Telangana High Court
M/S. Crrcipplgvriipljv vs The Chairman And Managing Director … on 19 June, 2025
THE HON'BLE SRI JUSTICE PULLA KARTHIK
WRIT PETITION No.22127 of 2024
ORDER:
This Writ Petition, under Article 226 of the Constitution of India,
is filed seeking the following relief:
“…to issue writ or order more particularly one in the
nature of mandamus, declaring clause 1.4 (b) of Work
Order No. 7600009302 dated 14-11-2022, issued by
respondent no. 2, in favour of petitioner is illegal, against
public policy and in violation of Section 23 of Indian
Contract and quash the said clause on such terms and
conditions as this court deems fit and may pass…”
2. Heard Sri L. Harish, learned counsel for the petitioner and
Sri E. Madan Mohan Rao, learned Senior Counsel, representing
Sri P. Sri Harsha Reddy, learned Standing Counsel for the respondents.
3. Learned counsel for the petitioner submitted that the petitioner,
being a joint-venture, obtained a work order from respondent No.2 vide
order No.7600009305 dated 14.11.2022, for drilling, excavation,
loading, transportation, dumping, spreading, leveling, etc. of 722.176
LBCM of IN-SITU overburden (which includes 3.982 LBCM of top soil,
7.715 LBCM of B.C. soil, 692.993 LBCM of hard OB and 17.486 LBCM
of coal) with conventional equipment and additional works, viz., 1500
shovel hours, 500 dozer hours and 75,000 RMT drilling at Srirampur
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Open Cast-I and II integrated project Srirampur area for a period of
forty-eight months (four years), commencing from 30.11.2022.
Accordingly, as per the work order, the respondent Company shall
supply diesel for running vehicles and machinery, and as per Clause
1.4(b) of work order, a fixed rate of Rs.143.26 per liter, as on
08.11.2022, was quoted for diesel, and it was also quoted that the diesel
price during the contract period will remain the same irrespective of an
increase or decrease in the diesel price. It was further submitted that
the diesel price in the country has fluctuated and it has come down to
Rs.96/- and the respondents, by taking undue advantage of Clause
1.4(b), are deducting the cost of diesel supplied from the bill raised by
the petitioner at Rs.143.29 per liter. Accordingly, the differential
amount calculated from September, 2023 to May, 2024 is about
Rs.3,80,82,418.96.
4. Learned counsel contended that petroleum or petroleum products,
which are essential commodities, are covered by the Essential
Commodities Act, 1955. Therefore, the respondent Company cannot
perform the business of purchasing diesel from the oil companies as per
the prevailing market value and supply it to the petitioner at a higher
price, i.e., Rs.143.26 per liter. Further, as per Section 3(2)(c) of the
Essential Commodities Act, 1955, the Central Government is
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empowered to control the price at which any essential commodity may
be bought or sold. Therefore, Clause 1.4(b) of the work order
No.7600009302 dated 14.11.2022 issued in favour of the petitioner by
respondent No.2, is unlawful, forbidden by law, and is hit by Section 23
of the Indian Contract Act, 1872, and the said clause is against public
policy. Therefore, learned counsel for the petitioner prayed this Court to
pass appropriate orders by setting aside Clause 1.4(b) of the Work Order
No.7600009302 dated 14.11.2022. Reliance has been placed on the
decisions of the Hon’ble Apex Court in ABL International Ltd. and
another v. Export Credit Guarantee Corporation of India Ltd. and
others 1 and Gas Authority of India Limited v. Indian
Petrochemicals Corporation Limited and others 2.
5. On the other hand, learned Senior Counsel appearing for the
respondents submitted that the petitioner firm stood as L1 in the open
market bidding enquiry No.E11220O137 dated 11.07.2022, for drilling,
excavation, loading, transportation, dumping, spreading, leveling, etc.
Therefore, a contract, vide work order No.7600009302 dated
14.11.2022, was awarded to the petitioner firm after completion of the
tender process, and the work commenced from 30.11.2022. Further, as
per Clause 1.1.1(e) of the Notice Inviting Tender (NIT), “SCCL will
1 (2004) 3 SCC 553
2 (2023) 3 SCC 629
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indicate estimated quantity of diesel of 0.581 LB/BCM for excavation of
Insitu OB and diesel price is fixed at Rs.143.26 per ltr as on
date:08.07.2022″. As per Clause 1.4(b) of the NIT, “for monthly excess
consumption, the amount for excess quantity of diesel will be recovered at
a fixed price as provided in the NIT (i.e. Rs.143.26 per ltr as on date
08.07.2022) irrespective of increase/decrease of diesel price during the
contract period and the same amount will be withheld from monthly bills”.
