Braithwaite And Co Ltd vs Union Of India
2024 Latest Caselaw 1217 AP

Andhra Pradesh High Court - Amravati

Braithwaite And Co Ltd vs Union Of India on 14 February, 2024

Author: Ninala Jayasurya

Bench: Ninala Jayasurya

                              1
                                                         NJS, J
                                                  WP_1300_2024


IN THE HIGH COURT OF ANDHRA PRADESH::AMARAVATI

     THE HON'BLE SRI JUSTICE NINALA JAYASURYA

             WRIT PETITION No.1300 of 2024

Between:-
Braithwaite and Co. Ltd., M/s Cognition
Projects Pvt. Ltd., Consortium, 5 Hide
Road, Kolkata-700043 Rep. by its
Authorized Person Mr Sundara Nanda
Barman S/o Ashutosh Barman, Aged
about 43 years R/o D.No.220/1. Raipur
Road. Regent Estate. Kolkata. West
Bengal.
                                                  .... Petitioner
                              And

Union of India, Rep. by its Chairman and
CEO, Railway Board, Room No.256A, Rail
Bhavan, Raisina Road, New Delhi, India
and others
                                               .... Respondents

Counsel for the Petitioner : Mr.C.V.Mohan Reddy, Senior
                             Counsel,     assisted   by
                             Mr.C.Prakash Reddy.

Counsel for the Respondents: Mr.B. Narasimha Sharma,
                           Additional Solicitor General,
                           assisted by Mr. Jupudi V.K.
                           Yagna Dutt.
ORDER:

This Writ Petition is filed, inter alia, to declare the order

of the 4th respondent - Chief Project Manager, East Coast

Railways, Waltair, in terminating the contract of "Major Up-

gradation of Visakhapatnam Railway Station of East Coast

NJS, J WP_1300_2024

Railway on Engineering, Procurement and Construction (EPC)

mode as arbitrary, illegal, without power or authority and

suffers from total non-application of mind and in violation of

Article 19 (1) (g) of the Constitution of India and to

consequently set aside the same.

BRIEF FACTS:

2) The relevant facts, as per the affidavit filed in support of

the Writ Petition, are, in brief, set out as under:

3) The 2nd respondent-The Rail Land Development Authority

issued a Request For Proposal (RFP) vide RFP Notice dated

14.06.2022, inviting proposals through e-tendering on single

stage two cover bidding system from interested eligible bidders

as per the conditions of bid documents for "Major UP-Gradation

of Visakhapatnam Railway Station of East Coast Railway on

Engineering, Procurement and Construction (EPC) Mode". M/s.

Braithwaite & Co. Ltd., (A Government of India Undertaking),

whose administrative control was taken over by the Ministry of

Railways from Ministry of Heavy Industries on 06.08.2010 and

M/s. Cognition Projects Pvt. Ltd., formed a consortium called

M/s. Braithwaite & Co. Ltd., and M/s. Cognition Projects Pvt.

Ltd., (Consortium) - M/s Braithwaite & Co. Ltd., as the lead

NJS, J WP_1300_2024

member of the said consortium, participated in the tender

process and emerged as selected bidder. Accordingly, a Letter

of Acceptance (LoA) was issued on 14.09.2022 specifying that

the period of the construction is 36 months from the

Appointed Date. The petitioner in terms of the LoA furnished

Performance Security of Rs.11,66,73,024/- on 07.10.2022 and

thereafter the 2nd respondent, on behalf of Her Majesty, the

President of India, entered into EPC Agreement

No.RLDA/2022/CA-04 with the petitioner Consortium on

15.11.2022.

4) The Agreement value is Rs.388,91,00,790/-. As per the

Agreement, the contract work has to be completed in

accordance with the specifications and drawings and

conditions of the Contract on or before 29.11.2025 and the

works shall be maintained for a period of 18 months from the

date of issue of completion certificate. After issuance of Letter

of Acceptance, joint site inspections were conducted on

19.09.2022, 16.10.2022 and 18.10.2022 and during the said

visits, Railway Officials instructed some major modifications in

the already approved Master Plan and the petitioner addressed

a letter dated 28.10.2022 for confirmation of the modifications.

