1
AFR
Court No. 5
Case : WRIT C No. 13291 of 2020
Petitioner : M/S Badri Narayan Shukla Associates
Respondent : State Of U.P. And 4 Others
Counsel for Petitioner : Vikrant Pandey,Santosh Kumar Shukla
Counsel for Respondent : C.S.C.
Hon'ble Surya Prakash Kesarwani,J.
Hon'ble Dr. Yogendra Kumar Srivastava,J.
(Per : Dr. Yogendra Kumar Srivastava,J.)
1.Heard Sri Vikrant Pandey, learned counsel for the petitioner
and learned Standing Counsel appearing for the State respondents.
2. The present writ petition has been filed praying for the
following reliefs :
“(i) Issue a writ, order or direction in the nature of certiorari to
call for record of the case and to quash the order dated 19.2.2020
passed by the respondent no.5 by which the payment of his earlier
work has been denied on false ground that the payment has
already been made (annexure no.1 to the writ petition).
(ii) Issue a writ, order or direction in the nature of certiorari to call
for record of the case and to quash the order dated 11.2.2020
passed by the respondent no.5 by which the contract of the
petitioner has been cancelled (annexure no.2 to the writ petition).
(iii) Issue a writ, order or direction in the nature of mandamus
directing the respondent no.5 to pay the rest amount of the work
done by the petitioner immediately.
(iv) Issue a writ, order or direction in the nature of mandamus
directing the respondents to not to take any coercive action against
the petitioner.
(v) Issue any other and further suitable writ, order or direction,
which this Hon'ble Court may deem fit and proper in the
circumstances of the case.
(vi) To award of the cost of petition in favour of the petitioner.”
Neutral Citation No. - 2020:AHC:114317-DB
2
3. The writ petition primarily seeks to raise a challenge to an
order dated 11.2.2020 passed by respondent no.5 whereunder, the
tender of the petitioner was rejected for the reason that at the time
of inspection, the work was found to be not in accordance with the
prescribed norms and despite repeated directions, neither the
shortcomings pointed out were rectified nor was the work
completed. The petitioner has also sought to challenge the
subsequent order dated 19.2.2020 of the respondent no.5 in terms
of which the contract awarded to the petitioner has been cancelled.
A further prayer has been made raising a claim for payment of a
balance amount stated to be due to the petitioner in respect of the
completed work.
4.The aforementioned reliefs which have been sought in the
present writ petition indicate that the petitioner seeks to enforce
certain contractual rights and obligations for which the appropriate
remedy is to approach the civil court or to initiate proceedings for
arbitration, and a writ petition in such matters is, ordinarily, not to
be entertained. It is not the case of the petitioner that the contract
in question was of a statutory nature; rather it has been clearly
admitted that the contract was a commercial contract.
5.As per the case set up in the writ petition, the respondent no.4
had invited tenders for a civil work and the petitioner being the
lowest bidder, was declared successful and awarded the contract.
The pleadings in the writ petition and the documents which have
been appended as annexures indicate that there arose serious
dispute with regard to the fact that the work was not as per the
prescribed standards and that it was not completed within the
scheduled time. There is also a serious dispute with regard to the
amount due and payable to the petitioner in respect of the work
which is stated to have been completed. The petitioner claims to
3
have submitted representations from time to time claiming payment
in respect of the work completed. On the other hand, the
respondents have issued notices to the petitioner requiring him to
complete the work as per the prescribed standards and within the
scheduled time.
6.The law with regard to the maintainability of a writ petition in
contractual matters is fairly well settled, and it has been
consistently held that although there is no absolute bar to the
maintainability of a writ petition in such matters, the discretionary
jurisdiction under Article 226 of the Constitution of India, may be
refused in case of money claims arising out of purely contractual
obligations where there are serious disputed questions of fact with
regard to the claims sought to be raised.
7.The remedy under Article 226 of the Constitution, has been
held, to be available in a limited sphere only when the contracting
party is able to demonstrate that the remedy it seeks to invoke is a
public law remedy, in contradistinction to a private law remedy
under a contract.
8.The legal position in this regard is that where the rights which
are sought to be agitated are purely of a private character no
mandamus can be claimed, and even if the relief is sought against
the State or any of its instrumentality the precondition for the
issuance of a writ of mandamus is a public duty. In a dispute based
on a pure contractual relationship there being no public duty
element, a mandamus would not lie.
