2025 (8) TMI 1699 - HC - GST

Transport Commissioner ordered to review petitioner's June 12, 2025 letter, report discrepancies and justify any bill deductions within four weeks

M/s Infrastructure Development Consultants Thru. Authorized Representative Umesh Kumbhalkar Versus State Of U.P. Thru. Prin. Secy. Deptt. Of Transport Lko. And 2 Others

Writ petition disposed; HC directed the Transport Commissioner to consider the petitioner's letter dated 12.06.2025 and, within four weeks of receipt of a ... Maintainability of petition - amicable settlement of dispute - HELD THAT:- The writ petition is disposed of with a direction to the Transport Commissioner to take into consideration the letter of the petitioner dated 12.06.2025 and inform the petitioner about discrepancies, if any, found in the performance of Contract within a period of four weeks' from the date a certified copy of this order is produced before him. Such letter shall contain detailed reasons for coming to such conclusions that deductions are necessary in the bills of the petitioner. ISSUES PRESENTED AND CONSIDERED 1. Whether the writ petition seeking quashing of office orders and mandamus for payment of alleged withheld sums is maintainable despite express contract provisions requiring amicable settlement and arbitration (Contract Clauses 56-57). 2. Whether the petitioner is entitled to a writ of mandamus directing the executive authority to release withheld payments or to pay the claimed invoices pending resolution of contractual disputes. 3. Whether failure by the executive authority to furnish reasons for deductions complained of (in response to the petitioner's written request) justifies judicial intervention short of finally determining the contractual dispute. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Maintainability of writ despite arbitration clause Legal framework: Contract contains a two-step dispute resolution mechanism: initial attempt at amicable settlement (Clause 56) and, if unsuccessful, arbitration under the Special Conditions (Clause 57.1). General principle: parties who agree to arbitration cannot ordinarily invoke the supervisory writ jurisdiction to adjudicate disputes that fall squarely within the arbitration agreement. Precedent Treatment: The petitioner relied on higher-court authorities permitting public-law interference in certain contractual disputes (cited judgments were placed before the Court). The Court acknowledged those authorities were invoked by the petitioner but did not apply them to grant substantive relief on the merits. Interpretation and reasoning: The Court observed the existence of the contractually agreed dispute-resolution route (amicable settlement then arbitration). It treated the arbitration clause as a relevant factor for adjudicatory restraint but did not hold that the clause absolutely bars all forms of judicial supervision, particularly where the executive has failed to respond to a request for reasons. Ratio vs. Obiter: The statement that arbitration and amicable settlement provisions bear on maintainability is ratio to the extent the Court declined to adjudicate the merits via writ. Any suggestion that arbitration always ousts writ jurisdiction in all circumstances is obiter, because the Court did not decide that discrete point conclusively. Conclusions: The Court did not dismiss the petition for want of jurisdiction solely on the basis of the arbitration clause but exercised restrained review. The presence of Clauses 56-57 influenced the remedial scope available via writ, limiting the Court from granting the substantive relief sought (payment) without following contractual dispute resolution. Issue 2 - Entitlement to writ mandamus for payment of withheld sums Legal framework: Mandamus may issue to compel public authorities to perform a statutory or public-law duty; however, where disputes arise from contract terms and an agreed dispute-resolution mechanism exists, courts are cautious about directing specific performance or ordering payment pending resolution unless exceptional grounds exist (e.g., mala fides, breach of public duty, or clear illegality). Precedent Treatment: The petitioner cited authorities supporting judicial intervention in contractual payment disputes involving public authorities. The Court considered those authorities but did not apply them as a basis for ordering payment in this matter. Interpretation and reasoning: The Court refrained from directing immediate payment of the withheld sums or quashing the office orders on the merits. The Court's decision reflects an assessment that the contractual dispute-resolution process and unresolved factual/contractual issues precluded granting a mandamus for payment at this stage. There was no finding of manifest mala fide or such exceptional circumstances that would warrant bypassing the contractual mechanism and ordering payment. Ratio vs. Obiter: The refusal to grant mandamus for payment is ratio in the context of these facts. Any general observations on when mandamus might be appropriate in contractual disputes with an arbitration clause are obiter and non-exhaustive. Conclusions: The Court declined to grant the substantive relief of ordering payment or quashing the deductions; it left the contractual remedy (amicable settlement/arbitration) intact as the appropriate forum for adjudication of the parties' competing claims to withheld sums. Issue 3 - Duty to furnish reasons for deductions and scope of interim judicial relief Legal framework: Administrative law principles require public authorities to give reasons for decisions affecting rights or liabilities where procedural fairness and transparency are engaged. Even where contractual dispute mechanisms exist, non-compliance with basic obligations to communicate reasons may attract limited judicial supervision to ensure fairness before arbitration or contractual remedies are pursued. Precedent Treatment: The petitioner relied on precedent to show courts may require a public authority to state reasons before deductions are enforced. The Court accepted the relevance of such precedents to the narrow question of whether the petitioner had been provided reasons for the deductions. Interpretation and reasoning: The petitioner had written to the authority requesting reasons for deductions and had not received a reply. The Court found this omission relevant and remediable by directing the authority to consider the petitioner's communication and furnish detailed reasons within a short, specified period. The Court limited its intervention to ensuring the authority complies with a duty to state the basis for its decision; it did not resolve the substantive validity of the deductions. Ratio vs. Obiter: The directive to the executive to consider the petitioner's letter and communicate detailed reasons within four weeks is ratio and constitutes the operative relief granted by the Court. Any broader remarks about procedural fairness in contract disputes are obiter, as the Court confined its order to the specific failure to respond. Conclusions: The Court disposed of the writ by directing the executive authority to take into account the petitioner's written request and to inform the petitioner of discrepancies and detailed reasons for any proposed deductions within four weeks of production of a certified copy of the order. The order is limited to ensuring transparency and does not preclude the parties from pursuing amicable settlement or arbitration under the contract. Cross-references and Practical Implications 1. The Court's limited intervention underscores that: (a) contractual dispute-resolution clauses remain generally effective to channel substantive disputes to designated fora; and (b) courts retain power to require administrative fairness (e.g., statement of reasons) before parties are compelled to resort to contractual remedies. 2. The directive to furnish reasons is a preliminary, interlocutory remedy and does not adjudicate the merits of the withheld sums; the contractual process (amicable settlement/arbitration) remains available and unaffected by the Court's order.