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TMI Blog1984 (5) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... yderabad. One of the conditions of the contract was that a sum of Rs. 1,00,000 should be deposited towards earnest money, either in the shape of cash or demand draft or a bank guarantee of a scheduled bank in favour of the Government company and should be furnished along with the tender. One of the conditions of the said contract is that in the case of any default by the petitioner either in quantity to be supplied or in the delivery period or in the event of any defect in the quality of gunny bags supplied, the Government company, is entitled to invoke the bank guarantee and purchase the defaulted quantity at the prevailing market rate at the risk and responsibility of the petitioner. The loss or damages incurred would be recovered from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakh bags February, 19843.28 lakh bags; To our dismay, we found that at the end of December, 1983, you have hardly supplied 2'00 lakh bags and you could supply a further quantity of 1.8 lakh bags approximately till January 15, 1984. Subsequently, you informed us that you will not be able to supply any bag due to strike in the jute mills till normalcy returns. As you had failed to stick to the delivery schedule at least up to January 15, 1984, we were put to lot of inconvenience and forced to make alternative arrangements for keeping our factory running. Kindly treat our order for the balance quantity as cancelled, as we had already made alternative arrangements to meet our requirements. This cancellation is issued without prejudice t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n restraining respondent No. 2 and/or its servants or agents and/or assigns from demanding or receiving any amount under the purported bank guarantee dated August 8, 1983, and from giving any effect to the purported demand dated February 13, 1984 ; ( h )Injunction restraining respondent No. 3 from making any payment under the bank guarantee dated August 8, 1983 ; ( i )Injunction restraining respondents Nos. 2 and 3 from giving any effect to the purported demand dated February 13, 1984, and from acting in reliance thereof. The petitioners have asked for extension of the said interim order on the same application. It has been submitted that notice has been served upon the Government company as well as on the Allahabad Bank. No one, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner-company or the Government company is a member of the said Exchange. Assuming that the Forward Contracts (Regulation) Act, 1952, and the bye-laws of the said Exchange are applicable, it has not been shown that the contract entered into in this case is not in the prescribed form. Nor is it the case of the petitioner that all the terms and conditions of the contract have not been set out in the tender. On the contrary, all the terms and conditions of the contract are contained in the tender documents. Mr. Gupta has also cited another decision of the Supreme Court in the case of Jaikishan Dass Mull v. Luchhiminarain Kanoria and Co., AIR 1974 SC 1579, which has reiterated the principles laid down in the case of Megna Mills Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment company in the matter of entering into or cancelling the contract or enforcing the bank guarantee is not discharging any statutory function. Merely because fifty one per cent of the paid-up share capital of the Government company is held by the State of Andhra Pradesh, it will not make it amenable to the writ jurisdiction. The rights and obligations of the parties must be governed by the contract and no question of any violation of article 14 of the Constitution or any other provision of the Constitution arises. I am also of the view that the Government company was and is entitled to invoke the bank guarantee in terms of the contract. It has been laid by the Supreme Court in the case of United Commercial Bank v. Bank of India, AI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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