NJS, J WP_1300_2024

On 03.11.2022 the respondents addressed a communication,

inter alia, stating that the Master Plan prepared also contain

provision for Additional two (02) railway tracks and one (1)

platform.

5) In view of the same, the scope of the work is revised

significantly as the area of the Air Concourse to be built as well

as the length of the Foot Over Bridge (FOB) is increased to a

considerable magnitude, resulting in enhancement in the cost

of construction. It also resulted in preparation of Master Plan

afresh and the Revised Master Plan was approved by the

respondents on 20.04.2023.

6) In the meanwhile, the respondents issued 15 days Notice

on 24.03.2023 for termination of contract alleging failure on

the part of the petitioner in achieving the project milestones.

The petitioner consortium submitted its reply on 05.04.2023

and the respondents did not take any further action.

Subsequently, the 4th respondent issued a Notice dated

06.11.2023 to which the petitioner submitted reply dated

16.11.2023. Thereafter, through the impugned proceedings

dated 26.12.2023, 4th respondent terminated the Contract /

NJS, J WP_1300_2024

Agreement. Challenging the same, the present Writ Petition is

filed.

PETITIONER'S SUBMISSIONS:

7) Mr. C.V.Mohan Reddy, learned Senior Counsel, made

elaborate submissions with reference to various Articles /

Terms of the Agreement.

8) Learned Senior Counsel submits that to the initial

showcause notice dated 24.03.2023, the petitioner submitted

detailed replies and satisfying with the explanation no further

action was taken by the respondents and the petitioner was

merely asked to expedite the works. He submits that though

in terms of the Agreement, the respondent authority shall

provide 'Right of Way' (RoW) to the contractor / petitioner and

provide free access for the execution of the works, the same

was not complied with. On the other hand, stating that there

are defaults on the part of the petitioner, another Notice dated

06.11.2023 was issued and a detailed reply, setting out all the

relevant aspects, was submitted on 16.11.2023. Learned

Senior Counsel submits that the 4th respondent without

appreciating the reply/explanation submitted by the petitioner

terminated the contract in an arbitrary manner. In elaboration

NJS, J WP_1300_2024

and with reference to the obligations of the Authority as

provided under Article 4 of the Agreement, he submits that in

terms of Clause 4.1.3, the Authority shall provide the

petitioner the 'RoW' in accordance with Clause 8.2 and all

forest clearances as required under Clause 4.3. He submits

that in terms of Clause 4.3, the petitioner prepared the

Environment Management Plan (EMP) and submitted for

approval of the Authority on 20.02.2023 and as seen from the

material filed along with Memo dated 10.02.2024 the same

was approved by the authority on 13.11.2023. He submits

that in the absence of approval of EMP, the petitioner cannot

proceed with the work and, therefore, there was no occasion to

the petitioner to proceed with the works.

9) Quoting Article 9 of the Agreement and Clause 9.4, which

deals with 'Felling of trees', he further contends that it is the

obligation of the Authority to remove the trees, which causes

obstruction to the project works and as seen from the material

on record there are more than 100 trees causing obstruction to

the works and only in April, 2023 steps were taken for removal

of the trees. Learned Senior Counsel further submits that in

the process of approving General Arrangement Drawing (GAD)

NJS, J WP_1300_2024

/ Master Plan so many changes were suggested by the

respondents and thereby the scope of work changed. Referring

to Article 13, more particularly Clause 13.2, which deals with

the Procedure for Change of Scope, learned Senior Counsel

submits that no Notice was issued as contemplated under

Clause 13.2.1, but the Contractor was directed to comply with

Clause 13.2.2. While contending that the authorities want to

put the blame on the petitioner without complying with the

Agreement conditions, he submits that detailed GAD / Master

Plans were submitted on 09.12.2022, but the same were

approved on 20.04.2023 as is evident from Ex.P.8. He submits

that all these aspects coupled with the material on record

would clearly establish that there are no defaults on the part of

the petitioner and the authorities to cover up their lapses had

issued notices as if the petitioner is at fault in proceeding with

the works.

