Amirul Islam Chowdhury vs. Respondent: Government of Bangladesh and Ors.

Jun 21, 2022

IN THE SUPREME COURT OF BANGLADESH (HIGH COURT DIVISION)

Writ Petition No. 1812 of 2014

Decided On: 22.11.2018

Appellants: Amirul Islam Chowdhury
Vs.
Respondent: Government of Bangladesh and Ors.

**Hon’ble Judges:**Bhabani Prasad Singha, J.

Counsels:
For Appellant/Petitioner/Plaintiff: Md. Khurshid Alam Khan and Kazi Md. Arifur Rahman, Advocates

For Respondents/Defendant: Shaheed Alam, Advocate

Subject: Contract

Subject: Banking

Catch Words

Mentioned IN

**Acts/Rules/Orders:**Constitution Of The People’s Republic Of Bangladesh - Article 102

Citing Reference:

Discussed

 

 1

JUDGMENT

Bhabani Prasad Singha, J.

1. On-an application under Article, 102 of the Constitution of the Peoples Republic of Bangladesh at the instance of the writ petitioner, Amirul Islam Chowdhury this Rule has been Issued calling upon the respondents to show cause as to why the inaction of the respondents in failing to release the Bank Guarantee with release endorsement in favour of the petitioner being Performance Guarantee No. BG/SBL/KTG/12/07 dated 20-9-2007 (Annexure-B) issued by the Standard Bank Limited, Khatungonj Branch, Chittagong (respondent No. 8) and issuance of letter by the office of the respondent No. 6 vide Memo No. /01/2012 dated 26-1-2014 and 4-2-2014 (Annexure-F and E-1) should not be declared mala fide, arbitrary and is of no legal effect and/or pass such other or further order or orders as to this Court may seem fit and proper.

  1. The facts relevant for the purpose of disposal of the Rule, inter alia, are that the petitioner is the proprietor of an establishment under name and style ‘Trans World Logistics and Distribution’ having Trade Licence being No. 077278 (3rd Floor) 99, Agrabad Commercial Area Chittagong-4100. The petitioner obtained a contract for repairing of “Traction Motor Armature and Main Generator Armature”, 47 in numbers for Bangladesh Railway and an agreement was signed to this effect being Agreement No. P6/DSL/007-/2006/Repair/P1/191 dated 25-10-2007 between the petitioner and the office of the respondent No. 5. The period of wrapping up of the repair work was further extended on 9-6-2011 upto 30-9-2011 as per the terms of the above agreement. The petitioner on 20-9-2007 provided a Bank Guarantee as performance security for a sum of Taka 59,60,000 (Taka Fifty nine lac sixty thousand) only issued by the Standard Bank Ltd., Khatungonj Branch, Chittagong. As per the said agreement, the petitioner performed the agreed work within the period stipulated with satisfaction of the authority concerned. After receiving the repaired “Traction Motor Armature and Main Generator Armature-47, the Chief Executive/Keloka, Bangladesh Railway, Parbotipur forwarded a letter in the form of a “Final Report” being Memo No. dated 19-12-2013 to the Respondent No. 5 for further necessary action as per General Condition of Contract (GCC) clause 29.5 of contract. The petitioner thereafter, on several occasions wrote several letters to the respondent requesting to release the bank guarantee as he has already performed his part of the contract and a report has been given on his completion of the obligation under the contract. Due to non return of the amount of the bank guarantee, the petitioner has been incurring increased interest/charges and other miscellaneous costs. Despite there was no objection from any quarter, the office of the respondent. No. 6 the Financial Advisor And Chief Accounts Officer, Bangladesh Railway, CRP, Chittagong issued the impugned letter date 26-1-2014 to the respondent No. 8, the Manager, Standard Bank Ltd., stating that–

  1. Said impugned letter requesting the respondent No. 8 for encashment of the Bank Guarantee was repeated by another letter dated 4-2-2014. Challenging the impugned letter dated 26-1-2014, this Writ Petition has been filed and the Rule was issued accordingly.

