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2026 Supreme(Online)(Mad) 19004
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. M. SUBRAMANIAM, K. SURENDER, JJ
The Government Of Tamil Nadu Rep. by its Additional Chief Secretary Finance (Salaries) Department, Fort St. George, Chennai – Appellant
Versus
P.S.T. Engineering Construction Rep. by its Managing Partner V.S.Thennarasu – Respondent
WA No. 1792 of 2022|C.M.P.Nos.13131 & 13132 of 2022|WP.No.34687/2019|WP.Nos.34682/2019
For the Appellant(s):Mr.R.Ramanlaal, Additional Advocate General, Mr.T.Arunkumar, Additional Government Pleader
For the Respondent(s): Mr.H.S.Hredai
Writ courts should not resolve contractual disputes, which are to be addressed through arbitration or competent forums as per the agreed contractual terms.
Headnote:(A) Contract Law - Articles of Agreement dated 06.12.2017 - Government Order G.O.Ms.296 dated 09.10.2017 - Writ Court lacks jurisdiction over contractual obligations due to disputes arising from the contract terms - Parties must adhere to the arbitration clause for grievances related to contractual obligations (Paras 4-7).
(B) Jurisdiction - Writ jurisdiction cannot resolve disputed facts involving contractual obligations - Such matters must be pursued through competent forums or arbitration (Paras 4, 7).
Facts of the case:
The respondent sought to avoid the applicability of G.O.Ms.296 in relation to a work agreement with the Tamil Nadu Slum Clearance Board. The appellant contested that contractual disputes should follow the arbitration clause stipulated in the agreement.
Findings of Court:
The writ order was set aside, affirming the special conditions of the contract regarding applicable government orders.
Issues: Whether the writ court could intervene in a contractual dispute; applicability of government orders in the contract.
Ratio Decidendi: The court determined that the validity of the government order must be honored and any dispute should be resolved through arbitration, as stipulated in the contract.
Result: Writ appeal allowed.
| Table of Content |
|---|
| 1. introduction to the appeal and context of the dispute. (Para 1 , 2) |
| 2. contentions on contractual obligations. (Para 3 , 4) |
| 3. analysis of contract terms and applicable governmental orders. (Para 5 , 6 , 7) |
| 4. conclusion and order to set aside the writ. (Para 8) |
(Judgment of the Court was delivered by S.M.Subramaniam J.)
The State preferred the present intra-Court appeal under Clause 15 of the Letters Patent challenging the writ order dated 04.04.2022 passed in W.P.No.34682 of 2019.
2. The respondent preferred the writ petition seeking a direction, not to apply G.O.Ms.296 Finance (Salaries) Department dated 09.10.2017 in respect of the work agreement dated 06.12.2017 entered into between the petitioner and Tamilnadu Slum Clearance Board calling for the records of the Board, which culminated in Resolution 4.17/487 dated 10.08.2018 and Resolution No.7.03/493 dated 07.06.2019 and quash the impugned resolution dated
19.11.2019.
3. The learned Additional Advocate General appearing on behalf of the State would mainly contend that it is a contractual obligation between the parties in pursuance to Articles of Agreement dated 06.12.2017 between Tamil Nadu Slum Clearance Board and the respondent, M/s.PST Engineer Construction Limited.
4. Dispute, if any arises, based on the terms and conditions of contract, remedy for an aggrieved person, is to invoke the arbitration clause, if any agreed or approach the competent forum for redressal of grievance. Writ Court under Article 226 of the Constitution of India cannot resolve the disputed facts involving contractual obligation which may be done in a trial nature proceedings.
5. Plain reading of the contract would show that in Clause 6.6, it is agreed between the parties that “All duties, taxes, Cess and other levies payable by the contractor as per State/ Central Government rules, shall be included in the contract value quoted by the Bidder”.
6. Special conditions annexed along with the contract would specifically state about the special condition regarding applicable of G.O.Ms.264 Finance (Salaries) Department dated 15.09.2017 and the said clause reads as under:
“6. The payment of Goods and Services Tax (GST) will have to be made by the procuring entity as specified in G.O.Ms.No.264, Finance (Salaries) Department, Dated 15.09.2017 and subsequent amendments, if any, made there after by the GOI/GOTIN during the currency of agreement.”
7. When the respondent agreed the applicability of G.O.Ms.No.264 dated 15.09.2017, now cannot turn around and claim that the said Government Order should not be implemented in respect of the subject contract. If at all any disputes arises regarding the transaction or payment of tax or otherwise, aggrieved person has to invoke the arbitration clause or approach the competent forum for the purpose of resolving the issues. As far as the relief sought for, not to implement G.O.Ms.264 dated 15.09.2017, is unacceptable, since the special condition as stated above would indicate that the G.O. will be made applicable in respect of the subject contract.
8. Granting liberty to the parties to work out their remedy in the manner known to law, the writ order dated 04.04.2022, is set aside. Consequently, Writ Appeal stands allowed. No costs. Consequently, connected miscellaneous petitions are closed.
