M/S Vijeta Projects And ... vs Union Of India And Others
2021 Latest Caselaw 539 j&K

            HIGH COURT OF JAMMU AND KASHMIR
                           AT JAMMU

                                                Reserved on: 15.04.2021
                                               Pronounced on: 30.04.2021


CJ Court
Case: LPA No. 59 of 2021
(through video conferencing)

M/s Vijeta Projects and Infrastructure Ltd                     ...Appellant(s)
Udhampur


                                Through: Sh. Pinaki Misra, Sr. Advocate
                                         with
                                         Sh. P. B. Suresh, Advocate
                                         Sh. Rupinder Singh, Advocate
                                         Sh. Vipin Nair, Advocate
                                         Sh. Karthik Jayashankar, Advocate
                                         Sh. Arindam Ghosh, Advocate and
                                         Sh. Anshumaan Bahadur, Advocate

               v/s
Union of India and others                                   .... Respondent(s)
                                Through: Sh. Vishal Sharma, ASGI with
                                         Brig. S. P. Yadava

       CORAM:
       HON'BLE THE CHIEF JUSTICE
       HON'BLE MR. JUSTICE RAJNESH OSWAL, JUDGE


                               JUDGMENT

RAJNESH OSWAL-J

1. This intra court appeal has been preferred against the judgment dated

14.01.2020 (hereinafter to the referred as the judgment impugned) passed by the

learned Single Judge by virtue of which, two writ petitions bearing Nos. OWP No.

168 of 2019 and OWP No. 485 of 2019 were dismissed.

2. The judgment impugned has been challenged on the following

grounds:

(i) that the learned Single Judge did not consider the fact that the

impugned communication dated 18.03.2019 terminating the

contract awarded to the appellant was in breach of the principles of

natural justice and it was incumbent upon the respondents to furnish

a reply to all pending points of the contract raised by the appellant

by virtue of representation dated 05.03.2019.

(ii) that the learned Single Judge should have considered the fact that

the respondents could not have issued the impugned order of

cancelation, particularly when they had agreed with the appellant

that the deadline for completion of the work would be 31.12.2019.

The work had been substantially completed by the appellant and the

work remained uncompleted due to the non-payment of dues of the

appellant by the respondents and also delay in the

execution/completion of project was occasioned because of

frequent deviations made by the respondents in the original plan.

(iii) that the learned Single Judge ought to have held that the termination

letter was bad in law due to legal mala fides and the writ petition

was maintainable as the State is under a constitutional obligation to

act fairly and that the State cannot practice discrimination or

arbitrariness.

(iv) that the impugned judgment prejudges the contractual claims and

observes on merits instead of limiting the jurisdiction within the

bounds of Article 14 of the Constitution thereby violating the scope

of Article 226 of the Constitution.

3. Briefly stated, the facts necessary for the disposal of the instant appeal

are that the appellant was awarded a contract for the construction of a 650 bed

hospital along with OTM ACCN In. Lift, Central AC Plant, Hot Water Supply,

Fire Hydrant, Sprinkler System, Fire Alarm System and External Service for a

Command Hospital, Northern Command, at Udhampur in the Union Territory of

Jammu and Kashmir and Contract Agreement No. CEUZ/UDH/09/2010-11 dated

27.01.2011 was executed. Time period for the execution of the work was 27

months commencing from 10.02.2011. It is the case of the appellant that after the

site was handed over to the appellant on 10.02.2011, the appellant started the

construction work of the hospital and during the course of execution of the work,

due to number of changes in the scope of work as well as in the goods to be

consumed by the appellant, the pace of the execution of the work was severely

effected. The appellant mentioned the following deviations sought for by the

respondents, in his writ petition:

a. In original contract allotted there was provision for lift with gears

but later on in place of lift with gears, gearless lifts were demanded

by the respondents.

b. The respondents demanded change in the size of the lifts from 20

passengers to 26 passengers.

c. Change was made from glass wool insulation for chilled water as

provided in original contract to the expanded Polystyrene

insulation

d. Change in G F Plan due to relocation of various areas with in the

Hospital building( 35% of the G.F area and 10% of Hospital area).

e. Abnormal variation in quantities ranging up to more than 1000%

for Air conditioning, Fire Fighting, Medical Gases etc.

f. Change in the specifications in the basement crumples, three times.

