Allahabad High Court

Avani Paridhi Energy & ... vs State Of Up Thru. Addl. Chief Secy. ... on 21 May, 2018

Bench: Devendra Kumar Arora, Virendra Kumar-Ii




HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

Court No. - 2								A.F.R.
 
Case :- MISC. BENCH No. - 9354 of 2018
 
Petitioner :- Avani Paridhi Energy & Communications (P) Ltd.
 
Respondent :- State of U.P. through Additional Chief Secretary and others
 
Counsel for Petitioner :- Srideep Chatterjee
 
Counsel for Respondent :- C.S.C.,Satyanshu Ojha
 

 
Hon'ble Dr. Devendra Kumar Arora,J.

Hon'ble Virendra Kumar-II,J.

(Delivered by Hon'ble Virendra Kumar, J.)

1. Heard Shri Srideep Chatterjee, learned counsel for petitioner, the learned Standing Counsel for respondent No.1 and Shri Satyanshu Ojha, learned counsel appearing for respondent Nos. 2 and 3.

2. The petitioner company has instituted this writ petition assailing the order dated 20.02.2018 passed by respondent No.3, cancelling the agreement dated 01.01.2018 entered between the petitioner and the respondent No.3 for violation of conditions of the said agreement. It is further pleaded that performance security has been forfeited in the most illegal, arbitrary and unreasonable manner, as it is violative of Articles 14, 19 and 21 of the Constitution of India.

3. It is contended by the learned counsel for petitioner that respondent No.2 issued a notice inviting tenders (e-bid) for supply of man power on outsourcing basis. The petitioner company applied for the same and completed the necessary formalities required for the participation in the aforesaid tender. The respondent No.3 wrote a letter dated 28.12.2017 informing the petitioner that rates quoted by him have been found to be lowest as such the petitioner was forwarded a copy of the draft agreement and was further directed to get agreement entered into by 01.01.2018. The respondent No.3 entered into an agreement dated 01.01.2018 with the petitioner regarding supply of man power for a period of one year. The petitioner, in pursuance of the said agreement, was required to supply man power to the respondent No.2 against the posts of Computer Operator, Stenographer, Clerk and Peon, etc.

4. It is further mentioned that Clause-8 of the aforesaid agreement provides that if the first party, i.e., the petitioner, is found to be guilty of unauthorized deduction/ recovery of any amount from the honorarium payable to any employee except E.P.F. and E.S.I. deductions, wherever applicable, the second party, i.e., the respondent No.3 shall be free to terminate the agreement with immediate effect and the Bank Guarantee/ F.D.R. of Rs.3,00,000/- deposited towards performance security shall be forfeited. According to Clause-10 of the aforesaid agreement it was the responsibility of the petitioner to carry out all the financial, administrative and statutory obligations under the laws in force, which were attracted in the case in hand. On 04.01.2018, the petitioner deposited performance security in the form of F.D.R., amounting to Rs.3,00,000/- for issuing work order in favour of petitioner.

5. It is further mentioned by the petitioner that on 05.02.2018, the petitioner wrote a letter mentioning therein that till date no work order has been issued in favour of the petitioner. It was also stated in the said letter that if the old employees had to be absorbed/ supplied, the said employees would have to get themselves registered. It was not cleared whether the old employees had to be accommodated in pursuance to the agreement dated 01.01.2018. The respondent No.3 forwarded a list dated 07.02.2018 containing the attendance of old employees to the petitioner with a further direction to submit the bills for payment of honorarium of the said employees mentioned in the aforesaid list.

6. It is further pleaded that it was nowhere mentioned in the agreement dated 01.01.2018, nor in the e-bid document, that the service provider company after having been selected through the aforesaid tender process, would have to absorb the old employees. As such, thrusting the same upon the petitioner by forwarding the list of employees is clearly illegal, arbitrary and cannot be justified on the touchstone of reasonableness and fairness. The respondent No.3 wrote a letter dated 15.02.2018 to the petitioner, calling upon it to submit its reply on account of alleged violation of Clause-8 of the agreement dated 01.01.2018 with respect to the allegation that the petitioner was extracting illegal money from the old employees in the name of registration fee. The petitioner company submitted its reply dated 17.02.2018 before the respondent No.3, stating therein that as to why the registration of the employees is compulsory before supplying manpower to the respondent No.3.

7. It was mentioned in this letter by the petitioner company that the personnel, who are supplied on outsourcing basis, are the employees of the outsourcing company, as such it is obligatory on the part of the outsourcing company to maintain the records of the personnel, who are supplied by it to the concerned department. It was also mentioned in the said letter that in order to supply the aforesaid personnel on outsourcing basis, the petitioner company has to maintain the records relating to I.D. proof, proof of residence and also the records relating to the educational qualification of the concerned employees.

8. It is further pleaded by the petitioner that it was his duty to get the police verification done of the concerned personnel prior to appointing them and these employees were to be registered under the various social welfare laws including the E.P.F. and E.S.I., without these formalities, no appointment could be made. It was the responsibility of the outsourcing company to take care of the welfare of its old employees. The concerned employees were required to submit a notarized affidavit on hundred rupees non judicial stamp paper for maintaining the confidentiality with respect to the work carried out by the aforesaid employee. There was no boundation on the concerned personnel to pay the requisite fee for getting themselves registered through the petitioner company. The petitioner had also mentioned in the letter dated 17.02.2018 that all the records of the employees are kept in physical as well as in digital form and the same are also available on the website of the petitioner and further requested that no further action be taken in pursuance to the letter dated 15.02.2018.

9. The respondent No.3, by means of the impugned order dated 20.02.2018 has cancelled the agreement dated 01.01.2018, forfeiting the performance security amounting to Rs.3,00,000/- deposited by the petitioner company, without considering reply dated 17.02.2018 submitted by the petitioner. It is further mentioned that the only embargo placed upon by the petitioner by means of the aforesaid agreement dated 01.01.2018, is with respect to illegal recovery/ deduction from the honorarium payable to the employees and demand of registration fee does not fall in the said category, as such the impugned order dated 20.02.2018 suffers from total non application of mind on the part of the respondent No.3.

10. It is further submitted that the respondent No.3 is taking supply of manpower of Class-IV employees for its organization through U.P. Small Scale Industries Corporation and the aforesaid Corporation is also charging registration fee, therefore, the respondent No.3 was requested to reconsider its decision.

11. On the above mentioned facts and circumstances, the following reliefs have been sought for:

(i) to issue a writ, order or direction in the nature of Certiorari quashing the impugned order dated 20.2.2018 passed by the Respondent No.-3, as is contained in Annexure No. -1 to this Writ Petition;

(ii) to issue a writ, order or direction in the nature of Mandamus commanding the Respondents not to give effect to the impugned order dated 20.2.2018 passed by the Respondent No.-3, as is contained in Annexure No. -1 to this Writ Petition;

(iii) to issue a writ, order or direction in the nature of Mandamus commanding the Respondents to allow the petitioner to supply manpower to the Respondent No. -2 in pursuance of the agreement dated 1.1.2018;

(iv) to issue any other writ, order or direction which this Hon'ble Court may deem fit, just and proper in circumstances of the case;

(v) to allow this writ petition with all costs in favour of the petitioner.