6. It was further submitted that five firms participated in the open
enquiry and quoted the excavation rate, wherein, the petitioner firm
quoted the bid after thorough verification of the NIT and stood as L1
bidder. The diesel price fixed at Rs.143.29 per liter was the current rate
in the market as on the date of NIT published, i.e., 08.07.2022, and this
rate will be applicable for the entire contract period of four years
irrespective of an increase or a decrease in the diesel price. As such, the
petitioner is stopped from revising the issue after long period of
commencement of contract and the terms of contract find the
particulars unless mutually agreed and modified by supplementary
agreement in writing. It was further submitted that the respondent
Company is deducing the diesel prices at Rs.143.26 per liter as per
Clauses 1.1.1(e) and 1.4(b) of NIT/work order, for excess consumption
than the awarded diesel eligibility only.
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7. It was further submitted that the respondent Company is not
undertaking any business with diesel supply and the Company is
supplying the diesel to the offloading firm as per the eligibility for the
excavated quantity of OB, according to the norms specified in the NIT
and work order. Further, the cost of diesel is only being recovered at the
specified rate for the excess quantity of diesel consumed only and the
cost of diesel is not being recovered if the firm consumes diesel within
the specified limit as per the cubic meter of OB removed. It was also
submitted that the respondent Company is not selling diesel to any firm
but is only recovering the cost of diesel for excess consumption with
respect to the OB removal as per the NIT/work order, for which, the firm
had also agreed while submitting its tender, and after issue of a letter of
intent, it entered into an agreement with the respondent company.
8. It was further submitted that Clause 1.14 of the work order dated
14.11.2022 provides for dispute resolution. According to this Clause,
the petitioner firm has to first approach the Mine Management
Committee for settlement of disputes, and if the dispute is not resolved,
the firm is supposed to approach the Civil Court for redressal of its
grievance. However, without first availing either of the said remedies,
the petitioner firm has approached this Court. Hence, the present writ
petition is not maintainable as the same arises out of a contractual
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obligation. Therefore, it was prayed to dismiss the present writ petition.
Reliance has been placed on the following decisions of the Hon’ble Apex
Court:
i. Orissa State Financial Corporation v. Narsingh Ch. Nayak
and others 3,ii. Numaligarh Refinery Ltd. v. Daelim Industrial Co. Ltd. 4,
iii. Rajasthan State Industrial Development and Investment
Corporation and another v. Diamond & Gem Development
Corporation Limited and another 5,iv. Joshi Technologies International INC. v. Union of India and
others 6,v. Bharat Coking Coal Limited and others v. AMR Dev Prabha
and others 7,vi. Union of India and others v. N. Murugesan and others 8,
vii. Judgment of a Division Bench of this Court in W.A.No.651 of 2022
dated 13.10.2022,viii. Order of this Court in W.P.No.30770 of 2022 dated 13.09.2022.
9. This Court has taken note of the rival submissions made by the
learned counsel for the respective parties and perused the material
available on record.
3 (2003) 10 SCC 261
4 (2007) 8 SCC 466
5 (2013) 5 SCC 470
6 (2015) 7 SCC 728
7 (2020) 16 SCC 759
8 (2022) 2 SCC 25
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10. Admittedly, the respondent Company published a Notice Inviting
Tender No.E11220O137 dated 11.07.2022, for the purpose of drilling,
excavation, loading, transportation, dumping, spreading, leveling, etc. at
Srirampur Open Cast-I and II projects, for a period of four years. In
response, as many as five firms participated in the tender process, and
the petitioner, a joint-venture entity, was declared as L1 bidder and was
awarded the contract vide Work Order No.7600009302 dated
14.11.2022. The work, admittedly, commenced from 30.11.2022.
11. The dispute in the present writ petition revolves around the
validity of Clause 1.4(b) of Work Order No.7600009302 dated
14.11.2022, which stipulates that the price of diesel shall be fixed at
Rs.143.26 per liter as on 08.11.2022, for the excess quantity of diesel
consumed, irrespective of any fluctuation in the market rate. The said
clause reads as under:
“1.4 SUPPLY OF DIESEL:
b. For monthly excess consumption, the amount for excess
quantity of diesel will be recovered at a fixed price as
provided in the order (i.e., Rs.143.23 per Liter as on date
on 8.07.2022) irrespective of increase/ decrease of diesel
price during the contract period and the same amount
will be withheld from monthly bills.”