10) Referring to Appointed Date as provided in Article 1, he

contends that the Appointed Date shall be taken as the date

on which the authority has provided the Right of Way (RoW)

and forest clearances of the site for the project inconformity

with the Clauses 4.3 and 8.2, that the respondent's

NJS, J WP_1300_2024

assumption that the appointed date means 15 th day of the

Date of Agreement i.e., 30.11.2022 is incorrect. He submits

that in the light of the undisputed material on record, which

goes to show that the revised Master Plan (GAD) was approved

on 20.04.2023, felling of trees was completed on 20.05.2023,

and the Environment Master Plan was approved on

13.11.2023, the Appointed Date shall be reckoned from

anyone of the said dates and if the same is taken into

consideration, there is no breach of milestones by the

petitioner.

11) Referring to Clause 10.4 of Article 10, which deals with

Extension of time for completion, learned counsel further

contends that the delay in providing the Right of Way,

Environmental / forest clearance, approval of GAD (Master

Plan) and change of scope of work are attributable to the

respondents and the petitioner is therefore entitled for

extension of time. He submits that the 4th respondent without

even applying his mind to the relevant clauses of the

Agreement had terminated the contract and the action under

challenge smacks of arbitrariness. While pointing out that even

as per the respondents' counter there is no change in the

NJS, J WP_1300_2024

scope of work, that there are no disputed questions of facts

and stating that the arguments at present are confined to the

extent of non-compliance of the Agreement conditions by the

respondents, learned Senior Counsel submits that the action

of the 4th respondent in treating the appointed date as

30.11.2022 is incorrect and this Court in exercise of

jurisdiction under Article 226 of the Constitution of India can

interfere in the matter.

12) Quoting Article 21 of the Agreement, which provides for

termination of contract, the learned Senior Counsel submits

that in the notice issued to the petitioner there is no mention

as to whether there was any breach of milestones / milestones

not achieved and further that no Notice under Clause 21.1.1(c)

granting 45 days time for achieving the project milestones was

issued. He submits that the action of the 4th respondent is,

therefore capricious, illegal and amounts to violation of

principles of natural justice. Learned Senior Counsel referring

to Memo dated 07.02.2024 further submits that in view of the

suggestions made by the respondents to the Master Plan after

a lapse of long time, the Authority Engineer (S.M. Private Ltd.,)

submitted the plans for approval of the 4th respondent on

NJS, J WP_1300_2024

11.10.2023 and the approval has not been received so far. He

submits that despite the lapses on the part of the respondents,

the petitioner was proceeding with the work. However, in

violation of Agreement conditions, without application of mind,

the Agreement in question was terminated. He submits that

the action of the 4th respondent amounts to disproportionate

punishment and even on that ground the interference of this

Court in exercise of powers under Article 226 of the

Constitution of India is called for.

13) Learned Senior Counsel in support of his contentions

placed reliance on the following judgments:

i) Sahara India (Firm) Lucknow v Commissioner of Income Tax, Central - 1 and Another1;

ii) Kisan Sahkari Chini Mills Ltd. v. Vardan Linkers 2;

iii) M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd.,3

iv) State of U.P. v. Sudhir Kumar Singh4

14) Learned Senior Counsel submits that had the

respondents granted extension of time in terms of the

Agreement conditions, the petitioner would have proceeded

(2008) 14 SCC 151

(2008) 12 SCC 500

(2023) 2 SCC 703

(2021) 19 SCC 706 = 2020 SCC OnLine 847

NJS, J WP_1300_2024

with the works. However, the respondent authority invited for

fresh tenders in respect of the works in question at escalated

estimated cost of Rs.433,56,19,990/-, which results in burden

on the exchequer. Making the said submissions, the learned

Senior Counsel seeks the reliefs by setting aside the

proceedings under challenge.