12. In support of his submissions, the learned counsel for petitioner has relied upon the case laws of Hon'ble Supreme Court in the cases of Ramana Dayaram Shetty Vs. International Airport Authority of India and others : (1979) 3 SCC 489, ABL International Ltd. and another Vs. Export Credit Guarantee Corporation of India Ltd. and others : (2004) 3 SCC 553, Union of India and others Vs. Tantia Construction Private Limited : (2011) 5 SCC 697, Asha Sharma Vs. Chandigarh Administration and others : (2011) 10 SCC 86, East Coast Railway and another Vs. Mahadev Appa Rao and others : (2010) 7 SCC 678, Kumari Shrilekha Vidyarthi Vs. State of U.P. :(1991) 1 SCC 212 and Zonal Manager, Central Bank of India v. Devi Ispat Limited and others : (2010) 11 SCC 186.

13. The learned counsel for the petitioner has relied upon the above mentioned exposition of law in which the Hon'ble Apex Court has held that today the Government in a welfare State, is the regulator and dispenser of special services and provider of a large number of benefits, including jobs, contracts, licences, quotas, mineral rights etc. The Government pours forth wealth, money, benefits, services, contracts, quotas and licences. The discretion of the Government has been held to be not unlimited in that the Government cannot give or withhold largess in its arbitrary discretion or at its sweet will. It is insisted that Government action should be based on standards that are not arbitrary or unauthorised. The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure.

14. The petitioner's counsel further argued that in the above exposition of law, the Hon'ble Supreme Court has propounded that it is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.

15. These basic principles have been held by the Hon'ble Apex Court in above mentioned case laws relied upon by the learned counsel for petitioner. The learned counsel for petitioner argued that judicial review on account of arbitrariness is permissible. Administrative or executive function requires application of mind and if executive authority has not passed orders by proper application of mind then the judicial review can be made by this Court under Article 226 of the Constitution of India.

16. The learned counsel for the petitioner has further argued that in cases of contract or specific relief regarding termination or discharge of contract, the petitioner cannot be relegated to civil court for filing civil suit or on the basis of arbitration clause in agreement/ contract to initiate arbitration proceedings by holding that alternate remedy is available to the petitioner. An arbitrary State action is sufficient to attract principle of judicial review for its being valid action on the anvil of Article 14 of the Constitution of India.

17. Keeping in view the above mentioned expositions of law propounded by the Hon'ble Apex Court, we have perused the record and contentions of the learned counsel for petitioner made in the grounds of this writ petition. The petitioner company participated in tender proceedings conducted by the State Project Director, Uttar Pradesh Madhyamik Shiksha Abhiyan-respondent No.3. The respondent No.3 has invited tenders for outsourcing the employees to work as Computer Operator, Stenographer, Clerk, Peon and other category as service provider company. The conditions for submitting tender has been brought on record by the petitioner. Clause 6, 7, 8 and 13 of which provides as follows:

"6. ई०पी०एफ० सर्विस टैक्स एवं अन्य वैधानिक देयताओं इत्यादि को जमा करने की जिम्मेदारी पूर्णतः निविदादाता की होगी एवं इस हेतु निविदादाता को ही प्रिंसिपल इम्प्लॉयर माना जायेगा| सर्विस टैक्स व ई०पी०एफ० जमा करने के पश्चात् कार्यालय में जमा चालान की सत्यापित प्रति एवं कार्मिक वार ई०पी०एफ० पासबुक का सत्यापित लेखा प्रस्तुत करने के उपरांत ही व्यय की प्रतिपूर्ति की जाएगी|

7. सफल निविदा दाताओं को रु 3.00 लाख परफॉरमेंस सिक्योरिटी (Performance Security) बैंक गारंटी/ एफ० डी० आर० / डी०डी० की रूप में संलग्न करनी होगी जो राज्य परियोजना निदेशक, उत्तर प्रदेश माध्यमिक शिक्षा अभियान लखनऊ की नाम देय होगी तथा जिसकी वैधता अवधि अनुबंध तिथि से न्यूनतम 01 वर्ष होगी | सफल निविदा दाताओं को उक्त धनराशि अनुबंध की अवधि पूर्ण होने की 03 माह बाद अनुबंध की पुनः नवीनीकरण न होने की स्थिति में वापस कर दी जाएगी |

8. किसी भी अथवा समस्त निविदाओं को बिना कारण बताये निरस्त करने का अधिकार राज्य परियोजना निदेशक, उत्तर प्रदेश माध्यमिक शिक्षा अभियान, लखनऊ के पास सुरक्षित होगा| यदि किसी भी समय किसी भी स्तर पर कोई गलती/ त्रुटि प्रकाश में आती है या कोई टेक्नीकल / वित्तीय त्रुटि सामने आती है तो विभाग को अधिकार होगा कि प्रथम न्यूनतम निविदा दाता की निविदा निरस्त करते हुए दितीय-न्यूनतम निविदादाता की निविदा को अनुमोदन प्रदान किया जा सकता है|

13. आर्बिट्रेशन की स्थिति में राज्य परियोजना निदेशक, उत्तर प्रदेश माध्यमिक शिक्षा अभियान, लखनऊ का निर्णय अंतिम होगा एवं दोनों पक्षों को मान्य होगा|

18. The petitioner company was obliged to deposit E.P.F., service tax and other legal dues and company was to be considered as Principal Employer. The Director of State Project Department was entitled to terminate these proceedings on the basis of any mistake, technically or financially, which came to knowledge of the department. Agreement was to be entered into between the department and petitioner company for a period of one year. The employees engaged under the conditions of agreement were not to be treated on pay roll. The Director of State Project Department was authorized to conduct arbitration proceedings if any dispute arises between the parties. Successful company, which participated in the tender proceedings would have to furnish performance security amounting to Rs.3,00,000/-.

19. The petitioner company participated in the tender proceedings conducted by the respondent State Project Department and he was declared successful on the basis of lowest rate offered by the petitioner company. Vide letter dated 28.12.2017 the petitioner company was invited to execute agreement on 01.01.2018, in pursuance of which agreement dated 01.01.2018 (Annexure-5) was executed between the respondent No.1 and the petitioner company for the period of one year. Clause-3, 6, 8 and 12 of the said agreement provides as follows:

"3. That the second party will require to make the payment to the first party (Service Provider) against the service of Computer Operator, Stenographer, Clerk, Peon and Others engaged by the first party, as per the following rate and details enclosed at annexure-A:-

a. Honorarium of Computer Operator, Stenographer, Clerk Rs. 18750/- per month and peon Rs. 1,0000/- per month.

b. Plus service Charges of Service Provider @ 0.01 paisa per person (as mentioned in your tender document) which will be charged on the amount of Honorarium only.

c. EPF and ESI as per applicable norms and rates.

d. GST as per applicable rates at the time of monthly billing.

e. Honorarium shall be subject to revision.

