M/S Barbrik Project Limited vs. State Of Chhattisgarh

Facts

M/s Barbrik Project Limited (petitioner) filed a writ petition challenging a communication dated June 2, 2025, from the Project Director (respondent no. 3). The communication directed the petitioner to deposit Rs. 12 Crores towards mobilization and machinery advance, failing which a bank guarantee of the same amount would be encashed. The petitioner was awarded a work order for road rehabilitation and upgradation under the Asian Development Bank-financed Chhattisgarh Road Connectivity Project (CRCP), valued at over Rs. 120 Crores. The petitioner alleged that delays were caused by the respondents' failure to provide encumbrance-free land and necessary clearances. The petitioner also claimed outstanding dues, including working bills (approx. Rs. 5-6 Crores), GST reimbursement, retention money, and claims under Clause 20.1 amounting to Rs. 48 Crores. The petitioner argued the notice was illegal and arbitrary as no prior notice or opportunity to be heard was given.

Held

The Court held that the petitioner has an alternative remedy available under Clause 20.5 (Amicable Settlement) and Clause 20.6 (Arbitration) of the contract agreement executed between the parties. The Court noted that these clauses provide for settlement of disputes through arbitration. Since the petitioner approached the High Court directly without availing these contractual remedies, the Court found no good ground to entertain the writ petition. The Court dismissed the writ petition at the motion stage, reserving liberty for the petitioner to take recourse to other alternate remedies available under the law, if advised.

Key Issues

1. Whether the impugned notice/communication dated June 2, 2025, issued by respondent no. 3, directing the petitioner to deposit Rs. 12 Crores and threatening encashment of the bank guarantee, is illegal and arbitrary, violating principles of natural justice, and whether the respondents should be restrained from encashing the bank guarantee? (Petitioner's contention: The notice was issued without prior notice, opportunity of hearing, or show cause, and attempts to recover mobilization advance by encashing the bank guarantee without clearing pending dues and issuing a formal closure order are arbitrary and amount to unjust enrichment. The petitioner relies on the principles of fair procedure and due process. Revenue's contention: The petitioner has an alternative remedy available as per the contract agreement and should have availed it before approaching the High Court.)