12. It is also relevant to refer to Clause 1.1.1 (e) of the Work Order
dated 14.11.2022, wherein, the respondent Company has categorically
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provided the quantity of diesel to be supplied to the petitioner for
undertaking the contracted work. The said Clause is extracted
hereunder:
“1. TECHNICAL TERMS AND CONDITIONS:
1.1 SCOPE OF WORK AND WORK COMPLETION SCHEDULE
e. SCCL will provide awarded quantity of diesel of 0.581
Lts/BCM for excavation of in-situ OB. The diesel price is
Rs.143.26 per Ltr as on date of 8.07.2022.”
13. As per Clause 1.4(b), the respondent Company is bound to recover
the amount from the monthly bills of the petitioner only for the
consumption of diesel, over and above the awarded quantity, at
Rs.143.23 per liter, which was the price prevailing in the market as on
08.07.2022. The said clause was also incorporated in the Notice
Inviting Tender dated 11.07.2022. Thus, the petitioner and the other
bidders had the option either to accept or reject the tender terms. The
petitioner has voluntarily participated in the tender process, submitted
its bid, and after being declared as L1 bidder, entered into the contract
with the respondent Company, where, Clause 1.4 was incorporated
without any objections. As per the work order, the work commenced
from 30.11.2022, and the petitioner performed the works, submitted its
bills, and accepted the payments. However, at no point of time, the
petitioner appears to have disputed the terms of contract, and now, only
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after almost eighteen month of executing the contract, the present writ
petition has been filed, contending that the said clause is contrary to
public policy and the Essential Commodities Act, 1955. Having chosen
to voluntarily bid, succeed, and execute the contracted work, the
petitioner cannot now object the said Clause. The principle of approbate
and reprobate squarely applies to the instant case.
14. The Hon’ble Apex Court, in Rajasthan State Industrial
Development and Investment Corporation (supra), particularly
addressed the interpretation of contractual terms, the doctrine of
estoppel, and the limits of judicial intervention in contractual matters.
The relevant observations are extracted hereunder: (approbate
reprobate)
“I. Approbate and reprobate
15. A party cannot be permitted to “blow hot-blow cold”, “fast
and loose” or “approbate and reprobate”. Where one knowingly
accepts the benefits of a contract, or conveyance, or of an
order, he is estopped from denying the validity of, or the
binding effect of such contract, or conveyance, or order upon
himself. This rule is applied to ensure equity, however, it must
not be applied in such a manner so as to violate the principles
of what is right and of good conscience. [Vide Nagubai Ammal
v. B. Shama Rao [AIR 1956 SC 593] , CIT v. V. MR. P. Firm Muar
[AIR 1965 SC 1216] , Ramesh Chandra Sankla v. Vikram
Cement [(2008) 14 SCC 58 : (2009) 1 SCC (L&S) 706 : AIR 2009
SC 713] , Pradeep Oil Corpn. v. MCD [(2011) 5 SCC 270 : (2011)
2 SCC (Civ) 712 : AIR 2011 SC 1869] , Cauvery Coffee Traders
v. Hornor Resources (International) Co. Ltd. [(2011) 10 SCC 420
: (2012) 3 SCC (Civ) 685] and V. Chandrasekaran v.
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Administrative Officer [(2012) 12 SCC 133 : (2013) 2 SCC (Civ)
136 : JT (2012) 9 SC 260] .]
III. Contractual disputes and Writ Jurisdiction
19. There can be no dispute to the settled legal proposition
that matters/disputes relating to contract cannot be agitated
nor terms of the contract can be enforced through writ
jurisdiction under Article 226 of the Constitution. Thus, the
writ court cannot be a forum to seek any relief based on terms
and conditions incorporated in the agreement by the parties.