6. It is mandatory on the part of the first party to transfer the amount of honorarium into the account of the concerned employees within maximum two working days from the date of credit of amount of honorarium into the account of the first party (Service Provider). Failing which full service charges will be deducted from the bill of next/subsequent month of the first party (service provider).

8. Under any circumstances if the first party is found to be guilty of unauthorized deduction/recovery of any amount from the honorarium payable to any employee except EPF and ESI deductions wherever applicable, the second party shall be free to terminate the agreement with immediate effect and the Bank Guarantee/FDR of Rs. 3,00,000/- deposited towards performance security will be forfeited.

12. This contract is deemed to have been signed at Lucknow. Courts in Lucknow will have jurisdiction in any suit arising out of any dispute over this contract/agreement service rendered thereunder payments and damages arising therefrom. Keeping in view the services of the service provider, if the services of the service provider are not required in future, this service agreement will be terminated after giving 15 days' notice.

20. The petitioner vide letter dated 04.01.2018 (Annexure-6) completed the formalities according to the conditions mentioned in the agreement dated 01.01.2018. F.D.R. for Rs.3,00,000/- as performance security was also deposited by the petitioner company. Vide letter dated 04.01.2018 and 05.02.2018 the petitioner company had asked the respondent No.3 to issue work order.

21. It is mentioned in the letter dated 05.02.2018 that if old employees were to be absorbed and taken over by the petitioner company for outsourcing to the State Project Department, then original educational qualification certificates, Aadhar Card, pass book and two photographs of those employees were required for registration in the office of the company. These employees did not appear on 05.02.2018 at the office of the petitioner company. It was also mentioned in this letter that if U.A.N. Number of any employee or registration with E.S.I. was available, then these certificates, photographs, U.A.N. Number, passbook and E.S.I. card should be obtained from the old company and be provided to the petitioner company, so that these employees would have to be taken over by the petitioner company.

22. Therefore, petitioner company itself offered to adjust the old employees for the purpose of outsourcing to the State Project Department of the respondents. There is no substance in the argument of the learned counsel for petitioner that old employees were not to be taken over or adjusted by the petitioner company according to the conditions of agreement dated 01.01.2018. The petitioner company is bound by the principle of estoppel and acquiescence.

23. The respondent No.3 vide letter dated 07.02.2018 provided the list of employees to be adjusted with the petitioner company for the purpose of outsourcing, which was never objected by the petitioner company. It has not raised any objection to take over these employees working with the respondents department through earlier company which provided these employees to the respondents. It has only required the original documents of these employees, i.e., U.A.N. Number, passbook, E.S.I. Card, etc.

24. On 01.01.2018 respondent No.3 provided two lists of 31 and 2 employees respectfully specifying the amount of honorarium of these employees along with their nature of work. Vide letter dated 07.02.2018, in continuation of list dated 01.01.2018 the petitioner company was required by respondent No.3 to produce the bill according to both the lists of 31 employees and 2 employees.

25. The respondent No.3 issued a show cause notice dated 15.02.2018 (Annexure-9) to the petitioner company mentioning in it that employees made a complaint that petitioner was extorting/ receiving the money from these employees on the pretext of registration fee. It was informed to the petitioner company that its action was conducted in violation of Clause-8 of the agreement, therefore why the agreement should not be terminated immediately and bank guarantee furnished by the petitioner company should not be forfeited.

26. The petitioner company vide reply dated 17.02.2018 has apprised respondent No.3 the requirement of registration of employees and payment of registration fee to the company by the employees. It is mentioned in this reply that petitioner company at the point of time of execution of agreement through the representative of Company, apprised the respondent No.3 and Finance Officer about the rules of the company for registration of employees outsourced by it. The company was obliged to maintain KYC record in physical as well as in digital form and these employees are required to be registered with different departments of the Government, therefore, registration fee and other expenses were required to be deposited by these employees which were to be outsourced through petitioner company. The details of expenses and amount received Rs.650/- and the amount Rs.50/-, total Rs.700/- per employee was received by the petitioner company as registration fee. The amount of Rs.50/- was to be given to a person who performed the formalities of each employee for their registration in the departments.

27. Therefore, the petitioner company admitted in its reply dated 17.02.2018 (Annexure-10) that the company received an amount of Rs.700/- on the pretext of registration of each employee. The registration fee could not be received by the petitioner company as it was not authorized according to the terms and conditions of agreement dated 01.01.2018. On the other hand it was specifically mentioned in the conditions of tender that E.P.F., Service Tax and other legal dues were only to be deposited by the petitioner company.

28. Likewise, it was prescribed in the condition No.8 that if petitioner company is found to be guilty of unauthorized deduction/ recovery of any amount from the honorarium payable to any employee, except E.P.F. and E.S.I. deductions, wherever applicable, the respondent No.3, the second party shall be free to terminate the contract with immediate effect and the amount of Rs.3,00,000/- towards performance security will be forfeited.

29. The respondent No.3, by invoking condition No.8 of the agreement dated 01.01.2018 has found that petitioner company has accepted this fact that it received an amount of Rs.700/- from each employee for their registration, for which petitioner company was not entitled to recover it from any employee. Therefore, on 20.02.2018 the order terminating the contract of the petitioner on the basis of violation of Clause-8 of agreement was passed by the respondent No.1.

30. The petitioner company was acquainted with the condition No.13 of tender which was regarding arbitration for settlement of disputes between the parties and Clause-12 of the agreement dated 01.01.2018 for institution of suit on any dispute which arose between the parties to this contract/ agreement, service rendered thereunder, payment and damages arisen therefrom. It was also stipulated that Courts in Lucknow will have jurisdiction for hearing any such suit.

31. The petitioner company was aware of these conditions of arbitration and civil suit from the very beginning from the stage of tender process. Now, the petitioner company cannot invoke jurisdiction under Article 226 of the Constitution of India for the reasons that the acts relating to violation of Clause-8 of the agreement dated 01.01.2018 have to be appreciated and evaluated on the basis of evidence adduced by both the parties. These facts cannot be appreciated and evaluated by this Court during the proceedings of writ jurisdiction. The dispute relating to termination of agreement dated 01.01.2018 is purely of civil nature. The petitioner company may invoke Condition No.13 of the tender and Condition No.12 of the agreement by instituting a civil suit before civil court or for referring the matter to the Arbitrator, Director of the State Project Department for settlement of its dispute regarding termination of its agreement.

