- 1 - HC-KAR NC: 2025:KHC:34567-DB WA No. 1709 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C M JOSHI WRIT APPEAL NO. 1709 OF 2024 (GM-RES) BETWEEN: 1. THE DEPUTY CHIEF ENGINEER (CONSTRUCTIONS), SOUTHERN RAILWAY ADMINISTRATION, SOUTHERN RAILWAYS, MANGALORE - 574 142. 2. THE CHIEF ADMINISTRATION, OFFICE AND CHIEF ENGINEER (CONSTRUCTIONS), SOUTHERN RAILWAYS, ERNAKULAM-692 011. KERALA. 3. THE GENERAL MANAGER, SOUTHERN RAILWAYS, CHENNAI - 600 001, TAMIL NADU. 4. MINISTRY OF RAILWAYS, UNION OF INDIA/ GOVERNMENT OF INDIA, REPRESENTED BY ITS SECRETARY, NEW DELHI - 110 001. …APPELLANTS (BY SRI K ARVIND KAMATH, ASGI A/W SRI B.S VENKATANARAYANA, ADVOCATE) AND: SHRI P.VENUGOPAL REDDY, S/O SHRI GOPI REDDY, AGED ABOUT 59 YEARS, RAILWAY CONTRACTOR, FLAT NO.108, SAMAYA SONATA, Digitally signed by NANDINI R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:34567-DB WA No. 1709 of 2024 APARTMENTS, M.S PALYA, VIDYARANYAPURA, BENGALURU - 560 097. REP. BY HIS SPA SHRI K.A. ABDUL RAHIMAN, S/O LATE ABDUL KHADAR, AGED ABOUT 63 YEARS, NO. 421E, E BLOCK, NEELADRI MAHAL, JAYAMAHAL EXTENSION, NANDI DURGA ROAD, BENSON TOWN POST, BENGALURU - 560 046. …RESPONDENT (BY SRI RAVIKANTH A, ADVOCATE) THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO CALL FOR RECORDS IN WP NO.19196/2024 (GM-TEN) AND TO SET ASIDE THE ORDER DATED 02.09.2024 PASSED IN WP NO.19196/2024 (GM-TEN) PASSED BY THE LEARNED SINGLE JUDGE AND CONSEQUENTLY DISMISS THE WP. THIS WRIT APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C M JOSHI ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE) 1. The appellants have filed the present appeal, impugning an order dated 02.09.2024 [impugned order] passed by the learned Single Judge in Writ Petition No.19196/2024 (GM-RES). 2. The respondent [writ petitioner] had filed the said petition impugning a communication dated 20.03.2024, issued by appellant - 3 - HC-KAR NC: 2025:KHC:34567-DB WA No. 1709 of 2024 No.1 rejecting the petitioner's request for refund of the Performance Guarantee and Security Deposit. The Performance Guarantee and Security Deposit were furnished by the respondent in terms of the Contract dated 12.08.2019 for doubling of tracks awarded to respondent. The terms of the contract was extended several times. However, the works remained incomplete. The appellants had terminated the contract in pursuant to a notice dated 20.02.2023. In terms of the General Conditions of the Contract, the appellants had sought to encash the Performance Guarantee and forfeit the Security Deposit. 3. The respondent herein had preferred a Writ Petition, being W.P. No.5171/2023 (GM-TEN), challenging the termination of the Contract. The said petition is pending consideration before the learned Single Judge. 4. The respondent had also filed an interim application being IA No.4/2023 in W.P.No.5171/2023, for staying the termination of the contract. The said IA was disposed of in terms of an order dated 04.08.2023, which reads as under: - 4 - HC-KAR NC: 2025:KHC:34567-DB WA No. 1709 of 2024 "ORDER ON IA NO.4/2023 No relief can be granted in terms of IA No.4/2023 inasmuch as, the Application for extension of tenure of the Agreement which the Petitioner himself had filed at Annexure-K shows that the progress of work was only 27%. The consistent view of several High Courts is that where the progress of work is less than 1/3rd of the quantum required, ordinarily the contractor is at fault unless a plausible explanation for other work not having been done, is offered. Learned Sr. Advocate argues that because of pendency of some acquisition proceedings the progress of work was hampered; however, this is denied by the other side, stoutly. Therefore, it cannot be assumed that the Petitioner has done the things in terms of what has been agreed upon. In view of the above, application in IA No.4/2023 is rejected. It is open to the Petitioner to seek refund of the security deposit/EMD and the Respondent shall consider the same leniently since contract in question has been awarded to some other agency now. Call this matter in the 1st Week of September, 2023." 5. In compliance with the aforesaid order, the concerned authority has considered the respondent’s request for refund of the Performance Guarantee and Security Deposit. As noted above, the same was rejected in terms of the communication dated 20.03.2024. - 5 - HC-KAR NC: 2025:KHC:34567-DB WA No. 1709 of 2024 6. The respondent had challenged the said communication by filing a Writ Petition in W.P.No.19196/2024, which was allowed in terms of the impugned order. The learned Single Judge has set aside the order for forfeiture of Security Deposit and Performance Guarantee on the ground that the work has since been awarded to another agency and there is no possibility of any monetary loss to the respondents. The said assumption is not based on any empirical data or any evidence. 7. The question whether the appellants were in breach of the terms of the Contract, or disentitled to forfeit the Performance Guarantee or Security Deposit, necessarily requires examination of factual aspects. Clearly, it would not be apposite to examine such contentious questions of fact in proceedings under Article 226 of the Constitution of India. In view of the above, the impugned order quashing the communication dated 20.03.2024 cannot be sustained. 8. However, we also note that the learned Single Judge has directed that a joint measurement of the work completed under the - 6 - HC-KAR NC: 2025:KHC:34567-DB WA No. 1709 of 2024 Contract be undertaken. We find no grounds to interfere with the said direction. 9. However, we clarify that conducting Joint Survey and measurements of the works completed by respondent, in terms of the impugned order, would not preclude the appellants from advancing their contention that the parties have agreed that the exclusive jurisdiction for considering any disputes relating to the contract in question, would be the Courts in the State of Kerala. 10. Needless to state that the said contention would be examined on its own merits. We also refrain from making any further observations regarding respondent's challenge to the termination of the Contract, which is a subject matter of Writ Petition No.5171/2023 as the said petition is pending before the learned Single Judge. 11. Nothing stated in this order shall be construed as precluding the parties from advancing such contentions in the said petition as advised. - 7 - HC-KAR NC: 2025:KHC:34567-DB WA No. 1709 of 2024 12. All rights and contentions of the parties in the said petition are reserved. 13. The appeal is allowed in the aforesaid terms. 14. Pending application is also disposed of. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (C M JOSHI) JUDGE tsn* List No.: 1 Sl No.: 43