4. It is also stated in the petition that the appellant time and again

requested the respondents that they should allow the appellant to adhere to the

original contract and should refrain from making unnecessary changes in the

executed agreement and allow the appellant to complete the awarded work as per

the original contract. Further there is an agreement between the parties that for any

extra work demanded by the respondents which did not form part of the original

contract, the respondents shall pay reasonable amount due to the appellant for such

extra work demanded from the appellant. However, despite repeated requests made

by the appellant for the payment of the extra work, the respondents failed to pay

the same and as such the respondents owe crores of rupees to the appellant and the

appellant requested the respondents to finalize the rate of items added pursuant to

their demands but the respondents have not finalized their rates. It is further stated

that the Chairman of the appellant-company in his last meeting with the

respondents requested them that the appellant be allowed to complete the

construction without any interference and the payment for work already done

should be released, so that the entire payment could be infused by the appellant in

the aforesaid work, which is yet to be completed. It is further stated that almost

70% of the work of main hospital building stand already completed and the

appellant made it clear to the respondents that with full cooperation of the

respondents the aforesaid work can be completed by 31 st of December, 2019. It is

further stated that the respondents vide its letter dated 21.01.2019 threatened to

terminate the work awarded to the appellant if the pace of execution of the work is

not increased by the appellant and the appellant immediately vide its letter dated

25.01.2019 submitted its reply to the respondents. The appellant challenged the

communication dated 21.01.2019 through the medium of writ petition bearing

OWP No. 168 of 2019 and the learned Single Judge vide order dated 04.02.2019

directed the respondents that without considering the reply filed by the appellant,

no order will be passed. Thereafter, the respondents sent a communication dated

25.02.2019 to the appellant in which the respondents conceded that though changes

have been made but the requirement of the changes are inevitable either due to

technical reasons, site requirements or in larger interest of the work to meet the

functional requirements of the hospital. The aforesaid communication was duly

replied by the appellant vide communication dated 05.03.2019 but the respondents

did not consider the said communication and vide order dated 18.03.2019

cancelled the contract awarded to the appellant. The appellant impugned the said

communication through the medium of writ petition.

5. The respondents filed their response in which besides preliminary

objections, stated that the Modern Command Hospital building was planned in

Udhampur for providing better medical facilities in the entire Northern Command

of the Indian Army. The Northern Command deals with the counter insurgency

operations in the entire Union Territory of Jammu and Kashmir. Being infected

with terrorism, there are causalities which require immediate, modern and better

medical facilities at the nearest place of occurrences. Though there are many small

hospitals at various places under different formations of Command, the nature of

casualties demand high end tertiary care medical facilities available within easy

reach and within the U.T of J&K. The respondents have admitted the allotment of

contract for new Command Hospital with OTM Accommodation i.e. Package-2 to

the appellant and the respondents have also given the progress report of the work

executed by the appellant and the same is reproduced as under:

Year wise progress of work FY 2012-13 7.56% FY 2013-14 9.72%

FY 2014-15 15.67% FY 2015-16 13.45% FY 2016-17 8.35% FY 2017-18 6.91%

4.

5.

                                        FY 2018-19             3.13%
6.

6. It is further stated that the appellant had not applied sufficient man

power and capital to ensure timely completion of work. The appellant was advised

verbally as well as in writing numerous times to expedite the progress of work by

deploying more labourers and material for the completion of work but no

appreciable progress was seen on ground. The respondents have given the details

of various letters written to the appellant from time to time regarding speedy

completion of the work. It is also stated in the objections that the Chairman and the

Director of the appellant-company during their visit to the site had given

undertakings to speed up the progress of work by infusing additional funds and the

undertakings had been given in this regard by the Chairman and the Director are

dated 30.04.2018, 28.06.2018, 30.11.2017 and 20.12.2016 but there was hardly

any increase in labour and infusion of capital. The appellant has placed on record

the minutes of the meeting held on 22.12.2016 and 23.10.2017, those bear the

signatures of the Chairman of the appellant-company as well. It is also stated that

with respect to OTM building, the appellant had just constructed a small type IV

building and there was nil progress in respect of other OTM buildings and rather

the appellant has been giving irrelevant excuses rather than concentrating on

progress of work which is already lagging behind commitments. Out of the various

OTM buildings planned in the project, following buildings have not been started

on the ground:

(a) CH & DH for 40 trainees.

