Writ Court may entertain disputes arising out of contract in exceptional circumstances #indianlaws

A While entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution, 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 discretion to entertain or not to entertain a writ petition.

A writ court whether can entertain disputes arising out of contract was the issue before Supreme Court in the instant matter. It was observed and held that it would depend upon facts of each case as to under what circumstances in respect of contractual claim or challenge to violation of contract the matter can be entertained by the writ court. The primary question that had arisen before the court for adjudication was whether the Appellate Bench in an intra-court appeal arising from a petition under Article 226 of the Constitution could have quashed the order terminating the contract.

In the instant case jurisdiction of the High Court under Article 226 of the Constitution was invoked on various occasions challenging every action which pertained to extension of time, denial of revised estimate by the State Government and many other facets of that nature. The High Court kept on passing orders for consideration by the appropriate authority, for grant of opportunity of being heard to the contractor and to consider his representation in accordance with law.

It was held that order of the type described as above in the contractual matter is ill-conceived as they encourage frivolous litigation. Disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India and writ court is not a proper forum to adjudicate upon such disputes. In a petition under Article 226 the High Court has jurisdiction to try issues both of fact and law. When the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account the High Court is of the view that the dispute may not appropriately be tried in a writ petition, the High Court may decline to try a petition. Rejection of a petition in limine will normally be justified, where the High Court is of the view that the petition is frivolous or because of the nature of the claim made dispute sought to be agitated, or that the petition against the party against whom relief is claimed is not maintainable or that the dispute raised thereby is such that it would be inappropriate to try it in the writ jurisdiction, or for analogous reasons.

What is to be noted is that in an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable. Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule. A writ petition involving a consequential relief of monetary claim is also maintainable. However, there does exist a word of caution for Courts. While entertaining an objection as to the maintainability of a writ petition under Article          226 of the Constitution, 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 discretion to entertain or not to entertain a writ petition. 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.

[State of Kerala & Ors. vs. M.K. Jose]

SC, 14.08.2015

Civil Appeal No. 6086 of 2015