[Vide Bareilly Development Authority v. Ajai Pal Singh [(1989) 2
SCC 116 : AIR 1989 SC 1076] and State of U.P. v. Bridge &
Roof Co. (India) Ltd. [(1996) 6 SCC 22 : AIR 1996 SC 3515] ]
20. In Kerala SEB v. Kurien E. Kalathil [(2000) 6 SCC 293 : AIR
2000 SC 2573] this Court held that a writ cannot lie to resolve
a disputed question of fact, particularly to interpret the
disputed terms of a contract observing as under : (SCC pp.
298-99, paras 10-11)
“10. … The interpretation and implementation of a clause
in a contract cannot be the subject-matter of a writ
petition. … If a term of a contract is violated, ordinarily
the remedy is not the writ petition under Article 226. We
are also unable to agree with the observations of the High
Court that the contractor was seeking enforcement of a
statutory contract. ….
11. … The contract between the parties is in the realm of
private law. It is not a statutory contract. The disputes
relating to interpretation of the terms and conditions of
such a contract could not have been agitated in a petition
under Article 226 of the Constitution of India. That is a
matter for adjudication by a civil court or in arbitration if
provided for in the contract. … The contractor should
have relegated to other remedies.”
IV. Interpretation of the terms of contract
23. A party cannot claim anything more than what is covered
by the terms of contract, for the reason that contract is a
transaction between the two parties and has been entered into
with open eyes and understanding the nature of contract.
Thus, contract being a creature of an agreement between two
or more parties, has to be interpreted giving literal meanings
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unless, there is some ambiguity therein. The contract is to be
interpreted giving the actual meaning to the words contained in
the contract and it is not permissible for the court to make a
new contract, however reasonable, if the parties have not made
it themselves. It is to be interpreted in such a way that its
terms may not be varied. The contract has to be interpreted
without any outside aid. The terms of the contract have to be
construed strictly without altering the nature of the contract,
as it may affect the interest of either of the parties adversely.
[Vide United India Insurance Co. Ltd. v. Harchand Rai Chandan
Lal [(2004) 8 SCC 644 : AIR 2004 SC 4794] and Polymat India
(P) Ltd. v. National Insurance Co. Ltd. [(2005) 9 SCC 174 : AIR
2005 SC 286] ]”
15. In N. Murugesan (supra), the Hon’ble Apex Court categorically
emphasized that an individual cannot selectively accept benefits from a
decision for a significant period and then challenge its terms when it no
longer suits them. Essentially, a party is prevented from approbating
and reprobating, by accepting an advantageous part of a transaction
while simultaneously rejecting a disadvantageous part.
16. Further, the instant case arises out of a contract and
interpretation of its clauses. This Court and the Hon’ble Apex Court
have been consistently holding that a writ petition under Article 226 of
the Constitution of India is not maintainable and the interpretation and
implementation of clauses of a contract cannot be the subject matter of
a writ petition.
17. In this context, it is relevant to refer to the decision of the Hon’ble
Apex Court in Joshi Technologies International INC. (supra),
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W.P.No.22127 of 2024wherein, it was categorically held that the jurisdiction of this Court
under Article 226 of the Constitution of India cannot ordinarily be
invoked to enforce purely private contractual rights against the State or
its instrumentalities. It was also held that intervention in a contractual
dispute is justified if the contract involves a public law element, such as
violation of a fundamental right or clear arbitrariness, beyond a mere
breach of contract. The relevant portion of the said decision is extracted
hereunder:
“68. The Court thereafter summarised the legal position in the
following manner : (ABL International Ltd. case [(2004) 3 SCC
553] , SCC pp. 572, paras 27-28)“27. From the above discussion of ours, following legal
principles emerge as to the maintainability of a writ petition:
(a) In an appropriate case, a writ petition as against a State or
an instrumentality of a State arising out of a contractual
obligation is maintainable.
(b) Merely because some disputed questions of facts arise for
consideration, same cannot be a ground to refuse to entertain
a writ petition in all cases as a matter of rule.
(c) A writ petition involving a consequential relief of monetary
claim is also maintainable.
28. However, while entertaining an objection as to the
maintainability of a writ petition under Article 226 of the
Constitution of India, the court should bear in mind the fact
that the power to issue prerogative writs under Article 226 of
the Constitution is plenary in nature and is not limited by any
other provisions of the Constitution. The High Court having
regard to the facts of the case, has a discretion to entertain or
not to entertain a writ petition. The Court has imposed upon
itself certain restrictions in the exercise of this power. (See
Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] .)
