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2021 Supreme(Online)(SC) 511

SUPREME COURT
, J
Union of India and Others v. M/s. Puna Hilda
C. A. No. 4981 of 2021



Advocates:
For the Appellants/Petitioners: Mr. Nataraj
For the Respondents: Ms. Meenakshi Arora

Private law disputes arising from contract obligations are resolved through appropriate legal forums and not via writ petitions under public law jurisdiction.

Headnote:(A) Contract Law - Disputes over payment for construction work - Writ petition for enforcement of contractual obligations rejected due to lack of statutory flavor and existence of an arbitration clause. The Court emphasized that private law disputes are to be resolved through appropriate forums, not writ petitions. (Paras 17-25)

(B) High Court Jurisdiction - The ambit of writ jurisdiction is limited to cases with public law character; otherwise, contractual disputes should be referred to arbitration. (Paras 24, 25)

Facts of the case:
The contractor, M/s. Puna Hinda, sought quashing of a letter denying payment for work completed on a road construction project. The matter involved disagreements over measurement of completed works versus payments made, leading to a writ petition for recovering dues and interest.

Findings of Court:
The appeal was allowed, and the writ petition dismissed as the issues were matters of fact that could not be resolved via writ jurisdiction, given the agreed arbitration clause.

Issues: The main issue was whether the High Court could entertain a writ petition for enforcement of contractual obligations subject to arbitration.

Ratio Decidendi: The court found that the interpretation of a contract and disputes over its fulfilment are private law issues that must be resolved through civil courts or arbitration, not writ jurisdiction.

Result: Appeal allowed.

Table of Content
1. initiation and challenges of appeal. (Para 1 , 2)
2. grounds for high court's decisions based on prior surveys and approvals. (Para 3 , 4 , 17)
3. contract compliance and disputes over claims for payment. (Para 10 , 12 , 21)
4. resolution of disputes through established legal forums. (Para 24 , 26)

1. The challenge in the present appeal is to an order dated 17.11.2017 passed by the Division Bench of the Gauhati High Court dismissing an intra - court appeal and affirming the order passed by the learned Single Bench on 4.8.2016.

2. The learned Single Bench of the High Court allowed the writ petition filed by the respondent - M/s. Puna Hinda, (Hereinafter referred to as the 'writ petitioner') who had sought quashing of letters dated 27.8.2015 and 21.10.2015 and also a direction to pay Rs. 31,57,16,134/- with interest at the rate of 18% pa.

3. The learned Single Judge held that payment in terms of Final Joint Survey / Measurement Report dated 24.10.2013 be taken into consideration for making revised Detailed Project Report (DPR) and thus passed necessary orders for payment of the amount due to the writ petitioner within four months of the receipt of copy of the order. In an appeal filed by the appellants, the Division Bench of the High Court held that resurvey for measurement and DPR would not be just and fair at this stage since five monsoons had passed. Therefore, the only option left to the appellants was to approve the DPR and pay the pending bills on the basis of Final Joint Survey / Measurement Report dated 24.10.2013.

4. Brief facts leading to the present appeal is that a Notice Inviting Tender (NIT) was issued on 22.10.2008 for construction and improvement of road from 26.800 km to 47.850 km between Lumla and Tashigong under Special Accelerated Rural Development Programme (SARDP). The bid of the writ petitioner was accepted at Rs.31,87,58,950/-. The work order was issued on 15.7.2009. The said work order was amended by the parties on 15.3.2012 leading to enhanced work cost at Rs. 35,03,15,695.23. The work order had provided details of the work to be carried out and the estimated amount payable for each work with rate of each work. The work was divided into three parts, such as, Formation work, which included jungle clearance etc.; Permanent work which included excavation in trenches, cement concrete; and Surface work which included preparation of subgrade in soil mix boulder, laying, spreading and compacting graded stone aggregate. The measurement process for payment was specified in the General Conditions of Contract, which read as under:
"2 .8 .1 Excavation for roadway shall be measured by taking cross Section at suitable intervals in the original position before the work starts and after its completion and computing the volumes in cum by the method of average and areas for each class of material encountered. Where it is not feasible to computes volumes by this method because of erratic location of isolated deposits, the volumes shall be computed by other accepted methods.
2.8.2 At the option of the Engineer - In - Charge / QC Contract, the Contractor shall leave depth indicators during excavations of such shape and size and in such positions as directed so as to indicates the originals ground level as accurately as possible. The Contractor shall see that there remain intact till the final measurements are taken."


5. The contractor completed the formation work by 20.9.2012, the communication of which was sent by the writ petitioner on 17.10.2012. The joint survey of the works was carried out by the Board of Officers on 23.1.2013. The Board of officers made the following recommendations: -
"RECOMMENDATION OF THE BOARD
FORMATION WORKS

20. The details of items of formation works provisioned (as per DPR), executed departmentally and balance between Km 26.800 and Km 31.00 are as under:
 xxxx xxxx xxxx
21. The details of items of formation works provisioned in DPR and as arrived at after detailed Joint Survey from Km 31






















































































































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