SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2025 Supreme(Guj) 1821

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.S. SUPEHIA, L.S. PIRZADA, JJ.
Innova Captab Limited – Appellant
Versus
Gujarat Medical Service Corporation Limited and Others – Respondents
Special Civil Application Nos. 9790, 9899, 9917 of 2025
Decided On : 06-10-2025

Advocates Appeared: For the Appellants :Digant Popat, Bhavik P. Shah For the Respondents: Shruti Dhruve, Utkarsh Sharma

The court ruled that the respondent's unilateral deductions from payments violated principles of natural justice, requiring adherence to contract clauses and valid justification for any recovery actions.

Headnote:(A) Writ Jurisdiction - Violation of Natural Justice - Petitioner's claim for payment of outstanding amounts with interest - Respondent unilaterally deducted amounts without notice - Respondent failed to justify deduction based on previous contract terms and invoked incorrect clauses - The court upheld principles of natural justice, allowing writ and directing payment. (Paras 5, 9.1, 12.2, 21)

(B) Contract Law - Recovery of dues under improper invocation of contract provisions - Validity discusses that principles of natural justice must be followed when recovering amounts from separate contracts. (Paras 20, 23)

Facts of the case:
The petitioner-Company sought payments for supplies made under current contracts while contending that deductions made by the respondent-Corporation were arbitrary and without due process, previously claiming amounts due from past contracts.

Findings of Court:
The court stated that deductions made by the respondent were impermissible as there was no adequate justification or following due process, specifically regarding the invocation of recovery clauses.

Issues: The court addressed issues concerning the legality of deductions from payments based on previous contracts and adherence to natural justice procedures.

Ratio Decidendi: The court emphasized the need to follow the natural justice principle before taking any punitive measures against a supplier, affirming that contracts must be interpreted without unfair bias against the supplier's circumstances.

Result: Writ petitions allowed, directing immediate payment to the petitioner.

Table of Content
1. petitioner seeks payment for invoiced amounts. (Para 1)
2. petitioner argues illegal deductions by corporation. (Para 5 , 9 , 10)
3. court notes actions impacting payments lacked notice. (Para 18)
4. recovery actions violated principles of natural justice. (Para 20 , 22)
5. existence of arbitration clause does not bar writ petition. (Para 21 , 23 , 24)
6. court directs payment of outstanding amounts with interest. (Para 26)

JUDGMENT :

A.S. SUPEHIA, J.

1. By way of present writ petition, the petitioner-Company, in Special Civil Application No.9917 of 2025, has sought for the following reliefs:

“A. Your Lordships may be pleased to admit and allow this application;

B. Your Lordships may be pleased to pass an appropriate writ, order or direction directing the Respondent no.1 to pay the petitioner, the full amount of Rs. 29,32,349/- towards clearance of invoices along with the interest at the rate of 18% in the interest of justice;

C. Pending admission and final hearing of the petition, Your Lordships may direct the respondent no.1 to pay the total outstanding amount of Rs.29,32,349/- along with the interest as this Hon’ble Court deems fit in the interest of justice;

D. Pending admission and final hearing of the Petition, Your Lordships may direct the respondent no.1 to not deduct any amount in future invoices raised by the petitioner without following due process of law; **”

1.1 The petitioner – Company, in Special Civil Application No.9899 of 2025, has sought for the following reliefs:

“A. Your Lordships may be pleased to admit and allow this application;

B. Your Lordships may be pleased to pass an appropriate writ, order or direction directing the Respondent no.1 to pay the petitioner, the full amount of Rs. 2,70,410 /- towards clearance of invoices along with the interest at the rate of 18% in the interest of justice.

C. Pending admission and final hearing of the petition, Your Lordships may direct the Respondent no.1 to pay the total outstanding amount of Rs.2,70,410/- along with the interest as this Hon’ble Court deems fit in the interest of justice;

D. Pending admission and final hearing of the Petition, Your Lordships may direct the Respondent no.1 to not deduct any amount in future invoices raised by the petitioner;

*** ”

1.2 The petitioner-Company, in Special Civil Application No.9790 of 2025, has sought for the following reliefs:

A. Your Lordships may be pleased to admit and allow this application:

B. Your Lordships may be pleased to pass an appropriate writ, order or direction directing the Respondent no.1 to pay the petitioner, the full amount of Rs. 3,66,292/- towards clearance of invoices along with the interest at the rate of 18% in the interest of justice.

C. Pending admission and final hearing of the petition, Your Lordships may direct the Respondent no.1 to pay the total outstanding amount of Rs.3,66,292/- in the interest of justice;

D. Pending admission and final hearing of the Petition, Your Lordships may direct the Respondent no.1 to not deduct any amount in future invoices raised by the petitioner without following due process of law.

*** ”

2. RULE. Learned advocates appearing for the respective respondents waives service of notice of rule. The affidavit-in-reply tendered by learned advocate Mr.Sharma dated 06.10.2025, is ordered to be taken on record.

3. Since a short issue is involved, the matters are taken up for final hearing today.

4. At the outset, learned advocate Mr. Digant Popat appearing with learned advocate Mr.Bhavik P. Shah for the petitioner, has submitted that the present matter was left out and de-tagged from Special Civil Application No.8535 of 2025, on the request of learned advocate Mr.Utkarsh Sharma appearing for the respondent for want of the affidavit and since the said writ petition was actually allowed by quashing and setting aside the action of the respondents vide judgment and order dated 30.09.2025, the present writ petition may also be allowed in terms of the said judgment. However, learne

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
Judicial Analysis

AI

SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top