Delhi High Court
Brig A K Bhutani (Retd.) vs M/S Central Warehousing ... on 10 May, 2016
Author: Manmohan
#31
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 4128/2016 & CM APPL. 17444/2016
BRIG A K BHUTANI (RETD.) ..... Petitioner
Through Mr. S.S. Pandey with Mr. H.S.
Tewari, Advocates
versus
M/S CENTRAL WAREHOUSING CORPORATION
AND ORS ..... Respondents
Through Mr. K.K. Tyagi with Mr. I. Ahmed
and Mr. Anoop Kumar, Advocates for
R-1 and 2.
Mr. Bhagvan Swarup Shukla, CGSC
with Mr. Rachit Goel, Advocate for
R-3/UOI.
% Date of Decision: 10th May, 2016
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
JUDGMENT
MANMOHAN, J: (Oral)
1. Present writ petition has been filed challenging the order dated 3 rd
May, 2016 whereby the contract to provide security to Inland Container
Depot was terminated on the ground that petitioner did not make payment to
the security guards and, therefore, has committed breach of the provisions of
contract. It has also been recorded in the impugned order that there was an
alleged theft of imported cargo contained in container No.GESU 4654154
and consequently, petitioner services were not satisfactory.
2. By way of present writ petition, petitioner also prays for a direction to
allow the petitioner to complete its term of contract till 25th September, 2016
and to compensate the petitioner after clearing all its dues along with interest
@18% per annum.
3. It has been averred in the writ petition that an agreement dated 25 th
September, 2014 was executed between the parties in accordance with
which the petitioner was to provide security to Inland Container Depot.
4. Learned counsel for petitioner states that respondent no. 1 has not
cleared the bills of the petitioner since December, 2015 and has withheld the
same without any valid reason. He further states that petitioner is not even
in a position to pay wages to the security personnel as the respondents have
withheld its payment since 2015.
5. Learned counsel for petitioner further states that the allegation of theft
of imported cargo is a figment of imagination as no claimant has come
forward to file his claim.
6. Learned counsel for petitioner also states that respondents are not
even referring the disputes to arbitration even though the petitioner has
specifically made a request for arbitration.
7. The Supreme Court in Joshi Technologies International Inc. Vs.
Union of India & Ors., IV (2015) SLT 711 has held as under:-
"57. Law in this aspect has developed through catena of
judgments of this Court and from the reading of these judgments
it would follow that in pure contractual matters extraordinary
remedy of writ under Article 226 or Article 32 of the Constitution
cannot be invoked. However, in a limited sphere such remedies
are available only when the non-Government contracting party is
able to demonstrate that it is a public law remedy which such
party seeks to invoke, in contradistinction to the private law
remedy simplicitor under the contract. Some of the case law to
bring home this cardinal principle is taken note of hereinafter.
xxx xxx xxx
68. The position thus summarised in the aforesaid principles has
to be understood in the context of discussion that preceded which
we have pointed out above. As per this, no doubt, there is no
absolute bar to the maintainability of the writ petition even in
contractual matters or where there are disputed questions of fact
or even when monetary claim is raised. At the same time,
discretion lies with the High Court which under certain
circumstances, it can refuse to exercise. It also follows that under
the following circumstances, "normally", the Court would not
exercise such a discretion:
(a) The Court may not examine the issue unless the action
has some public law character attached to it.
(b) Whenever a particular mode of settlement of dispute is
provided in the contract, the High Court would refuse
to exercise its discretion under Article 226 of the
Constitution and relegate the party to the said mode of
settlement, particularly when settlement of disputes is
to be resorted to through the means of arbitration.
(c) If there are very serious disputed questions of fact
which are of complex nature and require oral evidence
for their determination.
(d) Money claims per se particularly arising out of
contractual obligations are normally not to be
entertained except in exceptional circumstances.
69. Further, the legal position which emerges from various
judgments of this Court dealing with different situations/aspects
relating to contracts entered into by the State/public authority
with private parties, can be summarised as under:
(i) At the stage of entering into a contract, the State acts
purely in its executive capacity and is bound by the
obligations of fairness.
