2014 (5) TMI 1163 - HC - Indian Laws

Recovery of alleged dues pursuant to a contractual work - outstanding dues of service tax - jurisdiction under Article 226 - Held that - In the present case there is nothing on the record which may persuade us to hold that the contract is a statutory contract. The remedy of the contractor if he is aggrieved by non-payment would be to either file an ordinary civil suit or if there is an arbitration agreement between the parties to invoke the terms of the agreement - this Bench in M/s R.S. Associate Vs. State of U.P. Ors. (Writ-C No.11544 of 2014 decided on 24 February 2014) declined to entertain a petition which had been filed for making payment of bills under a contract - petition dismissed.

Summary

Issues:
1. Jurisdiction of the Court under Article 226 for a money decree related to a contractual matter.
2. Whether disputes arising from a contract should be resolved through ordinary principles of contract law or by a writ petition.
3. Differentiating between statutory and private contracts in terms of legal recourse.
4. Applicability of Article 226 in cases involving contractual obligations without constitutional or statutory rights.

Analysis:
1. The High Court addressed the issue of jurisdiction under Article 226 in a case where a petitioner sought a money decree for work performed under a contract. The Court highlighted that matters regarding the satisfactory completion of work and adherence to contract terms fall within the purview of competent authorities rather than the Court's jurisdiction under Article 226. Reference was made to the Supreme Court's decision in Kerala State Electricity Board v. Kurien E.Kalathil, emphasizing that disputes arising from a contract should be settled through the principles of contract law, not through writ petitions.

2. The Court delved into the distinction between resolving contract disputes through ordinary contract law principles versus seeking redress through a writ petition. It cited precedents to establish that the interpretation and enforcement of contractual clauses do not typically warrant a writ petition under Article 226. Emphasizing that a contract does not automatically become statutory merely due to involvement with a public body, the Court reiterated that disputes related to contract interpretation should be adjudicated through civil courts or arbitration, if provided for in the contract.

3. Further, the judgment discussed the differentiation between statutory and private contracts in terms of legal recourse. It clarified that contracts entered into by statutory bodies do not necessarily involve statutory powers and should be governed by general contract law principles. The Court highlighted that disputes concerning the interpretation of contract terms should not be agitated through a writ petition under Article 226, as such matters are more suited for resolution in civil courts or arbitration proceedings.

4. Lastly, the Court examined the applicability of Article 226 in cases involving contractual obligations without constitutional or statutory rights. Citing a Supreme Court decision, it emphasized that in the absence of statutory rights, a writ petition cannot be used to enforce contractual obligations or claim damages arising from breaches of contract. The judgment concluded by dismissing the petition, aligning with previous decisions that declined to entertain similar petitions seeking payment under contracts, reiterating the need for recourse to civil suits or arbitration agreements for resolution of contractual disputes.