Telangana HC issues notice to APTDC

A two-judge bench of the Telangana High Court on Wednesday issued notices to the Andhra Pradesh Tourism Development Corporation (APTDC) in a writ appeal pertaining to the invocation of bank guarantee.

The bench, comprising Chief Justice Alok Aradhe and Justice J. Anil Kumar, was dealing with a writ appeal filed by Curevin Pharma Pvt. Ltd and another, questioning the action of the bank in not releasing the securities money available with the bank in relation to an expired guarantee. 

The petitioner contended that it emerged as the successful bidder for tenders invited by the erstwhile Andhra Pradesh government to develop tourism projects in Visakhapatnam and for the purpose, deposited Rs 71.7 lakh besides providing bank guarantee for Rs 1.5 crores towards performance security.

The petitioners could not commence the project and had approached the Commercial Court, seeking to restrain the corporation from invoking the bank guarantee, which was accordingly allowed after an elaborate inquiry.

The corporation’s appeal was dismissed, with the court observing that "as the bank guarantee in relation to which the COP was filed, expired on October 25, 2007, no purpose would be



served in adjudicating the appeal on merits. Even if the appellant corporation succeeds… time long after its expiry".

The petitioner was contending that despite the expiry of the bank guarantee, the bank was refusing to release the securities. The bank argued that the guarantee was invoked by the corporation within its validity and it came to know about the arbitration and restraining orders only after the invocation of the bank guarantee by the beneficiary.

A single judge, dismissing the writ petition, observed that the petitioner had not brought to the notice of the court the invocation of the bank guarantee by APTDC before the expiry of its validity. The COP was filed only questioning the invocation of bank guarantee but not the release of securities and hence, they were not entitled to the discretionary relief.

On Wednesday, in an appeal, it was contended that the single judge also appreciated the factum that invocation of bank guarantee was not within the knowledge of the appellants and therefore, the writ petition of the appellants should not have been dismissed. The bench, after perusing the records, issued notices to the respondents.