And this plenary right of the High Court to issue a prerogative
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W.P.No.22127 of 2024writ will not normally be exercised by the Court to the
exclusion of other available remedies unless such action of the
State or its instrumentality is arbitrary and unreasonable so as
to violate the constitutional mandate of Article 14 or for other
valid and legitimate reasons, for which the Court thinks it
necessary to exercise the said jurisdiction.”
69. The position thus summarised in the aforesaid principles
has to be understood in the context of discussion that
preceded which we have pointed out above. As per this, no
doubt, there is no absolute bar to the maintainability of the
writ petition even in contractual matters or where there are
disputed questions of fact or even when monetary claim is
raised. At the same time, discretion lies with the High Court
which under certain circumstances, it can refuse to exercise. It
also follows that under the following circumstances,
“normally”, the Court would not exercise such a discretion:
69.1. The Court may not examine the issue unless the action
has some public law character attached to it.
69.2. Whenever a particular mode of settlement of dispute is
provided in the contract, the High Court would refuse to
exercise its discretion under Article 226 of the Constitution and
relegate the party to the said mode of settlement, particularly
when settlement of disputes is to be resorted to through the
means of arbitration.
69.3. If there are very serious disputed questions of fact which
are of complex nature and require oral evidence for their
determination.
69.4. Money claims per se particularly arising out of
contractual obligations are normally not to be entertained
except in exceptional circumstances.
…
70.4. Writ jurisdiction of the High Court under Article 226 of
the Constitution was not intended to facilitate avoidance of
obligation voluntarily incurred.
70.5. Writ petition was not maintainable to avoid contractual
obligation. Occurrence of commercial difficulty, inconvenience
or hardship in performance of the conditions agreed to in the
contract can provide no justification in not complying with the
terms of contract which the parties had accepted with open
eyes. It cannot ever be that a licensee can work out the licence
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if he finds it profitable to do so : and he can challenge the
conditions under which he agreed to take the licence, if he
finds it commercially inexpedient to conduct his business.
70.6. Ordinarily, where a breach of contract is complained of,
the party complaining of such breach may sue for specific
performance of the contract, if contract is capable of being
specifically performed. Otherwise, the party may sue for
damages.
…
70.8. If the contract between private party and the
State/instrumentality and/or agency of the State is under the
realm of a private law and there is no element of public law, the
normal course for the aggrieved party, is to invoke the remedies
provided under ordinary civil law rather than approaching the
High Court under Article 226 of the Constitution of India and
invoking its extraordinary jurisdiction.
70.9. The distinction between public law and private law
element in the contract with the State is getting blurred.
However, it has not been totally obliterated and where the
matter falls purely in private field of contract, this Court has
maintained the position that writ petition is not maintainable.
The dichotomy between public law and private law rights and
remedies would depend on the factual matrix of each case and
the distinction between the public law remedies and private
law field, cannot be demarcated with precision. In fact, each
case has to be examined, on its facts whether the contractual
relations between the parties bear insignia of public element.
Once on the facts of a particular case it is found that nature of
the activity or controversy involves public law element, then
the matter can be examined by the High Court in writ petitions
under Article 226 of the Constitution of India to see whether
action of the State and/or instrumentality or agency of the
State is fair, just and equitable or that relevant factors are
taken into consideration and irrelevant factors have not gone
into the decision-making process or that the decision is not
arbitrary.
70.10. Mere reasonable or legitimate expectation of a citizen,
in such a situation, may not by itself be a distinct enforceable
right, but failure to consider and give due weight to it may
render the decision arbitrary, and this is how the requirements
of due consideration of a legitimate expectation forms part of
the principle of non-arbitrariness.
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70.11. The scope of judicial review in respect of disputes falling
within the domain of contractual obligations may be more
limited and in doubtful cases the parties may be relegated to
adjudication of their rights by resort to remedies provided for
adjudication of purely contractual disputes.”