RESPONDENTS' CONTENTIONS:

15) Refuting the said contentions, Mr. B. Narasimha Sarma,

learned Additional Solicitor General of India argued the matter

at length. Drawing attention of this Court to Ex.P1 i.e., the

impugned Proceedings dated 26.12.2023 and the references

therein, he submits that before resorting to action of the

termination notices with regard to the poor progress of the

work by the petitioner were issued, joint meetings were held

with regard to progress of works and ultimately a final

showcause notice was issued on 06.11.2023 mentioning as

many as 43 defaults / lapses on the part of the petitioner. He

submits that after considering reply / explanation of the

petitioner, the impugned termination proceedings have been

issued, meeting all the points in reply by the petitioner. He

submits that the EPC is a self contained code, the terms and

NJS, J WP_1300_2024

conditions agreed therein are binding on both sides and the

action of the 4th respondent in issuing termination proceedings

is in accordance with the contractual terms.

16) Referring to Article 24 which provides for Dispute

Resolution and clauses contained therein, he submits that as

per Clause 24.1.1 all disputes and differences of any kind

whatsoever arising out of or in connection with the contract,

whether during the progress of the work or after its completion

and whether before or after the determination of the contract,

shall be referred by the Contractor / petitioner to the Authority

for conciliation of disputes at the first stage and in the event,

the same are not settled through conciliation, the same can be

referred to Dispute Adjudication Board (DAB) under Clause

24.2, which is the second stage. While referring to Clause

24.2.14, which contemplates that the parties shall not

approach any Court of Law for settlement of such disputes or

differences, unless an attempt has first been made by the

parties to settle such disputes or differences through DAB, he

further submits that a third level mechanism is provided for

settlement of disputes or differences by 'Standing Arbitral

Tribunal' under Clause 24.3. He also reference to Clause

NJS, J WP_1300_2024

24.3.18, which provides that in case of any dispute or

differences, resulting in Court cases between Contractor &

Authority, the jurisdiction shall be of Courts at Delhi only. Be

that as it may. He submits that the termination of the

Agreement is in terms of Clause 21.1 and that the same is

legal and valid. He contends that the jurisdiction of the Writ

Court under Article 226 of the Constitution of India can be

invoked only in those circumstances, where there is violation

of principles of natural justice, the authority acts without

jurisdiction / incompetent authority or the statutory

provisions are violated. He submits that the case on hand

would not fall in any one of the exceptions and all the disputes

can be examined / raised before the Dispute Redressal

Mechanism. He also submits that there is no whisper in the

affidavit as to why the alternative remedy is not effective.

While contending that the matter involves examination of

disputed questions of facts, based on the terms of the

Agreement / contract, he submits that the petitioner cannot be

permitted to seek relief in a proceeding under Article 226 of the

Constitution of India for enforcement of its contractual rights

or adjudication of disputed facts.

NJS, J WP_1300_2024

17) While contending that the Appointed Date would be

30.11.2022 i.e., fifteen days from the date of Agreement dated

15.11.2022, the learned counsel submits that pursuant to

LOA, Right of Way was given to the petitioner on 19.09.2022

and again on 07.12.2022 in terms of Clause 8.2.1, that as per

Clause 4.3 an obligation is cast on the petitioner to prepare the

Environment Management Plan (EMP) and forest clearance is

not required as mentioned in Annexure-IV Schedule - A of the

Agreement (Page No.447) and the same cannot be a reason to

postpone the Appointed Date. Referring to the Termination

Proceedings, he submits that the petitioner has not achieved

various project milestones which have an adverse effect on the

execution of works, the learned counsel seeks to justify the

said proceedings that the same are in conformity with the

terms and conditions of the Agreement. He submits that the

Appointed Date as mentioned in the Show Cause Notice is in

tune with the Agreement conditions, that EPC is a special

contract involving technical matters and in terms of Clause

3.1.1, the total obligation is on the petitioner / contractor to

perform all the works in respect of the Project in question. He

submits that as the petitioner had committed defaults, two

NJS, J WP_1300_2024

Notices were issued pointing out the same and after adverting

to each and every submission of the petitioner in the reply to

the Show Cause Notice, the 4th respondent issued the

Termination Proceedings by recording findings. He contends

that the scope of Judicial Review under Article 226 of the

Constitution of India is limited to the extent of examination of

decision making process only and the Court would not sit over

the decision of the decision making Authority. While stating

that the time is essence, convenience of public is of the utmost

consideration and the impugned termination of the

proceedings after due opportunity to the petitioner were

passed twelve months after entering into the Agreement, he

submits that the decision making process in the present case

is in compliance with the principles of natural justice, fair play

and repeated opportunities to the petitioner, pointing out the

lapses shows that there is no arbitrariness as alleged by the

petitioner. He further submits that it is also not a case of

malafides and in such circumstances, it is not a fit case to

exercise the jurisdiction of this Court under Article 226 of the

Constitution of India.