(b) SM Bk for 40 Hav & 75 Ors.

(c) Block for four Maj Trainees

(d) Block for four Md Qtrs (Type-II) for No8.

(e) Block of Guard House & Armoury

(f) Block of religious building

(g) Block of sentry post.

(h) Block of MT Store & tech office.

7. It is also stated that the appellant vide its various letters is stressing

upon finalization of the SRs. The execution of work on DOs, finalization of SRs

are part and parcel of the administration and management of the contract and both

the parties i.e. the department as well as the contractor are equally responsible for

their part as per CA provisions. As far as SRs are concerned, 80 to 85 per cent of

the payment has already been made to the appellant. It is also stated that there are

many parallel activities which do not involve any star rates like the construction of

various OTM buildings. The appellant-contractor is, however, not interested in

starting them, due to low quoted rates. It is further stated that as per the condition

No. 54 of the General Conditions of Contract, it can be cancelled on account of

contractor's default. The contractor/appellant was granted extension of time seven

times during various periods but the appellant could achieve negligible progress

during various periods as mentioned above. The respondents admitted that due to

certain changes in the technologies and material/goods and advancements in the

field of medicine, certain changes were made but there were no radical changes in

the scope of CA to ensure that progress of the work was not prolonged by the

appellant. The changes highlighted by the appellant like lift, chiller pipe line were

just latest technology version of the same as those contained CA scope and not

additional items. All the changes were within the DO limit of CA provisions.

Further 80-85% of the payments in lieu of lifts, glass wool insulation stands made

to the appellant. It is also stated that there has been no change in the floor area of

the first floor except for the change of nomenclature of the rooms, wards for

functional utility and convenience of medical practices/services. It is also stated

that the ceiling of crumble joint was an independent activity and change in

specification thereof was not effecting other activities. The changes sought to be

made were intimated to the appellant prior to attaining the progress of work at a

particular stage, so neither progress of work nor completion was hampered and the

delay in completion was solely because of the appellant's poor site management,

lack of resources, insufficient deployment of labourers etc. It was also stated that in

terms of Condition 62, the appellant has to be paid for the changes in the material

specification in lieu of existing material ordered by the respondents at reasonable

rate/amount to the appellant. Payments were made to the appellant as and when

demanded as per Contract Agreement provision in terms of Condition 64 for any

reason which was beyond the control of appellant, sufficient extension of time was

granted under Condition 11 of the Contract Agreement. More so, the change in the

amount of the item/material was nominal considering financial capability of the

contractor, value of the whole work and residual value of the work done by the

appellant. The appellant was intimated vide letter dated 12.01.2019 regarding the

deficiencies/shortcomings on the part of appellant. It is also stated that the

respondents were compelled to issue final notice for termination of the work to

safeguard public interest and the respondents have released an amount of Rs.

133.82 crores out of total Rs. 136.02 crores for the total work done including

escalation. As the extension of time was granted about seven times from the start

of the project but with the resources/materials employed by the appellant, the work

was not likely to be completed by another 10 to 15 years, as such, the respondents

came to conclusion that the commitment made by the Chairman of the appellant-

company to complete the work by 31.12.2019 is not likely to be fulfilled again, so

the final notice for termination of the contract followed by the communication

dated 18.03.2019 was issued by the respondents and till date only 60 per cent of

the work stands completed.

8. The appellant filed rejoinder to the objections of the respondents and

virtually elaborated the pleadings of the writ petition and also placed on record

various communications to demonstrate the changes sought by the respondents.

9. The learned Single Judge vide judgment dated 14.01.2020 dismissed

the writ petition whereby the termination of the contract was challenged by the

appellant and also the other writ petition whereby the notice dated 21.01.2019 was

impugned by the appellant.