9.The question as to whether jurisdiction of the High Court
under Article 226 of the Constitution would be open to resolve
disputes arising out of the contracts between the State and the
citizen was considered in Radhakrishna Agarwal and others vs.
4
State of Bihar and others
1
and drawing a distinction with the case
of a contract entered into by the State in exercise of a statutory
power, it was held that in cases where the contract entered into
between a State and the person aggrieved is nonstatutory and
purely contractual and the rights and liabilities of the parties are
governed by the terms of the contract, and the petitioner complains
about breach of such contract, the remedy of Article 226 would not
be open for such complaints and no writ or order can be issued
under Article 226 in such cases to compel the authorities to remedy
the breach of contract by the State.
10.The Supreme Court took note of the three types of cases
pertaining to breach of alleged obligation by the State or its agents,
as referred to in the judgement of the High Court, against which the
appeals were before it. The three types were stated as follows :
“(i) Where a petitioner makes a grievance of breach of promise on
the part of the State in cases where on assurance or promise made
by the State he has acted to his prejudice and predicament, but the
agreement is short of a contract within the meaning of Article 299
of the Constitution;
(ii) Where the contract entered into between the person aggrieved
and the State is in exercise of a statutory power under certain Act
or Rules framed thereunder and the petitioner alleges a breach on
the part of the State; and
(iii)Where the contract entered into between the State, and the
person aggrieved is nonstatutory and purely contractual and the
rights and liabilities of the parties are governed by the terms of the
contract, and the petitioner complains about breach of such
contract by the State.”
11. In respect of cases of the third category where questions
purely of alleged breach of contract were involved, it was observed
thus :
“15. It then, very rightly, held that the cases now before us should
be placed in the third category where questions of pure alleged
breaches of contract are involved. It held, upon the strength of
Umakant Saran v. The State of Bihar and Lekhraj Satramdas v.
1. (1977) 3 SCC 457
5
Deputy CustodiancumManaging Officer and B.K. Sinha v. State of
Bihar that no writ or order can issue under Article 226 of the
Constitution in such cases “to compel the authorities to remedy a
breach of contract pure and simple.”
xxx
17.Learned counsel contends that in the cases before us
breaches of public duty are involved. The submission made before
us is that, whenever a State or its agents or officers deal with the
citizen, either when making a transaction or, after making it,
acting in exercise of powers under the terms of a contract between
the parties, there is a dealing between the State and the citizen
which involves performance of “certain legal and public duties.” If
we were to accept this very wide proposition every case of a breach
of contract by the State or its agents or its officers would call for
interference under Article 226 of the Constitution. We do not
consider this to be a sound proposition at all.”
12.We may refer to the judgement of the Supreme Court in the
case of Bareilly Development Authority and others vs. Ajay Pal
Singh and others
2
wherein it was held that even though the
development authority had the trappings of a State, in a matter
pertaining to determination of the price of the flats constructed by it
and the rate of monthly instalments to be paid, the authority after
entering into the field of an ordinary contract was acting purely in
its executive capacity, and the right and obligations of the parties
inter se would be governed only as per the terms of the contract.
The observations made in the judgment are as follows:
"21. This finding in our view is not correct in the light of the facts
and circumstances of this case because in Ramana Dayaram Shetty
Vs. International Airport Authority of India [(1979) 3 SCC 489]
there was no concluded contract as in this case. Even conceding
that the BDA has the trappings of a State or would be
comprehended in 'other authority' for the purpose of Article 12 of
the Constitution, while determining price of the houses/flats
constructed by it and the rate of monthly instalments to be paid,
the 'authority' or its agent after entering into the field of ordinary
contract acts purely in its executive capacity. Thereafter the
relations are no longer governed by the constitutional provisions
but by the legally valid contract which determines the rights and
obligations of the parties inter se. In this sphere, they can only
claim rights conferred upon them by the contract in the absence of
2. (1989) 2 SCC 116
6
any statutory obligations on the part of the authority (i.e. BDA in
this case) in the said contractual field.
22. There is a line of decisions where the contract entered into
between the State and the persons aggrieved is nonstatutory and
purely contractual and the rights are governed only by the terms of
the contract, no writ or order can be issued under Article 226 of
the Constitution of India so as to compel the authorities to remedy
a breach of contract pure and simple Radhakrishna Agarwal &
Ors. v. State of Bihar (1977) 3 SCC 457, Premji Bhai Parmar &
Ors. v. Delhi Development Authority & Ors, (1980) 2 SCC 129 and
Divl. Forest Officer v. Bishwanath Tea Company Ltd. (1981) 3 SCC
238."