NJS, J WP_1300_2024

18) Referring to the contentions with regard to the Appointed

Date, approval of environmental plans, felling of tress and

approval of GAD / Master plan, he submits that each and

every default / lapse was elaborately considered by the 4th

respondent and detailed reasoning / finding was recorded in

the impugned proceedings. He submits that the decision of

termination is not arbitrary or irrational, but supported by

ample material in conformity in terms of the Agreement and

there is no perversity. He submits that the project is of great

importance, all the works are time bound and most of the

preliminary works are not even started by the date of the Show

Cause Notice, which was issued, eleven months after entering

into the Agreement. He submits that by the date of issuance of

Show Cause Notice, the petitioner has executed only 1.1% of

the works as against the target of 33%. He submits that

number of communications were addressed to the petitioner

and as there is a failure on the part of the petitioner, the

Agreement has been terminated. He submits that it is an

administrative decision in terms of the Agreement conditions

well supported by reasons and warrants no interference by this

Court.

NJS, J WP_1300_2024

19) Adverting to the contention with regard to change of

scope of work, the learned Senior Counsel referring to a

Communication dated 03.11.2022(Ex.R4) submits that the

Master plan prepared also contains provision for additional

two tracks and End platform. While stating that as

communicated to the petitioner vide Letter dated

15.11.2022(Ex.R5) that detailed procedure for execution of

works not covered under the scope of EPC will be dealt with in

terms of Article 13, he submits that the petitioner was not

showing progress even at the elementary stage of works and

repeated notices were issued with regard to poor progress of

works, as is evident from the impugned proceedings. He

submits that there is no dispute that the jurisdiction of the

Court under Article 226 of the Constitution of India is not

totally barred and can be exercised when action is challenged

on the grounds of malafides, arbitrariness, irrationality,

favouritism or perversity, but interpretation of the clauses in

the Agreement cannot be undertaken. He contends that the

Appointed Date cannot be substituted under judicial review.

20) The learned Additional Solicitor General of India while

stating that there is no dispute with regard to the propositions

NJS, J WP_1300_2024

laid down in the decisions relied on by the learned Senior

Counsel for the petitioner, submits that the said decisions are

distinguishable on facts and in the present case principles of

natural justice are complied with by issuing Show Cause

Notices and the action of the 4th respondent is in exercise of

powers in terms of the Agreement, not arbitrary or capricious

as contended on behalf of the petitioner. He submits that the

escalation in the Project Cost is because of levy of 18% GST as

against 12% GST when the Agreement in question was entered

into and also in view of the variance of costs. Making the said

submissions, the learned counsel submits that there are no

merits in the case warranting interference by this Court under

Article 226 of the Constitution of India.

21) Mr.C.V.Mohan Reddy, learned Senior Counsel made

submissions, in reply, reiterating the earlier contentions.

22) This Court has considered the submissions made and

perused the material on record.

23) At the outset, it may be pertinent to state that as the

disputes in relation to the Project in question which is of great

public importance are between the petitioner consortium,

which is led by M/s.Braithwaite & Company Limited, a

NJS, J WP_1300_2024

Government of India undertaking and the East Coast Railways,

on the other hand, this Court initially expressed a view that

the same can be resolved by the parties by mutual

discussions. As seen from the Minutes of the Meeting dated

05.02.2024 which are placed for perusal of this Court by the

learned Additional Solicitor General of India, it is discernable

that the petitioner as well as the respondents are attributing

lapses / delays / defaults against each other, which indicates

that there are no chances of amicable settlement. Be that as it

may.