18. Further, in Bharat Coking Coal Limited (supra), the Hon’ble
Apex Court provided a significant ruling on the limited scope of judicial
review in tender processes and contractual matters. The Hon’ble Court
made the following observations:
“(I) Maintainability of writ petition
28. The scope of judicial review in tenders has been explored
in-depth in a catena of cases. It is settled that constitutional
courts are concerned only with lawfulness of a decision, and
not its soundness. [Central Coalfields Ltd. v. SLL-SML (Joint
Venture Consortium), (2016) 8 SCC 622 : (2016) 4 SCC (Civ)
106; Siemens Aktiengeselischaft & Siemens Ltd. v. DMRC,
(2014) 11 SCC 288] Phrased differently, the courts ought not to
sit in appeal over decisions of executive authorities or
instrumentalities. Plausible decisions need not be overturned,
and latitude ought to be granted to the State in exercise of
executive power so that the constitutional separation of powers
is not encroached upon. [Air India Ltd. v. Cochin International
Airport Ltd., (2000) 2 SCC 617] However, allegations of
illegality, irrationality and procedural impropriety would be
enough grounds for courts to assume jurisdiction and remedy
such ills. This is especially true given our unique domestic
circumstances, which have demonstrated the need for judicial
intervention numerous times. Hence, it would only be the
decision-making process which would be the subject of judicial
enquiry, and not the end result (save as may be necessary to
guide determination of the former).
29. This position of law has been succinctly summed up in
Tata Cellular v. Union of India [Tata Cellular v. Union of India,
(1994) 6 SCC 651] , where it was famously opined that: (SCC
pp. 677-78, para 77)
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W.P.No.22127 of 2024“77. … Therefore, it is not for the court to determine
whether a particular policy or particular decision taken in
the fulfilment of that policy is fair. It is only concerned
with the manner in which those decisions have been
taken. The extent of the duty to act fairly will vary from
case to case. Shortly put, the grounds upon which an
administrative action is subject to control by judicial
review can be classified as under:
(i) Illegality: This means the decision-maker must
understand correctly the law that regulates his decision-
making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury [Associated
Provincial Picture Houses Ltd. v. Wednesbury Corpn.,
(1948) 1 KB 223 (CA)] unreasonableness.
(iii) Procedural impropriety.”
30. But merely because the accusations made are against the
State or its instrumentalities does not mean that an aggrieved
person can bypass established civil adjudicatory processes and
directly seek writ relief. In determining whether to exercise
their discretion, the writ courts ought not only confine
themselves to the identity of the opposite party but also to the
nature of the dispute and of the relief prayed for. Thus,
although every wrong has a remedy, depending upon the
nature of the wrong there would be different forums for
redress.”
19. In Numaligarh Refinery Ltd. (supra), the Hon’ble Apex Court
held as follows (limited scope of judicial review)
12. DIC vide letter dated 25-11-1995 pointed out to NRL that
contract price consisted of CIF value, cost of design and
engineering and supervision and other incidental costs and
requested for break-up of costs, so that DIC may not pay
customs duty on the total contract price when such duty was
payable on CIF value by the owner. Therefore, the amendment
not being carried out by NRL, DIC could not avail necessary
concession in customs duty. Therefore, they claimed under this
head a sum of Rs 1.65 crores and the same was accepted by
the majority of the arbitrators. The majority took the view that
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DIC had to unnecessarily pay the customs duty on service
portion of the price consideration and as such allowed the
claim. As against this, Justice M.M. Dutt in minority took a
contrary view and held that NRL was not responsible for
framing of such agreement and it was held that it was the fault
of DIC and as such the claim was turned down. However, it
was observed that DIC could justify and claim the said amount
from the Customs Department but NRL could not be held
responsible for the extra duty paid by DIC. The District Judge
agreed with the minority award. However, the Division Bench
of the High Court reversed the finding and approved the view
taken by the majority of the arbitrators. We have heard learned
counsel for the parties and find that it depends upon the
framing of the terms of the agreement, if DIC would have been
vigilant then they could have excluded the service charges, like
design engineering, etc. It was their duty to have excluded the
service charges but they have not properly framed the contract
and they cannot insist on amendment of the contract. If all the
services were subjected to duty which they could have
segregated the same but since they did not do this, therefore
they could not claim the benefit. No direction could be given to
the contracting party to amend their agreement. It is a mutual
affair of the contracting party. The view taken by the High
Court does not appear to be correct. Secondly, it was not
possible for NRL to amend the agreement as the same has
already been registered with the Customs Authorities and
Reserve Bank of India. Hence, DIC is not entitled to the
aforesaid amount of Rs 1.65 crores under this head.
(Claim of Rs 1.65 crores under this head not allowed.)