  2. The Rule has been opposed by the respondent Nos. 5 and 6 by filing Affidavit-in-Opposition and the Supplementary Affidavit-in-Opposition on behalf of the respondent Nos. 5 and 6.

  3. The case of the respondent Nos. 5 and 6 is that 32.3(11) of GCC out of 7 Traction Motor Armature 4 armature were repaired on 16-6-2012 and rest 3 armature were repaired on 12-12-2014 and the warranty period for the said 3 armature will be completed on 17-12-2015. Accordingly, the terms of the agreement will be finally completed on 17-12-2015 which show that the terms of the agreement as finally complete on 17-12-2015 and thereafter, there will be no claim from the petitioner by the respondent as per the agreement. It is further contended that the period of bank guarantee was extended up to 30-12-2013 before, expiry of the bank guarantee period. The concerned bank was advised for extending of bank guarantee upto 13-12-2014. By filing Supplementary Affidavit the respondent Nos. 5 and 6 further filed Annexures-I series containing certain documents on several dates such as the letter dated 27-11-2013, 24-11-2013, 22-12-2013 and 22-1-2014 which are about extension of bank guarantee upto 13-12-2015 not beyond that period of time as the petitioner completed with the terms of the agreement. It is also contended that-the part of the record within the Bangladesh Railway contains a portion of the record containing that–

This note dated 12-6-2014 containing a request by the GCC, Pahartali for referring the matter of dispute between the parties for amicable settlement within Clause of the agreement or for arbitration under the said agreement or alternatively to proceed to file a case for breach. The Supplementary Affidavit also Contains that on 10-6-2015 the respondent Clearly mentioned about the completion of the work as per the terms of the agreement.

  1. Be it mentioned here at the very outset that the matter was heard and disposed of by a Division Bench comprising of my Lords J. Mr. Md Moinul Islam Chowdhury and Mr. Justice JBM Hassan by two separate judgments dated 2441-2015. But unfortunately, they could not agree with each other’s opinion in passing their judgments of disagreement. When Mr. Justice Md. Moinul Islam Chowdhury disposed of the writ petition with the directions to the respondent Nos. 7 and 8 to release the bank guarantee to the petitioner, Mr. Justice JBM Hassan, discharged the Rule on some technical grounds. Subsequently, the Honourable Chief Justice of Bangladesh sent the case along with the 2(two) judgments to this Bench for disposal of the writ petition together as Third Judge.

  2. Advocate Mr. Khurshid Alam Khan representing the petitioner supports the judgment passed by Mr. Justice Moyeenul Islam Chowdhury stating that the petitioner filed the writ petition for releasing the bank guarantee and, as such, the Bangladesh Railway being a Government body, the writ petition is maintainable so far it relates to releasing the bank guarantee; that the petitioner seeks direction upon the respondents for releasing the bank guarantee and, as such, question of damage does not arise; that the provision of arbitration in the agreement or in section 10 of the arbitration Act have no manner of application in the petition; that as regards the bank guarantee as furnished by the petitioner as the performance guarantee, there is no disputed question of facts involved in the case.

  3. The learned Advocate Mr. Shaheed Alam representing the respondents did not make any submission controverting the contention of the petitioner in the Writ Petition. The learned Advocate only said that he supports the views as taken by the second judge in the dissenting judgment.

  4. Perused the writ petition, the supplementary affidavit, the affidavit in-opposition and Annexures attached-therewith.

  5. It appears from the materials on record that admittedly the petitioner entered into an agreement with the respondents Bangladesh Railway on 25-10-2007 for supplying certain goods containing the following sanction of work and the terms of the agreement include:–

“1 Traction Motor Armature P/No. 41C633012GI = 20 Nos.