(ii) State in its executive capacity, even in the contractual
field, is under obligation to act fairly and cannot
practise some discriminations.
(iii) Even in cases where question is of choice or
consideration of competing claims before entering into
the field of contract, facts have to be investigated and
found before the question of a violation of Article 14
could arise. If those facts are disputed and require
assessment of evidence the correctness of which can
only be tested satisfactorily by taking detailed
evidence, involving examination and cross-
examination of witnesses, the case could not be
conveniently or satisfactorily decided in proceedings
under Article 226 of the Constitution. In such cases
Court can direct the aggrieved party to resort to
alternate remedy of civil suit etc.
(iv) Writ jurisdiction of the High Court under Article 226
was not intended to facilitate avoidance of obligation
voluntarily incurred.
(v) Writ petition was not maintainable to avoid
contractual obligation. Occurrence of commercial
difficulty, inconvenience or hardship in performance of
the conditions agreed to in the contract can provide no
justification in not complying with the terms of
contract which the parties had accepted with open
eyes. It cannot ever be that a licensee can work out the
licence if he finds it profitable to do so: and he can
challenge the conditions under which he agreed to take
the license, if he finds it commercially inexpedient to
conduct his business.
(vi) Ordinarily, where a breach of contract is complained
of, the party complaining of such breach may sue for
specific performance of the contract, if contract is
capable of being specifically performed. Otherwise, the
party may sue for damages.
(vii) Writ can be issued where there is executive action
unsupported by law or even in respect of a corporation
there is denial of equality before law or equal
protection of law or if it can be shown that action of
the public authorities was without giving any hearing
and violation of principles of natural justice after
holding that action could not have been taken without
observing principles of natural justice.
(viii) If the contract between private party and the
State/instrumentality and/or agency of the State is
under the realm of a private law and there is no
element of public law, the normal course for the
aggrieved party, is to invoke the remedies provided
under ordinary civil law rather than approaching the
High Court under Article 226 of the Constitution of
India and invoking its extraordinary jurisdiction.
(ix) The distinction between public law and private law
element in the contract with the State is getting
blurred. However, it has not been totally obliterated
and where the matter falls purely in private field of
contract, this Court has maintained the position that
writ petition is not maintainable. Dichotomy between
public law and private law, rights and remedies would
depend on the factual matrix of each case and the
distinction between the public law remedies and
private law, field cannot be demarcated with precision.
In fact, each case has to be examined, on its facts
whether the contractual relations between the parties
bear insignia of public element. Once on the facts of a
particular case it is found that nature of the activity or
controversy involves public law element, then the
matter can be examined by the High Court in writ
petitions under Article 226 of the Constitution of India
to see whether action of the State and/or
instrumentality or agency of the State is fair, just and
equitable or that relevant factors are taken into
consideration and irrelevant factors have not gone into
the decision making process or that the decision is not
arbitrary.
(x) Mere reasonable or legitimate expectation of a citizen,
in such a situation, may not by itself be a distinct
enforceable right, but failure to consider and give due
weight to it may render the decision arbitrary, and this
is how the requirements of due consideration of a
legitimate expectation forms part of the principle of
non-arbitrariness.
(xi) The scope of judicial review in respect of disputes
falling within the domain of contractual obligations
may be more limited and in doubtful cases the parties
may be relegated to adjudication of their rights by
resort to remedies provided for adjudication of purely
contractual disputes."
(emphasis supplied)
8. Keeping in mind the aforesaid principles and after considering the
petitioner's argument, this Court is of the view that on facts it is not a fit
case where it should exercise discretionary jurisdiction under Article 226 of
the Constitution. The matter is in the realm of pure contract. It is not a case
where any statutory contract is awarded.
9. Further, this Court is of the opinion that there are disputed questions
of fact involved in the present writ petition, namely, as to whether a theft of
the consignment took place or not. The said issue cannot be decided in a
writ proceeding.
10. Consequently, this Court is of the opinion that present writ petition
and application are not maintainable. However, the petitioner is given
liberty to file alternate proceedings in accordance with the dispute resolution
mechanism provided for in the contract executed between the parties.
Order dasti.
MANMOHAN, J
MAY 10, 2016
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