13. Reference may also be had to the judgment in the case of Life
Insurance Corporation of India vs. Escorts Ltd. and others
3
wherein it was held that in a matter relating to the contractual
obligations the Court would not ordinarily examine it unless the
action has some public law character attached to it. The
observations made in the judgment are as follows:
"102...If the action of the State is related to contractual obligations
or obligations arising out of the tort, the court may not ordinarily
examine it unless the action has some public law character
attached to it. Broadly speaking, the court will examine actions of
State if they pertain to the public law domain and refrain from
examining them if they pertain to the private law field. The
difficulty will lie in demarcating the frontier between the public
law domain and the private law field. It is impossible to draw the
line with precision and we do not want to attempt it. The question
must be decided in each case with reference to the particular
action, the activity in which the State or the instrumentality of the
State is engaged when performing the action, the public law or
private law character of the action and a host of other relevant
circumstances. When the State or an instrumentality of the State
ventures into the corporate world and purchases the shares of a
company, it assumes to itself the ordinary role of a shareholder,
and dons the robes of a shareholder, with all the rights available to
such a shareholder. There is no reason why the State as a
shareholder should be expected to state its reasons when it seeks
to change the management, by a resolution of the company, like
any other shareholder."
14.The question of maintainability of a writ petition under Article
226 in the case of a money claim again came up for consideration in
3 (1986) 1 SCC 264
7
the case of Hindustan Petroleum Corporation Limited and others
Vs. Dolly Das
4
and it was held that for invoking the writ
jurisdiction, involvement of any constitutional or statutory right was
essential and in the absence of a statutory right, the remedy under
Article 226 could not be availed to claim any money in respect of
breach of contract, tort or otherwise. It was reiterated that in
absence of any constitutional or statutory rights being involved, a
writ proceeding would not lie to enforce a contractual obligation
even if it is sought to be enforced against the State or its authorities.
15.The maintainability of writ petition under Article 226 of the
Constitution in disputes relating to terms of contract with a
statutory body fell for consideration in Kerala State Electricity
Board and others Vs. Kurien E. Kalathil and others
5
and it was
held that the writ court would not ordinarily be the proper forum
for resolution of disputes relating to terms of contract with a
statutory body and disputes arising from contractual or commercial
activities must be settled according to ordinary principles of law of
contract. The observations made in the judgement in this regard are
as follows :
“10...The interpretation and implementation of a clause in a
contract cannot be the subject matter of a writ petition. Whether
the contract envisages actual payment or not is a question of
construction of contract? If a term of a contract is violated,
ordinarily the remedy is not the writ petition under Article 226.
We are also unable to agree with the observations of the High
Court that the contractor was seeking enforcement of a statutory
contract. A contract would not become statutory simply because it
is for construction of a public utility and it has been awarded by a
statutory body. We are also unable to agree with the observation of
the High Court that since the obligations imposed by the contract
on the contracting parties come within the purview of the Contract
Act, that would not make the contract statutory. Clearly, the High
Court fell into an error in coming to the conclusion that the
contract in question was statutory in nature.
4(1999) 4 SCC 450
5 (2000) 6 SCC 293
8
11.A statute may expressly or impliedly confer power on a
statutory body to enter into contracts in order to enable it to
discharge its functions. Dispute arising out of the terms of such
contracts or alleged breaches have to be settled by the ordinary
principles of law of contract. The fact that one of the parties to the
agreement is a statutory or public body will not of itself affect the
principles to be applied. The disputes about the meaning of a
covenant in a contract or its enforceability have to be determined
according to the usual principles of the Contract Act. Every act of a
statutory body need not necessarily involve an exercise of statutory
power. Statutory bodies, like private parties, have power to
contract or deal with property. Such activities may not raise any
issue of public law. In the present case, it has not been shown how
the contract is statutory. The contract between the parties is the
realm of private law. It is not a statutory contract. The disputes
relating to interpretation of the terms and conditions of such a
contract could not have been agitated in a petition under Article
226 of the Constitution of India. That is a matter for adjudication
by a civil court or in arbitration if provided for in the contract.
Whether any amount is due and if so, how much and refusal of the
appellant to pay it is justified or not, are not the matters which
could have been agitated and decided in a writ petition.”