  1. Traction Motor Armature P/No. 431 (.630518G5) = 12 Nos.

  2. Traction Motor Armature P/No. R775-715 = 5 Nos.

  3. Traction Motor Armature P/No. 1056, 1694 = 2 Nos.

  4. Main Generator Armature P/No. 9575.50 = 1 No.

  5. Main Generator Armature P/No. 949G241G3 = 4 Nos.

  6. Main Generator Armature P/No. 949C241G4 = 3 Nos. BEA, BEM against this office

  7. Tender No. P6/DSL/007/2006, Repair/PI dt. 19-7-2006 Opened on 4-12-2006.”

  1. Accordingly, the petitioner transferred longest furnishes materials and a bank guarantee as the performance security on 20-6-2007 (Annexure-D of Writ Petition) from the Standard Bank Ltd., Khatungonj Branch, Chittagong. The Writ Petitioner filed the writ petition against the inaction of the respondent to release the said bank guarantee in favour of the petitioner.

  2. It appears that as per the agreement dated 25-10-2007 the petitioner was under an obligation to supply the goods in order to undertake the repair works as specified in the agreement and for that purpose respondents extended the period of the agreement lastly until up to 30-9-2011 Annexure-A dated 24-5-2007 and Annexure-A-1 of the With Petition dated 25-10-2007 and 9-6-2011 respectively. From the date of expiry of the extension period agreed by the parties which is until 30-9-2011 it means the agreement became inoperative after the said period of time as terms and conditions of the agreement cannot be kept alive as the agreement itself became inoperative or dead by mutual agreement. There is no documents available showing that the petitioner applied under Clause 38.1. of the General Condition of Contract (GCC) or the agreement dated 25-10-2007 but by they mutual agreement it is to be presumed that the agreement had a natural death when the valid period of the agreement has expired and the terms of agreement had been inoperative, as such, no question arises as to the arbitration proceeding by any party if any dispute arose before the validity period of agreement.

  3. Now, it is to be decided whether the petitioner is entitled to get release of the bank guarantee given as a Performance Security in favour of the respondents Bangladesh Railway.

  4. It is the contention of the petitioner that as per the aforesaid agreement he performed the agreed work within the time stipulated with satisfaction of the concerned authority.

  5. It transpires from the materials on record that after receiving the repairing Traction Motor Armature and Main Generator Armanturg-47, the Chief Executive/Kaloka, Bangladesh Railway, Parbotipur forwarded a letter in the form of a “Final Report” being Memo. No. /09/09 date 19-12-2013, to the Respondent No. 5 for further necessary action as per General Condition of the, contract (GCC) clause 29.5 of the contract stating that Armature Armature Traction Motor Armature (Part No. R-775-715) Main Generator Armature (Part No. 9575250) CLW/TM Armature/Repair/07 dated, 20-8-2009 Traction Motor Armature (41C633012G1) , Transworld Logistics & Distribution 8 Armature/Repair/07 dtd. 10-6-12 (CEX Letter No:CLW/TM Traction Motor Armature Traction Motor Armature

  6. Annexure-9, the completion certificate dated 17-10-2012 as issued by Md. Hasan Mansur, the Chief Executive (CFW) (CC) which also provided a completion certificate which reads as follows:

“Bangladesh Railway

Completion Certificate

Date: 17-10-2012,

CCS/PHT’s Contract Agreement No. P6/DSL/007/2006/Repair/P-1/191 Date. 25-10-2007

  1. This is to certify that all huge items offered on 14-9-2011 under col. 7 were tested in running Locomotive and inspected at CLW/PBT and passed as given under col 8. of the following table. This Completion Certificate will supersede the Completion Certificate Issued on 7-6-2012 and 10-6-2012.

