No Acts & Articles mentioned in this case
1
AFR
Court No. 5
Case : WRIT C No. 13388 of 2020
Petitioner : M/S Bio Tech System
Respondent : State Of U.P. And 4 Others
Counsel for Petitioner : Mahabir Yadav,Arun Mishra
Connected with
Case : WRIT C No. 12479 of 2020
Petitioner : M/S Jai Bhawani Construction Company
Respondent : State Of U.P. And 2 Others
Counsel for Petitioner : Prashant Sharma
Counsel for Respondent : C.S.C.,Mahboob Ahmad
And
Case : WRIT C No. 12480 of 2020
Petitioner : Ashish Electrical
Respondent : State Of U.P. And 2 Others
Counsel for Petitioner : Prashant Sharma
Counsel for Respondent : C.S.C.,Mahboob Ahmad
Hon'ble Surya Prakash Kesarwani,J.
Hon'ble Dr. Yogendra Kumar Srivastava,J.
(Per : Dr. Yogendra Kumar Srivastava,J.)
1.Heard Sri Arun Mishra, learned counsel appearing for
the petitioners in the three connected writ petitions, learned
Standing Counsel for the respondents and Sri Mahboob
Ahmad, learned counsel for respondent nos.2 to 5.
2.All the three writ petitions relate to similar facts and
raise common questions of law, therefore, with the consent
of the counsel for the parties, the three petitions have been
heard together and are being decided by means of a
common judgement.
3.In all the three writ petitions, the principal relief
sought is with regard to certain claims for payment of
contractual amounts in terms of agreements said to have
Neutral Citation No. - 2020:AHC:101586-DB
2
been executed between the parties.
4.Sri Mahboob Ahmad, learned counsel appearing for
respondent nos.2 to 5 has raised objections with regard to
the maintainability of the writ petition on the ground that
the petitioners seek to enforce certain contractual rights and
obligations for which the appropriate remedy is to approach
the civil court, or if there is any dispute with regard to the
terms of the agreement, then in that case, the remedy is to
invoke the arbitration clause under the agreement. He
submits that the writ petitions are not liable to be
entertained for the reliefs which have been prayed for.
5.In support of his contention, learned counsel appearing
for the respondents has placed reliance upon the judgements
of this Court in M/s Lalloo Ji Rajiv Chandra And Sons vs.
Meladhikari Prayagraj Mela Authority and others
1
, M/S
Friscon Media Works vs. State Of U.P. And 3 Others
2
and
M/S Odyssey Computers through Marketing Manager Sri
Ajai Singh vs. State Of U.P. and others
3
.
6.Responding to the preliminary objection regarding
maintainability of the writ petition, counsel appearing for
the petitioners have sought to contend that there is no
absolute bar to the maintainability of a writ petition even in
contractual matters where there are disputed questions of
fact or even where monetary claims are sought to be raised.
7.In order to appreciate the rival contentions, the facts
relating to the writ petitions may be briefly adverted to.
8. Writ–C No.13388 of 2020 has been filed principally
1. (2019) ADJ Online 0081
2. Writ – C No.8104 of 2020, decided on 05.03.2020
3. Miscellaneous Bench No.14618 of 2017, decided on 07.07.2017
3
seeking a writ of mandamus commanding the respondent
no.2 Managing Director, Purvanchal Vidhut Vitrana Nigam
Ltd., DLW, Varanasi, to release an amount of Rs. 10,78,990/
to the petitioner relating to contractual payments, which the
petitioner claims to be due.
9.It is submitted that after completion of the work the
petitioner submitted the bills and thereafter despite several
requests and representations made by the petitioner, the
respondents have not made payment of the amounts which
are said to be due to the petitioner as per the terms of the
agreements.
10.The pleadings in the writ petition indicate that the
petitioner had entered into an agreement with respondent
no.4 to carry out the work of shifting of 11KV, LT line &
transformer against ETender No.69/SE/EUDC1
A/KM/201819 for a sum of Rs. 15,22,436.28 and of E
Tender No.70/SE/EUDC1A/KM/201819 for a sum of
Rs.3,39,290.00. The above agreements are stated to have
been entered into between the parties pursuant to L.O.I.
issued vide letters dated 24.9.2018.
11.In Writ – C No.12479 of 2020, a claim is sought to be
raised for payment of an amount of Rs.7,51,000/ alongwith
interest in respect of certain work stated to have been
completed by the petitioner pursuant to award of a contract
relating to civil works. The payment has been claimed in
terms of an agreement executed between the parties and the
petitioner has asserted that despite reminders, the amount in
question has not been paid.
12. Writ – C No.12480 of 2020 has been filed raising a
similar claim with regard to the payment of an amount of
4
Rs.10.11 lacs alongwith interest. In this case also, the
petitioner claims to have been awarded a contract as per
terms of an agreement entered into with the respondents for
certain civil works. The petitioner has asserted that despite
completion of the work as per terms of the agreement, the
payment due to him has not been made.