10. Sh. Pinaki Mishra, learned counsel appearing for the appellant drew

our attention particularly to the para 47 of the judgment impugned and vehemently

argued that the learned Single Judge has not properly considered the contentions

raised by the appellant that the delay was attributable to the respondents because

there were major changes in the work allotted to the appellant particularly in view

of the fact that the appellant had placed on record sufficient documentary evidence

in support thereof. He has further argued that it was a fit case for the learned Single

Judge to exercise jurisdiction power under Article 226 of the Constitution of India

as the respondents have arbitrarily terminated the agreement, when the respondents

were at fault and not the appellant.

11. Per Contra, Mr. Vishal Sharma, learned ASGI appearing for the

respondents has vehemently argued that the learned Single Judge has not declined

to exercise the jurisdiction under Article 226 of the Constitution and has rather

considered the grounds raised by the appellant and has come to the conclusion that

the termination of the contract was not arbitrary. Mr. Sharma has further argued

that the Chairman of the appellant-company in his various meetings had admitted

about the slow progress of the work due to cash flow problem of the firm as well as

incorrect quoting of the rates and further had assured time and again the

respondents to complete the project by the different deadlines but did not adhere to

the said deadlines leaving to option with the respondents to terminate the contract.

12. A perusal of the judgment would reveal that the learned Single Judge

has not dismissed the writ petition filed by the appellant on the issue of the

maintainability of the writ petition, rather after discussing the catena of judgments

of the Apex Court, had come to the conclusion that the jurisdiction under Article

226 of the Constitution in contractual matters can be exercised only when it was

first established that the contract in question had any public law character. There

cannot be any exception to the reiteration of settled position of law laid down in

the above mentioned judgments by the learned Single Judge in the judgment

impugned. It is settled law that resort cannot be had to Article 226 of the

constitution merely because there is contract between the private party and the

State or its instrumentality as defined under Article 12 of the constitution. First of

all it has to be established that contract in question has any public law character.

13. The Apex Court in "Joshi Technologies International Vs. Union of

India & ors" reported in 2015 (7)SCC 728 has culled out the various principles

with regard to the exercise of writ jurisdiction in contractual matters and relying

upon the same, the learned Single Judge has considered the same in extenso the

impugned judgment. The learned Single Judge has held that the contract in

question does not have any statutory genesis and has no public character but

nonetheless, the learned Single Judge has not dismissed the said petition on that

ground but has proceeded to consider the issue of arbitrariness and lack of fairness

on the part of respondents in termination of the contract, raised by the appellant. So

there is no force in the contention raised by the appellant that the learned Single

Judge has refused to exercise the jurisdiction under Article 226 of the Constitution

of India.

14. The main contention raised by the appellant through the medium of

writ petition was that the delay in execution of the contract was due to the rampant

changes made by the respondents from time to time in the scope of original

contract and also because of non-payment in lieu of changes made at the request of

the respondents. Precisely, it is the case of the appellant that for none of the fault of

the appellant, respondents have terminated the contract in an arbitrary manner.

15. Before appreciating the issues raised by the appellant, it would be apt

to take note of the law laid down by the Apex Court while exercising the power of

judicial review of the administrative action. Apex Court in "Tata Cellular Vs.

Union of India" reported in 1994(6)SCC 651 has held that the court does not sit as

a court of appeal but merely reviews the manner in which decision was made and

further the court does not have expertise to correct the administrative decision. If a

review of administrative decision is permitted it will be substituting its own

decision, without the necessary expertise which itself may be fallible.

16. Thus, while exercising the power of judicial review in contractual

matters, the court has to examine as to whether the decision that is questioned

before it is arbitrary and is of such nature that no responsible authority could have

reached at on the basis of material available before it. But at the same time, the

court is not to sit as a court of appeal over the decision that is the subject matter of

judicial review. If on the basis of material available before the authority, such

decision can be arrived at, then the decision of the authority is not required to be

interfered with merely because other opinion is also possible on the basis of

material available before Authority. Now the order passed by the learned Single

Judge is to be examined on the basis of abovementioned proposition of law.

