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2015 Supreme(Online)(Chh) 104

CHATTISGARH HIGH COURT
*Navin Sinha, Ag. C. J., Pritinker Diwaker, J.
Srihari Raju V. v. Municipal Corporation and Another
WP (C) 1323 of 2012



Advocates:
For the Appellants/Petitioners: [List of names]
For the Respondents: [List of names]

Writ petitions in contractual disputes are generally not maintainable if they involve disputed questions of fact.

Headnote:The court dealt with a contractual dispute regarding the termination of an agreement for installation of traffic signals. The respondents terminated the contract invoking alleged breaches without providing the opportunity to remedy under Clause 6.1. The court found that such termination was arbitrary and mala fide, but also noted that the writ petition was not maintainable due to the existence of disputed facts requiring detailed evidence. Ultimately, it emphasized the need for proper civil suit resolution of the matter.

Table of Content
1. termination of contract must follow prescribed procedures. (Para 2 , 3 , 4 , 5 , 8)
2. maintainability of writ petitions in contractual disputes. (Para 6 , 7)
3. discussion on legal expectations regarding contracts and natural justice. (Para 9 , 10 , 12)
4. judicial review is limited in contractual matters. (Para 14 , 15 , 16 , 17)
5. cases clarifying boundaries of writ jurisdiction. (Para 18 , 19 , 20 , 21 , 22)
6. mala fide claims require specific evidential support. (Para 23 , 24 , 25)
7. final judgement on maintainability and dismissal of writ. (Para 26 , 27 , 28)

1. We have heard learned counsel for the petitioner and Respondent Corporation.

2. A Contract Agreement was signed between the parties on 17-10-2005 awarding contract works to the Petitioner for installation of Automatic Traffic Signals at Twelve intersections in the city of Raipur. The duration of the contract was for 20 years. The petitioner was permitted to display commercial advertisements on the body of the illuminated traffic signals including Cabin and advertising banners of specified dimensions only as mentioned in the Contract. Clause 6. 1 of the Contract permitted either party to terminate the Agreement in the manner provided. The Agreement was terminated by the respondents on 6-7-2012. The petitioner as sailed the termination in WP (C) 1323 of 2012. The writ application was diposed on 9-10-2013 with directions to the Petitioner to remove defects pointed out by the respondent Corporation failing which it was open for the respondents to proceed in accordance with law.

3. The respondents have issue fresh orders for termination of the contract on 14-7-2014 which is challenged in the present writ application. Learned counsel for the petitioner submitted that notwithstanding the contractual dispute, the writ petition was maintainable as the respondents were acting arbitrarily, mala fide and on basis of nonexistent facts invoking Art.14 of the Constitution. It was next submitted that since there was no arbitration clause in the contract, the writ petition was maintainable. The remedy of a civil suit was neither expeditious nor efficacious. Reliance was placed on 2004 (3) SCC 553 ( ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. ), 2009 (8) SCC 339 : 2009 AIR SCW 5277 ( National Thermal Power Corporation Limited v. Mahesh Dutta ), 2007 AIR SCW 2010 : AIR 2007 SC (Supp) 152) ( M/s. Popcorn Entertainment v. City Industrial Development Corporation ) and 2010 (6) SCC 373 : AIR 2010 SC 1955 ( Secretary, Cannanore District Muslim Educational Association, Karimbam v. State of Kerala ).

4. It was next contended that the termination was also bad non - compliance with Clause 6. 1 of the contract as notice of 30 days with opportunity to remedy the breach was not provided before termination.

5. Cantilever advertisement for installation on traffic signals did not exist in 2005 when the contract was signed. The respondents had themselves later permitted cantilever advertisements. There was no prohibition in the contract regarding installation of cantilever advertisement. The installation of such advertisement by the petitioner therefore cannot be considered a breach of the contract. After notice by the respondents objecting to the same, it has been removed. Termination on that ground is therefore unjustified. Likewise installation of revolving advertisement was also not prohibited under the contract. They have also been removed after objection by the respondents. If the contract provided for an opportunity to remedy the breach and it having been done, termination on that ground was arbitrary as procedure prescribed for termination had not been followed. Reliance was placed on 2014 (3) SCC 502 : AIR 2014 SC 1792 ( Dipak Babaria v. State of Gujarat ) and 2014 AIR SCW 4586 : AIR 2014 SC 3371 ( Gorkha Security Services v. Govt. of NCT of Delhi and Ors. )

6. The termination of the contract had been done mala fide in order to favour blue eyed p




























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