1959 (7) TMI 65 - HC - Indian Laws

Summary

Issues Involved:
1. Delay in completion of contracts.
2. Withholding of payments by the employer.
3. Termination of contracts by the employer.
4. Availability of alternative remedy through arbitration.
5. Jurisdiction of the High Court under Article 226 of the Constitution of India.

Detailed Analysis:

1. Delay in Completion of Contracts:
The petitioner, Union Construction Company (Private) Limited, alleged delays in the completion of four building contracts (A, B, C, and D) due to various defaults and lapses by the employer, the Military Engineering Service (M.E.S.). For contract A, the petitioner claimed that the work order was delayed and alterations in layout, design, and specifications caused further delays. Similar issues were cited for contracts B, C, and D, including delays in the supply of materials and changes in specifications by the employer.

2. Withholding of Payments by the Employer:
The petitioner contended that significant sums were withheld by the employer for completed work under the contracts. For instance, &8377; 1,25,000/- was withheld for contract A, &8377; 90,000/- for contract B, and two lacs of rupees for contracts C and D. The employer, on the other hand, argued that the bills submitted by the petitioner were incorrect and that the petitioner had not completed the work as claimed.

3. Termination of Contracts by the Employer:
The employer issued notices under Clause 54 of the building agreement, threatening to cancel the contracts due to delays. Contracts B and D were terminated, and the petitioner was asked to vacate the sites. The petitioner argued that the terminations were illegal and that the employer had also seized large quantities of the petitioner's stores.

4. Availability of Alternative Remedy through Arbitration:
The court noted that Clause 68 of the agreement deed provided for arbitration of disputes. The petitioner argued that the conditions for arbitration were not met, but the court disagreed, stating that the contracts had been terminated, thus meeting the conditions for arbitration. The court emphasized that the petitioner had an alternative remedy through arbitration, which should be pursued before seeking judicial intervention.

5. Jurisdiction of the High Court under Article 226 of the Constitution of India:
The petitioner sought relief under Article 226, including writs of certiorari and mandamus. The court held that a writ of certiorari was untenable as the orders in question were administrative, not judicial or quasi-judicial. The court also found that a writ of mandamus was inappropriate due to the availability of an alternative remedy through arbitration. The court further stated that the jurisdiction under Article 226 should not be exercised to enforce contractual obligations, which are better suited for resolution through arbitration or civil suits.

Conclusion:
The petition was dismissed on multiple grounds:
1. The existence of an alternative remedy through arbitration.
2. The nature of the orders being administrative, not judicial or quasi-judicial.
3. The principle that contractual obligations should not be enforced through writs of mandamus.
4. The court's discretion to refuse a writ when an alternative remedy is available.

The court directed the petitioner to pursue arbitration as provided in the agreement and dismissed the petition with costs, vacating any interim stay orders previously granted.