17. This is an admitted fact that the contract was to be completed by

09.05.2013 and it was contended that because of the various extensions granted by

the respondents themselves under Clause 11(a) (vii) of the contract, the contact

could not be terminated. So the first point that was required to be considered is as

to whether there was a delay on the part of the appellant in completion of the

project or the delay was attributable to the respondents. The appellant has not

disputed the meeting held on 20.12.2016 at 1200 hours. The minutes of the

meeting reveal that the Chairman of the appellant-company accepted the slow

progress of the work on their part and reaffirmed their commitment to complete the

work by 31.10.2017. In the said meeting, he mentioned that the slow progress was

due to cash flow problem of the firm, incorrect quoting etc. He also admitted that

the situation has become more difficult due to demonetization as only Rs. 50,000/

per week could be withdrawn from the current account that was insufficient for

payment to the laborers. The minutes of the meeting have been signed by the

Chairman of the appellant-company. Yet another meeting was held on 30.11.2017

at 1600 hours and the minutes of this meeting refers to the minutes of the meeting

held on 23.10.2017 in which the appellant has again admitted the slow progress of

the work on its part and made a commitment to complete the whole work by

30.09.2018 and in the said meeting, the Chairman of the appellant-company had

again assured to increase the labour deployment. In the said meeting, the Chief

Engineer has expressed his unhappiness over the non adherence to the commitment

made by the chairman in the last and previous meetings. The minutes of the

meeting bear signatures of the Chairman of the appellant-company. From the

minutes of both these meetings, it is evident that the pace of the work of the

appellant was not up to the mark.

18. It was also contended that it was because of the numerous deviations

impressed upon by the respondents that resulted into the delay in completion of the

work. To appreciate this issue, it would be appropriate to take note of the last part

of the clause 7 of General Conditions of contract (I.A.F.W- 2249) dealing with the

deviations, which reads:

"All additions and deductions will be priced as per condition 62 hereof and added to or deducted from the Contract Sum. Whenever the Accepting Officers intends to exercise such right his intention shall be communicated to the Contractor by the G.E., whose order in writing shall specify the deviations which are to be made, the lump sum assessment or the proposed basis of payment, the change, if any, in the date or completion of the relevant phase and/ or the entire Contract. Any objection by the Contractor to any mater concerning the deviation order, shall be notified by him in writing to the G.E. within 15 days from the date of receipt of such order, but under no circumstances shall the progress of the Works be stopped (unless so ordered by the G.E.) owing to differences or controversies that may arise from such objection. In default of such notification, the Contractor will be deemed to have accepted the order and the conditions stated therein without in any way affecting the right of the parties to rectify any mistake on the basis of payment only to the extent it differs from Condition 62. In the event of the Contractor failing to agree with the G.E. regarding the proposed alteration of time, the objection shall be referred to the Accepting Officer or, in the case of Contracts (other than Term Contracts) accepted by the G.E. to the C.W.E., whose decision shall be final and binding."

19. Thus, in the case of any deviation either by way of addition or

deduction, the contractor is required to be intimated and the contractor has a right

to object the same in writing within 15 days from the receipt of such deviation

order but under no circumstances the work was required to be stopped unless

otherwise ordered by the Garrison Engineer and in absence of any such objection,

the contractor shall be deemed to have accepted the deviation order and the

conditions stated therein. In the instant case nothing has been brought on record by

the appellant that they at any point of time objected to the deviations on the ground

that they were major deviations beyond the scope of contract work and the

deviations were not acceptable to the appellant. Otherwise also, the extensions

were granted seven times to the appellant for the completion of work but the

appellant failed to meet the various deadlines fixed mutually and the chairman of

the appellant company admitted the lapse on the part of the company. More so, it is

evident from the record that there were certain works mentioned above those were

never started by the appellant. The clause 54 of the General Conditions of contract

provides that the Accepting Officer may, without prejudice to any other right or

remedy which shall have accrued or shall accrue thereafter to Government, cancel

the Contract as a whole or only such Work Order(s) or items of Work in default

from the Contract. The respondents on the basis of material available before them

have terminated the contract and it cannot be held that there was no material before

them to arrive at the said decision. Thus the contention raised by the appellant that

there were major deviations from the original plan resulting in to delay was rightly

rejected by the learned Single Judge.

20. It was also urged that the termination order dated 15.03.2019 was

issued without considering the reply dated 05.03.2019. A perusal of impugned

communication reveals that the letter dated 25.01.2019 of the appellant in response

to the letter dated 21.01.2019 of the respondents was duly considered and replied

vide communication dated 25.02.2019 and thereafter the contract was terminated.

