The court emphasized the need for fair, just, and reasonable actions by the State or its instrumentality in contractual matters, and the availability of alternative remedies such as arbitration.

1. Heard both sides.

2. The petitioner is a partnership firm. They have filed the present writ petition, challenging the order dated 27.08.2009 passed by the first respondent -Chief Regional Manager, Hindustan Petroleum Corporation Ltd., (for short HPCL) and after setting aside the same seeking for a consequential direction to restore possession of the Retail Outlet of the respondent Corporation situated at No.1/1 Arani Road, Vandavasi 604 408, Tiruvannamalai District to the petitioner to resume supply of Petroleum products.

.3. By the impugned order, the petitioners Dealership Agreement dated 19.07.1979 was terminated under Clause 55(A) and 55(K) for the violations committed by the petitioner in terms of Clause Nos.28,38 and 42 of the Dealership Agreement. The petitioner was intimated that it was without prejudice to the rights of the Corporation in respect of any matter antecedent to the termination. The petitioner was also informed about Clause Nos.4,57,58,59 and 64 in the Dealership Agreement dated 19.07.1979 and she was requested to comply with the same. In the operative portion of the impugned order, it was indicated as follows:-

."...The letter dated 3. 2009 Shri A.Tikrus accepting that the load was unauthorisedly purchased from IOC petrol pump was also signed by Ms.B.Katheeja (your representative/daughter) as witness. Also, the Manager of the outlet Shri S.Annamalai, has given a letter accepting that they use to purchase MS/HSD unauthorisedly. The Manager Sri S.Annamalai also mentioned that one Mr.Ravi was operating the petrol pump earlier and that they used to remove the meter and the same will be corrected in order make the dip adjustment."

4. Notwithstanding the same, the petitioner preferred the present writ petition, on which notice was taken by the respondents. After taking notice, the respondents have filed a counter affidavit dated 30.10.2009.

.5. In the counter affidavit, it was claimed that the termination arose out of breaches of certain clauses in the Dealership Agreement. The petitioner was issued with the show cause notice on 20.05.2009 observing certain irregularities and violations. The petitioner gave a reply dated 29.05.2009. Since the reply was not found satisfactory, the impugned order came to be passed. It was claimed that it is a commercial contract and the petitioner is not entitled to invoke the constitutional relief. The petitioner had agreed to abide by the terms of the contract and therefore, the writ petition is not maintainable. Since an arbitration agreement exists, the writ court could not exercise its discretionary jurisdiction. Since Clause 66 of the Arbitration Clause is provided therein, the writ petition is liable to be rejected.

6. Since the issues raised fundamental question about the maintainability of the writ petition, arguments were addressed on the said issue.

7. Mr.A.R.L.Sundaresan, learned Senior Counsel leading Ms.AL.Gandhimathi, learned counsel for the petitioner referred to various judgments in support of their contentions.

8. The learnedSenior Counsel appearing for the petitioner relied upon a judgment of the Full Bench of this Court in Aluminium Industries Ltd., Madras v. Minerals and Metals Trading Corporation of India Ltd., and others reported in 1997 (II) CTC 636. In paragraphs 47 and 48, it was observed as follows:

"47. It is one thing to say that there is total bar to entertain writ petition under Article 226 of the Constitution of India for enforcement of contractual obligations in cases where one of the parties being a State or Authority within the meaning of Article 12 of the Constitution; and it is yet another thing to say that the power under Article 226 of the Constitution of India should be exercised rarely and sparingly in exceptional and extra-ordinary cases in such contractual matters. While reiterating that ordinarily writ petitions cannot be entertained under Article 226 of the constitution of India for enforcement of terms of contrac