Sverdrup Civil Inc. , Banjara Hills, Hyderabad v. Government Of A. P.
2001-06-20
R.RAMANUJAM
body2001
DigiLaw.ai
R. RAMANUJAM, J. ( 1 ) M/s. Sverdrup Civil Inc. , the petitioner herein, (hereinafter referred to as "the Company") is a Company incorporated in United States of America. It was entrusted with the work relating to construction, supervision and consultancy services for the Andhra Pradesh State highway Project, Phase-Ill, by the Engineer- in-Chief, R and B Administration and external aided Projects, 2nd respondent herein, under a written Agreement No. 8/ nc/r and B Administration and EAP/csc/ 2000-2001, dated 28-6-2000 executed by and between the parties. The agreement, inter alia, contains an Arbitration Clause in clause 8. 2, which provides for settlement of all disputes between the parties by arbitration. Clause 8. 2. 1 to 8. 2. 5 provide for the number of Arbitrators, the method and manner of their appointment and other related matters. Clause 2. 9 provides for termination of the contract either by the owner of the work i. e. , respondent (referred to as "the Clients" in the agreement) or by the Company (referred to as "the consultants" in the agreement ). Clause 2. 9. 6 of the Agreement provides for reference of the disputes regarding termination of the contract also to arbitration. ( 2 ) NOT satisfied with the work, the 2nd respondent, in exercise of his powers conferred under clause 2. 9. 1 (a) of the agreement issued a termination notice to the company by his letter No. 31798/wb/csc/ phase-III/98, dated 19-4-2001 to explain within 30 days from the date of receipt of the said notice as to why the contract should not be terminated. The Company then submitted its explanation on 25-4-2001. The company also submitted another representation to the 2nd respondent on 7-5-2001 explaining its case. On 18-5-2001 the Company addressed another letter to the 2nd respondent and the 3rd respondent- project Director invoking the Arbitration clause and appointing an Arbitrator on its side. The respondents were called upon to appoint an Arbitrator on their side within 30 days, making it clear that if they fail to appoint an Arbitrator within that time, the company would be obliged to proceed further in terms of clause 8. 2. 2 (c) of the special Conditions of the agreement. Thereafter, the 2nd respondent by his letter No. 31798/wb/csc/phase-III/98, dated 21-5-2001 informed the Company that there is no valid explanation from its side to the termination notice and, hence, the agreement between the parties stood terminated.
2. 2 (c) of the special Conditions of the agreement. Thereafter, the 2nd respondent by his letter No. 31798/wb/csc/phase-III/98, dated 21-5-2001 informed the Company that there is no valid explanation from its side to the termination notice and, hence, the agreement between the parties stood terminated. By another letter issued on the very same day, the 2nd respondent called upon the Company to handover all the records, furniture, office equipment, remaining stationery etc. , with immediate effect pursuant to clauses 2. 9. 4, ( 3 ) 9 and 3. 10 of the agreement. Thereupon, the Company approached this Court by filing Writ Petition No. 10641 of 2001 during the summer vacation i. e. , on 26-5-2001 with the following prayer: "hence, for the above said reasons, the petitioner herein prays the Honourable High court be pleased to issue a writ or order or direction in more particular a Writ of mandamus directing the respondents to act according to law as per clause 2. 9. 6 of contract by declaring the notice of suspension issued by the 2nd respondent on 14-9-2001 and termination dated 21-5-2001 issued under clause 2. 8 and 2. 9. 1 (a) respectively as illegal, arbitrary and contrary to law as well as agreement between the parties, consequently direct the respondents, their subordinates, officials etc. , not to take over the office records, furniture, equipment and stationery etc. , and not to interfere with the execution of the work by preventing the professionals and Engineers connected to the Project pending arbitral proceedings under clause 8 GC in respect of Agreement No. 8/ enc (Randb)/admn. and EAP/csc/2000-2001 dated 28-6-2000 and pass such other order or orders as the Honourable High Court deem fit and proper in the circumstances of the case". and moved a House Motion before my learned brother-Hon ble Mr. Justice T. Ch surya Rao on 26-5-2001. The learned Judge while ordering Notice before admission and posting the case to 11-6-2001 made the following interim order: "interim direction not to take over the office records furniture, equipment, stationery etc. , pursuant to the letter No. 31798/wb/csc/ phase-III/98, dated 21-5-2001, in the meanwhile till then. 3.