32. We, after considering the facts and circumstances of this case find that the dispute between the parties is purely civil in nature, this Court is not inclined to invoke equitable writ jurisdiction under Article 226 of the Constitution of India. The Hon'ble Apex Court, Full Bench and the Division Bench of this Court has propounded the exposition of law that the disputes of contract which are purely of civil nature, the writ petition under Article 226 of the Constitution of India cannot be entertained. The contentions of both the parties based on facts can only be appreciated during the proceedings before the competent civil court or before the arbitration proceedings conducted before the Arbitrator.

Exposition of law on the point of dispute of civil nature:-

33. We have perused the above-mentioned exposition of law propounded by Hon'ble Apex Court and of this Court and perused record of this writ petition. The facts and circumstances of this petition have to be considered for application of this exposition of law. The following exposition of law propounded by the Hon'ble Apex Court and this Court are relevant for alternate remedy and disputes of purely civil nature:-

Hon'ble Supreme Court in the case of Hindustan Petroleum Corporation Ltd. and Another Vs. Dolly Das : (1999) 4 SCC 450 (decided on 13.4.1999) has observed as follows:

7. In the absence of constitutional or statutory rights being involved a writ proceeding would not lie to enforce contractual obligations even if it is sought to be enforced against the State or to avoid contractual liability arising thereto. In the absence of any statutory right Article 226 cannot be availed to claim any money in respect of breach of contract or tort or otherwise.

Hon'ble Supreme Court in the case of Kerala State Electricity Board & Anr. vs. Kurien E. Kalathil & Ors. : (2000) 6 SCC 293 (decided on 19.7.2000) has observed 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......

....... 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.

The Full Bench of this court in the case of Indian Sugar Mills Association through its President Shri Hari Raj Swarup Vs. Secretary to Government, Uttar Pradesh, Labour Department and Others : AIR 1951 All 1 (decided on 14.8.1950) has observed as follows:

11. Those remarks are with reference to a suit. They are much more applicable to proceedings under Article 226 which are of a summary and of a coercive nature without providing for a normal trial or a right of appeal except in those cases where a substantial question of interpretation of the constitution arises. This Court is being flooded with applications under Article 226 of the Constitution which is seriously, affecting the normal work of the Court. We feel that the time has come when we may point out that Article 226 of the Constitution was not intended to provide an alternative method of redress to the normal process of a decision in an action brought in the usual courts established by law. The powers under this article should be sparingly used and only in those clear cases where the rights of a person have been seriously infringed and he has no other adequate and specific remedy available to him.

The Division Bench of this Court in the case of WRIT - C No. - 42697 of 2002 M/S Jai Goswami Electric Works Alld. Vs. Union Of India Thru' D.R.M. & Others (decided on 19.5.2016) has observed as follows:

In this case in para 3 facts have been narrated

3. Petitioner is Railway Contractor and pursuant to an agreement for work, he has performed some work but his payment has not been made. Since payment has been approved by competent authority, therefore, prayer has been made that respondents be directed to make payment.

........ Hon'ble division Bench after considering the above mentioned proposition of law propounded by Hon'ble Supreme Court and various precedents / decision of Division Benches of this court has observed in para 12 as follows:

12. In view thereof, we are clearly of the view that mandamus sought by petitioner is nothing but grant of a money decree in extraordinary equitable jurisdiction under Article 226 which ought not to have been granted.

The Division Bench of Hon'ble Allahabad High Court in the case of Kaka Advertising Agency vs. U.P. Technical University and Ors. (ALLHC) 2014 (11)ADJ 227 has observed as follows:

7. In the present case, once a serious matter relating to the evasion of service tax is alleged and drawn to the notice of the first respondent by the revenue authorities and the first respondent has been informed both of the pending investigation as well as to disclose documentary material, it cannot be held that the claim falls within that category where it can be ascertained that there is absolutely no defence or that a mandamus would be warranted. Even in the present case, we may reiterate that while exercising the discretion on whether or not to entertain a writ petition under Article 226 in a contractual matter where a mandamus is sought which would have the effect of decreeing a money claim, the Court must also deal with the issue as to whether a writ petition would be an appropriate remedy when other remedies under the ordinary civil law are available. For instance, a summary remedy in accordance with the procedure established under Order 37 of the Code of Civil Procedure, 1908 is available even where the claim is founded inter alia on a written contract for a liquidated sum. If such a claim is filed, the recipient is required to make a suitable defence for being granted leave to defend and the plaintiff is not relegated to the remedy of pursuing a long drawn trial, if the defence is frivolous. Exercising the jurisdiction under Article 226 evidently forecloses a defence of this nature, which would have to be evaluated on the facts of each case. This can more appropriately be carried out when a suit is filed. In the light of the facts which have been brought to the notice of the Court, we are of the view that this is not a fit and proper case for exercising the discretion by the Court under Article 226 to entertain a petition seeking a mandamus for the payment of bills and the petitioner ought to be relegated to the ordinary civil remedy.

We clarify that we have not made any finding on the merits of the case since we have declined to exercise the extraordinary jurisdiction under Article 226.

The petition is, accordingly, dismissed. There shall be no order as to costs.

The Division Bench of Hon'ble Allahabad High Court in the case of Budh Gramin Sansthan Vs. State of U.P. (ALLHC) 2014 (7)ADJ 29 (decided on 30.4.2014) has observed as follows-:

3. In view of the defence which has been set up by the State, it would not be appropriate, in our view, to entertain the petition under Article 226 of the Constitution and pass an order, that would essentially be a money decree. At the least, the defence would raise issues on which evidence would have to be adduced before a Civil Court. Quite independently of that, in a matter of this nature, remedies are available either in the form of a suit under Order XXXVII of the Code of Civil Procedure, 1908 or in the form a complaint under section 138 of the Negotiable Instruments Act, 1888. The High Court must exercise a great deal of circumspection in granting relief of the nature sought, particularly when facts are brought to the notice of the Court which indicate that the State seeks to establish a defence on facts.

4. In a judgment of this Court dated 24 February, 2014 in M/s. R.S. Associate v. State of U.P. and others, (Writ-C No. 11544 of 2014), this Court declined to entertain a similar petition. The Court, inter alia, held as follows:

"2. These are purely contractual matters and we are not inclined to entertain a petition under Article 226 of the Constitution in this regard. Whether the work under the contract has been satisfactorily carried out; whether the rates quoted are in accordance with the terms of the agreement and the applicable schedule of rates; whether the work has been carried out properly are issues which have to be addressed, among other questions, by the competent authority before an appropriate decision is taken. The jurisdiction of the Court under Article 226 of the Constitution cannot appropriately be exercised in such matters. The remedy of the contractor, if he is aggrieved by non-payment, 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.

3......

