2024 (5) TMI 882 - HC - Indian Laws

Writ petitions for contractual payment claims dismissed due to lack of exceptional circumstances and unexplained delay

Calcutta HC set aside a Single Judge's order allowing writ petitions for contractual payment claims. The Court held that writ petitions involving money ... Maintainability of petition - honour of contractual obligations of making payment - Jurisdiction of the writ court in contractual matters - violation of a contractual right - time limitation for filing a suit - HELD THAT:- The issue whether a matter which lies entirely within a private realm can be dealt with under a writ jurisdiction against an entity amenable to such jurisdiction cropped up in M.P. POWER MANAGEMENT COMPANY LIMITED, JABALPUR VERSUS SKY POWER SOUTHEAST SOLAR INDIA PRIVATE LIMITED AND ORS. [2022 (11) TMI 1395 - SUPREME COURT]. The proposition of law laid down by the Hon’ble Supreme Court in the aforesaid reports is that even in case of non-statutory contract, the jurisdiction of the writ court can be invoked if the aggrieved party is able to establish that the action of the entity amenable to writ jurisdiction is per se arbitrary. The said decision also recognizes the right of an aggrieved party to call upon such an entity to honour its obligation of making payment unless a serious and genuine dispute is raised relating to the liability to make such payment. Before arriving at a final conclusion as to whether the judgment and order impugned calls for interference, this Court has to turn back to the case on hand to see whether there is a serious and genuine dispute relating to the liability to make payment - The stand of the Institute in the report filed in the form of an affidavit before the writ court that the Institute was established and placed under the mentorship of NIT, Durgapur, in the absence of its regular Director and the mentorship continued till 06.08.2017 and also that the Institute got its first director on and from 07.08.2017 does not appear to have been disputed by the writ petitioners. This Court is of the considered view that in case of alleged violation of a contractual right or duty by the State or its instrumentalities or entities amenable to jurisdiction under Article 226, normally the aggrieved person has to avail the established civil adjudicatory process and only in exceptional circumstances in contractual matters or even when money claim is raised, the writ court may in exercise of its discretion entertain the writ petition. Violation of a contractual right - HELD THAT:- The writ petitioners have claimed payment on account of work done by them. The dispute, therefore, is within the private realm. In order to maintain a writ petition involving such a dispute, the writ petitioners have to satisfy the Court that the case falls within the exceptional circumstances. The conduct of the writ petitioners may be of some relevance for deciding whether the case of the writ petitioners fall within the exceptional circumstances. Time limitation for filing a suit - HELD THAT:- This Court holds that the period prescribed under the Limitation Act for filing a suit shall be considered to be the reasonable time period for filing a writ petition involving money claim. Any contrary interpretation would encourage an aggrieved person, not vigilant of his rights, to get a claim arising out of contractual matters adjudicated through judicial process which has already become time barred - In the case on hand there has been an inordinate delay in filing the writ petition which remains unexplained. The writ petitioners have failed to satisfy this Court that a civil suit for such reliefs would not have become barred by limitation at the point of time when the writ petition was filed. Such an issue goes to the jurisdiction of the Court which somehow escaped the attention of the learned Single Judge. Therefore, it appears to this Court that there is a serious dispute as to the liability to make payment. The writ petitioners have miserably failed to bring their case within the exceptional circumstances for the Writ Court to entertain a money claim for alleged violation of a contractual right by an entity amenable to the jurisdiction under Article 226 of the Constitution of India - this Court is of the considered view that the writ petitioners could not have been allowed to bypass the established civil adjudicatory process merely because the claim is against an entity amenable to writ jurisdiction. This Court, therefore, holds that the writ petitions were not maintainable. The impugned judgment and order stands set aside - Appal allowed. Issues Involved:1. Maintainability of the writ petitions.2. Alleged arbitrary and unreasonable conduct by the Institute.3. Time-barred claims and delay in filing the writ petition.4. Jurisdiction of the writ court in contractual matters.Summary:1. Maintainability of the Writ Petitions:The primary issue was whether the writ petitions were maintainable given that the dispute arose from a non-statutory contract. The court noted that the Institute, being a Central Government funded technical institute, is amenable to the jurisdiction of the High Court u/s 226 of the Constitution of India. However, the rights of the parties were governed by the terms of the contract, and the court emphasized that normally, disputes arising from contractual obligations should be resolved through established civil adjudicatory processes unless exceptional circumstances justify the intervention of the writ court.2. Alleged Arbitrary and Unreasonable Conduct by the Institute:The learned Single Judge had observed that the Institute's non-payment of the petitioners' bills, despite the completion of work to the Institute's satisfaction, amounted to arbitrary and unreasonable conduct. The Single Judge directed the Institute to release the amounts indicated in the impugned order along with interest. However, the appellate court found that there was a serious and genuine dispute regarding the liability to make payment, as evidenced by the objections noted by the Assistant Engineer and the return of the original file by NIT, Durgapur.3. Time-Barred Claims and Delay in Filing the Writ Petition:The court highlighted that the final bill was submitted on February 23, 2015, and the writ petition was filed only in December 2022. The court held that the period prescribed under the Limitation Act for filing a suit should be considered the reasonable time period for filing a writ petition involving money claims. The court found that the writ petitioners failed to explain the inordinate delay and that a civil suit for such reliefs would likely have been time-barred at the time of filing the writ petition.4. Jurisdiction of the Writ Court in Contractual Matters:The court reiterated that while the writ jurisdiction is a public law remedy, it can be invoked in contractual matters if the action of the entity amenable to writ jurisdiction is per se arbitrary. However, in this case, the court found that the writ petitioners failed to demonstrate exceptional circumstances that would justify bypassing the established civil adjudicatory process. The court concluded that the writ petitions were not maintainable and that the learned Single Judge had improperly exercised discretion by granting relief.Conclusion:The appeals were allowed, and the impugned judgment and order were set aside. The writ petitioners were advised to approach the proper forum for appropriate reliefs in accordance with the law. The court clarified that its observations were only to support the ultimate conclusions in these appeals and should not prejudice the parties if they approach the proper forum.