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2023 Supreme(Cal) 1366

IN THE HIGH COURT AT CALCUTTA
ARIJIT BANERJEE, APURBA SINHA RAY, JJ.
Union of India & Ors. – Appellants
Versus
M/s. M.K. Basu & Ors. – Respondents
M.A.T. 1200 of 2022, IA No: C.A.N. 1 of 2022 With M.A.T. 1206 of 2022
Decided On : 11-01-2023

Advocates Appeared:
For the Appellants : Mr. Sandip Kumar Bhattacharyya, Mr. Sauvik Nandy.
For the Respondents: Mr. Debojyoti Basu, Mr. Supratim Dhar, Mr. Tirupati Mukherjee.

IMPORTANT POINT
The power of the High Court under Article 226 of the Constitution is plenary in nature, and the court has the discretion to entertain a writ application in spite of an alternative remedy being available.

Headnote:

Writ Petitions - Contractual Disputes - Indian Railways Standard General Conditions of Contract, Article 226 of the Constitution of India - [Hospital Road Lake, Petrol Pump Lake and Office Road Lake] - [Indian Railways Standard General Conditions of Contract, Article 226 of the Constitution of India] - The court upheld the maintainability of the writ petitions and held that the matter needs to be heard upon exchange of affidavits.

Fact of the Case:

The writ petitioners challenged the refusal of the Union of India/Railways to extend the validity of contracts awarded to them for cleaning and fishing rights in certain lakes. They alleged discrimination and arbitrary action on the part of the authorities. The preliminary point of maintainability was raised by the Union of India/Railways, arguing that the arbitration clause and the commercial nature of the disputes barred the writ petitions.

Finding of the Court:

The court held that the availability of an alternative remedy is not an absolute bar to the maintainability of a writ petition and is a matter of the court's discretion. It also rejected the argument that the writ court cannot adjudicate upon contractual disputes, stating that the power of the High Court under Article 226 of the Constitution is plenary in nature.

Issues: 1. Can a writ court entertain application under 226 of the Constitution when the subject matter involves contractual obligations between the State and the private individual? 2. Can a concerned private individual straightway move a writ application under Article 226 of the Constitution, particularly when there is an alternative remedy available as per the agreement between the parties? 3. Has the Learned Single Judge committed any error in holding that writ applications filed by the respondents are maintainable?

Ratio Decidendi: The court has the discretion to entertain a writ application in spite of an alternative remedy being available, and the power of the High Court under Article 226 of the Constitution is plenary in nature. The court may entertain contractual disputes if they can be adjudicated upon on affidavits without holding a trial on evidence.

Final Decision: The court upheld the maintainability of the writ petitions and directed exchange of affidavits for the matter to be heard on merits.

JUDGMENT :

APURBA SINHA RAY, J.

1. By a common judgment dated 24.06.2022 the Learned Single Judge has disposed of four Writ Petitions being WPA 7505 of 2022 With WPA 7509 of 2022 With WPA 7511 of 2022 With WPA 7514 of 2022). Two appeals filed against the said judgment are also being disposed of by the instant common judgment.

2. (Re: Hospital Road Lake, Petrol Pump Lake and Office Road Lake)

    a) The writ petitioners have entered into an agreement with Chittaranjan Locomotive Works (CLW in short) for performance of the works of “cleaning and fishing rights of the hospital road lake, petrol pump lake and office road lake” vide agreement being No. CE/B/17/2019-2020 dated 27.08.2019 for a period of three years with a provision for extension of licence period for one or two years more, on payment of licence fees. Due to intervention of the Covid-19 Pandemic, the writ petitioner’s business had suffered losses and for which requests were made from the side of the writ petitioners to the respondent for reducing license fees or to extend the payment schedule but the respondent railway authorities did not pay any heed to such requests of the writ petitioners, though the said authorities granted various benefits of welfare waiver scheme to some business houses who were similarly situated with the writ petitioners. It is also alleged that as per the agreement being No. CE/B/17/2019-2020 dated 27.08.2019 entered between the writ petitioners and the respondents and also as per the letter of acceptance dated 26.02.2019, initial period of license was stated to be three years, with a provision for extension of the contract for a further period of one or two years as per clause 40 the Special Specification and Special Conditions of Contract. It is also the case of the writ petitioners that there was no impediment anywhere in the said agreement that such provision for extension of the contract period will depend upon any concurrence of the respondent authorities. Respondent authorities have no unilateral power to refuse or deny the extension of tender period in favour of the writ petitioners. As the respondent railway authorities did not extend the period of license as per the said agreement, and as the respondent authorities floated fresh tender, the writ petitioners moved this Court in its writ jurisdiction, and the present appellant and other respondents in the writ petition raised objection with regard to the maintainability of the writ application. According to the appellants/respondents in the writ petition, clause no. 63 of Indian Railways Standard General Conditions of Contract provides for arbitration for settlement of disputes arising out of or in connection with the contract, but the same has not been availed of by the writ petitioners and further the dispute between the private parties and the State has arisen out of a commercial contract and as such there was no element of public law for invoking Article 226 of the Constitution of India.

b) After hearing the learned counsel of the parties, the Learned Single Judge has upheld the point of maintainability of the writ petition on the basis of several judicial decisions. The Learned Single Judge has specifically stated that the writ petitions are held to be maintainable and with regard to the merits, the matter needs to be heard upon exchange of affidavits.

3. The learned Counsel for the appellant in MAT 1200/2022, Mr. Sandip Kumar Bhattacharyya has challenged the above impugned judgment on several grounds:

    First, the Hon'ble Single Judge merely referred to the principles of law, without coming to any findings that the Appellants herein had acted arbitrarily.

Secondly, the entire issue could have been decided on the undisputed documentary evidences forming part of the writ petition.

Thirdly, the appellants laid emphasis on the issue of "eo nominee", meaning that whenever an issue of malice / mala-fide/arbitrariness is claimed, one has to name the persons involved personally and not merely

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