(Emphasis supplied)
20. In Orissa State Financial Corporation (supra), the Hon’ble
Apex Court observed:
“6. The said order is under challenge in this appeal. On a plain
reading of the impugned order it is manifest that the High
Court while considering the writ petition filed by the owner of
the vehicle for quashing of the notice of auction-sale and for
other consequential reliefs has passed order drawing up a fresh
contract between the parties and has issued certain further
directions in the matter; the Corporation has been directed to
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W.P.No.22127 of 2024advance a fresh loan to the writ petitioner to enable him to
purchase a new truck; to enter into agreement for realization of
the balance loan amount in accordance with law; to write off
the remaining amount of Rs 16,500 and to order waiving of the
interest till date etc. The order, to say the least, was beyond the
scope of the writ petition which was being considered by the
High Court and beyond the jurisdiction of the Court in a
contractual matter. No doubt, while exercising its extraordinary
jurisdiction under Article 226 of the Constitution the High
Court has wide power to pass appropriate order and issue
proper direction as necessary in the facts and circumstances of
the case and in the interest of justice. But that is not to say
that the High Court can ignore the scope of the writ petition
and nature of the dispute and enter the field pertaining to
contractual obligations between the parties and issue such
directions annulling the existing contract and introducing a
fresh contract in its place.”
21. The Division Bench of this Court, in its judgment dated
13.10.2022 in W.A.No.651 of 2022, categorically held that the
interpretation of the terms and conditions of a contract may not be
permitted under Article 226 of the Constitution of India. The relevant
portion of the said judgment is extracted hereunder:
“9. It is a settled proposition that disputes relating to
interpretation of the terms and conditions of a contract may
not be permitted to be agitated in a petition under Article 226
of the Constitution of India. In Kerala State Electricity Board v.
Kurien E. Kalathi1 Supreme Court held that this is a matter for
adjudication by a civil Court or in arbitration if such
arbitration is provided in the contract.
10. This position has been reiterated by the Supreme Court
in Bharat Coking Coal Limited v. AMR Dev Prabha2 wherein
Supreme Court has categorically held that writs are
impermissible when the allegation is solely with regard to
violation of a contractual right or duty. A person seeking writ
relief should satisfy the Court that the right he is seeking is
one in public law and not merely contractual.”
19
PK, J
W.P.No.22127 of 2024
22. Coming to the decisions relied on by the petitioner, the same are
clearly distinguishable on facts, and thus, are of no avail to the
petitioner.
23. In the foregoing discussion, this Court finds no merit in the
present writ petition and the same is, therefore, liable to be dismissed.
24. Further, it is also relevant to note that this Court, while dealing
with a matter of similar nature in W.P.No.30770 of 2022, dismissed the
said writ petition vide order dated 13.09.2022, however, granted liberty
to the petitioner therein to approach the competent Civil Court. The
relevant portion of the said order is also extracted hereunder:
“13. In the considered opinion of this Court, the dispute
in the instant case falls in the realm of civil law jurisdiction. A
bare reading of few clauses of the contract would not be
sufficient to determine nature of contract and interpret the
disputed terms and conditions of the contract. It is an
established principle of law that entire terms of the contract
have to be read to understand intention of the parties and for
interpreting terms of the contract. It is not within the purview
of the writ jurisdiction to decide whether equivalent rate is
basic rate (Rs.84.16 per litre) or market rate in the context of
assertions made by the respondents in its counter and
submissions of the learned senior counsel appearing for the
SCCL. The contention of the respondents is that basic rate
was indicated in the tabulated column under clause 1.2(e) of
the order which is only for the purpose of arriving at total value
of the contract. That due to the ongoing Russia-Ukraine war,
there was steep increase in the price of diesel; the petitioner
was aware of the changed circumstances; at no point of time,
the petitioner has raised objection; the invoice rate of diesel is
charged only for the excess consumption and if the petitioner is
able to meet the targets with the optimum consumption of
diesel, only Rs.84.16 per litre will be charged.