4. On the other hand, we have heard this petition for final disposal and we are firmly of the view that it will not be appropriate for this Court to exercise jurisdiction in the matter. It is true that there is no absolute bar in entertaining a petition in a contractual matter. However, in cases such as the present, several issues on facts which have been noted in the earlier part of this judgment have to be determined by the competent authority. The exercise of jurisdiction under Article 226 is not warranted for what the petitioner seeks in essence is a decree in a civil suit which cannot be granted in this proceeding, particularly having regard to the nature of the issues involved. The Court, therefore, declines to entertain this petition."

The Division Bench of Hon'ble Allahabad High Court in the case of Alaska Tech vs. State of U.P. (ALLHC) 2014 (6)ADJ 591 (decided on 8.5.2014) has observed as follows:

6. For convenience of reference, it would be appropriate to extract the relevant part of the order of the Division Bench which reads as follows:

Instant writ petition under Article 226 of the Constitution of India has been preferred by the petitioner for issuance of writ in the nature of mandamus commanding the respondents to pay an amount of ` 1,34,71,670/- alongwith interest @ 18 per cent as outstanding dues for contractual work.

According to Shri H.G.S. Parihar learned Senior Counsel, petitioner had supplied spare parts but in spite of satisfactory supply, payment to the tune of ` 1,34,71,670/- has not been paid to the petitioner.

Attention has been invited towards para 8 of the counter-affidavit in which it has been stated that outstanding dues is to the tune of ` 1,20,00,000/-.

However, Shri S.S. Chauhan learned Counsel for the Nagar Nigam while defending the action of Nagar Nigam invited attention towards para 14 of the counter-affidavit wherein it has been specifically pleaded that enquiry is pending with the Economic Offence Wing and Dinesh Kumar Foreman has been charged for the fabrication of bill. Submission is that Economic Offence Wing is investigating the matter with regard to liability of Nagar Nigam.

According to Shri S.S. Chauhan learned Counsel for the Nagar Nigam that manipulation has been done with regard to preparation of bill and Economic Offense Wing has been directed to hold an inquiry. It is submitted that amount in question is also subject-matter of inquiry by the Economic Offence Wing.

Keeping in view the arguments advanced and the averments contained in counter-affidavit, no case for issuance of writ in the nature of mandamus is made out. Mandamus may be issued by this Court in case, there is some violation of statutory duty followed by statutory rights. Disputed question of fact can be adjudicated only through competent Court in a regular suit or before other statutory forum. It is not for this Court to interfere under Article 226 of the Constitution of India where a disputed question of fact is raised. High Court in exercise of jurisdiction under Art. 226 of constitution, would ordinarily not adjudicate a matter where the foundational facts are disputed vide Sughashree Das v. State of Orissa 2012(9) SCC 729.

In view of above, no case for interference is made out. Dismissed.

However, order passed by this Court shall not preclude the petitioner to approach appropriate forum or authority concerned.

The Division Bench of Hon'ble Allahabad High Court in the case of MISC. BENCH No. - 3898 of 2015 on 13.5.2015 Uttaranchal Paper Converters & Publishers Thru. Prop. Vs. The State Of U.P. Thru. Secy. Basic Education & 10 Ors. (decided on 13.5.2015) has observed as follows:

....... In our view, granting the relief which is sought in these proceedings, would virtually amount to a money decree. Since there is an arbitration agreement between the parties, the petitioner will have to invoke the terms of the agreement.

In a similar case, M/s R.S. Associate Vs. State of U.P. & Ors.1, a Division Bench of this Court had declined to entertain a prayer for similar reliefs with the following observations:

"These are purely contractual matters and we are not inclined to entertain a petition under Article 226 of the Constitution in this regard. Whether the work under the contract has been satisfactorily carried out; whether the rates quoted are in accordance with the terms of the agreement and the applicable schedule of rates; whether the work has been carried out properly are issues which have to be addressed, among other questions, by the competent authority before an appropriate decision is taken. The jurisdiction of the Court under Article 226 of the Constitution cannot appropriately be exercised in such matters. The remedy of the contractor, if he is aggrieved by non payment, 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.

............It is true that there is no absolute bar in entertaining a petition in a contractual matter. However, in cases such as the present, several issues on facts which have been noted in the earlier part of this judgement have to be determined by the competent authority. The exercise of jurisdiction under Article 226 is not warranted for what the petitioner seeks in essence is a decree in a civil suit which cannot be granted in this proceeding, particularly having regard to the nature of the issues involved.

The Court, therefore, declines to entertain this petition."

Following the earlier view of the Division Bench and for the reasons indicated above, we decline to entertain the petition and relegate the petitioner to invoke the terms of the arbitration agreement.

The petition is, accordingly, dismissed. There shall be no order as to costs.

The Division Bench of Hon'ble Allahabad High Court in the case of MISC. BENCH No. - 3472 of 2014 Major Travels Thru. Prop. Mujtaba Ali Khan Vs. State Of U.P. Thru Princ. Secy. Minorities Welfare Waqf And others (decided on 25.4.2014) has observed as follows:

......The reliefs which are claimed are purely in terms of money decree for the payment of work allegedly due in respect of bills submitted for execution of certain work orders. Such reliefs cannot be granted in exercise of a writ jurisdiction under Article 226 of the Constitution. Significantly, the contract in the present case is not a statutory contract where a limited exception has been made by the Supreme Court. The petitioner would have to take recourse to the ordinary civil remedy for espousing the claim.

The petition is, accordingly, dismissed. There shall be no order as to costs.

The Division Bench of Hon'ble Allahabad High Court in the case of MISC. BENCH No. - 1909 of 2014 M/S A.K. Constructions Through Its Partner A. K. Chaturvedi Vs. State Of U.P. Thr. Prin. Secy. Deptt. of Forests, Lucknow & Others (decided on 7.3.2014) has observed as follows:

......In the event, the contract contains an arbitration agreement, the petitioner would have an ordinary remedy of invoking arbitration and if there is no arbitration clause, then the petitioner would have an ordinary civil remedy for claiming money decree by way of filing a civil suit. The petitioner may either invoke the arbitration clause (if it exists) and if there is no arbitration clause, may file a money claim before the competent civil court but the relief sought in this petition cannot be granted in exercise of the writ jurisdiction under Article 226 of the Constitution, as this Court cannot entertain a claim of this nature seeking essentially a money decree in a contractual matter.

The writ petition is, accordingly, dismissed. We leave it open to the petitioner to take recourse to the remedies available to him in law.

