TaxTMI 
TaxTMI 
2008 (8) TMI 901
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.... Corporation to the respondents was given on 7/4/2005 and the work was to be completed within 12 months from that date. There is no dispute that the work was not completed and the corporation released an advertisement published in some of the local newspapers on 30/6/2006 inviting tenders for the improvement and widening of four roads, including the road which was the subject matter of the contract awarded to the respondents i.e. Item No. 3-A - Telco road. The approximate costs of this road in the advertisement has been shown to be Rs. 30 crores as against the original tender cost of Rs. 17.6 crores. After the advertisement was released, the respondents were issued a letter dated 19/7/2006 informing the Corporation's decision to take action under clause 3(a) of the contract and the respondents were called upon to remain present for final measurement on 27/6/2006. The respondents submitted a representation on 25/7/2006 and by its letter dated 1/8/2006 the corporation reiterated its action as per the letter dated 19/7/2006. The respondents approached the High Court on 22/8/2006 after they had submitted another representation on 4/8/20006 to the Corporation and the Corporation confirm....
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....orporation and its functionaries submitted that the High Court lost sight of the objections raised as regards to the maintainability of the writ petition. It was submitted that there was cancellation of tender and fresh advertisement was issued. The agreement provided inhouse mechanism in relation to dispute arising out of the contract. The High Court did not consider this aspect. The High Court also did not take note of the difference between the statutory contracts and non-statutory contracts. Before the High Court the writ petition was questioned on three grounds; (i) disputed questions relates to facts were involved; (ii) to enforce the terms of contractual rights remedy under the Civil Law is available, and in any event, the writ petition was not maintainable in respect of contractual matters. It was pointed out that the writ petitioners were seeking relief of enforcement of their contractual rights, and that several relevant and material facts have been suppressed. In essence, it was submitted that the above aspects have not been considered by the High Court. 5. In response, learned counsel for the respondents-writ petitioners submitted that the Corporation itself was guil....
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....of his obligations to adhere strictly to the City Engineer's instructions with regard to the actual carrying out of the works. The Owner & the Contractor hereby also agree that the said reference to the Committee under this clause shall be a condition precedent to any right of action under the Contract." 7. In matters relating to maintainability of writ petitions in contractual matters there are catena of decisions dealing with the issue. 8. In National Highways Authority of India v. Ganga Enterprises (2003 (7) SCC 410), it was inter alia held as follows: "6. The respondent then filed a writ petition in the High Court for refund of the amount. On the pleadings before it, the High Court raised two questions viz.: (a) whether the forfeiture of security deposit is without authority of law and without any binding contract between the parties and also contrary to Section 5 of the Contract Act; and (b) whether the writ petition is maintainable in a claim arising out of a breach of contract. Question (b) should have been first answered as it would go to the root of the matter. The High Court instead considered Question (a) and then chose not to answer Question (b). In our....
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....Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature. 11. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract cou....
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....such a contract cannot be agitated, and could not have been agitated, in a writ petition. That is a matter either for arbitration as provided by the contract or for the civil court, as the case may be. Whether any amount is due to the respondent from the appellant-Government under the contract and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not, are all matters which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition, viz., to restrain the Government from deducting a particular amount from the writ petitioner's bill(s) was not a prayer which could be granted by the High Court under Article 226. Indeed, the High Court has not granted the said prayer." 12. At para 11 of India Thermal Power Ltd. v. State of M.P. and Ors. (2000 (3) SCC 379), it was observed as follows: "11. It was contended by Mr. Cooper, learned Senior Counsel appearing for appellant GBL and also by some counsel appearing for other appellants that the appellant/IPPs had entered into PPAs under Sections 43 and 43-A of the Electricity Supply Act and as such they are statutory contracts and,....