# M/s Bio Tech System v. State of U.P. & Ors

- **Citation:** (2021) 1 ILRA 257
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-11-19
- **Case number:** Writ C No. 13388 of 2020
- **Bench:** Surya Prakash Kesarwani, Dr. Yogendra Kumar Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-bio-tech-system-v-state-of-u-p-ors-45994
- **Pages:** 17

## Headnote

(A) Civil Law - Constitution of India -
Article 226 - maintainability of a writ
petition in contractual matters - no
absolute bar to the maintainability of
a writ petition in such matters -
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.
(Para - 17)

The principal relief sought is with regard to
certain claims for payment of contractual
amounts in terms of agreements said to have
been executed between the parties.(Para - 3)

HELD:- 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.(Para - 43)

Writ Petition dismissed. (E-6)

List of Cases cited :-

## Text

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1 All. M/s Bio Tech System Vs. State of U.P. & Ors.
257
(2021)01ILR A257
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.11.2020

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ C No. 13388 of 2020
Connected with
Writ C No. 12479 of 2020 & 12480 of 2020

M/s Bio Tech System ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Mahabir Yadav, Sri Arun Mishra

Counsel for the Respondents:
C.S.C.

(A) Civil Law - Constitution of India -
Article 226 - maintainability of a writ
petition in contractual matters - no
absolute bar to the maintainability of
a writ petition in such matters -
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.
(Para - 17)

The principal relief sought is with regard to
certain claims for payment of contractual
amounts in terms of agreements said to have
been executed between the parties.(Para - 3)

HELD:- 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.(Para - 43)

Writ Petition dismissed. (E-6)

List of Cases cited :-

1. M/s Lalloo Ji Rajiv Chandra & Sons Vs
Meladhikari Prayagraj Mela Authority & ors. ,
(2019) ADJ Online 0081

2. M/S Friscon Media Works Vs St.Of U.P. & 3
ors., Writ-C No. 8104 of 2020 decided on
05.03.2020

3. M/S Odyssey Computers through Marketing
Manager Sri Ajai Singh Vs St. Of U.P. & ors. ,
Miscellaneous bench No. 14618 of 2017 ,
decided on 07.07.2017

4. Radhakrishna Agarwal & ors. Vs St. of Bihar &
ors., (1977) 3 SCC 457

5. Premji Bhai Parmar & ors. Vs Delhi
Development Authority & ors., (1980) 2 SCC
129

6. Divisional Forest Officer Vs Bishwanath Tea
Company Ltd. , (1981) 3 SCC 238

7. L.I.C. Vs Escorts Ltd. & ors. , (1986) 1 SCC
264

8. Bareilly Development Authority & ors. Vs Ajay
Pal Singh & ors. , (1989) 2 SCC 116

9. Hindustan Petroleum Corporation Ltd. &
ors.Vs Dolly Das , (1999) 4 SCC 450

10. Kerala State Electricity Board & ors. Vs
Kurien E. Kalathil & ors. , (2000) 6 SCC 293

11. State of U.P. & ors. vs Bridge & Roof Co.
(India) Ltd , (1996) 6 SCC 22
258 INDIAN LAW REPORTS ALLAHABAD SERIES
12. St. of Guj. & ors. Vs Meghji Pethraj Shah
Charitable Trust & ors. , (1994) 3 SCC 552

13. St.of Bihar & ors. Vs Jain Plastics &
Chemicals Ltd. , (2002) 1 SCC 216

14. K.K.Saksena Vs International Commission on
Irrigation and Drainage & ors. , (2015) 4 SCC
670

15. Election Commission of India Vs Saka
Venkata Rao & ors. , AIR 1953 SC 210

16. R.(Hopley) Vs Liverpool Health Authority ,
2002 EWHC 1723

17. Joshi Technologies International Inc. Vs
U.O.I. & ors. , (2015) 7 SCC 728

18. Life Insurance Corporation of India & ors. Vs
Asha Goel (Smt.) & anr. , (2001) 2 SCC 160

19. M/s Ipjacket Technology India Private Ltd.
Vs M.D. Uttar Pradesh Rajkiya Nirman Nigam
Ltd.. , 2019 (6) ADJ 113

20. Naseem Ahmad Vs St. of U.P. & ors. ,
(2015) 14 SCC 685

21. Surya Constructions Vs St. of U.P. & ors.,
(2019) 16 SCC 794

(Delivered by Hon'ble 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 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, M/S Friscon Media
Works vs. State Of U.P. And 3 Others and
M/S
Odyssey
Computers
through
Marketing Manager Sri Ajai Singh vs.
State Of U.P. and others.

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.
1 All. M/s Bio Tech System Vs. State of U.P. & Ors.
259

8. Writ-C No.13388 of 2020 has been
filed principally 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
E-Tender
No.69/SE/EUDC-1-A/KM/2018-19 for a sum
of
Rs.
15,22,436.28
and of
E-Tender
No.70/SE/EUDC-1-A/KM/2018-19 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
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
260 INDIAN LAW REPORTS ALLAHABAD SERIES
the contract and the said fact has not been
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 and drawing a distinction
with the case of a contract entered into by
the State in exercise of a statutory power,
it was held that in cases where the
contract entered into between a State and
the person aggrieved is non-statutory 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 non-statutory 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."
1 All. M/s Bio Tech System Vs. State of U.P. & Ors.
261

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 and Lekhraj
Satramdas
v.
Deputy
Custodian-cumManaging 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
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 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. 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 :-
262 INDIAN LAW REPORTS ALLAHABAD SERIES

"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 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 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."
1 All. M/s Bio Tech System Vs. State of U.P. & Ors.
263