The appellant had already raised the issues in its letter dated 25.01.2019 and they

were duly considered and replied in compliance to the order of Learned Single

Judge. The appellant cannot be permitted to raise issues time and again and if such

course is permitted then the whole purpose of clause 54 of the General Conditions

of Contract(supra) shall become meaningless.

21. Another issue raised was with regard to the non-payment of the dues

by the respondents. The appellant has not denied the claim of the respondents that

it has received the sum of Rs. 133.82 crores rather in rejoinder the appellant has

stated the sum of Rs. 5.13 crores raised vide bill No. 126 dated 05.03.2019 is still

outstanding. The said bill was raised when the parties were in litigation. But the

slow pace of the work in the year 2016,2017 and 2018 cannot be ignored in view

of the fact that the Chairman of the appellant-company had himself admitted the

shortcomings on the part of the appellant including the wrong quoting. Even in its

communication dated 25.02.2019 the appellant called upon the respondents to

grant extension of time as it would not only enable it to claim much needed

payments but also the contract would remain alive, failing which it will have legal

right to treat the contract as closed. It is evident from the communication that the

appellant did not claim any payments initially and rather cautioned the respondents

that in the event the extension of time is not granted, the appellant shall have a

legal right to treat the contract as closed.

22. The last contention raised by the appellant is that the learned Single

Judge has prejudged the contractual claims of the appellant, is also without any

force as the learned Single Judge has considered the claims of both the parties for

the purpose of determining as to whether the act of the respondents in terminating

of the contract was arbitrary or not. No detailed discussion has been made qua the

genuineness of the claims made by both the parties against each other. Had the

learned Single Judge not examined the claims then the either of the parties could

have complained that the Learned Single Judge has not applied its mind to the facts

of the case. The perusal of the record reveals that there are allegations and counter

allegations on the part of both the parties against each other and neither we nor the

learned Single Judge has returned any finding qua the genuineness of the claims of

either of the parties. The work of the utility in question being of vital importance

cannot be allowed to remain in suspended animation just because of the slow pace

of the work or on account of payments due, if any.

23. Learned Single Judge has rightly come to the conclusion that there is

no arbitrariness on the part of the respondents in terminating the contract as they

have terminated the contract on the basis of certain grounds. The appellant would

have been right in contending that the action of the respondents was arbitrary, had

the respondents furnished no reason for the purpose of terminating the contract or

had terminated the contact on the basis of the reasons contrary to the record, but

there is nothing on record to demonstrate either of the above.

24. In view of all what has been discussed above, there is no merit in the

appeal and, as such, the instant appeal is liable to be dismissed.

(RAJNESH OSWAL) JUDGE

PANKAJ MITHAL, CJ:

1. Agreeing with the above opinion expressed by my learned Brother, I

would like to reiterate that the dispute in the appeal has arisen due to the

cancellation of a civil contract vide order dated 18.03.2019 for constructing a Multi

Storey Command Hospital at Udhampur.

2. One of the points which arose before the writ court was whether the

writ petition against the cancellation of the contract is maintainable as it involved

disputed questions of fact and the contract provided for a remedy of arbitration as

per Clause 70 of the Agreement.

3. The writ court opined that since the contract does not have any

statutory genesis and a public law element, the exercise of writ jurisdiction would

not be justified.

4. It is important to note that where a State or its agents enters into the

field of ordinary civil contract, its relations vis-à-vis the contracting party ceases to

be governed by constitutional or statutory provisions but by a legally valid contract

and the rights and obligations inter se the parties are determined accordingly. In

such cases of contracts, Article 14 of the Constitution of India or any other

constitutional provision does not come into play at all and ordinarily would not be

amenable to writ jurisdiction. It may be a different thing where the breach of

contract involves breach of statutory obligation but that would only be where the

contract is by virtue of a statutory power.

