Madras High Court
Petition Filed Seeking For A Writ Of vs The Tamil Nadu Water Supply on 23 December, 2009
Author: M.Jaichandren
Bench: M.Jaichandren
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATE: 23/12/2009 CORAM THE HONOURABLE MR.JUSTICE M.JAICHANDREN Writ Petition (MD) Nos.8549 to 8553 of 2009 and M.P.(MD) No.1 of 2009 W.P.No.8549 of 2009: Semalaiappan .. W.P.No.8549 of 2009 K.A.I.G. Constructions (P) Ltd., Rep. By its Managing Director, I.Gurusamy, 7/A, Chokkanathapuram, Madurai. .. W.P.No.8550 of 2009 M/s.Raja Constructions, Rep. By its Sole Proprietor, S.N.Dhanasekar, 240, Karur Road, Opp. To Carmal Convent School, Kangeyam-636 701. .. W.P.No.8551 of 2009 M/s.Raja Constructions, Rep. By its Sole Proprietor, S.N.Dhanasekar, 240, Karur Road, Opp. To Carmal Convent School, Kangeyam-636 701. .. W.P.No.8552 of 2009 S.Balasubramanaia Pandian .. W.P.No.8553 of 2009 Versus 1.The Tamil Nadu Water Supply and Drainage Board, Rep. By its Chief Engineer, Southern Region, Ganesh Nagar, Near Law College Hotel, Opp, Mattuthavani Bus Stand, Melur Road, Madurai-625 001. 2.The Executive Engineer, TWAD Board, Urban Division, Dindigul. .. Respondents. Prayer in W.P.No.8549 of 2009 Petition filed seeking for a writ of Certiorarified Mandamus, calling for the records of the respondents, ending with the order of the first respondent in Lr.No.F.101/SDO.1/C&A/2006, dated 14.8.2009, and quash the same and directing the respondents herein to forthwith foreclose the Agreement No.DR/TWAD/No.25/2008-2009, dated 1.9.2008. Prayer in W.P.No.8550 of 2009 Petition filed seeking for a writ of Certiorarified Mandamus, calling for the records of the respondents, ending with the order of the first respondent in Lr.No.F.93/SDO.1/C&A/2006, dated 14.8.2009, and quash the same and directing the respondents herein to forthwith foreclose the Agreement No.DR/TWAD/No.26/2008-2009, dated 1.9.2008. Prayer in W.P.No.8551 of 2009 Petition filed seeking for a writ of Certiorarified Mandamus, calling for the records of the respondents, ending with the order of the first respondent in Lr.No.F.201/SDO.1/C&A/2006, dated 14.8.2009, and quash the same and directing the respondents herein to forthwith foreclose the Agreement No.DR/TWAD/No.23/2008-2009, dated 1.9.2008. Prayer in W.P.No.8552 of 2009 Petition filed seeking for a writ of Certiorarified Mandamus, calling for the records of the respondents, ending with the order of the first respondent in Lr.No.F.235/SDO.1/C&A/2006, dated 14.8.2009, and quash the same and directing the respondents herein to forthwith foreclose the Agreement No.DR/TWAD/No.23/2008-2009, dated 1.9.2008. Prayer in W.P.No.8553 of 2009 Petition filed seeking for a writ of Certiorarified Mandamus, calling for the records of the respondents, ending with the order of the first respondent in Lr.No.F.109/SDO.1/C&A/2006, dated 14.8.2009, and quash the same and directing the respondents herein to forthwith foreclose the Agreement No.DR/TWAD/No.24/2008-2009, dated 1.9.2008. !For Petitioners... Mr.K.Doraisami Senior Counsel for Ms.Muthumani Doraisami ^For Respondents... Mr.M.Ajmal Khan :COMMON ORDER
As similar issues are arising for consideration, a common order is passed by this Court, in the above writ petitions.
2. The brief facts of the case are as follows:
The petitioners are class-I contractors with the Tamil Nadu Water Supply and Drainage Board (hereinafter referred to as the `Board'). They have been executing several projects, involving crores of rupees, to the full satisfaction of the Board. While so, the Board had proposed to execute a Combined Water Supply Scheme to Vedasandur, Palayam, Oddenchathram, Kannivadi, Sriramapuram and 735 Rural Habitations, in Dindigul District and 25 Rural Habitations, in Karur District.