The Division Bench of Hon'ble Allahabad High Court in the case of MISC. BENCH No. - 10971 of 2015 M/S Goyal Stationary Mart Thru Its Prop. Ajay Kr. Goyal Vs. State Of U.P. Thru Prin. Secy. Medical And Health Lko.& Ors. (decided on 27.11.2015) has observed as follows:

.......We may observe that while exercising the discretion as to whether a writ petition under Article 226 of the Constitution of India, in a contractual matter, where a writ in the nature of mandamus is sought for payment of money (which would have the effect of passing a money decree) may be entertained, the Court has also to deal with the issue as to whether the writ petition would be an appropriate remedy when other remedies are available under ordinary civil law.

Admittedly, the claim of the petitioner is that the payment in respect of the work done pursuant to the award of a contract for carrying out certain construction work has not been made. This Court in a judgment dated 07.03.2014 in Writ Petition No. 1942 (MB) of 2014 has declined to entertain such a writ petition raising an issue similar to the issue raised in this writ petition. The relevant observations made by the Division Bench in its judgment dated 07.03.2014 in Writ Petition No. 1942 (MB) of 2014 are as follows:-

"The claim of the petitioner is that the final payment in respect of the work done pursuant to the award of a contract for carrying out certain civil work has not been effected.

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.

We, accordingly, dismiss the petition, however, reserving liberty to the petitioner to pursue appropriate remedy available in law."

In view of the above settled position of law, we are not inclined to interfere in this writ petition.

The Division Bench of Hon'ble Allahabad High Court in the case of WRIT- C No. - 25075 of 2014 M/S Prabhu Construction Company Through Its Proprietor Vs. State Of U.P. And Another (decided on 05-05-2014) has observed as follows:

......This is a purely contractual matter and we are not inclined to entertain a petition under Article 226 of the Constitution in this regard. Whether the work under the contract has been satisfactorily carried out and whether the rates quoted are in accordance with the terms of the agreement and the applicable schedule of rates are issues which have to be addressed, among other questions, by the competent authority before an appropriate decision is taken. The jurisdiction of the Court under Article 226 of the Constitution cannot appropriately be exercised in such matters.

This court after considering precedents of Hon'ble Supreme Court in Kerala State Electricity Board & Anr. Vs. Kurien E.Kalathil & Ors.(2000)6SCC293 and In Hindustan Petroleum Corporation Limited & Anr. Vs. Dolly Das (1994)4SCC450 , also observed as follows -

......In the present case, there is nothing on the record which may persuade us to hold that the contract is a statutory contract. The remedy of the contractor, if he is aggrieved by non-payment, 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.

Recently, this Bench in M/s R.S. Associate Vs. State of U.P. & Ors.3 declined to entertain a petition which had been filed for making payment of bills under a contract.

Following the aforesaid decisions, we decline to entertain this petition. It is, accordingly, dismissed.

The Division Bench of Hon'ble Allahabad High Court in the case of WRIT - C No. - 11544 of 2014 M/S R.S. Associate Thru' Prop. Reeta Singh Vs. State Of U.P. & 3 Others (decided on 24-2-2014) has observed as follows:

The petitioner entered into a contract on 23 September 2010 with the Irrigation Department inter alia for the supply of bolders, ropes for labourers and sand bags. The grievance is in regard to non payment of the bills. The petitioner seeks a mandamus to the State, the Chief Engineer and the Executive Engineer in the Irrigation Department to pay the bills together with interest.

2. These are purely contractual matters and we are not inclined to entertain a petition under Article 226 of the Constitution in this regard. Whether the work under the contract has been satisfactorily carried out; whether the rates quoted are in accordance with the terms of the agreement and the applicable schedule of rates; whether the work has been carried out properly are issues which have to be addressed, among other questions, by the competent authority before an appropriate decision is taken. The jurisdiction of the Court under Article 226 of the Constitution cannot appropriately be exercised in such matters. The remedy of the contractor, if he is aggrieved by non payment, 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.

......4. On the other hand, we have heard this petition for final disposal and we are firmly of the view that it will not be appropriate for this Court to exercise jurisdiction in the matter. It is true that there is no absolute bar in entertaining a petition in a contractual matter. However, in cases such as the present, several issues on facts which have been noted in the earlier part of this judgement have to be determined by the competent authority. The exercise of jurisdiction under Article 226 is not warranted for what the petitioner seeks in essence is a decree in a civil suit which cannot be granted in this proceeding, particularly having regard to the nature of the issues involved. The Court, therefore, declines to entertain this petition.

5. The petition is, accordingly, dismissed. There shall be no order as to costs.

34. The following case laws of the Hon'ble Apex Court are relevant on the point when powers under Article 226 of the Constitution of India can be invoked by the Writ Court and in which circumstances these powers should not be invoked.

Hon'ble Supreme Court has considered the case law of L. Chandra Kumar Vs. Union of India and others (supra) of Hon'ble Seven Judges' Constitutional Bench in paragraph-78, 80 and 99 and in T. K. Rangarajan Vs. Govt. of T. N. and others: AIR 2003 SC 3032 Hon'ble Apex Court in paras-5 and 6 has observed as follows:

78. The legitimacy of the power of courts within constitutional democracies to review legislative action has been questioned since the time it was first conceived. The Constitution of India, being alive to such criticism, has, while conferring such power upon the higher judiciary, incorporated important safeguards. An analysis of the manner in which the Framers of our Constitution incorporated provisions relating to the judiciary would indicate that they were very greatly concerned with securing the independence of the judiciary. [ See Chapter VII, "The Judiciary and the Social Revolution" in Granville Austin, The Indian Constitution : Cornerstone of a Nation, Oxford University Press, 1972; the chapter includes exhaustive references to the relevant preparatory works and debates in the Constituent Assembly.] These attempts were directed at ensuring that the judiciary would be capable of effectively discharging its wide powers of judicial review. While the Constitution confers the power to strike down laws upon the High Courts and the Supreme Court, it also contains elaborate provisions dealing with the tenure, salaries, allowances, retirement age of Judges as well as the mechanism for selecting Judges to the superior courts. The inclusion of such elaborate provisions appears to have been occasioned by the belief that, armed by such provisions, the superior courts would be insulated from any executive or legislative attempts to interfere with the making of their decisions. The Judges of the superior courts have been entrusted with the task of upholding the Constitution and to this end, have been conferred the power to interpret it. It is they who have to ensure that the balance of power envisaged by the Constitution is maintained and that the legislature and the executive do not, in the discharge of their functions, transgress constitutional limitations. It is equally their duty to oversee that the judicial decisions rendered by those who man the subordinate courts and tribunals do not fall foul of strict standards of legal correctness and judicial independence. The constitutional safeguards which ensure the independence of the Judges of the superior judiciary, are not available to the Judges of the subordinate judiciary or to those who man tribunals created by ordinary legislations. Consequently, Judges of the latter category can never be considered full and effective substitutes for the superior judiciary in discharging the function of constitutional interpretation. We, therefore, hold that the power of judicial review over legislative action vested in the High Courts under Article 226 and in this Court under Article 32 of the Constitution is an integral and essential feature of the Constitution, constituting part of its basic structure. Ordinarily, therefore, the power of High Courts and the Supreme Court to test the constitutional validity of legislations can never be ousted or excluded.

