When a contract or statute provides for a specific dispute redressal mechanism, the litigating parties must exhaust that remedy before approaching the court through a writ petition.

Headnote:
Contract Law - Pradhan Mantri Gram Sadak Yojna - Sections 24, 25
Fact of the Case:

The petitioner, a proprietorship firm involved in civil construction and maintenance, was awarded a tender for construction and routine maintenance of rural roads under the Pradhan Mantri Gram Sadak Yojna in Mandsaur District. After completing the construction work, the petitioner submitted the final payment bill along with receipts of bitumen bills. However, the respondents raised a demand of Rs. 51,97,471/- against the petitioner, alleging that the petitioner had purchased bitumen from private refineries instead of public sector refineries.
Finding of the Court:

The court found that the petitioner had an alternate and efficacious remedy available under Clauses 24 and 25 of the tender document/Conditions of Contract, which provided for a dispute redressal system. The court held that the petitioner should have approached the competent authority under the dispute redressal system instead of filing a writ petition directly.
Issues: Whether the writ petition filed by the petitioner is maintainable, given the existence of a dispute redressal system under the contract.
Ratio Decidendi: The court relied on the principles established in the judgments of the Supreme Court, which held that when a statute or contract provides for a statutory appeal or dispute redressal mechanism, the litigating parties must avail that remedy instead of filing a writ petition.
Final Decision: The court dismissed the writ petition, stating that the petitioner is at liberty to avail the remedy under the dispute redressal system provided in the contract.

ORDER

Heard on the question of admission and interim relief.

In this petition under Article 226 of the Constitution of India, petitioner has assailed the order dated 19.03.2024 and letter dated 24.04.2024 (Annexure P/8) issued by respondent No.3 whereby petitioner has been directed to deposit an amount of Rs. 51,97,471/- on account of submission of private bills of bitumen not issued by the public sector refineries.

2 . The brief facts of the case are that the petitioner is a proprietorship firm involved in civil construction and maintenance. After being successful in the bid, petitioner was allotted the tender and issued a letter of acceptance dated 17.02.2020 for construction and routine maintenance of rural road under the Pradhan Mantri Gram Sadak Yojna in Mandsaur District. The construction was completed and after satisfaction by the respondents, petitioner submitted the final payment bill voucher along with receipt of bitumen bills. Respondent No. 3 issued show cause notice dated 14.07.2022 and 30.11.2023 for calling original bills of bitumen to which the petitioner submitted reply on 04.12.2023. However, without considering the reply and the documents filed by the petitioner, respondent No.3 issued the impugned communication dated 19.03.2024 and 24.04.2024 raising demand of Rs. 51,97,471/- against the petitioner in gross violation of the principles of natural justice. Hence, this petition.

3. Learned counsel for the petitioner submits that the road constructed and maintained with the usage of said bitumen have been recorded in the measurement book and taken into consideration and being approved while drawing the final bill of the petitioner for the work. As per Clause 4 Condition of Contract of the Standard Bidding Document, Condition No. 4.6B prescribes for price adjustment providing for grant of any variation in the cost of bitumen or steel on theoretical consumption. Further, the respondents have raised objection on the ground of purchase of bitumen from private refinery and that the bills have not been submitted by the petitioner. It is not the case of the respondents that the bitumen is of inferior or lesser quality. The conduct of the respondents in firstly permitting the petitioner to lay the bitumen and thereafter issuing order for recovery on the basis of audit objection is not permissible on the touchstone of Doctrine of Promissory Estoppel. Further, as per the contractual terms, no consequence is provided for non purchase of bitumen from the government refineries. No other efficacious remedy is available to the petitioner at this stage other than to approach this Court against the impugned action of the respondents. Hence, on these grounds, the writ petition deserves to be entertained.

4. In support of his contentions, learned counsel for the petitioner has relied on the judgment of the Apex Court in case of State of Karnatak vs. Shree Rameshwara Rice Mills, (1987) 2 SCC 160 wherein it is held that adjudication of concerning the contract violation by either of those privy to the contract cannot be legal. This is because allowing a party to the agreement to serve as the arbiter in their own case contradicts the fundamental principle of nemo debetesse judex in propria causa meaning one should not be a judge in their own cause. Learned counsel has also placed reliance on the Full Bench judgment of this Court in case of B.B.Verma vs. State of M.P., 2007 (4) MPLJ 610 upheld by the Apex Court in Tulsi Narayan Garg vs. M.P.Road Development Authority, 2019 SCC OnLine SC 1158.

5. Per contra, learned counsel appearing for the respondents opposed the prayer and submitted that the petitioners have an alternate and efficacious remedy available under Clauses 24 and 25 of the tender document/Conditions of Contract. Hence, this petition is liable to be dismissed being not maintainable.

6. Heard learned counsel for the parties. Perused the record.

7. The Clause 24 and 25 'General Conditions of Contract' of the tender document/Contract

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