3. The scheme comprises of conveying water from Kaveri River at Kattalai point to 760 rural habitations, in Dindigul and Karur Districts. The scheme had been divided into six stages. Stage one was the main work for conveying water from the source point, namely, Kattalai head work to Veriappur Pirivu, running to about 88 kilometers. The other stages deal with the distribution of water from the conveying main line to the rural habitations.
4. The petitioners were awarded different stages of the contract works. The scope of the works was to convey water from conveying main line to respective rural habitations. Work orders had been issued to the petitioners by the Board. Pursuant to the work orders, agreements had been entered into between the first respondent and the petitioners. The period agreed for the completion of the contract works was twelve months.
5. In the said agreement it had been stipulated that the petitioners would have to maintain the scheme for a period of twelve months from the date of the completion of the main scheme. The main scheme was to be executed by a different contractor. The petitioner had completed the works, as per the terms of the agreement, except the erection of the pump sets, which could be carried out only after the completion of the main scheme, by the main contractor. Further, the pump sets could be operated only after the water is energised from the source point to the conveying main line.
6. The contractors, who were entrusted with the work of main line, had completed 33% of the entire contract given to them, as on date. Until and unless the main conveying line work is completed and energised, the petitioners, who were entrusted with the contract of distributing water from the conveying main line, will not be able to complete the installation of the pump sets and the maintenance of the scheme, thereafter.
7. In such circumstances, the petitioners had given representations to the competent authorities, requesting them to foreclose the original agreement, entered into by the petitioners and for the settling of their final bills. By the proceedings of the first respondent, dated 30.5.2008, the original agreement of the petitioners had been foreclosed by the competent authority and a further direction had been issued to the second respondent to settle their final bills.
8. The final bills had been settled by the second respondent pursuant to the order of the first respondent. Further, a fresh agreement had been entered into between the second respondent and the petitioners, for the erection of pump sets and the other allied works, by an agreement, dated 1.9.2008. The only work to be completed by the petitioners is the erection of the pump sets. Since, the work of the main conveying line has not been completed, even after the expiry of the new contract period of nine months, the petitioners are not in a position to fulfill their part of the contract.
9. While so, the petitioners had been shocked to receive a communication from the second respondent, dated 22.4.2009, unilaterally, extending the period of the new agreement, for a further period of one year, i.e. up to 31.3.2010. Thereafter, the petitioners had submitted a representation to the second respondent stating that they were never at fault, at any point of time and that they had completed their contractual obligations, both in the old agreement, as well as under the new agreement and the only balance work remaining to be done by them is the installation of the pump sets, which cannot be carried out unless the main conveying line works are completed.
10. Therefore, the petitioners had requested the authorities concerned to foreclose the new agreement, dated 1.9.2008 and to discharge the petitioners from the contractual obligations. However, the second respondent had rejected the request of the petitioner, without applying his mind to the ground reality, as the installation of the pump sets and the maintenance of the scheme, for a period of twelve months, after the completion of the main conveying line work, is impossible of performance due to the inordinate delay caused by the main contractor. Therefore, the petitioners had submitted a fresh representation to the second respondent, requesting him to reconsider his earlier decision and to foreclose the new agreement, since the probable date of the completion of the main work cannot be predicted.
11. Since, the second respondent did not consider the request of the petitioners they had submitted detailed representations to the first respondent, who is the competent authority. As the first respondent had not considered the representations submitted by the petitioners, the petitioners had filed writ petitions before this Court. By an order, dated 14.7.2009, the writ petitions had been disposed of directing the first respondent to consider the representations of the petitioners, on merits and in accordance with law, within a period of four weeks from the date of receipt of a copy of the order. Pursuant to the said order passed by this Court, on 14.7.2009, the first respondent had rejected the request of the petitioner, by his order, dated 14.8.2009, stating that the order of extension of the agreement, passed by the Executive Engineer, is in conformity with the terms of the agreement. The present writ petitions have been filed challenging the said order of the first respondent, dated 14.8.2009.