16.Considering the maintainability of a writ petition under
Article 226 of the Constitution in the context of a dispute relating to
terms of a private contract where a mandamus was sought seeking
to restrain authorities from making any deduction from bills in
terms of the contract, it was held in State Of U.P. and others vs
Bridge & Roof Co. (India) Ltd
6
that proper course would be to
refer the matter to arbitration or institution of a suit and not filing
of a writ petition. It was observed thus :
“15. In our opinion, the very remedy adopted by the respondent is
misconceived. It is not entitled to any relief in these
proceedings,i.e, in the writ petition filed by it. The High court
appears to be right in not pronouncing upon any of the several
contentions raised in the writ petition by both the parties and in
merely reiterating the effect of the order of the Deputy
Commissioner made under the proviso to section 8D (1).
16. Firstly, the contract between the parties is a contract in the
realm of private law. It is not a statutory contract. It is governed by
the provisions of the contract Act or, maybe, also by certain
provisions of the Sale of Goods Act. Any dispute relating to
6. (1996) 6 SCC 22
9
interpretation of the terms and conditions of such a contract
cannot be agitated, and could not have been agitated,in a writ
petition. That is a matter either for arbitration as provided by the
contract or for the civil court, as the case may be. Whether any
amount is due to the respondent from the appellantGovernment
under the contract and, if so, how much and the further question
whether retention or refusal to pay any amount by the
Government is justified, or not, are all matters which cannot be
agitated in or adjudicated upon in a writ petition. The prayer in
the writ petition,viz.,to restrain the Government from deducting
particular amount from the writ petitioner's bill(s) was not a
prayer which could be granted by the High Court under Article
226. Indeed, the High Court has not granted the said prayer.
17. Secondly, whether there has been a reduction in the statutory
liability on account of a change in law within the meaning of sub
clause (4) of clause 70 of the contract is again not a matter to be
agitated in the writ petition. That is again a matter relating to
interpretation of a term of the contract and should be agitated
before the arbitrator or the civil court, as the case maybe. If any
amount is wrongly withheld by the Government,the remedy of the
respondent is to raise a dispute as provided by the contract or to
approach the civil court, as the case may be, according to law.
Similarly if the Government says that any over payment has been
made to the respondent, its remedy also is the same.
18. Accordingly, it must be held that the writ petition filed by the
respondent for the issuance of a writ of mandamus restraining the
Government from deducting or withholding a particular sum,
which according to the respondent is payable to it under the
contract, was wholly misconceived and was not maintainable in
law (See the decision of this Court in Assistant Excise
Commissioner v. Isaac Peter (1994 (4) S.C.C.104), where the law
on the subject has been discussed fully.) The writ petition ought to
have been dismissed on this ground alone.
xxx
21. There is yet another substantial reason for not entertaining the
writ petition. The contract in question contains a clause providing
inter a1ia for settlement of disputes by reference to arbitration
(Clause 67 of the contract). The Arbitrators can decide both
questions of fact as well as questions of law. When the contract
itself provides for a mode of settlement of disputes arising from the
contract, there is no reason why the parties should not follow and
adopt that remedy and invoke the extraordinary jurisdiction of the
High Court under Article 226. The existence of an effective
alternative remedy in this case, provided in the contract itself is
a good ground for the court to decline to exercise its extraordinary
jurisdiction under Article 226. The said article was not meant to
supplant the existing remedies at law but only to supplement them
10
in certain wellrecognised situations. As pointed out above, the
prayer for issuance of a writ of mandamus was wholly
misconceived in this case since the respondent was not seeking to
enforce any statutory right of theirs nor was it seeking to enforce
any statutory obligation cast upon the appellants. Indeed, the very
resort to Article 226 whether for issuance of mandamus or any
other writ, order or direction was misconceived for the reasons
mentioned supra.”
17.The maintainability of a writ petition in a case where
termination of an agreement between the private parties and the
State Government was challenged under Article 226 of the
Constitution came up for consideration in State Of Gujarat and
others vs Meghji Pethraj Shah Charitable Trust and others
7
and
it was stated that as the matter was governed by a contract between
the parties, the writ petition was not maintainable since it was a
public law remedy and was not available in private law field i.e.
where the matter is governed by a nonstatutory contract. The
observations made in the judgement in this regard are as follows :
“22. We are unable to see any substance in the argument that the
termination of arrangement without observing the principle of
natural justice (audi alteram partem) is void. The termination is
not a quasijudicial act by any stretch of imagination; hence it was
not necessary to observe the principles of natural justice. It is not
also an executive or administrative act to attract the duty to act
fairly. It was as has been repeatedly urged by Sri Ramaswamy a
matter governed by a contract/agreement between the parties. If
the matter is governed by a contract, the writ petition is not
maintainable since it is a public law remedy and is not available in
private law field, e.g., where the matter is governed by a non
statutory contract. Be that as it may, in view of our opinion on the
main question, it is not necessary to pursue this reasoning further.”
