The judgment emphasizes that a writ petition would not be maintainable for disputes arising from a contract and that the respondent, a finance company, did not qualify as an instrumentality or agency of the State.

Vipin Sanghi, J.

Cav. 513/2017

1. Since the Caveator has put in appearance, the caveat stands discharged.

CM No. 19751/2017 (exemption)

2. Allowed, subject to just exceptions.

LPA 401/2017

3. Notice. Mr. Mayank Mishra, Advocate accepts notice on behalf of the respondent.

4. With consent of parties, arguments have been heard, and we proceed to dispose of this Letters patent appeal.

5. The appellant has preferred the present Letters Patent Appeal to assail the judgment dated 08.05.2017 passed by the learned Single Judge in W.P.(C) No. 8031/2016. Vide the impugned judgment, the learned Single Judge has dismissed the appellants said writ petition as being not maintainable against the respondent.

6. The case of the appellant/ petitioner in the writ petition was that the petitioner had started construction of the Rajpur Hydro Electrical Project in Rajpura Village, Tehsil Shimla, District Himachal Pradesh, and had entered into an agreement with the respondent, M/s PTC India Financial Services Ltd. to obtain a loan of Rs. 60 crores, out of the total project cost of Rs. 85.75 crores. The grievance of the petitioner was that the respondent disbursed only an amount of Rs. 47 crores by 01.11.2015. By that time, 80% of the project was already complete. The respondent, however, failed to release the balance loan amount which was essential for completion of the project. The said failure on the part of the respondent resulted in the petitioner’s inability to complete the project. The respondent, rather than disbursing the balance loan amount, served a notice dated 17.06.2016 upon the petitioner’s promoters threatening to acquire 100% equity shares of the promoters in the petitioner company. Consequently, the writ petition was preferred to seek a writ of mandamus against the respondent so as to restrain the respondent from acquiring the promoters 100% equity share capital in the petitioner company, or taking any coercive steps against the assets of the petitioner company. The petitioner also sought a direction to the respondent to disburse the complete sanctioned credit facility and provide the overall costs of the project, on account of the alleged non-disbursal of the entire sanctioned loan as per the Agreement dated 28.03.2013.

7. Upon issuance of notice in the petition, on 15.09.2016 learned counsel for the respondent appeared and contested the maintainability of the writ petition on the ground that it was neither a ‘State’ nor a ‘Public Authority’ or a ‘Government Agency’, and that it was not amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India.

8. The learned Single Judge has held in the impugned judgment that the writ petition was not maintainable since the respondent was neither ‘State’; nor ‘an Authority’ nor “an instrumentality of the State’. In the course of the impugned judgment, the learned Single Judge has considered the various pronouncements of the Supreme Court on the issue, viz.:

i. Praga Tools Corpn. vs. C.V. Imanual, (1969) 1 SCC 585;

ii. Motilal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh and Ors., AIR 1979 SC 621;

iii. Gujarat State Financial Corporation vs. Lotus Hotels Pvt. Ltd., AIR 1983 SC 848;

iv. Shri Anadi Mukta Sadguru Trust vs. V.R. Rudani, (1989) 2 SCC 691;

v. VST Industries Ltd. vs. Workers’ Union, (2001) 1 SCC 298;

vi. State of Bihar and Ors. vs. Jain Plastics and Chemicals Ltd., (2002) 1 SCC 216;

vii. Mysore Paper Mills Ltd. vs. Mysore Paper Mills Officers Association and Anr., 2002 (2) SCC 167;

viii. Federal Bank Ltd. vs. Sagar Thomas and Ors., (2003) 10 SCC 733;

ix. ABL International Ltd. and Anr. vs. Export Credit Guarantee Corporation of India Ltd and Ors., (2004) 3 SCC 553;

x. Mardia Chemicals Ltd. and Ors. vs. UOI and Ors., (2004) 4 SCC 311;

xi. Binny Ltd. and Anr. vs. Sadasivan and Ors., (2005) 6 SCC 657

xii. State of Uttar Pradesh and Anr. vs. Radhey Shy