12. The main contentions of the learned counsel appearing on behalf of the petitioners is that the first respondent had rejected the request of the petitioners to foreclose the agreement and to settle their final bills, without applying his mind and without taking into account the fact that the main contractor had not completed his part of the contract works and therefore, the petitioners could not complete their part of the agreement, due to impossibility of performance. The unilateral extension of the original contract by the respondents is arbitrary, illegal and void. The respondents ought to have seen that the petitioners could not complete their part of the agreement, only due to the impossibility of performance, as the main contractor had not completed his works. He had further submitted that even though certain issues relating to contractual obligations may arise for the decision of this Court, in the present writ petitions, since, the facts are not in dispute and as the impugned orders of the first respondent are arbitrary and illegal, this Court can take cognizance of the matter involved in the present writ petitions, by invoking its extraordinary jurisdiction, under Article 226 of the Constitution of India. In such circumstances, the writ petitions are maintainable.
13. Mr.K.Doraisami, the learned Senior counsel appearing on behalf of the petitioners had further submitted that the writ petitions are maintainable, since, the agreements entered into between the petitioners and the first respondent Board are clearly arbitrary, illegal and void. The petitioners had been compelled to sign the fresh agreements, without being given the choice to opt out of the Combined Water Supply Scheme Works. Further, the work of erecting pump sets and the maintenance of the scheme is impossible of performance, since, the main work had not been completed, till date. It has also been stated that since, no disputed facts are involved, this Court could entertain the writ petitions and decide the same, on merits. He had relied on the following decisions in support of his contentions.
13.1) In ABL International Ltd V. Export Credit Guarantee Corpn. of India Ltd. (2004(3) SCC 553), it has been held as follows:
"19) ...... This clearly shows that in an appropriate case, the writ Court has the jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation and/or involves some disputed questions of fact."
13.2) In Noble Resources Ltd. V. State of Orissa (2006 AIR SCW 5408), it has been held as follows:
"15) It is trite that if an action on the part of the State is violative the equality clause contained in Article 14 of the Constitution of India, a writ petition would be maintainable even in the contractual field. A distinction indisputably must be made between a matter which is at the threshold of a contract and a breach of contract; whereas in the former the court's scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution. While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on its part. Indisputably, inherent limitations exist, but it would not be correct to opine that under no circumstances a writ will lie only because it involves a contractual matter."
13.3) In Bharat Petroleum Corpn. Ltd. V. Maddula Ratnavalli (2007(6) SCC
81), it had been held as follows:
"16)....... Objective satisfaction must be the basis for the executive action. Even subjective satisfaction on the part of a State is liable to judicial review. The "State" acting whether as a "landlord" or a "tenant" is required to act bona fide and not arbitrarily, when the same is likely to affect prejudicially the right of others."
13.4) In United India Insurance Co. Ltd. V. Manubhai Dharmasinhbhai Gajera (2008(10) SCC 404), it had been held as follows:
"39) Another distinction in the approach of the Court in this behalf must also be borne in mind, namely, that a Court may exercise its power of judicial review at the threshold of formation of a contract as was the case in Ramana Dayaram Shetty V. International Airport Authority of India and the cases where the terms and conditions of contract are to be enforced. Whereas in the former case, the Court's jurisdiction is wider, in the latter, it is not. We may, however, hasten to add that it does not mean that the Court shall not interfere even in a case where the term of the contract is against the public policy or where in enforcing the same the State acts arbitrarily, unfairly or unreasonably or makes discrimination amongst the persons similarly situated. .......
46) One important facet of the matter which must also be taken note of is duty on the part of a State to act fairly. Such a fair dealing is expected at the hands of State within the meaning of Article 12 of the Constitution of India. Strong reliance has been placed by Mr.Parekh on the decision of this Court in Mahabir Auto Stores V. Indian Oil Corpn. And Shrilekha Vidyarthi V. State of U.P. There cannot be any doubt whatsoever that Article 4 of the Constitution of India which encompasses within its fold obligations on the part of the State to act fairly which operates also in the contractual field, but the said principle would be applicable more in a case where bargaining power is unequal or where the contract is not a negotiated one and/or is based on the standard form contracts between unequals......"