24) The learned Senior Counsel for the petitioner, inter alia,

contended that the impugned Termination Proceedings are

violative of principles of natural justice, suffers from non-

application of mind and smacks of arbitrariness. That if the

Appointed Dates are reckoned from any of the three dates i.e.,

20.04.2023 or 30.05.2023 or 13.11.2023, there is no breach of

milestones. There are no disputed questions of facts involved

and writ petition can be entertained.

25) On the other hand, the learned Additional Solicitor

General of India had pointed out that notices were issued to

the petitioner from time to time with regard to poor progress of

NJS, J WP_1300_2024

work, two Show Cause Notices were issued setting out the

deficiencies / defaults in execution of the works and thereafter

a detailed order is passed by dealing with all the points in

reply to the notices, that in such circumstances, there is no

violation of principles of natural justice, the Writ Court cannot

sit in appeal over the decision of the decision making authority

/ 4th respondent, Agreement provides for conciliation and

arbitration, matter involves examination of disputed questions

of facts, that the Appointed Date cannot be substituted.

26) On an appreciation of the matter and perusal of the

material, it is discernible that before passing the Termination

Proceedings impugned in the present Writ Petition, opportunity

was afforded to the petitioner and therefore, it is not a case

where the proceedings under challenge are without any notice.

As is evident from the references in the impugned proceedings

and which is not contradicted, notices on different dates were

issued to the petitioner regarding poor progress of work. Thus,

there is compliance with principles of natural justice.

27) Whether poor progress of work is a consequence of not

giving RoW as per the Agreement conditions or due to delay in

seeking or granting approval of plans, whether the petitioner /

NJS, J WP_1300_2024

contractor could as well proceeded with the preliminary works

etc., without approvals, are all matters which involve a deep

probe.

28) That delays are attributable to the Authority and though

the Agreement provides for extension of time, without

application of mind to the Agreement conditions the impugned

proceedings are issued are matters that require examination of

Agreement conditions with reference to factual aspects which

cannot be undertaken by this Court in a proceeding under

Article 226 of the Constitution of India.

29) Though elaborate contentions were raised with reference

to reckoning of Appointed Date either from the approval of

environment plan or felling of tress or the approval of GAD

plans i.e., dated 20.04.2023, 30.05.20223 and 13.11.2023

respectively, in the light of the rival contentions about non-

adherence to the obligations by the respective parties, this

Court is of the opinion that these matters cannot be gone into

as the same fall in the realm of disputes between the parties. It

is also not a case of malafides nor was there any challenge that

the proceedings of the 4th respondent are without jurisdiction.

Suffice to state that by virtue of novation of the Agreement vide

NJS, J WP_1300_2024

Ex.P.37, respondent No.4 has power to terminate the

Agreement. As to whether termination proceedings are justified

or not, involves examination of factual aspects / disputed

questions of fact, which cannot be undertaken in the present

proceedings under Article 226 of the Constitution of India. It

is not in dispute that the Agreement provides for dispute

redressal mechanism at different levels and arbitration in

terms of the Arbitration and Conciliation Act.

30) In State of U.P. & Others v. Bridge & Roof Company

(India) Ltd.5, the Hon'ble Supreme Court was dealing with a

judgment of a Division Bench of the Allahabad High Court,

wherein the dispute relates to certain payments in respect of a

works contract, which the respondent-Company claims are

due to it, whereas the appellant contends that it is entitled to

retain it. The Hon'ble Supreme Court while opining that the

contract between the parties therein is the contract in the

realm of private law, not a statutory contract and it is governed

by the provisions of the Contract Act or, may be, also by

certain provisions of the Sale of Goods Act, inter alia , held that

"any dispute relating to interpretation of the terms and

(1996) 6 SCC 22

NJS, J WP_1300_2024

conditions of such a contract cannot be agitated, and could

not have been agitated, in a writ petition, that it is a matter

either for arbitration as provided by the contract or for the civil

court or as the case may be." The Hon'ble Supreme Court at

Para No.21 further held as follows:

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

NJS, J WP_1300_2024

31) Looking to the facts of the present case and the stand

taken by the petitioner that the delay is occurred at the

instance of the respondents, which is contradicted in the

counter-affidavit by attributing defaults on the part of the

petitioner, this Court is of the view that whether the delays are

due to lapses on the part of the respondents and the

termination is not lawful are matters for adjudication by the

Arbitral Tribunal. In the event, it is found that the delays are

attributable to the respondents, the petitioner can as well be

compensated suitably.