  2. This is issued as per Clause GCC 31-2 of PCC of the above mentioned Contract Agreement.” Thereafter, the petitioner approached the respondents requesting to release the bank guarantee as furnished by him as he has already performed his part of the contract. Although there was no objection from any quarter, the office of the respondent No, 6, the Financial Advisor and the Chief Accounts Officer, Bangladesh Railway, CRB, Chittagong issued the impugned letter dated 26-1-2004 to the respondent No. 8, the Manager, Standard Bank Ltd. requesting to extend the period of Bank Guarantee stating that Traction Motors were not repaired as per the terms of the contract and that there were some objections with regard to some repaired materials. The petitioner’s request to release the Bank guarantee remained unresponded by the respondents. From the above two conflicting statements it can only be inferred that the said respondents complain is about 3 Traction Motor Armature whereas the other respondents have admitted that there are 3 Traction Motors Armature which could not be completed because those became unrepairable and this is the only thing which the impugned order contains as some of the repair work have not been until completed. The above conflicting statements from the highest authority against the lower employee like the Account Officer have created a serious doubt as to the genuineness of the claim of the respondents in respect of releasing bank guarantee in favours of the petitioner. The petitioner, therefor, filed the writ petition against the in action of the respondents to release the bank guarantee in favour of the petitioner.

  3. The respondent No. 6, Financial Advisor and Chief Accounts Officer (FA & CAO) (East) Bangladesh Railways, CRB, Chittagong who is not related with the contract in question by another letter dated 26-1-2014 (impugned letter) stated that the traction motors have not been repaired as per terms of the agreement. These contradictory and conflicting letters are in between the officers of Railway Authority, not between the Railway Authority and the petitioner.

  4. If the petitioner was in violation of any terms and conditions of the agreement during the valid period of contract the respondents as a government institution could have exercised their contractual right to cancel or terminate the agreement instead of giving extensions until 30-9-2011. Moreover it is noted from the submissions made by the learned Advocate for the respondents 5 and 6 that they are not concerned as to the performance of the petitioner as per the agreement because the petitioner has already completed his part of the obligation under the agreement.

  5. In this case, admittedly, the petitioner obtained a contract for repairing of “Traction Motor Armature and Main General Armature.” 47 in numbers for Bangladesh Railway and an agreement was signed to this effect being Agreement No. P6/DSL/007 between the petitioner and the office of the respondent No. 5 on 20-9-2002. The petitioner provided a Bank Guarantee as performance security for a sum of Taka 59,60,000 issued by the Standard Bank Ltd., Khatunganj Brach, Chittagong.

  6. Admittedly, the petitioner gave the bank Guarantee as performance security for a sum of Taka 59, 60,000. In this Writ petition, there is no disputed question of fact inasmuch as the furnishing bank guarantee by the petitioner is admitted and that the petitioner only prayed for releasing his Bank Guarantee. The bank Guarantee being not disputed can be released. In this writ petition the Petitioners is not praying for enforcement of the contract.

  7. In this case, there is no scope to travel into the disputed question of fact inasmuch as there is no dispute in respect of the Bank Guarantee as stared earlier. Be it mentioned here that the respondents-side did not controvert the averments of the petitioner in the writ petition.

  8. The learned Advocate Mr. Khurshid Alam Khan for the petitioner submits that the petitioner filed the writ petition for releasing the bank guarantee and, as such, the Bangladesh Railway being the Government Body, the writ petition is maintainable in the eye of law so far as it relates to releasing the bank guarantee. Accordingly, the Learned Advocate relied upon the case of Managing Director, Titas Gas Transmission and Distribution Company Ltd. vs. Abul Limes reported in 21 BLC (AD) 78 wherein it has been held that the statutory contract can be enforced under the writ jurisdiction and, as such, the writ petition is maintainable in the eye of law.

  9. The agreement in question is in between the petitioner and the Bangladesh Railway which is connected with the essential services for the best interest of commuters and about their day to day lives, a government establishment must not be allowed to deal with the petitioner unreasonably. Considering that, the bank guarantee should/be allowed to be encashed by the petitioner and, as such, this Court is inclined to dispose of the writ petition with direction.

  10. Accordingly, the Rule is disposed of.

  11. The respondent Nos. 7 and 8 are hereby directed to release the bank guarantee furnished as the performance security being dated 20-9-2007 (Annexure-B) issued by the Standard Bank Ltd. Khatungonj Branch Chittagong in favour of the writ petitioner, namely, Amirul Islam Chowdhury, within 10 days from the date of receipt of the copy of this judgment and order.

Let a copy of this judgment be sent to the respondent Nos. 7 and 8.

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