IMPORTANT POINT
Any dispute relating to interpretation of the terms and conditions of a private contract cannot be agitated in a writ petition as it is a matter either for arbitration as provided by the contract or for Civil Court, as the case may be.

Headnote:Constitution of India-Art. 226-Writ Petition - Maintainability -Works contract with Government of State for rehabilitation and improvement of road-Dispute about certain payments which respondent claims are due to it-State Government claims that it is entitled to retain as liability to tax-Matter within realm of private law, therefore, outside the purview of writ petition-Arbitration Clause in contract-Prayer for issuance of a writ of mandamus was misconceived in this case-Respondent not seeking of enforce any statutory rights of theirs nor any statutory obligation cast upon appellants. (U.P. Sales Tax Act, 1948-Sections 7-D, 8).
       Held, the very remedy adopted by the respondent is misconceived. It is not entitled to any relief in these proceedings, i.e., in the writ petition filed by it. The High Court appears to be right in not pronouncing upon any of the several contentions raised in the writ petition by both the parties and in merely reiterating the effect of the order of the Deputy Commissioner made under the proviso to Section 8-D(1). (Para 11)
       Firstly, the contract between the parties is a contract in the realm of private law. It is not a statutory contract. It is governed by the provisions of the Contract Act or, may be, also by certain provisions of the Sale of Goods Act. Any dispute relating to interpretation of the terms and conditions of 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 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 particular amount from the writ petitioner s bill(s) was not a prayer which could be granted by the High Court Article 226.
       Secondly, whether there has been a reduction in the statutory liability on account of a change in law within the meaning of sub-clause (4) of Clause 70 of the Contract is again not a matter to be agitated in the writ petition. That is again a matter relating to interpretation of a term of the contract and should be agitated before the arbitrator or the civil court, as the case may be. If any amount is wrongly withheld by the Government, the remedy of the respondent is to raise a dispute as provided by the contract or to approach the civil court, as the case may be, according to law. Similarly if the Government says that any over-payment has been made to the respondent, its remedy also is the same. (Para 12)
       Just because the interpretation of orders made under Section 7-D or Section 8-D(1) may also fall for consideration while construing the terms of the contract does not convert the controversy into public law issue. It is yet a matter within the realm of private law and, therefore, outside the purview of the writ petition. The Arbitrator under the contract or the civil court, as the case may be - can go into and decide both questions of fact as well as questions of law. (Para 15)
       The contract in question contains a clause providing inter alia for settlement of disputes by reference to arbitration [Clause 67 of the Contract]. The Arbitrators can decide both questions of fact as well as questions of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should not follow and adopt that remedy and invoke the extra-ordinary jurisdiction of the High Court under Article 226. The existence of an effective alternative remedy - in this case, provided in the contract itself - is a good ground for the court to decline to exercise its extra-ordinary jurisdiction under Article 226. The said Article was not meant to supplant the existing remedies at law but only to supplement them in certain well-recognised situations. (Para 16)

JUDGMENT

B.P. Jeevan Reddy, J.-Leave granted.

2. This appeal is directed against the judgment of a Division Bench of the Allahabad High Court disposing of the writ petition filed by the respondent with certain directions. The arguments before us ranged far and wide and several questions have been raised though none of them are reflected in the judgment under appeal. It is averred that all these contentions were indeed urged before the High Court. Be that as it may, having regard to the importance of the questions raised herein, which is said to be arising in that Court frequently, it has become necessary to refer to the contentions urged.

3. The respondent - Bridge & Roof Company (India) Limited - is a public sector corporation. It entered into a works contract with the Government of Uttar Pradesh of rehabilitation and improvement of a certain stretch of road in Uttar Pradesh. The tender notice was issued on September 1, 1990. The date of opening the tenders was specified as December 17, 1990. The tenders were opened and the respondent s tender was accepted on May 1, 1991. The work has since been completed. The dispute is only about certain payments which the respondent claims are due to it whereas the appellant - Government of Uttar Pradesh - says that it is entitled to retain.

4. According to the terms of the contract, the rates quoted by the contractor were deemed to be inclusive of the sales tax, if any, on the constructional plant, material and supplies required for the purposes of the contract. The relevant clause [sub - clause (4 - a) of Clause 78 of the Contract, quoted at pages 25 and 26 of the Paper - book] stated inter alia that "4(a): Nothing in the contract shall relieve the contractor from the responsibility to pay any Trade Tax that may be levied under the U.P. Trade tax Act, 1948 as amended from time to time in performance of this contract; during pursuance of the contract the engineer in charge or any other person responsible for making payment to the contractor shall, at the time of making the payment to the contractor either in cash or in any other manner, deduct an amount equal to the amount specified in section 8-D of the aforesaid Act as in force, for the time being towards part, or as the case may be, full satisfaction of the tax payable under the said Act on account of the contract; the amount presently specified in the said section is 4% (four per cent) of the amount payable to the contractor." Another clause [sub - clause (2) of Clause 78 quoted at page 24 of the Paperbook] Stated that "(2) The tendered amount by the contractor shall include, all excise duties custom duties, import duties, sales tax, and other taxes that may be levied according to the laws and regulations for the time being in force as on the date 30 days prior to the closing date for submission of bids in the Employer s country on the constructional plants, materials and supplies (both permanent, temporary and consumable) acquired for the purpose of the contract. Nothing in the contract shall relieve the contractor from his responsibilities to pay any tax that may be levied in the Employer s Country on profits made by him in respect of the contract." Clause 70 of the contract provided for price adjustment. It would be sufficient if we notice sub-clause (4) of the said clause (quoted at page 47 of the Paperbook). It reads: "(4) If, after the date thirty days prior to the date of opening of tenders for the works, there in India, changes to any National or State Statute, Ordinance, Decree or other Law or any regulation or bye-law of any local or other duly constituted authority, or the introduction of any such State Statute, ordinance, Decree, Law, regulation or bye-law which causes additional or reduced cost of the contract, other than under sub-clause (1a), (2) and (3) of this clause, in the executing of the works, such additional or reduced cost shall be certified by the Engineer after examining the records provided by the claima

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1996 Supreme(SC) 1282

IMPORTANT POINT Any dispute relating to interpretation of the terms and conditions of a private contract cannot be agitated in a writ petition as it is a matter either for arbitration as provided by the contract or for Civil Court, as the case may be.

Cases Referred (1)

IMPORTANT POINT
Any dispute relating to interpretation of the terms and conditions of a private contract cannot be agitated in a writ petition as it is a matter either for arbitration as provided by the contract or for Civil Court, as the case may be.