18.In the case of State of Bihar and others vs. Jain Plastics &
Chemicals Ltd.
8
a grievance was sought to be raised against
deduction of an amount from the final bill to be paid to the
contractor due to breach of contract by him. The petition was
7 (1994) 3 SCC 552
8 (2002) 1 SCC 216
11
allowed by the High Court. The matter was taken to the Supreme
Court wherein it was held that even if it was possible to decide the
question raised in the petition on the basis of affidavits and counter
affidavits, it would not be proper to exercise extraordinary
jurisdiction under Article 226 of the Constitution in cases of alleged
breach of contract. The observations made by the Supreme Court
are as follows:
"2. Limited question involved in this appeal is whether the High
Court ought not to have exercised its jurisdiction under Article 226
of the Constitution of India for granting relief in case of alleged
breach of contract.
3. Settled law writ is not the remedy for enforcing contractual
obligations. It is to be reiterated that writ petition under Article
226 is not the proper proceedings for adjudicating such disputes.
Under the law, it was open to the respondent to approach the court
of competent jurisdiction for appropriate relief for breach of
contract...
x x x
7...It is true that many matters could be decided after referring to
the contentions raised in the affidavits and counteraffidavits, but
that would hardly be a ground for exercise of extraordinary
jurisdiction under Article 226 of the Constitution in case of alleged
breach of contract. Whether the alleged nonsupply of road permits
by the appellants would justify breach of contract by the
respondent would depend upon facts and evidence and is not
required to be decided or dealt with in a writ petition. Such
seriously disputed questions or rival claims of the parties with
regard to breach of contract are to be investigated and determined
on the basis of evidence which may be led by the parties in a
properly instituted civil suit rather than by a court exercising
prerogative of issuing writs."
19.Distinguishing private law from public law, it was held in
K.K.Saksena vs. International Commission on Irrigation and
Drainage and others
9
that private law obligations of the State or
public authorities are not amenable to writ jurisdiction. The
relevant observations made in the judgement are as follows :
“43. What follows from a minute and careful reading of the
aforesaid judgments of this Court is that if a person or authority is
9. (2015) 4 SCC 670
12
“State” within the meaning of Article 12 of the Constitution,
admittedly a writ petition under Article 226 would lie against such
a person or body. However, we may add that even in such cases
writ would not lie to enforce private law rights. There are catena
of judgments on this aspect and it is not necessary to refer to those
judgments as that is the basic principle of judicial review of an
action under the administrative law. The reason is obvious. A
private law is that part of a legal system which is a part of common
law that involves relationships between individuals, such as law of
contract or torts. Therefore, even if writ petition would be
maintainable against an authority, which is “State” under Article
12 of the Constitution, before issuing any writ, particularly writ of
mandamus, the Court has to satisfy that action of such an
authority, which is challenged, is in the domain of public law as
distinguished from private law.
44. Within a couple of years of the framing of the Constitution,
this Court remarked in Election Commission of India v. Saka
Venkata Rao that administrative law in India has been shaped in
the English mould. Power to issue writ or any order of direction
for “any other purpose” has been held to be included in Article 226
of the Constitution with a view apparently to place all the High
Courts in this country in somewhat the same position as the Court
of the King's Bench in England. It is for this reason ordinary
“private law remedies” are not enforceable through extraordinary
writ jurisdiction, even though brought against public authorities
(see Administrative Law, 8th Edition; H.W.R. Wade & C.F. Forsyth,
page 656). In a number of decisions, this Court has held that
contractual and commercial obligations are enforceable only by
ordinary action and not by judicial review.”