13.Learned counsel appearing for the respondents, apart
from submitting that the reliefs sought in the writ petition
were in the realm of a contractual relationship and as such
the same were not amenable to the writ jurisdiction, has also
strongly disputed the claims sought to be raised by the
petitioners. He has contended that the claims sought to be
raised relate to disputed facts pertaining to interpretation of
the terms of the agreement for which the appropriate
remedy is to invoke the arbitration clause under the
agreement or to avail the appropriate civil remedy.
14.Heard learned counsel for the parties and perused the
record.
15. The pleadings in the writ petitions and the material on
record clearly indicate that the petitioners had executed
agreements with the respondents for completion of certain
civil works. The petitioners claim to have completed the
work as per the terms of the agreements and submitted their
bills as per specifications which they claim have not been
paid to them.
16.A copy of the agreement which is on record in one of
the writ petitions (Writ – C No.13388 of 2020) contains an
arbitration clause for the purposes of settlement of any
dispute which may arise between the contractor and the
Engineer of the contract and the said fact has not been
5
disputed.
17.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.
18.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.
19.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.
20.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. State of Bihar and others
4
and
drawing a distinction with the case of a contract entered into
4. (1977) 3 SCC 457
6
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.
21.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 judgment 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."
22. 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
7
and Lekhraj Satramdas v. 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.”
23.In Premji Bhai Parmar and others Vs. Delhi
Development Authority
5
and others a petition was filed
under Article 32 before the Supreme Court contending that
the surcharge collected by the authority in respect of a flat
purchased by the petitioner was illegal. Considering the legal
position, it was held that after the State or its agents have
entered into the field of ordinary contract, the relations are
no longer governed by the constitutional provisions but by
the legally valid contract which determines rights and
obligations of the parties inter se and that no question of
violation of Article 14 or of any other constitutional
provision arises when the State or its agents, purporting to
act within this field, perform any act. The petition was
dismissed with the following observations :
"8...petition to this Court under Article 32 is not a proper
remedy nor is this Court a proper forum for reopening the
concluded contracts with a view to getting back a part of
the purchase price paid and the benefit taken. ..... But after
the State or its agents have entered into the field of
ordinary contract, the relations are no longer governed by
the constitutional provisions but by the legally valid
5. (1980) 2 SCC 129
8
contract which determines rights and obligations of the
parties inter se. No question arises of violation of Article 14
or of any other constitutional provision when the State or
its agents, purporting to act within this field, perform any
act. In this sphere, they can only claim rights conferred
upon them by contract and are bound by the terms of the
contract only unless some statute steps in and confers some
special statutory power or obligation on the State in the
contractual field which is apart from contract."
24. In the case of Divisional Forest Officer Vs.
Bishwanath Tea Company Ltd.
6
the question of
maintainability of a writ petition in respect of a claim arising
out of the contractual rights and obligations flowing from
the terms of a lease was considered, and it was held as
follows :
"8. It is undoubtedly true that High Court can entertain in
its extraordinary jurisdiction a petition to issue any of the
prerogative writs for any other purpose. But such writ can
be issued where there is executive action unsupported by
law or even in respect of a corporation there is a denial of
equality before law or equal protection of law. The
Corporation can also file a writ petition for enforcement of
a right under a statute. As pointed out earlier, the
respondent (company) was merely trying to enforce a
contractual obligation. To clear the ground let it be stated
that obligation to pay royally for timber cut and felled and
removed is prescribed by the relevant regulations. The
validity of regulations is not challenged. Therefore, the
demand for royalty is unsupported by law. What the
respondent claims is an exception that in view of a certain
term in the indenture of lease, to wit, clause 2, the
appellant is not entitled to demand and collect royalty from
the respondent. This is nothing but enforcement of a term
of a contract of lease. Hence, the question whether such
contractual obligation can be enforced by the High Court in
its writ jurisdiction.
9. Ordinarily, where a breach of contract is complained of,
a party complaining of such breach may sue for specific
performance of the contract, if contract is capable of being
specifically performed, or the party may sue for damages.
Such a suit would ordinarily be cognizable by the civil
court. The High Court in its extraordinary jurisdiction
would not entertain a petition either for specific
performance of contract or for recovering damages. A right
6. (1981) 3 SCC 238
9
to relief flowing from a contract has to be claimed in a civil
court where a suit for specific performance of contract or
for damages could be filed."
25. We may also refer to the judgment in the case of Life
Insurance Corporation of India Vs. Escorts Ltd. and
others
7
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."
26.We may draw reference to the judgment in the case of
Bareilly Development Authority and others vs. Ajay Pal
Singh and others
8
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
7. (1986) 1 SCC 264
8. (1989) 2 SCC 116
10
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 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 non
statutory 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."
27.The question of maintainability of a writ petition under
Article 226 in the case of a money claim again came up for
consideration in the case of Hindustan Petroleum
Corporation Limited and others Vs. Dolly Das
9
and it was
held that for invoking the writ jurisdiction, involvement of
any constitutional or statutory right was essential and in the
9. (1999) 4 SCC 450
11
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.
