Non-Renewal Of Contract In Line With Terms Not Arbitrary; No Judicial Review Needed Despite Public Element: Gauhati HC - 2025-06-23

Tracking Legal Developments.

Gauhati High Court Declines to Interfere in Non-Renewal of Doctor's Contract with Assam Cancer Care Foundation

Guwahati, Assam – The Gauhati High Court has dismissed a writ petition filed by a radiologist, Dr. Sanghamitra Saha , challenging the non-renewal of her employment contract with the Assam Cancer Care Foundation (ACCF). The court, led by Hon’ble Mr. Justice SoumitraSaikia , held that since the non-renewal was in accordance with the contractual terms, it did not warrant judicial review, even if a public law element was involved.

The court, however, clarified that the dismissal of the petition would not prevent the doctor from invoking the arbitration clause in her agreement to seek redress.

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Background of the Case

Dr. Sanghamitra Saha , a qualified radiologist, was appointed as a Consultant at the Dibrugarh Cancer Centre, operated by the Assam Cancer Care Foundation (ACCF), a joint venture between the Government of Assam and the Tata Trust. Her employment began on August 1, 2022, under a one-year contract, which was subsequently extended until July 31, 2024.

The dispute arose when Dr. Saha 's contract was not renewed further. She alleged that she had received a verbal assurance of renewal with a 6% increment but was instead informed of the "exit" of her engagement contract on September 9, 2024. Dr. Saha contended that the real reason for this decision was her recent disclosure of pregnancy, aimed at denying her maternity benefits, and that the official reason given—that she demanded a share of profits—was stigmatic and false.

Arguments from Both Sides

Petitioner's Counsel, Mr. K.N. Choudhury , argued: * The termination was stigmatic and arbitrary, issued without a proper opportunity for a hearing. * The primary motive was to avoid granting maternity benefits under the Maternity Benefit Act, 2017. * The ACCF, with significant government funding (₹1,080 crore out of a ₹1,910 crore project) and high-level government functionaries on its board, qualifies as an "instrumentality of the State" under Article 12 of the Constitution, making it subject to writ jurisdiction. * The existence of an arbitration clause does not bar the High Court from exercising its powers of judicial review under Article 226.

Respondents' Counsel argued: * Dr. Saha ’s engagement was purely contractual, and the management was within its rights not to renew it. * The ACCF is not a 'State' under Article 12, rendering the writ petition non-maintainable. * The petitioner's appropriate remedy lies in arbitration, as specified in the contract. * They claimed Dr. Saha had made unreasonable demands for profit-sharing and had threatened to tarnish the organization's reputation.

Court's Examination and Legal Reasoning

The court framed three key issues for determination: the amenability of the contractual termination to judicial review, the bar of alternative remedy, and whether ACCF is a 'State'.

On Judicial Review of Contractual Termination: The court found that Dr. Saha 's employment was undeniably contractual. It referred to Clause 9.1 of the agreement, which allowed either party to terminate the contract with a 30-day notice or payment of one month's fee in lieu. The judgment noted:

"The petitioner’s extension having been completed on 31.07.2024 and it is admitted by the petitioner that she had received the pay for the month of August, 2024, the requirement under Clause 9.1 appears to have been satisfied by the respondent authority."

Justice Saikia observed that while judicial review is permissible in contractual matters involving a public element, it is not all-pervasive. Interference is warranted only if the action is "malafide, arbitrary, irrational, disproportionate or unreasonable." In this case, the court found the respondents' actions were a direct consequence of the contract's terms and did not meet this threshold for interference. The court also noted that the petitioner did not seriously press the claim regarding the denial of maternity benefits during arguments.

On Alternative Remedy and Maintainability: The court agreed with the petitioner that the existence of an arbitration clause is not an absolute bar to invoking writ jurisdiction. However, it chose not to exercise its power, given its finding that the facts of the case did not justify judicial intervention.

Crucially, the court left the question of whether ACCF is a 'State' under Article 12 open for future determination. It reasoned that since it had already decided not to interfere on the merits, ruling on this "would be purely an academic endeavour."

Final Decision and Implications

The writ petition was dismissed as being "devoid of any merit." However, the court provided a significant safeguard for the petitioner. It explicitly stated:

"The dismissal of the writ petition shall not foreclose the claims of the petitioner, if any, for invoking the Arbitration Clause as is provided under Clause-11 of the Agreement... In the event the petitioner seeks to invoke the Arbitration Clause, the period during which the matter was pending before the Court shall be excluded while computing the limitation period, if any."

This judgment reinforces the principle that while public bodies are held to a standard of fairness even in contractual matters, courts are reluctant to interfere with decisions that align with mutually agreed-upon contractual terms, especially when an alternative dispute resolution mechanism like arbitration is available.