13.5) In Karnataka State Forest Industries Corpn. V. Indian Rocks (2009(1) SCC 150), it had been held as follows:
"38) Although ordinarily a superior Court in exercise of its writ jurisdiction would not enforce the terms of a contract qua contract, it is trite that when an action of the State is arbitrary or discriminatory and, thus, violative of Article 14 of the Constitution of India, a writ petition would be maintainable (See ABL International Ltd. V. Export Credit Guarantee Corpn. Of India Ltd.)
39) There cannot be any doubt whatsoever that a writ of mandamus can be issued only when there exists a legal right in the writ petition and a corresponding legal duty on the part of the State, but then if any action on the part of the State is wholly unfair or arbitrary, the superior courts are not powerless."
14. In the counter affidavit filed on behalf of the respondents it has been stated that the writ petition is not maintainable, either in law or on facts and it is liable to be dismissed, in limine. The petitioner is not entitled to invoke the extraordinary original jurisdiction of this Court, under Article 226 of the Constitution of India, either for the enforcement of the contractual obligations or for the breach of such obligations, especially, when the agreement is non-statutory in character.
15. It has been further stated that the Tamil Nadu Water Supply and Draining Board is a statutory body, constituted under the Tamil Nadu Water Supply and Drainage Board Act, 1971. One of the main purposes of the Board is to provide for the establishment of water supply and drainage systems and schemes. The Government of Tamil Nadu had sanctioned a sum of Rs. 38.01 crores to implement a scheme, namely, the Combined Water Supply Scheme, to Vedasandur, Palayam, Odanchathiram, Kannivadi, Srirampuram Town Panchayat, and 735 Rural Habitations, in Dindigul Disrict and 25 Rural Habitations, in Karur District.
16. The scheme had been dived into six stages. Stage one was the main work, which conveys water from the source point, namely, Kattalai head work, in River Kaveri, to Veriappur Pirivu, running about 88 kilometers. The other stages deal with the distribution of water from the conveying main to the rural habitations. The main contract, for providing combined water supply scheme to five town panchayats and 760 rural habitations in Dindigul and Karur Districts, including the maintenance of the scheme for 12 months, was awarded to M/s.Taher Ali Industries and projects (P) Limited. The work of conveying of water from the main line to the respective rural habitations, by distributing water from the respective conveying lines, was awarded to five contractors, who are the petitioners, in W.P.(MD) Nos.8549 to 8553 of 2009.
17. It has been further stated that, originally, an agreement had been entered into between the petitioners and the first respondent, for the supply and erection of pump sets and for maintenance of the scheme, for twelve months, from the date of the commissioning of the Combined Water Supply Scheme, free of cost. Since, there was a delay in the execution of the main scheme by M/s.Taher Ali Industries and Projects (P) Limited, the petitioner had requested the first respondent to foreclose the original agreement. Since, the main scheme had not been completed it was not possible for the first respondent Board to foreclose the agreement and to settle the bills. Hence, in the meeting held between the respondents and the petitioners, the petitioners had agreed to enter into fresh agreements for the supply, delivery and erection of pump sets and for the maintenance of the scheme, free of cost, for twelve months, from the date of the commissioning of the Combined Water Supply Scheme. In furtherance of the fresh agreements, the petitioners had been paid the entire amounts due to them, under the agreement, for the execution of the works, under the Combined Water Supply Scheme, including 2.5 % of the amount to have been withheld by the Board, in case of non-completion of the works.