32) Further, the decision of the 4th respondent was rendered

after examination of the explanation with reference to the

several alleged defaults. This Court has no expertise to

examine the same nor expected to do so. As contended by the

learned Additional Solicitor General of India, this Court is

concerned with the decision making process and would not sit

as an Appellate Authority. In view of the Arbitration Clause, it

is not desirable to record any finding or conclusion with regard

to the contention that the impugned Termination Proceedings

smacks of arbitrariness, vitiated by non-application of mind or

violative of terms of the Agreement conditions.

NJS, J WP_1300_2024

33) The Hon'ble Supreme Court in Kerala State Electricity

Board & Another v. Kurien E.Kalathil & Others 6 was dealing

with an Appeal against the orders of the High Court and with

regard to contention about the maintainability of the writ

petition opined that "interpretation and implementation of a

Clause in a Contract cannot be the subject matter of a writ

petition and that "if a term of contract is violated, ordinarily

the remedy is not the writ 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."

The Hon'ble Supreme Court, however, in the facts of the said

case while holding that alternative remedy is no longer

efficacious due to lapse of time, modified the order of the High

Court by reducing the interest.

34) There can be no second opinion that violation of

principles of natural justice or public law element would justify

the exercise of powers under Article 226 of the Constitution of

India. It all depends upon the facts of each case as to whether

having regard to the scope of dispute to be resolved, the Court

will still entertain the petition.

(2000) 6 SCC 293

NJS, J WP_1300_2024

35) In M.P.Power Management Company Limited v. Sky

Power Southeast Solar India Private Limited7, on which

reliance was placed by the learned Senior Counsel for the

petitioner, the Hon'ble Supreme Court was dealing with the

decision of High Court, wherein the writ petition challenging

the order of termination of power projects agreement was

allowed. The Hon'ble Supreme Court while elaborately dealing

with the scope of judicial review of State action in a matter

arising from non-statutory contract in the attending facts and

circumstances of the said case, was not inclined to interfere

with the decision of the High Court. The Hon'ble Supreme

Court while recording its conclusions at Para No.82.1 that the

writ jurisdiction is a public law remedy and a matter which lies

entirely within a realm of affairs of public body, may not lend

itself for being dealt with under the writ jurisdiction of the

Court, at Para No.82.3 held that "the mere fact that relief is

sought under a contract which is not statutory, will not entitle

the respondent State in a case by itself to ward off scrutiny of

its action or inaction under the contract, if the complaining

party is able to establish that the action / inaction is, per se,

(2023) 2 SCC 703

NJS, J WP_1300_2024

arbitrary." At Para No.82.7, the Hon'ble Supreme Court opined

as follows:

"82.7. The existence of an alternate remedy, is undoubtedly, a matter to be borne in mind in declining relief in a writ petition in a contractual matter. Again, the question as to whether the writ petitioner must be told off the gates, would depend upon the nature of the claim and relief sought by the petitioner, the questions, which would have to be decided, and, most importantly, whether there are disputed questions of fact, resolution of which is necessary, as an indispensible prelude to the grant of the relief sought. Undoubtedly, while there is no prohibition, in the writ court even deciding disputed questions of fact, particularly when the dispute surrounds demystifying of documents only, the Court may relegate the party to the remedy by way of a civil suit."