20
PK, J
W.P.No.22127 of 2024
14. It is borne out from the record that the petitioner
has invoked dispute resolution mechanism provided under
Clause 1.14 of the order. At three levels, the grievance of the
petitioner was heard, and there were several deliberations
between the petitioner and the SCCL authorities. It is not the
case of the petitioner that there are mala fides on the part of
the respondents and that the petitioner was not heard. Thus,
it cannot be held that there were any violation of principles of
natural justice and the respondents acted in an arbitrary
manner. The petitioner having availed the remedy provided
under the Dispute Redressal Committee as per clause 1.14 of
the order, ought to have approached the civil Court as there
are complex disputed questions of facts involved in this case
and further it requires interpretation of terms and conditions of
the contract. The relief if any granted to the petitioner will
have financial implications on the respondents running into
several crores of rupees. The market / invoice rate of diesel is
demanded by the respondents only for the excess consumption
of diesel by the petitioner. So far as supply of diesel for the
notified quantity, the rate charged by the respondents is
Rs.84.16 per litre irrespective of the market price / invoice
price. In the opinion of this Court, detailed analysis of terms
and conditions of the contract and interpretation thereof is
required to reach a conclusion that the equivalent rate as per
clause 1.4.b of the order is basic rate of Rs.84.16 per litre. The
dispute in ABL International Limited‘s case (Supra 1) was
entertained by the Apex Court by coming to a conclusion that
there is no ambiguity in the terms of the policy (See Paragraph
No.53). The contention of contra proferentem rule put-forth by
the learned counsel for the petitioner will have to be considered
only when the Court deciding the dispute comes to the
conclusion that there are two possible interpretations. The
said judgment is not relevant in the instant case in view of the
observations of this Court in the preceding paragraphs that the
matter involves disputed questions fact and interpretation of
terms of the contract which do not come within the realm of
writ jurisdiction. It is nobody’s case that writ Court does not
have jurisdiction to entertain contractual disputes. The border
line is discretion of the Court. The writ Court would exercise
discretion in contractual matters keeping in mind the factors
like availability of alternate remedy, existence of disputed
questions of fact, complexity of dispute, interpretations of
terms of contract, the contract being private in nature and no
public law element is involved etc.
21
PK, J
W.P.No.22127 of 2024
15. The subject contract is a private contract. As
noted above, there is no allegation of mala fides on the part of
the respondents and the respondents have adhered to the
dispute redressal mechanism under the contract. Further, the
instant case is not a case of simple nature and the resolution
thereof requires detailed analysis and interpretation of terms of
the contract; oral and documentary evidence is required to be
adduced by the parties, which, normally, is the domain of civil
law Courts. [See: Kerala State Electricity Board‘s case (Supra 3)
and Joshi Technologies International INC‘s case (Supra 4)].
Thus, exercise of jurisdiction under Article 226 of the
Constitution is not warranted. There are no merits in the
present writ petition.”
25. In the instant case, as per Clause 1.14.3 of the Work Order dated
14.11.2022, any dispute arising out of the contract, including issues
related to its interpretation, performance, breach, or termination, which
is not settled through negotiations, must be resolved by filing a case
before a civil court having competent pecuniary and territorial
jurisdiction, or before the Civil Court at Bhadradri-Kothagudem District.
“1.14 SETTLEMENT OF DISPUTES:
1.14.3 Civil Court
In the event of any question, dispute or difference arising under
the terms and conditions or interpretation of the terms of, or in
connection with Purchase Order/Contract/Agreement (except as to
any matter the decision of which is specially provided for by these
conditions), or the performance of any of the obligations of SCCL and
the contractor hereunder or referred to herein, including an issue or
dispute as to breach or termination of this contract or as to any claim
in toto, in equity or pursuant to any statute (“Dispute”) is not settled
through negotiations, the respective parties can seek remedy through
‘CIVIL COURT’ having competent pecuniary and territorial
jurisdiction or at competent court in Bhadradri-Kothagudem district
and not by Arbitration.
22
PK, J
W.P.No.22127 of 2024
No dispute shall be referred to Arbitration other than civil
courts. No dispute shall be entertain in any form and on any matter
pertaining to contract except herein above mentioned.”
26. Since the petitioner has not availed this remedy and has directly
approached this Court under Article 226 of the Constitution of India,
this Court is not inclined to entertain the present writ petition and the
same is liable to be dismissed.
27. Accordingly, the Writ Petition is dismissed. However, the
petitioner is at liberty to approach the competent Civil Court as per
Clause 1.14.3 of the Work Order No.7600009305 dated 14.11.2022, for
redressal of its grievance, if it so desires.
Miscellaneous applications, if any, pending in this writ petition,
shall stand closed. No costs.
_________________________________
JUSTICE PULLA KARTHIK
Date: 19.06.2025.
GSP