18. It has also been stated that in furtherance of the fresh agreements, the petitioners had supplied the pump sets and they had also been paid 50% of the cost of the pump sets, by the respondent Board. However, the pump sets had not been erected, till date. Even though a number of extensions had been given M/s.Taher Ali Industries and Projects (P) Limited, had not completed the main scheme. Therefore, the petitioners had made a request to foreclose the fresh agreements. While rejecting the request made by the petitioners to foreclose the fresh agreements, the period for completion of the works had been extended. However, the petitioners had requested the second respondent to review the order extending the period of the agreements and to consequently, foreclose the agreements. However, the requests made by the petitioners had been rejected, in the light of Clauses 67 and 50 of the agreements, which stipulate that the contractors are not entitled to advance any reason for the delay or to claim any extra cost in the completion of the project and that the commencement of the maintenance of the project would start on the date of the completion and the commissioning of the Combined Water Supply Scheme, at no extra cost. It was also made clear, while rejecting the request made by the petitioners, that it is their sole responsibility to maintain the entire project, successfully, for the maintenance period of twelve months, after the completion of the main scheme, as laid down in Chapter IX of the agreements. As such, the requests made by the petitioners, for the foreclosure of the agreements, cannot be entertained. The learned counsel appearing on behalf of the respondents had submitted that the main work, which had been given to M/s.Taher Ali Industries and Projects (P) Limited, had been given to different contractors, to expedite the works and to complete the same, within the next six months. In such circumstances, the petitioners are not entitled to request for the foreclosure of the agreements entered into by them with the first respondent Board. Therefore, the request made by the petitioners cannot be granted.
19. The learned counsel, Mr.Ajmal Khan, appearing on behalf of the respondents had submitted that only a Civil Court of competent jurisdiction would be in a position to entertain the claims made by the petitioners, as stipulated in Clause 67 of the agreement, which reads as follows:
"In the event of any dispute arising between the parties hereto in respect of any matter comprised in the contract, the same shall be settled by a competent Court having jurisdiction over the place where the contract is awarded and agreement is concluded and by no other Court."
20. Further, Clause 50 of the agreement, with regard to maintenance of the project, reads as follows:
"The contractor/firm shall successfully maintain the project for the stipulated period from the successful commissioning of the works in this project. The commencement of maintenance project will start on the day of completion and commissioning of CWSS to Vedasandur at no extra cost for any extended period of completion of Vedasandur CWSS if any. During the period of maintenance all costs towards labour, spares, repairs and renewals shall be borne by the firm/contractor."
21. He had further submitted that since, disputed questions of fact had arisen for the consideration of this Court and as it is purely a commercial contract, this Court would not have the jurisdiction to decide the issues arising for its consideration, under Article 226 of the Constitution of India. He had further submitted that contractual obligations or the breach thereof, which are the subject matters before this Court, cannot be decided in the present writ petitions filed by the petitioners. He had relied on the following decisions in support of his contentions:
21.1. In K.N.Guruswamy V. The State of Mysore and others (1954 STPL (LE) 460 SC), it has been held as follows:
"We would therefore in the ordinary course have given the appellant the writ he seeks. But, owing to the time which this matter has taken to reach us (a consequence for which the appellant is in no way to blame, for he has done all he could to have an early hearing), there is barely a fortnight of the contract left to go. We were told that the excise year for this contract (1953-54) expires early in June. A writ would therefore be ineffective and as it is not our practice to issue meaningless writs we must dismiss this appeal and leave the appellant content with an enunciation of the law. But as he has in reality won his case and is prevented from reaping the full fruits of his victory because of circumstances for which he is not responsible, we direct that the first respondent, the State of Mysore, and the fourth respondent, Thimmappa pay the appellant his costs hear and in the High Court. The other respondents will bear their own costs."
21.2. In Har Shankar v. Dy.E & T. Commr. (AIR 1975 SC 1121), it has been held as follows:
"21. ............Analysing the situation here, a concluded contract must be held to have come into existence between the parties. The appellants have displayed ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching contractual obligations.......
22...... The writ jurisdiction of High Courts under Article 226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. That, however will not estop the appellants from contending that the amended Rules are not applicable as their licences were renewed before the amendments were made."
21.3. In Radhakrishna Agarwal V. State of Bihar (AIR 1977 SC 1496), it has been held as follows:
"It is true that Article 14 of the Constitution imports a limitation or imposes an obligation upon the State's executive power under Art. 298 of the Constitution. All constitutional powers carry corresponding obligations with them. This is the rule of law which regulates the operation of organs of Government functioning under a Constitution (para 9).