20.The Constitution Bench Judgement in the case of Election
Commission, India vs. Saka Venkata Subba Rao and others
10
and the judgement in the case of R.(Hopley) vs. Liverpool Health
Authority
11
, were referred to for the proposition that contractual
and commercial obligations are enforceable only by ordinary action
and not by judicial review. It was stated thus :
“50. We have also pointed out above that in Saka Venkata Rao this
Court had observed that administrative law in India has been
shaped on the lines of English law. There are a catena of judgments
in English courts taking same view, namely, contractual and
commercial obligations are enforceable only by ordinary action and
not by judicial review. In R. (Hopley) v. Liverpool Health Authority
10 AIR 1953 SC 210
11 2002 EWHC 1723
13
(unreported) (30.7.2002), Justice Pitchford helpfully set out three
things that had to be identified when considering whether a public
body with statutory powers was exercising a public function
amenable to judicial review or a private function. They are: (i)
whether the defendant was a public body exercising statutory
powers; (ii) whether the function being performed in the exercise
of those powers was a public or a private one; and (iii) whether the
defendant was performing a public duty owed to the claimant in
the particular circumstances under consideration.”
21.The nature of the prerogative remedy of a mandatory order as
the normal means for enforcing performance of public duties by
public authorities has been considered in Administrative Law by
H.W.R. Wade & C.F. Forsyth
12
, and a distinction has been drawn
between public duties enforceable by a mandatory order, which are
usually statutory, and duties arising merely from contract. It has
been stated thus :
“A distinction which needs to be clarified is that between public
duties enforceable by a mandatory order, which are usually
statutory, and duties arising merely from contract. Contractual
duties are enforceable as matters of private law by the ordinary
contractual remedies, such as damages, injunction, specific
performance and declaration. They are not enforceable by a
mandatory order, which in the first place is confined to public
duties and secondly is not granted where there are other adequate
remedies.”
22. We may also gainfully refer to the judgment in the case of
Joshi Technologies International Inc. vs. Union of India and
others
13
wherein the legal position in this regard has been taken
note of and summarized in the following terms:
"69. The position thus summarised in the aforesaid principles has
to be understood in the context of discussion that preceded which
we have pointed out above. As per this, no doubt, there is no
absolute bar to the maintainability of the writ petition even in
contractual matters or where there are disputed questions of fact
or even when monetary claim is raised. At the same time,
discretion lies with the High Court which under certain
circumstances, it can refuse to exercise. It also follows that under
the following circumstances, "normally", the Court would not
12 Administrative Law, Tenth Edition, H.W.R. Wade & C.F. Forsyth
13 (2015) 7 SCC 728
14
exercise such a discretion:
69.1. The Court may not examine the issue unless the action has
some public law character attached to it.
69.2. Whenever a particular mode of settlement of dispute is
provided in the contract, the High Court would refuse to exercise
its discretion under Article 226 of the Constitution and relegate the
party to the said mode of settlement, particularly when settlement
of disputes is to be resorted to through the means of arbitration.
69.3. If there are very serious disputed questions of fact which are
of complex nature and require oral evidence for their
determination.
69.4. Money claims per se particularly arising out of contractual
obligations are normally not to be entertained except in
exceptional circumstances.
70. Further, the legal position which emerges from various
judgments of this Court dealing with different situations/aspects
relating to contracts entered into by the State/public authority
with private parties, can be summarised as under:
70.1. At the stage of entering into a contract, the State acts purely
in its executive capacity and is bound by the obligations of
fairness.
70.2. State in its executive capacity, even in the contractual field,
is under obligation to act fairly and cannot practise some
discriminations.
70.3. Even in cases where question is of choice or consideration of
competing claims before entering into the field of contract, facts
have to be investigated and found before the question of a
violation of Article 14 of the Constitution could arise. If those facts
are disputed and require assessment of evidence the correctness of
which can only be tested satisfactorily by taking detailed evidence,
involving examination and crossexamination of witnesses, the
case could not be conveniently or satisfactorily decided in
proceedings under Article 226 of the Constitution. In such cases
the Court can direct the aggrieved party to resort to alternate
remedy of civil suit, etc.
70.4. Writ jurisdiction of the High Court under Article 226 of the
Constitution was not intended to facilitate avoidance of obligation
voluntarily incurred.
70.5. Writ petition was not maintainable to avoid contractual
obligation. Occurrence of commercial difficulty, inconvenience or
hardship in performance of the conditions agreed to in the
contract can provide no justification in not complying with the
terms of contract which the parties had accepted with open eyes. It
cannot ever be that a licensee can work out the licence if he finds
15
it profitable to do so: and he can challenge the conditions under
which he agreed to take the licence, if he finds it commercially
inexpedient to conduct his business.
70.6. Ordinarily, where a breach of contract is complained of, the
party complaining of such breach may sue for specific performance
of the contract, if contract is capable of being specifically
performed. Otherwise, the party may sue for damages.
