TaxTMI 
TaxTMI 
2012 (8) TMI 1112
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....esh Industrial Infrastructure Corporation Ltd. (APIIC). An agreement dated 24.9.2008 was entered into between the appellant and the APIIC. The work was to be completed within a period of 12 months. However, the appellant alleges that the respondents asked it not to proceed with the work during December, 2009. By that time, the appellant claims to have completed more than 34% of the work. The appellant submitted running account bills for the works executed by it, but only two payments were released and no payments were made against running account bill No. II. According to the appellant, these bills were certified by the respondents. On 13.7.2009 and 5.2.2010 also, the appellant claims to have submitted the bills but the same were not even certified and payment released. By its letters dated 21.1.2010, 22.3.2010 and 29.5.2010, the appellant requested the APIIC to grant permission to resume the work and to release the outstanding payments. Thereafter also, the appellant submitted representations to the APIIC, but even after lapse of 19 months, the APIIC failed to make payments as stipulated in the agreement dated 24.9.2008. Therefore, the writ petition. 2. The Hon'ble Single J....
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....he judgments of the Supreme Court in Gujarat State Financial Corpn. v. Lotus Hotels (1983) 3 SCC 379, Food Corporation of India v. SEIL Ltd. (2008) 3 SCC 440 and Union of India v. Tantia Construction (P) Ltd. (2011) 5 SCC 697 5. On the other hand, the learned Advocate General appearing for the APIIC submitted that the appellant stopped the work in December, 2009 itself on its own accord and there were no instructions from the officers of the APIIC to stop the work. The appellant had not completed more than 31% of the work and the pending bills could not be cleared for want of funds to be provided by the Government. The appellant is not entitled to any relief and the writ appeal is liable to be dismissed. 6. The learned Advocate General submitted that after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter se. He submitted that the parties can only claim rights conferred upon them by the contract and are bound by the terms of the contract only unless some special statutory power or oblig....
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....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. 8. In Radhakrishna Agarwal v. State of Bihar, the Supreme Court observed that it was the contract and not the executive power regulated by the Constitution, which governed the relation of the parties on the facts of the case and they involved questions of pure alleged breaches of contract. In such cases, no writ or order could issue under Article 226 of the Constitution to compel the authorities to remedy a breach of contract. In the said judgment, the Supreme Court noted three types of cases in which breaches of alleged obligation by the State or its agents can be set up, and after referring to several judgments on the subject including Lekhraj Sathram Das v. N.M. Shah AIR 1966 SC 334 observed as follows: ....the State Act purely in its executive capacity and is bound by the obligations which dealings of the State with the individual citizens import into every transaction entered into in exercise of its constitutional powers. But, after the State or its agents have entered into the field of ordinary contract, the relati....
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....e writ petition is misconceived since the appellant was not seeking to enforce any statutory right or seeking to enforce any statutory obligation cast upon the respondents. In our view, the existence of an effective alternative remedy provided in the agreement itself is a good ground for the court to decline to exercise its extraordinary jurisdiction. 10. If a term of a contract is violated, ordinarily the remedy is not a writ petition under Article 226 of the Constitution. Admittedly, the contract entered into between the appellant and the APIIC is in the realm of private law. Disputes arising out of the terms of such contracts 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. Whether any amount is due and if so, how much and refusal of the respondent APIIC to pay it, is justified or not, are not the matters which could be agitated in a writ petition. 11. The judgment of the Supreme Court in Union of India v. Tantia Construction (P) Ltd. relied on by the learned Senior Counsel appearing for the appellant can be distinguished ....