The Chhattisgarh High Court holds that writ jurisdiction under Article 226 cannot ordinarily be invoked in cases of contractual disputes concerning bank guarantee encashment when an effective alternative remedy under the Arbitration and Conciliation Act is available. The decision upholds established precedent regarding maintainability and clarifies procedural recourse for aggrieved parties in commercial contracts.
Summary
| Category | Data |
|---|---|
| Case Name | WPC/5459/2025 of JAGDAMBA TRAILERS PRIVATE LIMITED Vs CONTAINER CORPORATION OF INDIA LIMITED (CONCOR) |
| CNR | CGHC010443312025 |
| Date of Registration | 14-10-2025 |
| Decision Date | 15-10-2025 |
| Disposal Nature | DISMISSED |
| Judgment Author | HON’BLE THE CHIEF JUSTICE (per Ramesh Sinha, Chief Justice) |
| Court | High Court of Chhattisgarh at Bilaspur |
| Bench | Hon’ble Shri Ramesh Sinha, Chief Justice; Hon’ble Shri Bibhu Datta Guru, Judge |
| Precedent Value | Binding within the territorial jurisdiction of the Chhattisgarh High Court |
| Questions of Law | Whether the High Court’s writ jurisdiction under Article 226 may be invoked to challenge bank guarantee encashment in cases of pure contractual dispute where an alternative remedy exists. |
| Ratio Decidendi |
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| Facts as Summarised by the Court |
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Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within the jurisdiction of Chhattisgarh High Court |
| Persuasive For | Other High Courts and commercial law practitioners |
What’s New / What Lawyers Should Note
- Reaffirms that writ jurisdiction will not ordinarily be entertained in matters of purely contractual dispute, specifically regarding bank guarantee encashment, when a statutory alternative remedy exists.
- The Court specifically referenced the remedy under Section 9 of the Arbitration and Conciliation Act, highlighting its suitability for interim relief in such cases.
- Petitions of this nature may be summarily dismissed or withdrawn, with liberty to approach the appropriate commercial court or arbitral forum.
Summary of Legal Reasoning
- The Court recorded the principal submission of the respondents that the matter involved a contractual dispute, and an alternative remedy was available under Section 9 of the Arbitration and Conciliation Act.
- The writ petition was withdrawn by the petitioner after the disputed bank guarantee was encashed during pendency.
- The Court did not adjudicate on the merits but underscored that in circumstances where an efficacious alternative statutory remedy (such as under the Arbitration Act) exists, writ petitions — especially concerning contractual or commercial matters — are not maintainable.
- Liberty was expressly granted for the petitioner to pursue remedy before the appropriate forum, in line with established jurisprudence limiting writ intervention in contractual disputes.
Arguments by the Parties
Petitioner
- Sought quashing of letters relating to bank guarantee encashment, contending the respondent’s actions were illegal and beyond the scope of the contract.
- At hearing, sought withdrawal of the petition as the bank guarantee had already been encashed.
Respondent
- Asserted that the dispute was purely contractual in nature.
- Emphasised the existence of an efficacious alternative remedy under Section 9 of the Arbitration and Conciliation Act before the Commercial Court.
- Argued the writ petition was therefore not maintainable.
Factual Background
The petitioner, a private company, challenged letters and email communications issued by a government-owned entity relating to the invocation and encashment of a bank guarantee. The primary contention was that such actions were illegal and beyond the contractual agreement. During pendency, the bank guarantee was encashed. The dispute arose from commercial transactions governed by contract, and the respondents highlighted the existence of a remedy under the Arbitration and Conciliation Act.
Statutory Analysis
- The Court referenced Section 9 of the Arbitration and Conciliation Act, identifying it as the alternative remedy available for interim protection in contractual disputes concerning bank guarantees.
- The maintainability of writ petitions in contractual matters was discussed in light of the presence of such statutory remedies.
Alert Indicators
- ✔ Precedent Followed – The decision is consistent with established law on the bar to writ jurisdiction in contractual/commercial disputes where alternative remedies exist.