70.7. Writ can be issued where there is executive action
unsupported by law or even in respect of a corporation there is
denial of equality before law or equal protection of law or if it can
be shown that action of the public authorities was without giving
any hearing and violation of principles of natural justice after
holding that action could not have been taken without observing
principles of natural justice.
70.8. If the contract between private party and the
State/instrumentality and/or agency of the State is under the
realm of a private law and there is no element of public law, the
normal course for the aggrieved party, is to invoke the remedies
provided under ordinary civil law rather than approaching the
High Court under Article 226 of the Constitution of India and
invoking its extraordinary jurisdiction.
70.9. The distinction between public law and private law element
in the contract with the State is getting blurred. However, it has
not been totally obliterated and where the matter falls purely in
private field of contract, this Court has maintained the position
that writ petition is not maintainable. The dichotomy between
public law and private law rights and remedies would depend on
the factual matrix of each case and the distinction between the
public law remedies and private law field, cannot be demarcated
with precision. In fact, each case has to be examined, on its facts
whether the contractual relations between the parties bear insignia
of public element. Once on the facts of a particular case it is found
that nature of the activity or controversy involves public law
element, then the matter can be examined by the High Court in
writ petitions under Article 226 of the Constitution of India to see
whether action of the State and/or instrumentality or agency of
the State is fair, just and equitable or that relevant factors are
taken into consideration and irrelevant factors have not gone into
the decisionmaking process or that the decision is not arbitrary.
70.10. Mere reasonable or legitimate expectation of a citizen, in
such a situation, may not by itself be a distinct enforceable right,
but failure to consider and give due weight to it may render the
decision arbitrary, and this is how the requirements of due
consideration of a legitimate expectation forms part of the
principle of nonarbitrariness.
70.11. The scope of judicial review in respect of disputes falling
16
within the domain of contractual obligations may be more limited
and in doubtful cases the parties may be relegated to adjudication
of their rights by resort to remedies provided for adjudication of
purely contractual disputes."
23.The question of maintainability of the writ petition under
Article 226 for enforcement of a contractual right again came up in
Life Insurance Corporation of India and others vs. Asha Goel
(Smt.) and another
14
, and it was held that pros and cons of fact
situation should be carefully weighed and the determination of the
question as to when a claim can be enforced in writ jurisdiction
would depend on consideration of several factors like, whether the
writ petitioner is merely attempting to enforce his contractual rights
or the case raises important questions of law and constitutional
issues, the nature of dispute raised; the nature of enquiry necessary
for determination of the dispute etc. It was held that the matter
would be required to be considered in the facts and circumstances
of each case. The observations made in the judgement in this regard
are as follows :
“10.Article 226 of the Constitution confers extraordinary
jurisdiction on the High Court to issue high prerogative writs for
enforcement of the fundamental rights or for any other purpose. It
is wide and expansive. The Constitution does not place any fetter
on exercise of the extraordinary jurisdiction. It is left to the
discretion of the High Court. Therefore, it cannot be laid down as a
general proposition of law that in no case the High Court can
entertain a writ petition under Article 226 of the Constitution to
enforce a claim under a life insurance policy. It is neither possible
nor proper to enumerate exhaustively the circumstances in which
such a claim can or cannot be enforced by filing a writ petition.
The determination of the question depends on consideration of
several factors like, whether a writ petitioner is merely attempting
to enforce his/her contractual rights or the case raises important
questions of law and constitutional issues, the nature of the
dispute raised; the nature of inquiry necessary for determination of
the dispute etc. The matter is to be considered in the facts and
circumstances of each case. While the jurisdiction of the High
Court to entertain a writ petition under Article 226 of the
14 (2001) 2 SCC 160
17
Constitution cannot be denied altogether, courts must bear in
mind the selfimposed restriction consistently followed by High
Courts all these years after the constitutional power came into
existence in not entertaining writ petitions filed for enforcement of
purely contractual rights and obligations which involve disputed
questions of facts. The courts have consistently taken the view that
in a case where for determination of the dispute raised, it is
necessary to inquire into facts for determination of which it may
become necessary to record oral evidence a proceeding under
Article 226 of the Constitution, is not the appropriate forum. The
position is also well settled that if the contract entered between the
parties provide an alternate forum for resolution of disputes
arising from the contract, then the parties should approach the
forum agreed by them and the High Court in writ jurisdiction
should not permit them to bypass the agreed forum of dispute
resolution. At the cost of repetition it may be stated that in the
above discussions we have only indicated some of the
circumstances in which the High Court have declined to entertain
petitions filed under Article 226 of the Constitution for
enforcement of contractual rights and obligation; the discussions
are not intended to be exhaustive. This Court from time to time
disapproved of a High Court entertaining a petition under Article
226 of the Constitution in matters of enforcement of contractual
rights and obligation particularly where the claim by one party is
contested by the other and adjudication of the dispute requires
inquiry into facts. We may notice a few such cases: Mohd. Hanif v.
