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2003 Supreme(Mad) 1061
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE P.K. MISRA
Sri Jagatheesan Lorry Transports - Appellant
Versus
Indian Oil Corporation Limited - Respondents
WRIT PETITION.NO.7014 OF 2001 and W.M.P.NO.9996 OF 2001
Decided On : 18 July 2003
The remedy under Article 226 of the Constitution of India is not applicable to enforce a contract for payment of money, especially when there is an arbitration clause in the contract.
Headnote:
Mandamus - Contract Dispute - The court dismissed the petition for a writ of Mandamus, stating that the remedy under Article 226 of the Constitution of India is not applicable to enforce a contract. The court emphasized the presence of an arbitration clause in the contract and held that the claim for payment of money under a contract does not warrant the invocation of writ jurisdiction.
Fact of the Case:
The petitioner sought a writ of Mandamus to prevent the respondents from withholding payment of bills due under a work order, citing a claim from another region. The respondents argued that the petition was essentially for payment under a contract and not maintainable, and that the petitioner should approach the appropriate forum, such as the Civil Court or Arbitration.
Finding of the Court:
The court found that the remedy under Article 226 of the Constitution of India is not applicable to enforce a contract. It emphasized the presence of an arbitration clause in the contract and held that the claim for payment of money under a contract does not warrant the invocation of writ jurisdiction. The court dismissed the writ petition, leaving it open to the petitioner to establish their right in the appropriate forum.
Issues: Dispute over payment under a work order, applicability of writ jurisdiction to enforce a contract, presence of an arbitration clause in the contract.
Ratio Decidendi: The court's decision was influenced by the presence of an arbitration clause in the contract and the inapplicability of writ jurisdiction to enforce a contract for payment of money.
Final Decision: The writ petition was dismissed, and the court closed the case without costs.
The petitioner has prayed for issuing a writ of Mandamus forbearing the respondents from interfering with the payment of bills due and payable by the respondents pursuant to the Work Order dated 5.7.2000 bearing No.SR/LPG/BULK/TPT/409 in view of any claim from the Eastern Region and consequently direct the respondents to effect payment of the bills due to the petitioner for transportation of bulk LPG throughout the Southern Region in accordance with law.
2. The petitioner responded to Tender No.LPG/LOG 9 (SR) 99. Subsequently, work had been awarded to the petitioner, who successfully completed the work relating to transportation of Bulk LPG on behalf of the respondent Corporation in the Southern Zone. The petitioner has submitted various bills in accordance with the terms and conditions for the work done till the end of March 2001. The representatives of the petitioner had also discussed the matter relating to payment with the respondents. However, it was learnt by the petitioner that the amount had been with-held on account of a claim lodged by the Eastern Region of the Corporation in respect of some other transaction against the petitioner not connected with the present transactions. It has been further asserted that, in fact, the petitioner is not liable for the amount claimed by the Indian Oil Corporation, Eastern Region and on the other hand the petitioner is entitled to receive some amounts even from the Indian Oil Corporation, Eastern Region. It is contended that the admitted amount payable to the petitioner by the Indian Oil Corporation, Southern Region cannot be held for the alleged liability in respect of some other Region. Accordingly, prayer has been made for issuing a direction as indicated.
3. In the counter of the second respondent filed on behalf of the respondents, it is indicated that some amount is to be paid by the petitioner to the Corporation for the loss caused in the Eastern Region. It has been further indicated that the writ petition is essentially for payment under a Contract and is not maintainable. It has been further indicated that even under the contract between the petitioner and the respondents, an Arbitration clause is available and if the petitioner is aggrieved by the non-payment, he should approach the appropriate forum, that is to say, either the Civil Court or the Arbitration.
4. Learned counsel appearing for the petitioner submitted that since there is no dispute regarding the amount payable by the Southern Region, there is no justification for with-holding payment of such amount for the alleged liability in respect of some other Region. It is further indicated that the action of the respondents in with-holding payment is arbitrary and cannot be sustained in law.
5. Learned counsel appearing for the respondents has placed reliance upon the decision of this Court reported in 2000(1) LLJ 769 (S. SITARAMAN v. HINDUSTAN PETROLEUM CORPORATION LTD. AND ANOTHER) wherein it has been held that the remedy under Article 226 of the Constitution of India is not applicable to enforce a contract.
6. It is not disputed that in the contract between the parties relating to the present transaction, there is an arbitration clause that if the applicant is aggrieved by the non-payment of amount due, it is always open to the petitioner to invoke such arbitration clause. Even otherwise, the claim of the petitioner is essentially a claim for payment of money under a contract for which invocation of writ jurisdiction is not the appropriate remedy. The ratio of the decision of this Court, already cited above, is squarely applicable. In such view of the matter, I am not inclined to issue writ of Mandamus as prayed for in the present case leaving it open to the petitioner to establish his right in the appropriate forum in accordance with law.
7. Subject to the above observation, the writ petition is dismissed. No costs. Consequently, WMP.No.9996 of 2001 is closed.
