Maintainability of writ Petition in contractual matters

Constitutional Right to property

At the outset the writ seeks to enforce the property right of the petitioner who is an aged senior citizen. Her right to hold the property is under jeopardy on account of the chaos created by the respondents.

It has been held by the Honourable Supreme Court in Vimala Ben Ajith Bhai Patel -Vs- Vatsala Ben Ashok Bhai Patel reported in 2008 (4) SCC 649 that the right to property can be taken away only as per law and right to hold the property has been glorified as ‘Human Right’. A Constitution Bench of the Honourable Supreme Court in its judgment in State of West Bengal and others -Vs- The Committee For Protection of Democratic Rights, West Bengal and others reported in 2010(2) Scale 467 held that Article 226 of the Constitution of India can be exercised for enforcing any legal right conferred by a statute

Alternative remedy

Sheeba philominal merlinand anr vs Repco Bank and ors -2010 (5) CTC 449

“The division bench of the Hon’ble Madras high Court observed “36. That apart, it is well settled law that availability of an alternative remedy is not an absolute bar for exercising the writ jurisdiction and it is only a self-imposed restraint on its power. This has been held so in the judgment in State of Uttar Pradesh -Vs- Mohammad Nooh reported in AIR 1958 SC 86, in Whirlpool Corporation -Vs- Registrar of Trade Marks, Mumbai and others reported in AIR 1999 SC 22, and in Mariamma Roy -Vs- Indian Bank and others reported in 2009 AIR SCW 654. Therefore the plea of availability of alternate remedy miserably fails. The petitioners cannot approach the Tribunal, as the measures taken by the Bank were belatedly known to the petitioners and by that time the time prescribed under the Act was over. The Judgement in Hongo India (P) Ltd relied upon by Mr.K.M.Vijayan, in fact, justifies the contention of the petitioners. As per the judgement, Courts cannot extend the time limit prescribed by the Statute. As such the only remedy for the petitioners is to file a writ petition which has been rightly done by them.

37. The Tribunal is not competent to look into violation of fundamental rights and constitutional rights and this Court being a custodian of Constitutional rights is entitled to examine the matter. A Constitution Bench of the Honourable Supreme Court in its judgment in State of West Bengal and others -Vs- The Committee For Protection of Democratic Rights, West Bengal and others reported in 2010(2) Scale 467 held that Article 226 of the Constitution of India can be exercised for enforcing any legal right conferred by a statute and it is further held that under Article 226 of the Constitution of India, the High Court has got more wider power than the Honourable Supreme Court. In Secretary Cannanore Muslim Educational Association, Kanpur vs. State of Kerala reported in 2010 (5) SCALE 184, the Apex Court held that the High Court is conferred with wide power to " reach injustice whenever it is found". Therefore as injustice is writ large and glaring, necessarily the judicial arm of this court has to reach there and it cannot be prevented by plea of availability of alternative remedy.”

Disputed questions of facts

In AIR 2011 SC 2161- Shankara Co-op Housing Society Vs M. Prabhakar and ors- The Supreme court has held as follows :

“Therefore, it is clear from the above enunciation of law that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the court entertaining such petition under Article 226 of the Constitution is not always bound to relegate the parties to a suit. In the above case of Smt. Gunwant Kaur (supra), this Court even went to the extent of holding that in a writ petition, if facts required, even oral evidence can be taken. This clearly shows that in an appropriate case, the writ court has the jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation and or involves some disputed questions of fact”

Further referring to the ruling in Surya Dev Rai vs. Ramchander Rai and Others (2003) 6 SCC 675 the court ruled that the writ of certiorari could be issued if the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and a grave injustice or gross failure of justice has occasioned thereby

Can a writ Court interpret the provisions of a contract without relegating the parties to civil court or other remedies? Can issues arising out of contract be agitated before a writ court?

In Abl International Ltd. & Anr vs Export Credit Guarantee corpn and anr in 2004 3 SCC 553, the Supreme Court held as follows, “If such objection as to disputed questions or interpretations are raised in a writ petition, in our opinion, the courts can very well go into the same and decide that objection if facts permit the same as in this case. We have already noted the decisions of this court which in clear terms have laid down that mere existence of disputed questions of fact ipso facto does not prevent a writ court from determining the disputed questions of fact”.

Again in In a recent decision in Karnataka State Forest Industries Corporation vs. Indian Rocks, (2009) 1 SCC 150, while considering the similar issue, S.B. Sinha, J. speaking for the Bench reiterated thus:

“38. Although ordinarily a superior court in exercise of its writ jurisdiction would not enforce the terms of a contract qua contract, it is trite that when an action of the State is arbitrary or discriminatory and, thus, violative of Article 14 of the Constitution of India, a writ petition would be maintainable. (See ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd.)

39. There cannot be any doubt whatsoever that a writ of mandamus can be issued only when there exists a legal right in the writ petition and a corresponding legal duty on the part of the State, but then if any action on the part of the State is wholly unfair or arbitrary, the superior courts are not powerless.”

Following the said ruling in Zonal Manager, Central Bank of India Vs Devi Ispat Ltd  - 2010 11 SCC 186 the Hon’ble SC held that “if the instrumentality of the State acts contrary to the public good, public interest, unfairly, unjustly, unreasonably discriminatory and violative of Art. 14 of the Constitution of India in its contractual or statutory obligation, writ petition would be maintainable. However, a legal right must exist and corresponding legal duty on the part of the State and if any action on the part of the State is wholly unfair or arbitrary, writ courts can exercise their power

Contract vitiated by malice or ulterior motives    

In Sushila Chemicals Vs BCCL 2010 10 SCC at pg 391 it is observed that a writ petition is maintainable against the state and its instrumentalities and functionaries even in contractual matters of state if their action is found to be violative of article 14 of the constitution or in breech of public law or vitiated by malafide or ulterior motives.

Again in Noble Resources ltd Vs State of Orissa 2006 10 SCC 236, referring to Asia Foundation and Construction Ltd. v. Trafalgar House Construction India Ltd. and Others [(1997) 1 SCC 738], the supreme court held that the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any collateral purpose.

The supreme court further held that even in the domain of contractual matters the high Court can entertain a writ petition on the ground of violation of Article 14 of the Constitution when the impugned act of the state or instrumentality is arbitrary, unfair or unreasonable or in breach of the obligations  under public law.

Regards

L. Manikantan

Advocate