State of Assam (1969) 2 SCC 782; Banchhanidhi Rath v. State of
Orissa (1972) 4 SCC 781; Rukmanibai Gupta v. Collector, Jabalpur
(1980) 4 SCC 556; Food Corpn. of India v. Jagannath Dutta 1993
Supp (3) SCC 635 and State of H.P. v. Raja Mahendra Pal (1999)
4 SCC 43.”
24.Taking a similar view where a contractual right was sought to
be enforced by filing a writ petition, this Court in M/s Lalloo Ji
Rajiv Chandra And Sons vs. Meladhikari Prayagraj Mela
Authority and others
15
, reiterated the legal position that in a case
of nonstatutory contract, the remedy available to the contractor, if
he is aggrieved by nonpayment, would be either to file a civil suit
or if there is an arbitration agreement between the parties, to
invoke the terms of the agreement. The writ petition was dismissed
with the following observations :
15 (2019) ADJ Online 0081
18
“10. In the present case there is nothing to held that the contract is
a statutory contract. The remedy of the contractor, if he is
aggrieved by nonpayment, would be to either file an ordinary civil
suit or if there is an arbitration agreement between the parties, to
invoke the terms of the agreement.
11. In our view, it will not either be appropriate or proper for the
Court under Article 226 of the Constitution to entertain a petition
of this nature. The grant of relief of this nature would virtually
amount to a money decree. The petitioner is at liberty to take
recourse to the remedies available by raising such a claim either
invoking an arbitration clause (if it exists in the contract between
the parties) or if there is no provision for arbitration, to move the
competent civil court with a money claim.”
25.The aforementioned legal position with regard to the question
of maintainability of a writ petition seeking enforcement of
contractual and commercial obligations has been considered in
detail in recent judgements of this Court in M/s Ipjacket
Technology India Private Limited vs. M.D. Uttar Pradesh Rajkiya
Nirman Nigam Limited
16
and M/S Bio Tech System vs. State of
U.P. and 4 others
17
.
26.From the foregoing discussion, as a matter of general
principle, it may be held that in a case where the contract entered
into between the State and the person aggrieved is of a non
statutory character and the relationship is governed purely in terms
of a contract between the parties, in such situations the contractual
obligations are matters of private law and a writ would not lie to
enforce a civil liability arising purely out of a contract. The proper
remedy in such cases would be to file a civil suit for claiming
damages, injunctions or specific performance or such appropriate
reliefs in a civil court. Pure contractual obligation in the absence of
any statutory complexion would not be enforceable through a writ.
27.The remedy under Article 226 of the Constitution being an
16 2019(6) ADJ 113
17 2020 (11) ADJ 488
19
extraordinary remedy, it is not intended to be used for the purpose
of declaring private rights of the parties. In the case of enforcement
of contractual rights and liabilities the normal remedy of filing a
civil suit being available to the aggrieved party, this Court would
not exercise its prerogative writ jurisdiction to enforce such
contractual obligations. The only exception may be a case where the
amount is admitted and there is no disputed question of fact
requiring adjudication of detailed evidence and interpretation of the
terms of the contract.
28.In the case at hand, the reliefs sought, as per the case set up
by the petitioner, would require adjudication of serious factual
disputes relating to the terms of the contract in respect of the
prescribed standards of work and the time schedule for its
completion. There is also serious dispute with regard to the extent
of the work completed and the payments which are due. The
pleadings and the material which are on record do not in any
manner indicate that it is a public law remedy which the petitioner
is seeking to invoke so as to pursuade us to exercise our
discretionary jurisdiction.
29.Having regard to aforesaid facts and circumstances, we are
not inclined to exercise our extraordinary jurisdiction under Article
226 of the Constitution.
30.The writ petition stands accordingly dismissed.
Order Date : 15.12.2020
Shalini
(Dr. Y.K. Srivastava,J.)(Surya Prakash Kesarwani,J.)
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