Justice T. Ch surya Rao on 26-5-2001. The learned Judge while ordering Notice before admission and posting the case to 11-6-2001 made the following interim order: "interim direction not to take over the office records furniture, equipment, stationery etc. , pursuant to the letter No. 31798/wb/csc/ phase-III/98, dated 21-5-2001, in the meanwhile till then. 3. Subsequently, when the writ petition came up for admission before G. Raghuram, J. , it appears that the learned counsel for the petitioner sought permission of the Court to withdraw the writ petition with liberty to institute fresh proceedings in an appropriate Forum. Thereupon, the learned Judge passed the following order on 13-6-2001:"the learned Counsel for the petitioner seeks to withdraw the writ petition with liberty to institute a fresh proceedings in appropriate forum. The writ petition is dismissed as withdrawn with liberty as sought for. "on 15-6-2001, the Company filed the present writ petition substantially for the same relief as in WP No. 10641 of 2001, set forth here in above. ( 4 ) IN my considered view, this writ petition is liable to the dismissed, at the very threshold, fpr more than one reason. First - ( 5 ) THE main dispute between the parties in this case, as already noted, is the validity of the termination of the Contract by the respondents. That dispute arises out of a commercial contract and is, therefore, a private law dispute. Public law remedy of judicial Review, under Article 226 of the constitution of India, cannot be availed for adjudication of such a dispute. This legal position is now well settled. See the decisions of the Apex Court in State of U. P. and others v. Bridge Roof Company (India) limited, (1996) 6 SCC 22 , and State of gujarat v. M. P. Shah Chairtable Trust, (1994) 3 SCC 552 . Further more, the agreement itself provides for settlement of all disputes by arbitration, which is an adequate and efficacious alternative remedy. It may be noted here, that Section 9 of the arbitration and Conciliation Act, 1996, provides for issuing orders for interim injunction or interim protection etc. , by a court as defined under Section 2 (e) of that act even before the commencement of the arbitral proceedings. See the decision of the Supreme Court in Sundaram Finance limited v. NEPC India Limited, (1999) 2 scc 479 .
, by a court as defined under Section 2 (e) of that act even before the commencement of the arbitral proceedings. See the decision of the Supreme Court in Sundaram Finance limited v. NEPC India Limited, (1999) 2 scc 479 . There is absolutely no reason as to why the Company should not pursue that alternative remedy and invoke the extraordinary jurisdiction of this Court under article 226 of the Constitution of India. ( 6 ) COUNSEL for the Company, Sri T. Dhamirbhanudu, relying upon the decisions of the Supreme Court in Hindusthan Sugar mills v. State of Rajasthan, AIR 1981 sc 1681 , Damodar Valley v. K. K. Kar, AIR 1974 SC 158 , and Century Spg and Mfg co. v. Ulhasnagar Municipal Council, air 1971 SC 1021 , however, submits that this Court can, in exercise of its jurisdiction under Article 226 of the Constitution, direct the respondents, by issuing a writ of mandamus to honour their obligations arising out of the contract made in exercise of the executive power of the State under article 299 of the Constitution of India. ( 7 ) I do not find any merit in this submission. Simply because the contract was made in exercise of the Executive Power of the State Government under Article 299 of the Constitution of India, it cannot be termed as a statutory contract. Even the company s Counsel did not contend so. Thus, the contract is a pure and simple commercial contract. In any event, it is not a statutory contract, nor is it regulated by any statute. The Company is not complaining breach of any of its fundamental rights. What it seeks is, enforcement of contractual obligations. It is now well settled that obligations arising out of non-statutory contract will not be enforced by issuing a writ of mandamus. See the decisions of the Supreme Court in Lekhraj v. Dy. Custodian, Bombay, AIR 1966 SC 334 and divisional Forest Officer v. Bishwanath Tea co. , Ltd. , AIR 1981 SC 1368 . ( 8 ) THE decision of the Supreme Court in Hindusthan Sugar Mills (supra), referred to by the Company s Counsel, cannot be of any help. In that case, the Supreme Court merely observed that the Central Government has to honour its legal obligation under a contract and should not drive the appellant therein to file a suit for recovery of the amount.
