC. However, on account of the impact of Covid-19 Pandemic the petitioner could not discharge the duties effectively and as a result there was some shortfalls on the part of the petitioner in completion of the work as per schedule and which the petitioner had been apprising the management of NTPC time and again. It is the further contention of the petitioner that ignoring the aforesaid factual aspect of the matter and without taking a pragmatic approach the respondents unilaterally decided to terminate the contract of the petitioner and initially issued a show cause notice which was responded too by the petitioner

It was stated by the petitioners that since in the agreement itself there is a mechanism carved out for resolving the disputes, if any, by a mutual negotiation and discussion in good faith. The respondent should first have resorted to the said mechanism before initiating any co-ercive action against the petitioner. The petitioner referring to clause 24.4.(c) submitted that under no circumstances could the respondents have initiated any recovery proceedings within 30 days time from the date of issuance of the notice which in the instant case is 10-01-2022.

Counsel for the respondent submitted that the writ petition first of all would not be maintainable in the light of there being an alternative remedy carved out in the agreement of resolving the dispute by resorting to the arbitration clause.

It was observed that if the party is able to make out an exceptional case at the same time if the court finds that an irretrievable injustice would occur in the event if the writ jurisdiction is not invoked by the court, at a given moment of time, the High Courts do have the power to entertain the writ petition.

The Court observed that it was mutually agreed between the parties to first try to resolve the dispute in good faith by negotiation and discussion across the table in respect of any dispute arising out of the said contract/agreement.

It cannot be lost sight of the fact that for the last almost two years period the whole country was grappling with the impact of Covid-19 Pandemic. Every establishment has been adversely affected by its impact. The respondent NTPC is no exception and the contractors engaged by the NTPC also were faced with similar situation. If that was the reason, it was expected of the management of NTPC to consider the grievances in a pragmatic, practical and in a feasible manner without there being any detriment to the interest of either of the parties.

The Court further observed that instead of admitting the petition along with an interim protection and keeping it pending for a long, this court is of the opinion that ends of justice would meet if the writ petition at this juncture is disposed of directing the petitioner and the respondent NTPC to resort to the conditions as stipulated in Clause 24.4(c) and 24.4(d) of the agreement entered into between the parties by way of a mutual discussion and negotiation and try to resort the disputes. That, only on failure of the said discussion/conciliation should the management of NTPC avail other remedies available to them in terms of the agreement entered into between the parties which includes the action of invocation of the bank guarantee.

The Court thus held “The respondents accordingly are restrained from encashing the bank guarantee referred to in the preceding paragraph, if not encashed by now.”[SS Chhatwal v. NTPC, 2022 SCC OnLine Chh 72, decided on 18-01-2022]


For Petitioner: Shri S.C. Verma, Shri Vikram Sharma and Ms. Juhi Jaiswal,

For Respondent 1: Shri Anand Shukla

Arunima Bose, Editorial Assistant has reported this brief.

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