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MADHYA PRADESH HIGH COURT (GWALIOR BENCH)
G.S. Ahluwalia, J.
Rajkmar Goyal - Appellant
Versus
Municipal Corporation Gwalior - Respondent
Writ Petition No. 10368 of 2020
Decided On : 01-09-2020
MUNICIPAL CORPORATION - CONTRACT - PAYMENT - DISPUTE RESOLUTION SYSTEM - WRIT PETITION - MAINTAINABILITY - PUBLIC LAW AND PRIVATE LAW ELEMENT - ARBITRATION - LIMITATION: 1. A writ petition for enforcement of contractual obligations is not maintainable unless there is a public law element involved or the case raises important questions of law and constitutional issues. 2. Where a contract between a private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction. 3. The distinction between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. 4. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision-making process or that the decision is not arbitrary. 5. Where there is a dispute between the parties and an alternative and efficacious remedy of approaching the Dispute Resolution System is available, a writ petition for enforcement of contractual obligations is not maintainable. 6. The question of limitation in a dispute resolution system is a disputed question of fact, which cannot be decided by the High Court while exercising power under Article 226 of the Constitution of India.
Fact of the Case:
The petitioner, a contractor, entered into three separate contracts with the Municipal Corporation for construction work in illegal colonies. The petitioner completed the work and submitted bills, but the Municipal Corporation did not make any payment. The petitioner filed a writ petition under Article 226 of the Constitution of India seeking payment of the amount due to him along with interest.
Finding of the Court:
1. The amended provisions of Rule 15-A of the M.P. Nagar Palika (Registration of Colonizer, Terms and Conditions) Rules 1998 (Rules, 1998), which provided for regularization of illegal colonies, were declared ultra vires by the High Court. 2. The State Government could not release its share of 50% of the total expenses for the regularization of illegal colonies due to the declaration of the amended provisions of Rule 15-A of the Rules, 1998 as ultra vires. 3. There was a dispute between the petitioner and the Municipal Corporation regarding the payment of the amount due to the petitioner. 4. The petitioner had an efficacious remedy of approaching the Dispute Resolution System as provided under Clause 12 of the General Conditions of Contract. 5. The writ petition was not maintainable as there was no public law element involved and the case did not raise any important questions of law and constitutional issues.
Issues: 1. Whether a writ petition for enforcement of contractual obligations is maintainable where there is a dispute between the parties and an alternative and efficacious remedy of approaching the Dispute Resolution System is available? 2. Whether the question of limitation in a dispute resolution system is a disputed question of fact, which cannot be decided by the High Court while exercising power under Article 226 of the Constitution of India?
Ratio Decidendi: 1. A writ petition for enforcement of contractual obligations is not maintainable unless there is a public law element involved or the case raises important questions of law and constitutional issues. 2. Where a contract between a private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction. 3. The question of limitation in a dispute resolution system is a disputed question of fact, which cannot be decided by the High Court while exercising power under Article 226 of the Constitution of India.
Final Decision: The writ petition was dismissed with liberty to the petitioner to approach the Dispute Resolution System as provided under Clause 12 of the General Conditions of Contract.
JUDGMENT
G.S. Ahluwalia, J. - This petition under Article 226 of the Constitution of India has been filed seeking the following relief:-
"(i) That, the Respondent-Municipal Corporation may kindly be directed to make the payment to the petitioner against the work done by him in File Nos. 269/18x3/6, 270/18x3/6 & 271/18x3/6.
(ii) That, the Respondent-Municipal Corporation be further directed to pay the interest to the petitioner for wrongly withholding the amount without any reason @ 14% per annum.
(iii) Any other writ, order or direction as this Hon'ble Court may deems fit in the facts and circumstances of the case be granted to the petitioner. Costs be awarded."
2. It is the case of the petitioner that the Municipal Corporation, Gwalior decided to carry out the construction work (CC Floor and Drainage System) in Ward No. 65 Gokulpur, Ward No. 65, Shanti Nagar and in Indian Overseas Bank Colony, Gwalior and for that purpose, NITs were issued by the Municipal Corporation, Gwalior. The petitioner and other contractors submitted their tenders and since the tender submitted by the petitioner was the lowest, therefore, the same was accepted. An agreement was entered into between the petitioner and the Municipal Corporation, Gwalior and the work order with regard to three construction works were issued, which haves been filed as Annexure P-1 [Collectively]. It is the case of the petitioner that before issuance of NITs, budget was worked out by the Municipal Corporation and it was found that budget is available for carrying out the construction work and, therefore, NITs were issued and the work order was issued. The petitioner thereafter completed his work within time frame work and the technical report was also submitted which was to the effect that work performed by the petitioner is up to the satisfaction of the authority and was in accordance with the specifications. Initially, the petitioner submitted the first bill in all the three cases and, thereafter, final bill was also submitted but it is the case of the petitioner that neither the first bill has been honoured nor the final bill has been honoured and till date, not a singly penny has been paid to the petitioner. It is further submitted that the petitioner applied for documents under the RTI to find out as to why the payment has not been made. Although the copies of the note-sheets have been supplied to the petitioner under the Right to Information Act, but no reason has been assigned as to why the payment has not been made. The note-sheet with regard to three different work orders have been placed as Annexures P-2, P-3 and P-4. By referring to the note-sheets Annexures P-2, P-3 and P-4, it is submitted by the counsel for the petitioner that in all these three cases, it is specifically mentioned that the work which was done by the petitioner was in accordance with the specifications and a recommendation was made for releasing the amount. However, the Commissioner is sitting tight over the recommendation made by the authorities and the amount has not been paid. It is further submitted that since the budget was available with the respondent authority, therefore, they cannot withhold the amount on the ground that budget is not available. It is further submitted that the act of respondent of withholding the amount payable to the petitioner is violative of Article 19 of the Constitution of India because he has been deprived of his livelihood and due to shortage of fund, he is not in a position to take further contract.
3. The respondent has filed its return. It is submitted by the counsel for the respondent that one petition has been filed arising out of three different contracts, therefore, in the light of High Court Rules, single petition is not maintainable because provisions of Order 2 Rule 3 of CPC are applicable to writ petition also and, therefore, the petitioner should have filed three different writ petitions. Another preliminary objection of the respondent is that as per
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