28. The maintainability of writ petition under Article 226
in disputes relating to terms of contract with a statutory
body fell for consideration in Kerala State Electricity Board
and other Vs. Kurien E. Kalathil and others
10
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.
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
10. (2000) 6 SCC 293
12
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.”
29.Considering the maintainability of a writ petition
under Article 226 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. & others vs Bridge & Roof Co. (India) Ltd
11
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
11. (1996) 6 SCC 22
13
dispute relating to 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 subclause (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 extra
ordinary jurisdiction of the High Court under Article 226.
14
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 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.”
30.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
12
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 nonstatutory contract. Be that as it may, in
view of our opinion on the main question, it is not
necessary to pursue this reasoning further.”
31. In the case of State of Bihar and others Vs. Jain
12. (1994) 3 SCC 552
15
Plastics & Chemicals Ltd.
13
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 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."
32.Distinguishing private law from public law, it was held
in K.K.Saksena vs. International Commission on
13. (2002) 1 SCC 216
16
Irrigation and Drainage and others
14
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 “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.”
33.The Constitution Bench Judgement in the case of
Election Commission, India vs. Saka Venkata Subba Rao
and others
15
and the judgement in the case of R.(Hopley)
14. (2015) 4 SCC 670
15. AIR 1953 SC 210
17
vs. Liverpool Health Authority
16
, 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
(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.”
34.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
17
, 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.”
16. 2002 EWHC 1723
17. Administrative Law, Tenth Edition, H.W.R. Wade & C.F. Forsyth
18
35.We may also gainfully refer to the judgment in the case
of Joshi Technologies International Inc. vs. Union of
India and others
18
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 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
18. (2015) 7 SCC 728
19
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
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
20
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 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."
36.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
19
, and it was held
that pros and cons of factsituation 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
19. (2001) 2 SCC 160
21
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 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
22
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.”
37.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
1
, reiterated the legal
position that in a case of non statutory contract, the remedy
available to the contractor, if he is aggrieved by non
payment, 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 :
“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.”
38.The aforementioned legal position with regard to the
question of maintainability of a writ petition seeking
1. (2019) ADJ Online 0081
23
enforcement of contractual and commercial obligations has
been considered in detail in a recent judgement of this Court
in M/s Ipjacket Technology India Private Limited vs. M.D.
Uttar Pradesh Rajkiya Nirman Nigam Limited
20
.
39. The general principles which may be culled out from
the aforementioned judgments is that in a case where the
contract entered into between the State and the person
aggrieved is of a nonstatutory 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.
40.The remedy under Article 226 of the Constitution
being an 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 may not exercise its prerogative
writ jurisdiction to enforce such contractual obligations.
41.To support the contra view that the High Court in
exercise of powers under Article 226 of the Constitution of
India could interfere in such matters, attention of this Court
has been drawn to the decisions in Naseem Ahmad vs.
State of Uttar Pradesh and others
21
and Surya
20. 2019 (6) ADJ 113
21. (2015) 14 SCC 685
24
Constructions vs. State of Uttar Pradesh and others
22
.
42.In the case of Naseem Ahmad (supra), the amount in
question had been clearly admitted by the respondent
authorities and taking notice of the above, it was observed
that in view of the peculiar facts of the case, the appeal was
being allowed and a direction was made for payment of the
amount. The case of Surya Constructions (supra) was one
in which payment for extra work by the respondent
authorities had not been made to the appellant though such
work was expressly sanctioned and completed to their
satisfaction, and the only reason assigned for not making the
payment was that no money was available in the account of
the respondent and that payment would be made after
availability of the funds from the Government. It was, in this
background, that the Court came to the conclusion that
there was no dispute as to the amount which had to be paid
to the appellant and therefore, the dismissal of the writ
petition stating that the disputed questions of fact arise, was
held to be not correct inasmuch as there was no disputed
question of fact and on the contrary, the amount payable to
the appellant was wholly undisputed.
43.We may, therefore, add that it cannot be held in
absolute terms that a writ petition is not maintainable in all
contractual matters seeking enforcement of obligations on
part of the State or its authorities. The limitation in
exercising powers under Article 226 in contractual matters is
essentially a selfimposed restriction. 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, may be an
22. (2019) 16 SCC 794
25
exception to the aforementioned general principle.
44.In the present case, the claims sought to be set up by
the petitioners have been strongly disputed. The payments in
respect of which the petitioners have raised their claims
pertain to contractual and commercial obligations, and the
pleadings and the material which are on record, do not in
any manner indicate that it is a public law remedy which the
petitioners are seeking to invoke so as to persuade this Court
to exercise its discretionary jurisdiction.
45.In view of the foregoing discussions, and keeping in
view the facts of the case at hand, we are not inclined to
exercise our extraordinary jurisdiction under Article 226 of
the Constitution.
46.The writ petitions are accordingly dismissed.
Order Date : 19.11.2020
Shalini
(Dr. Y.K. Srivastava,J.)(Surya Prakash Kesarwani,J.)
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