80. However, it is important to emphasise that though the subordinate judiciary or Tribunals created under ordinary legislations cannot exercise the power of judicial review of legislative action to the exclusion of the High Courts and the Supreme Court, there is no constitutional prohibition against their performing a supplemental -- as opposed to a substitutional -- role in this respect. That such a situation is contemplated within the constitutional scheme becomes evident when one analyses clause (3) of Article 32 of the Constitution which reads as under:

"32. Remedies for enforcement of rights conferred by this Part.--

(1) ***

(2) ***

(3) Without prejudice to the powers conferred on the Supreme Court by clauses (1) and (2), Parliament may by law empower any other court to exercise within the local limits of its jurisdiction all or any of the powers exercisable by the Supreme Court under clause (2)."

(emphasis supplied)

99. ............... The jurisdiction conferred upon the High Courts under Articles 226/227 and upon the Supreme Court under Article 32 of the Constitution is part of the inviolable basic structure of our Constitution. While this jurisdiction cannot be ousted, other courts and Tribunals may perform a supplemental role in discharging the powers conferred by Articles 226/227 and 32 of the Constitution. The Tribunals created under Article 323A and Article 323B of the Constitution are possessed of the competence to test the constitutional validity of statutory provisions and rules. All decisions of these Tribunals will, however, be subject to scrutiny before a Division Bench of the High Court within whose jurisdiction the concerned Tribunal falls. The Tribunals will, nevertheless, continue to act like Courts of first instance in respect of the areas of law for which they have been constituted. It will not, therefore, be open for litigants to directly approach the High Courts even in cases where they question the vires of statutory legislations (except where the legislation which creates the particular Tribunal is challenged) by overlooking the jurisdiction of the concerned Tribunal. Section 5(6) of the Act is valid and constitutional and is to be interpreted in the manner we have indicated.

Although the Hon'ble Apex Court has dealt with function of Tribunals constituted under Article 323A and 323B of the Constitution of India but functions of subordinate courts have also been discussed by Hon'ble Apex Court and ratio-decidendi is that litigants cannot straightaway approach this Court under 226 and the Hon'ble Supreme Court under Article 32 of the Constitution of India. The litigants must approach Courts of first instance in respect of the areas of law for which they have been constituted.

The Hon'ble Supreme Court in the case of Satwati Deswal Vs. State of Haryana : 2010 (1) SCC 126, while dealing with a service matter, in paras-5 and 6, inter alia, observed as follows:-

Para 5. In our view, the High Court had fallen in grave error in rejecting the writ petition on the aforesaid ground. First, such an order of termination was passed without issuing any show-cause notice to the appellant and without initiating any disciplinary proceedings by the authorities and without affording any opportunity of hearing. It is well settled that a writ petition can be held to be maintainable even if an alternative remedy is available to an aggrieved party where the court or the tribunal lacks inherent jurisdiction or for enforcement of a fundamental right; or if there had been a violation of a principle of natural justice; or where vires of the Act were in question.

Para 6. The aforesaid exceptions recognised by this Court were taken note of by this Court in Collector of Customs v. Ramchand Sobhraj Wadhwani [AIR 1961 SC 1506] in which the Constitution Bench laid down the principles of the above exceptions when writ application could be entertained even if an alternative remedy was available to an aggrieved party. The same view was expressed by this Court in L.K. Verma v. HMT Ltd. [(2006) 2 SCC 269 : 2006 SCC (L&S) 278 : AIR 2006 SC 975] and M.P. State Agro Industries Development Corpn. Ltd. v. Jahan Khan [(2007) 10 SCC 88 : (2008) 1 SCC (L&S) 9 : AIR 2007 SC 3153].

In the case of S.J.S. Business Enterprises (P) Ltd. Vs. State of Bihar & Ors. : (2004) 7 SCC 166, the Hon'ble Supreme Court held as follows:-

14. Assuming that the explanation given by the appellant that the suit had been filed by one of the Directors of the Company without the knowledge of the Director who almost simultaneously approached the High Court under Article 226 is unbelievable (sic), the question still remains whether the filing of the suit can be said to be a fact material to the disposal of the writ petition on merits. We think not. The existence of an adequate or suitable alternative remedy available to a litigant is merely a factor which a court entertaining an application under Article 226 will consider for exercising the discretion to issue a writ under Article 226. But the existence of such remedy does not impinge upon the jurisdiction of the High Court to deal with the matter itself if it is in a position to do so on the basis of the affidavits filed. If, however, a party has already availed of the alternative remedy while invoking the jurisdiction under Article 226, it would not be appropriate for the court to entertain the writ petition. The rule is based on public policy but the motivating factor is the existence of a parallel jurisdiction in another court.

In the case of Ritesh Tewari Vs. State of U.P. : AIR 2010 SC 3823, the Apex Court found the occasion to consider the scope of exercise of Writ jurisdiction by High Courts under Article 226 of the Constitution as under:-

Para 20. The power under Article 226 of the Constitution is discretionary and supervisory in nature. The extraordinary power in the writ jurisdiction does not exist to set right mere errors of law which do not occasion any substantial injustice. A writ can be issued only in case of a grave miscarriage of justice or where there has been a flagrant violation of law.

The writ court has to protect a person from being subjected to a flagrant violation of law by the acts and omissions of the administrative/ executive authorities/ officers.

The Constitution does not place any fetter on the power of the extraordinary jurisdiction but leaves it to the judicious discretion of the court.

A court of equity, when exercising its equitable jurisdiction must act so as to prevent perpetration of a legal fraud and promote good faith and equity.

24. This Court in State of Maharashtra & Ors. V/s. Prabhu (1994) 2 SCC 481 considered the scope of equity jurisdiction of the High Court under Article 226 of the Constitution and pointed out as follows:

"It is the responsibility of the High Court as custodian of the Constitution to maintain the social balance by interfering where necessary for sake of justice and refusing to interfere where it is against the social interest and public good."

The Hon'ble Supreme Court in the case of Sanjana M. Wig Vs. Hindustan Petro Corporation Ltd. : 2005 (8) SCC 242, while dealing with the scope of Article 226 of the Constitution of India, in para-14 has observed as follows:-

(14). A Division Bench of this Court in ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd. [(2004) 3 SCC 553 : JT (2003) 10 SC 300] observed that in certain cases even a disputed question of fact can be gone into by the court entertaining a petition under Article 226 of the Constitution, holding:

"28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1].) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction."

