2016 (9) TMI 1156 - HC - Indian Laws

Breach of Contract - Recovery of certain money from U.P. Rajya Vidyut Utpadan Nigam Limited - based on contractual matter for which remedy lies in common law - availment of Article 226 to claim any money in respect of breach of contract or tort or otherwise - Held that - In Kerala State Electricity Board and another Vs. Kurien E. Kalathil and others 2000 (7) TMI 920 - SUPREME COURT , Court said that interpretation and implementation of a clause in a contract cannot be subject-matter of a writ petition. Whether a contract envisages actual payment or not is a question of construction of contract. If a term of contract is violated, ordinarily remedy is not the writ petition under Article 226. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Disputes arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies have power to contract or deal with property like private parties. Such activities may not raise any issue of public law. When it is not shown that contract is statutory and parties are within the realm of their authority, contract between the parties is in the realm of private law. The disputes relating to interpretation of terms and conditions of such contract cannot be agitated in a petition under Article 226 of the Constitution. The same has been reiterated in many other cases. therefore, in view of the same, mandamus sought by petitioner is nothing but grant of a money decree in extraordinary equitable jurisdiction under Article 226 which ought not to have been granted. - Decided against the petitioner

Summary

Issues:
1. Prayer (i) rendered infructuous by efflux of time.
2. Recovery of money from U.P. Rajya Vidyut Utpadan Nigam Limited based on contractual matter.

Analysis:
1. The petitioner acknowledged that Prayer (i) had become irrelevant due to the passage of time. The counsel for the petitioner did not contest this fact.

2. Regarding Prayer (ii), the issue of recovering money from U.P. Rajya Vidyut Utpadan Nigam Limited was discussed. The counsel for the petitioner admitted that this matter pertained to a contractual dispute, emphasizing that seeking relief under Article 226 for breach of contract was not appropriate. Citing the case of Kerala State Electricity Board and another Vs. Kurien E. Kalathil and others, it was highlighted that disputes arising from contractual terms should be resolved through common law principles or arbitration, rather than through a writ petition under Article 226. The court emphasized that contracts with statutory bodies do not automatically become statutory contracts, and disputes related to such contracts fall under the purview of private law. The court referred to previous judgments to support the stance that seeking a money decree through a writ petition was not permissible under extraordinary equitable jurisdiction. Therefore, the court concluded that the mandamus sought by the petitioner for recovery of money was akin to seeking a money decree through Article 226, which was not warranted. Consequently, the court found no grounds to intervene and dismissed the writ petition, vacating any interim orders previously issued.