2012 (8) TMI 1112 - HC - Indian Laws

Dispute over Water Supply Contract Appeal Dismissed

The High Court dismissed the appeal regarding stoppage of work and non-payment of bills in the Somasila Drinking Water Supply Scheme contract. The court ... - Issues Involved:1. Stoppage of work and non-payment of bills.2. Applicability of arbitration clause.3. Jurisdiction of High Court under Article 226.4. Admission of amounts by respondents.Summary:1. Stoppage of work and non-payment of bills:The appellant was awarded the Somasila Drinking Water Supply Scheme by APIIC, with an agreement dated 24.9.2008. The appellant alleged that the respondents instructed them to stop work in December 2009 after completing over 34% of the work. Despite submitting running account bills, only two payments were released, and subsequent bills were neither certified nor paid. The appellant sought permission to resume work and release outstanding payments through multiple representations, leading to the writ petition.2. Applicability of arbitration clause:The Single Judge noted that Clause 61 of the agreement dealt with suspension of work by the contractor, and Clause 73 provided for arbitration in case of disputes. The Judge observed a serious dispute regarding the stoppage of work and the appellant's entitlement to payments, suggesting that the appellant should seek remedies provided in the agreement rather than a writ of mandamus.3. Jurisdiction of High Court under Article 226:The appellant contended that the stoppage of work was instructed by APIIC officers and that there was no dispute warranting arbitration. The appellant argued that APIIC, as a statutory corporation, should not act arbitrarily. The respondents countered that the appellant stopped work on its own and that the contract, being in the realm of private law, should be governed by the Contract Act, not constitutional provisions. The court reiterated that disputes under private contracts should be resolved through arbitration or civil courts, not writ petitions, citing precedents like State of U.P. v. Bridge & Roof Co. (India) Ltd. and Radhakrishna Agarwal v. State of Bihar.4. Admission of amounts by respondents:The appellant raised a point regarding the admission of amounts by the respondents. However, the court found no documents or material constituting such an admission. The court emphasized that admissions must be unequivocal and specifically stated under the law. Consequently, the court found no merit in this point and affirmed the Single Judge's order, dismissing the writ appeal.Conclusion:The court concluded that the contract between the parties was governed by private law and any disputes should be resolved through arbitration or civil courts as stipulated in the agreement. The writ petition was deemed inappropriate for enforcing contractual obligations, leading to the dismissal of the appeal.