36) The Hon'ble Supreme Court at Para No.82.10 while

opining that "the reach of Article 14 enables a writ court to

deal with arbitrary State action even after a contract is entered

into by the State and wide variety of circumstances can

generate causes of action for invoking Article 14 and the

Court's approach in dealing with the same, would be guided

by, undoubtedly, the overwhelming need to obviate arbitrary

State action, in cases where the writ remedy provides an

effective and fair means of preventing miscarriage of justice

NJS, J WP_1300_2024

arising from palpably unreasonable action by the State", at

Para No.82.11, inter alia , opined as follows:

"82.11............Ordinarily, the cases of termination of contract by the State, acting within its contractual domain, may not lend itself for appropriate redress by the writ court. This is, undoubtedly, so if the Court is duty- bound to arrive at findings, which involve untying knots, which are presented by disputed questions of facts. Undoubtedly, in view of ABL(ABL International Ltd., v. Export Credit Guarantee Corpn.of India Ltd., (2004) 3 SCC

553), if resolving the dispute, in a case of repudiation of a contract, involves only appreciating the true scope of documentary material in the light of pleadings, the Court may still grant relief to an applicant. We must enter a caveat. The Courts are today reeling under the weight of a docket explosion, which is truly alarming. If a case involves a large body of documents and the Court is called upon to enter upon findings of facts and involves merely the construction of the document, it may not be an unsound discretion to relegate the party to the alternate remedy. This is not to deprive the Court of its constitutional power as laid down in ABL. It all depends upon the facts of each case as to whether, having regard to the scope of the dispute to be resolved, whether the Court will still entertain the petition."

37) In view of the self imposed restraints and as the

matter involves examination of disputed questions of facts,

in the considered opinion of this Court, the exercise of

jurisdiction under Article 226 of the Constitution of India,

NJS, J WP_1300_2024

more particularly in view of the availability of arbitration

Clause in the Agreement, is not warranted.

38) M/s.N.G.Projects Limited v. M/s.Vinod Kumar

Jain8 is a case where the Hon'ble Supreme Court was

dealing with an appeal filed against the decision of a

Division Bench of High Court of Jharkhand at Ranchi,

whereby the Order of the learned Single Judge allowing the

Writ Petition was confirmed. The issue relates to awarding

of tender in respect of the works for reconstruction of

Nagaruntari - Dhurki - Ambakhoriya Road. Referring to a

catena of cases relating to Award of tenders and the scope

of interference by the Court, the Hon'ble Supreme Court

while opining that the Writ Court should refrain itself from

imposing its decision over the decision of the employer as to

whether or not to accept the bid of a tenderer, inter alia ,

held that "Courts should be even more reluctant in

interfering with contracts involving technical issues as

there is a requirement of the necessary expertise to

adjudicate upon such issues. The approach of the Court

should be not to find fault with magnifying glass in its

2022 LiveLaw(SC) 302

NJS, J WP_1300_2024

hands, rather the Court should examine as to whether the

decision-making process is after complying with the

procedure contemplated by the tender conditions. If the

Court finds that there is total arbitrariness or that the

tender has been granted in a malafide manner, still the

Court should refrain from interfering in the grant of tender

but instead relegate the parties to seek damages for the

wrongful exclusion rather than to injunct the execution of

the contract."

39) Though the said judgment of the Hon'ble Supreme

Court was rendered against the background of granting of

tenders, this Court is of the opinion that the expressions of

the Hon'ble Supreme Court referring to the various earlier

precedents are guiding factors where the issues involve

interpretation of terms and conditions of the Agreement

entered into between the parties.

40) For the aforegoing reasons and the conclusions

arrived at, the matter involves disputed questions of fact

and interpretation of terms and conditions of the

Agreement. Therefore, this Court is not inclined to exercise

powers under Article 226 of the Constitution of India.

NJS, J WP_1300_2024

41) The writ petition, is, however disposed of, leaving it

open to the petitioner to avail the remedy of arbitration in

terms of the Agreement and raise all contentions, in the

event of which, the same shall be dealt with uninfluenced

by the observations, if any made by this Court. There shall

be no order as to costs.

As a sequel, pending miscellaneous petitions, if any, shall stand closed.

_______________________ NINALA JAYASURYA, J.

Date: 14.02.2024.

Ssv/BLV

NJS, J WP_1300_2024

IN THE HIGH COURT OF ANDHRA PRADESH::AMARAVATI

THE HON'BLE SRI JUSTICE NINALA JAYASURYA

Date:14.02.2024.

Ssv/BLV