26. We may draw reference to the
judgment
in
the
case
of
Bareilly
Development Authority and others vs.
Ajay Pal Singh and others wherein it was
held that even though the development
authority had the trappings of a State, in a
matter pertaining to determination of the
price of the flats constructed by it and the
rate of monthly instalments to be paid, the
authority after entering into the field of an
ordinary contract was acting purely in its
executive capacity, and the right and
obligations of the parties inter se would be
governed only as per the terms of the
contract. The observations made in the
judgment are as follows :-

"21. This finding in our view is
not correct in the light of the facts and
circumstances of this case because in
Ramana Dayaram Shetty Vs. International
Airport Authority of India [(1979) 3 SCC
489] there was no concluded contract as in
this case. Even conceding that the BDA has
the trappings of a State or would be
comprehended in 'other authority' for the
purpose of Article 12 of the Constitution,
while determining price of the houses/flats
constructed by it and the rate of monthly
instalments to be paid, the 'authority' or its
agent after entering into the field of
ordinary contract acts purely in its
executive capacity. Thereafter the relations
are
no
longer
governed
by
the
constitutional provisions but by the legally
valid contract which determines the rights
and obligations of the parties inter se. In
this sphere, they can only claim rights
conferred upon them by the contract in the
absence of any statutory obligations on the
part of the authority (i.e. BDA in this case)
in the said contractual field.

22. There is a line of decisions
where the contract entered into between the
State and the persons aggrieved is nonstatutory and purely contractual and the
rights are governed only by the terms of the
contract, no writ or order can be issued
under Article 226 of the Constitution of
India so as to compel the authorities to
remedy a breach of contract pure and
simple -- Radhakrishna Agarwal & Ors. v.
State of Bihar (1977) 3 SCC 457, Premji
Bhai Parmar & Ors. v. Delhi Development
Authority & Ors, (1980) 2 SCC 129 and
Divl. Forest Officer v. Bishwanath Tea
Company Ltd. (1981) 3 SCC 238."

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 and it was held that
for
invoking
the
writ
jurisdiction,
involvement of any constitutional or
statutory right was essential and in the
absence of a statutory right, the remedy
under Article 226 could not be availed to
claim any money in respect of breach of
contract, tort or otherwise. It was reiterated
that in absence of any constitutional or
statutory rights being involved, a writ
proceeding would not lie to enforce a
contractual obligation even if it is sought to
be enforced against the State or its
authorities.

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 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
264 INDIAN LAW REPORTS ALLAHABAD SERIES
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 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 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 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
1 All. M/s Bio Tech System Vs. State of U.P. & Ors.
265
is governed by the provisions of the
contract Act or, maybe, also by certain
provisions of the Sale of Goods Act. Any
dispute relating to 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 particular
amount from the writ petitioner's bill(s)
was not a prayer which could be granted by
the High Court under Article 226. Indeed,
the High Court has not granted the said
prayer.

17. Secondly, whether there has
been a reduction in the statutory liability on
account of a change in law within the
meaning of sub-clause (4) of clause 70 of
the contract is again not a matter to be
agitated in the writ petition. That is again a
matter relating to interpretation of a term of
the contract and should be agitated before
the arbitrator or the civil court, as the case
maybe. If any amount is wrongly withheld
by the Government,the remedy of the
respondent is to raise a dispute as provided
by the contract or to approach the civil
court, as the case may be, according to law.
Similarly if the Government says that any
over- payment has been made to the
respondent, its remedy also is the same.

18. Accordingly, it must be held
that the writ petition filed by the respondent
for the issuance of a writ of mandamus
restraining the Government from deducting
or withholding a particular sum, which
according to the respondent is payable to it
under
the
contract,
was
wholly
misconceived and was not maintainable in
law (See the decision of this Court in
Assistant Excise Commissioner v. Isaac
Peter (1994 (4) S.C.C.104), where the law
on the subject has been discussed fully.)
The writ petition ought to have been
dismissed on this ground alone.
xxx

21.
There
is
yet
another
substantial reason for not entertaining the
writ petition. The contract in question
contains a clause providing inter a1ia for
settlement of disputes by reference to
arbitration (Clause 67 of the contract).
The Arbitrators can decide both questions
of fact as well as questions of law. When
the contract itself provides for a mode of
settlement of disputes arising from the
contract, there is no reason why the
parties should not follow and adopt that
remedy and invoke the extra-ordinary
jurisdiction of the High Court under
Article 226. The existence of an effective
alternative remedy - in this case, provided
in the contract itself - is a good ground
for the court to decline to exercise its
extraordinary jurisdiction under Article
226. The said article was not meant to
supplant the existing remedies at law but
only to supplement them 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."
266 INDIAN LAW REPORTS ALLAHABAD SERIES

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 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 non-statutory 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 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 Sri Ramaswamy - a matter governed by
a contract/agreement between the parties. If
the matter is governed by a contract, the
writ petition is not maintainable since it is a
public law remedy and is not available in
private law field, e.g., where the matter is
governed by a non-statutory contract. Be
that as it may, in view of our opinion on the
main question, it is not necessary to pursue
this reasoning further."

31. In the case of State of Bihar and
others Vs. Jain Plastics & Chemicals
Ltd. 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
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
1 All. M/s Bio Tech System Vs. State of U.P. & Ors.
267
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 Irrigation
and Drainage and others 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 and the judgement
in the case of R.(Hopley) vs. Liverpool
Health Authority, 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
268 INDIAN LAW REPORTS ALLAHABAD SERIES
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, 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."

35. We may also gainfully refer to the
judgment
in
the
case
of
Joshi
Technologies
International
Inc.
vs.
Union of India and others 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.