2005 (9) TMI 589 - SC - Indian Laws

Whether a discretionary jurisdiction would be refused to be exercised solely on the ground of existence of an alternative remedy which is more efficacious? Held that - In this matter no case has been made out for grant of a relief of restoration of the dealership. The contract stood terminated on the death of the Appellant s partner. No case of novation of contract has been made out. It is also not the case of the parties that any other or further agreement between the parties came into being. The arrangement was an ad hoc one. The Appellant did not derive any legal right to continue the business for an indefinite period. Moreover, she allegedly violated the terms of the contract. It may be true that the said award has been made without prejudice to the interest of the parties in this appeal; but keeping in view the admitted fact that the Appellant committed a default in payment of dues towards supplies made and having regard to the fact that the dealership agreement has come to an end, we are of the opinion that it is not a fit case where we would set aside the impugned order of the High Court and direct it to dispose of the writ petition afresh. For the reasons aforementioned, there is no merit in this Appeal which is dismissed accordingly.

Issues Involved:
1. Scope and ambit of judicial review vis-`a-vis availability of alternative remedy.
2. Termination of dealership agreement.
3. Alleged breaches and defaults by the Appellant.
4. Arbitration and subsequent consent award.
5. Jurisdiction of the High Court under Article 226 of the Constitution of India.

Detailed Analysis:

1. Scope and Ambit of Judicial Review vis-`a-vis Availability of Alternative Remedy:
The principal question was whether discretionary jurisdiction should be refused solely due to the existence of an alternative remedy. Ordinarily, when disputes require adjudication of disputed facts needing evidence, courts may not entertain writ applications. However, access to justice by way of public law remedy would not be denied when the lis involves public law character and when the chosen forum cannot grant appropriate relief. The court observed that in certain cases, even disputed questions of fact can be addressed under Article 226 of the Constitution of India.

2. Termination of Dealership Agreement:
The dealership agreement was terminated by the Respondent on 19.03.2004, citing Clause 55, which allowed termination upon the death of a partner, among other grounds. The Respondent alleged that the agreement ended due to the death of Smt. Bimladevi T. Obhan. Despite this, the dealership continued on an ad hoc basis due to representations by the Appellant. The Respondent issued a show-cause notice on 20.12.2002 for various breaches, followed by another notice on 07.11.2003 warning of stringent action for future defaults. Upon further defaults, the agreement was terminated.

3. Alleged Breaches and Defaults by the Appellant:
The Respondent cited low sales volume, sales performance issues, dry outs at the outlet, and lack of active interest/participation by the Appellant as breaches of clauses 9, 42, 44, and 55(a). The Appellant contended that the Respondent had condoned these lapses and insisted only on payment of dues as per the notice dated 07.11.2003. The Appellant also argued that she was entitled to three months' notice under Clause 9.

4. Arbitration and Subsequent Consent Award:
The disputes were referred to an arbitrator on 07.06.2004, resulting in a consent award on 15.12.2004. The award required the Respondent to pay Rs. 4,64,586/- in installments with interest. The Appellant contended that the arbitrator had no jurisdiction to pass an award regarding the restoration of possession. The court noted that the parties had invoked the arbitration agreement and entered into a settlement. The Appellant's claim for damages could have been made before the arbitrator.

5. Jurisdiction of the High Court under Article 226 of the Constitution of India:
The High Court dismissed the writ petition in limine on the ground of the existence of an arbitration clause. The court held that a public law remedy cannot be denied solely due to the existence of an arbitration clause, especially when a fundamental right breach by the State is alleged. The court cited precedents where writ jurisdiction was exercised despite alternative remedies being available, particularly in cases involving fundamental rights, failure of natural justice, or orders without jurisdiction. However, the court concluded that no case for restoration of the dealership was made out as the contract terminated on the partner's death, and no novation of contract was established.

Conclusion:
The Supreme Court dismissed the appeal, noting that the Appellant committed defaults and the dealership agreement had ended. The court found no merit in setting aside the High Court's order and directed it to dispose of the writ petition afresh. The appeal was dismissed with no order as to costs.

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