At the very threshold or at the time of entry into the field of consideration of persons with whom the Government could contract at all, the State, no doubt, acts purely in its executive capacity and is bound by the obligations which dealings of the State with the individual citizens import into every transaction entered into in exercise of its constitutional powers. 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 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. (para 10) Even in cases where the question is of choice or consideration of competing claims before an entry into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 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 cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution (para 11) Where the State government leased out some forest land to appellants to collect and exploit sal seeds for 15 years on payment of royalty at a certain rate and when the State, under the terms of leases, revised the rate of royalty and thereafter cancelled the leases for breach of certain conditions, the petitioners-appellants challenged the orders of revision of rate and cancellation of leases as illegal by writ proceedings under Article 226:
Held that (i) the contracts did not contain any statutory terms or obligations and no statutory power or obligation which could attract the application of Article 14 was involved. (para 11)
(ii) It was the contract and not the executive power regulated by the Constitution, which governed the relations of the parties on the facts apparent in the instant cases. They involved questions of pure alleged breaches of contract. No writ or order could issue under Article 226 in such cases to compel the authorities to remedy a breach of contracts pure and simple. (paras 12,
15)."
21.4. In State of Gujarat V. Meghji Shah Charitable trust (1994(3) SCC
552), it has been held 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 quasi-judicial 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 Shri 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."
21.5. In State of U.P. V. Bridge & Roof Co. (India) Ltd (1996(6) SCC 22), it has been held as follows:
"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 8-D(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, may be, also by certain provisions of the Sale of Goods Act. Any 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 appellant Government 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 a 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."
21.6. In Union of India Vs. Sri Gayathri Agencies (2000(4) CTC 711), it has been held as follows:
"9. We have heard the learned counsel for the respective parties and perused the materials on record. Though the matter could have been disposed of on the short ground, since the learned counsel for the parties have argued the matter at length, without insisting upon to decide the main case, we have no other option but to mention their arguments in detail, as above. It is settled that if a right has been claimed in terms of the contract, such a right cannot enforced in writ petition. In other words the extraordinary remedy cannot be used for the enforcement of contractual obligations, since the same can be resorted on the basis of the agreement executed between the parties i.e., by way of arbitration clause, as in the present case, as per the agreement. It is also settled, that generally this Court does not interfere with the interlocutory orders passed by the Courts below, as the matter is still pending, and has not been finally decided. But from the facts culled out, and the arguments advanced by the learned counsel for the parties, and applying the case laws cited, it is crystal clear that the matter agitated before us pertains to questions of facts, which needs investigation and that is based on the contract, which is a non- statutory one and is also being safeguarded with the arbitration clause. A perusal of Section 8(1)(i) of the Arbitration Act reveals that a judicial authority, before which an action is brought, in a matter which is the subject of an arbitration agreement, shall refer the parties to arbitration."
21.7. In Kerala SEB V. Kurien E.Kalathil (2000(6) SCC 293), it has been held as follows:
"10. We find that there is a merit in the first contention of Mr.Raval learned counsel has rightly questioned the maintainability of the writ petition. 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 contrat. 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 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 by 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 he present case, it has not been shown how the contract is statutory. The contract between the parties is in 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 nto 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. The contractor should have relegated to other remedies."