The Hon'ble Supreme Court in the case of M.P. State Agro Industries Development Corporation Ltd. Vs. Jahan Khan) : 2007 (10) SCC 88, inter alia, has observed as under:-

Para 10. ......In a given case, the High Court may not entertain a writ petition under Article 226 of the Constitution on the ground of availability of an alternative remedy, but the said rule cannot be said to be of universal application. The rule of exclusion of writ jurisdiction due to availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of the availability of an alternative remedy, a writ court may still exercise its discretionary jurisdiction of judicial review, in at least three contingencies, namely, (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. In these circumstances, an alternative remedy does not operate as a bar. (See Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] , Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [(2003) 2 SCC 107] , State of H.P. v. Gujarat Ambuja Cement Ltd. [(2005) 6 SCC 499] and Sanjana M. Wig v. Hindustan Petroleum Corpn. Ltd. [(2005) 8 SCC 242])

In the case of Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill : (2012) 2 SCC 108, Hon'ble Apex Court in paras-80 and 81 has observed as follows:

Para 80. It is a settled canon of law that the High Court would not normally interfere in exercise of its jurisdiction under Article 226 of the Constitution of India where statutory alternative remedy is available. It is equally settled that this canon of law is not free of exceptions. The courts, including this Court, have taken the view that the statutory remedy, if provided under a specific law, would impliedly oust the jurisdiction of the civil courts. The High Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India can entertain writ or appropriate proceedings despite availability of an alternative remedy. This jurisdiction, the High Court would exercise with some circumspection in exceptional cases, particularly, where the cases involve a pure question of law or vires of an Act are challenged. This class of cases we are mentioning by way of illustration and should not be understood to be an exhaustive exposition of law which, in our opinion, is neither practical nor possible to state with precision. The availability of alternative statutory or other remedy by itself may not operate as an absolute bar for exercise of jurisdiction by the courts. It will normally depend upon the facts and circumstances of a given case. The further question that would inevitably come up for consideration before the Court even in such cases would be as to what extent the jurisdiction has to be exercised.

Para 81. Should the courts determine on merits of the case or should they preferably answer the preliminary issue or jurisdictional issue arising in the facts of the case and remit the matter for consideration on merits by the competent authority? Again, it is somewhat difficult to state with absolute clarity any principle governing such exercise of jurisdiction. It always will depend upon the facts of a given case. We are of the considered view that interest of administration of justice shall be better subserved if the cases of the present kind are heard by the courts only where they involve primary questions of jurisdiction or the matters which go to the very root of jurisdiction and where the authorities have acted beyond the provisions of the Act. However, it should only be for the specialised tribunal or the appellate authorities to examine the merits of assessment or even the factual matrix of the case.

A Division Bench of this Court in Special Appeal No. 73 of 2012, Rajendra Prasad Upadhyaya Vs. State of U.P. and others, decided on 29.03.2012, has observed on page-4, 5 and 6 after considering the case law of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and others : (1998) 8 SCC, as follows:-

"The existence of alternative remedy is not an absolute bar, is a legal proposition, which does not require any detailed reasons. It is also not open to debate that in case an alternative efficacious remedy is available, the High Court normally would not interfere straight-way under Article 226 of the Constitution of India. It is also established principle of law that self restraint is exercised by the High Court in dealing with such matters, which otherwise can be looked into by the Special Forum or Statutory Authorities. Merely the bar in granting any interim relief by a Special Forum or Tribunal created for the purpose of adjudicating such disputes would also not be a ground in itself to permit the aggrieved person to by-pass the alternative remedy and to entertain the petition straight-way in writ jurisdiction unless there are some cogent reasons for permitting such a challenge straight-way in writ jurisdiction. The exceptions, however, have been well defined by the Apex Court as well as this Court in a number of judgements.

In the case of Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and others, [(1998) 8 SCC], the Supreme Court has laid down the principles for the guidance for the High Court in determining the forum in a matter where efficacious alternative remedy is available and has observed that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of Habeas Corpus; Mandamus; Prohibition, Quo Warranto and Certiorari, for the enforcement of any of the fundamental rights contained in Part-III of the Constitution but also for "any other purpose".

The Supreme Court further held that under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has discretion to entertain or not to entertain a writ petition but the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least following contingencies, namely,-

(i) where the writ petition has been filed for the enforcement of any of the Fundamental Rights; or

(ii) where there has been a violation of principle of natural justice; or

(iii) where the, order or proceedings are wholly without jurisdiction; or

(iv) the vires of an Act is challenged.

Division Bench of this Court in the aforesaid case has observed in page-21 that, "the Court while exercising its jurisdiction under Article 226 is duty-bound to consider whether:

(a) adjudication of writ petition involves any complex and disputed questions of facts and whether they can be satisfactorily resolved;

(b) the petition reveals all material facts;

(d) person invoking the jurisdiction is guilty of unexplained delay and laches;

(e) ex facie barred by any laws of limitation;

(f) grant of relief is against public policy or barred by any valid law; and host of other factors.

Division Bench on page-23 and 24 has summarized the legal position of law laid down by the Hon'ble Supreme Court as well as by this High Court regarding exercise of jurisdiction under Article 226 of the Constitution of India, which are as follows:-

(i) Statutory alternative remedy is not an absolute bar for the High Court to entertain a writ petition under Article 226 of the Constitution.

(ii) Refusal to entertain a writ petition on existence of statutory alternative remedy is a self imposed restriction broadly based on following considerations, namely;

(a) alternative remedy is adequate, efficacious and speedy.

(b) writ petitions involving complex and disputed question of facts may be relegated to statutory alternative forum;

(iv) If a writ petition has been entertained despite there being a statutory remedy, which may be adequate, and the said petition has remained pending for considerable long time then there would be little justification for relegating the petitioner to the alternative remedy, unless there are valid and cogent reasons for doing so.

(v) Even if there exists an adequate alternative, efficacious speedy remedy in the alternative forum, the High Court may entertain the writ petition in the following circumstances.

(a) for enforcement of any of the fundamental rights,

(b) where there has been a violation of principle of natural justice,

(d) the vires of the Act is challenged.

35. In the light of above mentioned expositions of law mentioned by us on the appropriate place, we do not find that the action of respondent No.3 suffers from vice of arbitrariness or is irrational and unfair. A show cause notice was issued by the respondent No.3 to the petitioner company before terminating the agreement. Serious allegations of exploitation by receiving the amount of Rs.700/- from each of employee were levelled by the employees against the petitioner company and considering this fact respondent No.3 has terminated the contract of petitioner company. It is pertinent to mention here that the petitioner company has accepted that it has received an amount of Rs.700/- from each employee. The case laws relied upon by the learned counsel for petitioner are of no help to the petitioner.

36. In view of the discussion made above, we do not find any merits in the writ petition. The writ petition is liable to be dismissed and is hereby dismissed. However, it is open for the petitioners to approach proper forum for redressal of their grievance as provided in Condition No.13 of the tender and Condition No.12 of the agreement.

Order Date :- 21.5.2018

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