In that case, the Supreme Court merely observed that the Central Government has to honour its legal obligation under a contract and should not drive the appellant therein to file a suit for recovery of the amount. Nowhere in this decision the supreme Court has laid down the principle that obligations arising out of non-statutory contract can be enforced by issuing a writ of mandamus. ( 9 ) THE decision of the Supreme Court in Damodar Valley (supra), relied upon by the learned Counsel for the Company, is of any assistance to the Company. In that case, the Apex Court, while quoting with approval the famous judgment of House of lords in Heyman v. Darwins Limited, 1942 ac 356, held that the Arbitration Clause, which stands apart from other clauses of a contract, will survive for determining the rights and obligations of the parties even after repudiation or determination of the main contract. ( 10 ) LIKEWISE, the decision of the supreme Court in Century Spg. and Mfg. Co. , (supra) also cannot be of any help to the Company. In the facts and circumstances of that case, the Supreme Court pointed out that the petitioner therein need not be relegated to seek alternative remedy merely because of questions of facts arise for decision. Such is not the case here. Secondly - ( 11 ) THIS writ petition is also liable to be dismissed on the ground of "abuse of process of the Court". As already noted, the company filed Writ Petition No. 10641 of 2001 substantially for the same relief. For the convenience sake, the reliefs sought for in the two writ petitions are set forth hereunder, side-by-side: wp No. 10641 of 2001 wp No. 11934 of 2001"hence, for the above said reasons, the petitioner herein prays the Honourable High Court be pleased to issue a writ or order or direction in more particular a writ of mandamus directing the respondents to act according to law as per clause 2. 9. 6 of Contract by declaring the notice of suspension issued by the 2nd respondent on 14-9-2001 and termination order dated 21-5-2001 issued under clause 2. 8 and 2. 9. 1 (a) respectively as illegal, arbitrary and contrary to law as well as agreement between the parties, consequently, direct the respondents, their subordinates, officials etc. , not to take over the office records, furniture, equipment and stationery etc.
8 and 2. 9. 1 (a) respectively as illegal, arbitrary and contrary to law as well as agreement between the parties, consequently, direct the respondents, their subordinates, officials etc. , not to take over the office records, furniture, equipment and stationery etc. , and not to interfere with the execution of the work by preventing the Professionals and Engineers connected to the Project pending arbitral proceedings under clause 8 GC in respect of Agreement No. 8/ ENC (R and B)/admn, EAP/csc/2000-2001 dated 28-6-2000 and pass such other order or orders as the Honourable High Court deem fit and proper in the circumstances of the case. " hence, for the above said reasons, the petitioner herein prays the Honourable High Court be pleased to issue a writ or order or direction in more particular a writ of mandamus directing the respondents to act according to law as per clause 2. 9. 6 of Contract by declaring the notice of termination issued by the 2nd respondent on 19-4-2001 and termination dated 21-5-2001 issued under clause 2. 8 and 2. 9. 1 (a) approval clauses of 3. 7, 4. 3 of GC and 3. 7 of SC respectively as illegal, arbitrary and contrary to law consequently direct the respondents, their subordinates, officials, etc. , not to take over the facilities under Appendix-F of the agreement, office records, furniture, equipment and stationary etc. , and not to interfere with the execution of the work by preventing the Professionals, skilled and unskilled connected to the Project pending arbitral proceedings under clause 8 GC and such other reliefs as deem and proper". ( 12 ) AS already noted, when Writ petition No. 10641 of 2001 came up for admission before my learned brother-G. Raghuram, J. , the Counsel for the company sought permission to withdraw the same with a liberty to institute a fresh proceeding in an appropriate Forum. Thereupon, the said writ petition was dismissed as withdrawn on 13-6-2001 giving liberty to the Company to "institute fresh proceedings in appropriate Forum". Instituting fresh proceeding in an appropriate forum, does not mean again filing a fresh writ petition for substantially same relief. The facts noted above would clearly show that instead of instituting proceedings before an appropriate Forum the Company has filed the present writ petition on 15-6-2001 i. e. , 2 days after withdrawing the earlier writ petition.
Instituting fresh proceeding in an appropriate forum, does not mean again filing a fresh writ petition for substantially same relief. The facts noted above would clearly show that instead of instituting proceedings before an appropriate Forum the Company has filed the present writ petition on 15-6-2001 i. e. , 2 days after withdrawing the earlier writ petition. This, in my view, is nothing but "gross abuse of the process of the Court. " ( 13 ) COUNSEL for the Company, however submits that they were compelled to file the present writ petition because of the letter addressed by the 3rd respondent on 14-5-2001 directing them to handover all the documents, records, reports, office furniture and office equipment etc. , with immediate effect. I do not find any merit in this submission. Such an order was passed on 21-5-2001 itself by the 2nd respondent, vide: his letter No. 31798/wb/csc/phase-III/98/2 i. e. , before the Company filed the first writ petition. In fact, the interim direction that was granted on 26-5-2001 by the learned Judge - Hon ble Mr. Justice t. Ch. Suryarao - was, not to takeover office records, furniture, equipment, stationery etc. , pursuant to the said letter. Yet, the Company chose to withdraw that writ petition. After dismissal of the first writ petition, as aforesaid on 13-6-2001, the 3rd respondent again issued the letter dated 14-6-2001 reiterating the directions contained in his letter dated 21-5-2001. Therefore, the fact that the 3rd respondent issued the said letter dated 14-6-2001 cannot be a valid reason or justification for filing the present writ petition for substantially the same relief. ( 14 ) FOR the aforementioned reasons, this writ petition is dismissed, and in the circumstances, with exemplary costs quantified at Rs. 15,000/- (Rupees fifteen thousand only ).