21.8. In State of Bihar V. Jain Plastics and Chemicals Ltd. (2002(1) SCC
216), it has been held as follows:
"A writ is not the remedy for enforcing contractual obligations. A 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. When an alternative and equally efficacious remedy is open to the litigant, he should be required to pursue that remedy and not invoke the writ jurisdiction of the High Court. Equally, the existence of alternative remedy does not affect the jurisdiction of the Court to issue writ, but ordinarily that would be a good ground in refusing the exercise the discretion under Article 226 (Para 3). In the present case many matters could be decided after referring to the contentions raised in the affidavits and counter-affidavits, 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 non-supply 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. (para 7)"
21.9. In National Highways Authority of India V. Ganga Enterprises (2003 (7) SCC 410), it has been held as follows:
"6. The respondent then filed a writ petition in the High Court for refund of the amount. On the pleadings before it, the High Court raised two questions viz. (a) Whether the forfeiture of security deposit is without authority of law and without any binding contract between the parties and also contrary to Section 5 of the Contract Act; and (b) whether the writ petition is maintainable in a claim arising out of a breach of contract. Question (b) should have been first answered as it would go to the root of the matter. The High Court instead considered Question (a) and then chose not to answer Question (b). In our view, the answer to Question (b) is clear. It is settled law that disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India. It has been so held in Kerala SEB V. Kurien E.Kalathil (2000(6) SCC 293), State of U.P. V. Bridge & Roof Co. (India) Ltd (1996(6) SCC 22) and Bareilly Development Authority V. Ajai Pal Singh (1989(2) SCC 116). This is settled law. The dispute in this case was regarding the terms of offer. They were thus contractual disputes in respect of which a writ court was not the proper forum. Mr.Dave, however, relied upon Verigamto Naveen V. Govt. of A.P. (2001(8) SCC 344). and Harminder Singh Arora V. Union of India (1986(3) SCC 247). These, however, are cases where the writ court was enforcing a statutory right or duty. These case do not lay down that a writ Court can interfere in a matter of contract only. Thus, on the ground of maintainability the petition should have been dismissed."
21.10. In Siemons Public Communication Pvt. Ltd. V. Union of India (AIR 2009 SC 1204), it has been held as follows:
"On examining the facts and circumstances of the present case, we are of the view that none of the criteria has been satisfied justifying Court's interference in the grant of contract in favour of the appellants. When the power of judicial review is invoked in the matters relating to tenders or award of contracts, certain special features have to be considered. A contract is a commercial transaction and evaluating tenders and awarding contracts are essentially commercial functions. In such cases principles of equity and natural justice stay at a distance. If the decision relating to award of contracts is bona fide and is in public interest, Courts will not exercise the power of judicial review and interfere even if it is accepted for the sake of argument that there is a procedural lacuna."
22. In view of the submissions made by the learned counsels appearing on behalf of the petitioners, as well as the respondents and on a perusal of the records available, and in view of the cases cited supra, this Court is of the considered view that the writ petitions are not maintainable, before this Court, under Article 226 of the Constitution of India. It is clear, from the various decisions cited by the learned counsel appearing on behalf of the respondents, that the contractual obligations or the breach thereof cannot be the subject matter of the writ jurisdiction of this Court, except in certain cases. The present writ petitions cannot be said to be falling under the extraordinary category, which could be entertained under the extraordinary original jurisdiction of this Court, especially, in view of Clause 67 of the agreements, relating to the jurisdiction of the competent Court to decide the disputes arising between the parties to the agreements.
23. When Clause 67 of the agreement states that the disputes arising between the parties to the agreements shall be settled by a competent Court, having jurisdiction over a place, where the contract is awarded and the agreement is concluded, it should only mean a competent Civil Court, having jurisdiction to deal with the matter. Even though this Court has extraordinarily wide powers, under Article 226 of the Constitution of India, it cannot be said that such powers could be invoked, even in cases where disputed questions of fact arise for its consideration and when contractual obligations and breaches thereof are involved.
24. Further, it is not for this Court to examine as to whether the petitioners had been compelled or coerced into signing the agreements, as alleged in the present case. The petitioners have not alleged any mala fide motive on the part of the respondents, in respect of the contracts concluded between the petitioners and the Tamilnadu Water Supply and Draining Board. While so, it is not open to this Court to probe into the subtle mechanisms that may be at work, when such commercial contracts are concluded. Such disputes can be dealt with, effectively, by the competent Civil Court, having the necessary jurisdiction, in respect of the issues arising for its consideration. Accordingly, this Court, without going into the merits of the matter, is of the considered view, that the writ petitions cannot be held to be maintainable. Hence, they are dismissed. No costs. However, it is made clear that it would be open to the petitioners to establish their rights and to settle their disputes before the appropriate and competent Court of law, having the jurisdiction to deal with the matter.
csh To
1.The Tamil Nadu Water Supply and Drainage Board, Rep. By its Chief Engineer, Southern Region, Ganesh Nagar, Near Law College Hotel, Opp, Mattuthavani Bus Stand, Melur Road, Madurai-625 001.
2.The Executive Engineer, TWAD Board, Urban Division, Dindigul.