2011 (7) TMI 1307 - HC - Indian Laws

Summary

Issues Involved:
1. Quashing of letters dated 21st June 2010, 3rd May 2011, and 3rd June 2011.
2. Alleged violation of principles of natural justice.
3. Maintainability of the writ petition due to the existence of an arbitration clause.
4. Interpretation of Article 4.1.1 of the Concession Agreement.
5. Whether the writ jurisdiction can be invoked in contractual disputes.

Summary:

1. Quashing of Letters:
The petitioner sought to quash letters dated 21st June 2010, 3rd May 2011, and 3rd June 2011, and to restrain the respondent from implementing these letters. The letters pertained to alleged violations of a concession agreement by the petitioner, including unauthorized use of rail terminal facilities by other private operators and a demand for Rs. 40 crores.

2. Alleged Violation of Principles of Natural Justice:
The petitioner contended that the order dated 3rd June 2011, demanding Rs. 40 crores and threatening termination of the Concession Agreement, was issued without a show cause notice or an opportunity for a hearing, violating principles of natural justice. The respondent countered that a show cause notice was served on 21st June 2010, and the petitioner replied on 28th June 2010, thus fulfilling the requirement of natural justice.

3. Maintainability of the Writ Petition:
The petitioner argued that the existence of an arbitration clause does not bar the writ jurisdiction of the court. The respondent contended that the petitioner should invoke the arbitration clause rather than the writ jurisdiction. The court noted that while the existence of an arbitration clause does not absolutely bar writ jurisdiction, it is generally not appropriate for disputes involving interpretation of contractual terms and serious disputed facts.

4. Interpretation of Article 4.1.1 of the Concession Agreement:
The petitioner argued that Article 4.1.1 allowed them to extend rail terminal facilities to other Private Container Train Operators (PCTOs) without prior approval. The respondent disagreed, stating that the article did not authorize such actions without specific permission. The court found that the interpretation of Article 4.1.1 and the related factual disputes were not suitable for adjudication under writ jurisdiction.

5. Whether the Writ Jurisdiction Can Be Invoked in Contractual Disputes:
The court referred to several Supreme Court judgments, emphasizing that writ jurisdiction is generally not appropriate for disputes involving contractual terms, especially when serious disputed facts are involved. The court concluded that the present case involved such disputes and was not suitable for writ jurisdiction.

Conclusion:
The court dismissed the petition, finding no merit in the arguments presented. However, it directed the respondent to decide the petitioner's representation dated 15th June 2011 before the expiry of the 60-day period mentioned in the order dated 3rd June 2011, ensuring an opportunity for a hearing.