5. The writ court in dismissing the writ petition noted ABL

International Limited vs. Export Credit Guarantee Corporation of India Limited,

(2004) 3 SCC 553 which highlights the legal principles that have been crystallized

regarding the maintainability of the writ petition in contractual matters. It observed

that a writ petition arising out of a contractual obligation, cannot be refused to be

entertained as of a rule merely because some disputed questions of fact arise for

consideration. Even Union of India vs Tantia Constructions (P) Ltd (2011) 5

SCC 697 lays down that existence of arbitration clause is not a bar in filing a writ

petition when there is injustice and violation of rule of law and the constitutional

powers of the courts cannot be fettered but simultaneously in Joshi Technologies

International Inc. vs. Union of India and Others, (2015) 7 SCC 728, the Supreme

Court laid down the circumstances in which normally the court would not exercise

its discretionary jurisdiction in contractual matter. It laid down that whenever a

contract provides for a particular mode of settlement of dispute; where serious

disputed questions of fact which are of complex nature arise and are required to be

determined on evidence; where the issue has no pubic law character attached to it;

and, where the claim is for money arising out of contractual obligation, the High

Court would refuse to exercise the jurisdiction under Article 226 of the

Constitution of India.

6. The writ court relied upon K.K.Sakesena vs. International

Commission on Irrigation & Drainage, (2015) 4 SCC 670, where it has been

observed that a writ would not lie to enforce private law rights arising under a civil

contract. A private law is different part of the legal system which is a part of

common law that involves relationships between individuals, such as, law of

contracts or torts. Therefore, even if writ petition would be maintainable, the court

has to satisfy before issuing any writ especially that of mandamus whether the

action impugned is within the domain of public law as distinguished from private

law. In other words, where the action challenged does not have the trappings of a

public element and is essentially falls under the private category, the court would

not be justified to issue any writ.

7. Thus, in the facts and circumstances of the case, as the contract in the

case at hand was purely of a civil nature between a private individual and the State

was not acting in any statutory capacity, the writ court rightly held that it was not

having any public law character and was not in the domain of the public law.

8. There is no dispute to the fact that the agreement vide Clause 70

provided for the resolution of disputes through arbitration.

9. Sh. Pinaki Misra, senior counsel submitted that the said clause is

illusory in nature as it limits the invocation of the same only after the contract work

is got completed through some other agency. The agreement does provide for an

alternative remedy of arbitration and the complete reading of the arbitration clause

reveals that the said remedy can be invoked as soon as the respondents award a

fresh contract for the purposes of completing the balance work and the appellant

need not to wait till the completion of the contract for invoking the arbitration. The

appellant having waited since March 2019 can certainly wait for some more time

to get the matter adjudicated through arbitration as the respondents very fairly

submitted that they would be finalizing the contract for the remaining work

without wasting any time at the earliest which could not be done earlier due to this

litigation. Moreover, arbitration happens to be a complete remedy for the redressal

of all grievances of the parties which can be settled or adjudicated on the basis of

evidence including that of summary proceedings.

10. The other point which arose for consideration before the writ court

was whether the termination of the contract vide order dated 18.03.2019 is illegal

or unjustified.

11. The court has categorically concluded that the contract had been

terminated in accordance with the terms and conditions of the agreement and that

there was no arbitrariness in such termination. The slow pace of the work or the

delay in completing the construction work which is one of the main factor for

terminating the contract, was more or the less attributable to the appellant as the

appellant in various meetings admitted the same. The alleged deviations were

within the four corners of the agreement and were not the major ones. The issue

whether the deviations exceeded the permissible limit of 10% to classify them as

major deviations is certainly a question of fact dependent upon the evidence which

could not have been looked into and adjudicated upon by the writ court in exercise

of its extra ordinary power.

12. Thus, in the overall facts and circumstances, there is no error or

illegality on the part of the writ court in refusing to entertain the writ petition both

on the ground that it is not a case which warrants exercise of extraordinary

jurisdiction and that there is no ex facie illegality in the termination of contract

leaving it to be adjudicated upon by the appropriate forum on the basis of evidence

without prejudice to any observations or finding recorded by the High Court in the

writ petition or in this Letters Patent Appeal.

13. The appeal as such lacks merit and is dismissed.

(PANKAJ MITHAL) CHIEF JUSTICE Jammu 30 .04.2021 Tilak Whether the order is speaking? Yes/No Whether the order is reportable? Yes/No