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2021 Supreme(Online)(SC) 1526
SUPREME COURT
N.V. Ramana, CJ
Union of India and Others v. M/s. Puna Hilda
C. A. No. 4981 of 2021
For the Appellants/Petitioners: Mr. Nataraj
For the Respondents: Ms. Meenakshi Arora
Disputes arising from contractual obligations should be resolved through contractual mechanisms rather than through writ jurisdiction, particularly when involving statutory bodies.
Headnote:(A) Contract Law - The interpretation and implementation of a contractual provision cannot be the subject of writ jurisdiction, as disputes relating to the terms of a contract should be resolved under ordinary principles of contract law, not Article 226 of the Constitution. (Paras 17-19)
(B) The court reiterated that the existence of a statutory nature does not attach to a contract merely because it is with a statutory body and disputes regarding its breach must follow contractual norms. (Paras 20-23)
Facts of the case:
The appeal arises from a challenge to a High Court order denying a contractor's claims for additional payment stemming from disputes regarding joint surveys and contractual obligations on a government road construction project. The original work order was amended over time, and large payment claims were disputed by the government. (Paras 1-3)
Findings of Court:
The court found that the lower court misapplied jurisdiction, emphasizing that disputes over payment claims necessitate adjudication through arbitration, not writs due to disputed factual matters. (Paras 24-26)
Issues: The primary issues included whether the claims made by the contractor were contractual in nature and whether the writ court had the jurisdiction to adjudicate such claims. (Para 17)
Ratio Decidendi: The findings confirm that contractual disputes, especially regarding payment and work performed, should not be pursued in writ petitions but through existing contractual mechanisms or arbitration as stipulated within contracts. (Paras 20-23)
Result: Appeal allowed; writ petition dismissed.
| Table of Content |
|---|
| 1. challenge to the high court's dismissal of appeal regarding contractor's payment. (Para 1 , 2) |
| 2. dispute over contractual obligations and payment calculations. (Para 4 , 16) |
| 3. jurisdictional issues concerning writ petition versus arbitration. (Para 17 , 21) |
| 4. emphasis on resolving contractual disputes through appropriate channels. (Para 20 , 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 
