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2019 DIGILAW 391 (JK)

New India Structure Pvt. Ltd. v. Union of India

2019-08-21

DHIRAJ SINGH THAKUR

body2019
JUDGMENT : 01. The petitioners are all construction companies as well as contractors, who claim that they have not been paid their dues even after the successful completion of the contracts allotted to them by a Company, namely, IL & FS Transportation Networks Limited (ITNL) and, therefore, seek a mandamus commanding the respondent No. 2, i.e. the National Highway Authority of India and respondent No. 4 - M/s Chenani-Nashri Tunnel Way Limited for releasing the outstanding amount. Briefly stated, the material facts are as under:- 02. The Government of India, entrusted the National Highway Authority of India (NHAI) the task of development, maintenance and management of National Highway No. 1A from kilometer 89 to kilometer 130 including 9 kilometer long tunnel (2 lane) with A parallel escape tunnel with the approximate length of 9 kilometers on DBFOT (Design Build Finance Operate Transfer) Annuity basis. With a view to achieve the needful the NHAI started the process of shortlisting of eligible bidders and selected M/s IL & FS Transportation Networks Limited. A letter of authority was issued by the NHAI dated 03.05.2010 to the selected bidder, requiring inter alia the execution of a concession agreement within 45 days from the date of issue thereafter. Concessionaire Agreement dated 28.06.2010 03. The selected bidder, i.e., ITNL promoted and incorporated Chenani Nashri Tunnelway (CNTL) as a concessionaire as a limited liability Company under the Companies Act, 1956 as a special purpose vehicle for executing the works in question and requested the NHAI to accept the concessionaire as the entity, which would undertake and perform the obligations and exercise the rights of the selected bidder under the LOA. The NHAI, accordingly, entered in to a concession agreement with the concessionaire CNTL-respondent No. 4 herein for execution of the project on DBFOT annuity basis, subject to the terms and conditions in the concession agreement dated 28.06.2010. Terms & Conditions of the Concession Agreement 04. At this stage, it may be pertinent to refer to some of the terms and conditions of the concession agreement. According to clause 5.1.1., the concessionaire-respondent No. 4 was required to undertake the project at its own cost and expense, procure finance undertake the design engineering, procurement, construction, operation and maintenance of the project highway and observe, fulfill and perform all its obligations set out in the agreement. 05. According to clause 5.1.1., the concessionaire-respondent No. 4 was required to undertake the project at its own cost and expense, procure finance undertake the design engineering, procurement, construction, operation and maintenance of the project highway and observe, fulfill and perform all its obligations set out in the agreement. 05. According to clause 5.2.1., the concessionaire was made responsible and liable for all obligations under the agreement. Clause 5.6. of the said agreement envisaged that the concessionaire had been set up for the sole purpose of exercising the rights and observing and performing its obligations and liabilities under the agreement and that it could not except with the previous written consent, directly or indirectly engage in any business other than as envisaged therein. 06. Clause 27.1.1. envisaged payment of annuity to the concessionaire upon completion of the project. A sum of Rs. 317.52 crores was the annuity amount, which was payable on each of the dates, as reflected in Schedule-L of the agreement. ESCROW Account 07. Clause 31 envisaged the opening of an ESCROW account by the concessionaire with a Bank, which would be called the ESCROW Bank in accordance with the ESCROW agreement. Clause 31.2 envisaged the money that was required to be deposited in the ESCROW account, which was identified as under:- (a) all funds constituting the financial package. (b) All annuities and any other revenues from or in respect of the project highway including the proceeds of any rentals, deposits, capital receipts or insurance claims. (c) All payments by the authority after deduction of any outstanding concession fee. 08. Clause 31.3.1. prescribed that the concessionaire at the time of opening of the ESCROW account should give irrevocable instructions by way of an ESCROW agreement to the ESCROW Bank instructing inter alia that deposits in the ESCROW account be appropriated in a particular order every month or at shorter intervals, if necessary. The order prescribed in terms of 31.3.1. was as under:- “.............................. (A)All taxes due and payable by the concessionaire for and in respect of the project highway; (B)All payments relating to construction of the project highway, subject to and in accordance with the conditions, if any, set forth in the financing agreement; (C)O&M expenses, subject to the ceiling, set forth in the financing agreement. was as under:- “.............................. (A)All taxes due and payable by the concessionaire for and in respect of the project highway; (B)All payments relating to construction of the project highway, subject to and in accordance with the conditions, if any, set forth in the financing agreement; (C)O&M expenses, subject to the ceiling, set forth in the financing agreement. (D)O&M expenses and other costs and expenses incurred by the authority in accordance with the provisions of the agreement and certified by the authority as due and payable to it; (E)....................... (F)....................... (G)....................... (H)....................... (I)....................... (J)Balance if any, in accordance with the instructions of the concessionaire.” 09. Clause 31.3.2. envisaged that the concessionaire shall not in any manner modify the order of payment specified in clause 31.3.1. except with the prior written approval of the authority. 10. Clause 42.2.1.(C) envisaged that the concessionaire was to fully indemnify the authority against any loss or damage arising out of or with respect to the non-payment of amounts due as a result of materials or services furnished to the concessionaire, which were payable by the concessionaire or any of its contractors. Development Agreement dated 02.11.2010 11. Another back to back agreement came to be executed by the ITNL (the developer) and the concessionaire on 02.11.2010, which was called as a ‘development agreement’. As per this agreement, ITNL agreed to undertake the construction works in accordance with the terms of the agreement and the concession agreement on behalf of the concessionaire. The developer (ITNL) undertook and acknowledged to discharge the obligations of the concessionaire as per the concession agreement, which was to be read in conjunction with the development agreement. 12. According to Clause 3.1 of the development agreement, the developer undertook to inter alia design and construct at its own cost and expense the works in accordance with the construction requirements. The developer also undertook to indemnify the concessionaire against all actions, liabilities and demands that may be suffered in accordance with the performance of its obligations under the agreement. Clause 18.3 of the development agreement also envisaged resolution of disputes through the mechanism of arbitration. 13. The petitioners are construction companies and contractors, who individually executed agreements with the developer, i.e., ITNL for execution of some of the works in question. Clause 18.3 of the development agreement also envisaged resolution of disputes through the mechanism of arbitration. 13. The petitioners are construction companies and contractors, who individually executed agreements with the developer, i.e., ITNL for execution of some of the works in question. As an instance, petitioner No. 1, namely, M/s New India Structures Private Limited entered into an agreement dated 18.05.2018 with ITNL for execution of certain works more elaborately dealt with in the said agreement. Various terms and conditions have been incorporated in the said agreement defining the rights and obligations of the parties therein. According to Clause 18.3, resolution of disputes is envisaged through the mechanism of arbitration, if the parties failed to resolve the disputes or the controversy in accordance with the mechanism prescribed under clauses 18.1 or 18.2. Similar agreements are stated to have been executed in regard to other petitioners for different works with the developer – ITNL. 14. The petitioners’ case is that whatever works were required to be executed by them under the agreements executed by them with the ITNL, were successfully completed. With a view to support this fact, the petitioners rely upon completion certificates reflecting satisfactory execution and completion of the works by them. The said certificates are purported to have been issued by the authorized signatory of the developer-ITNL. Some of such certificates have been placed on record. 15. Learned counsel for the petitioners urged that despite the successful completion of the works in question, payments were not made to them. Repeated efforts in that regard failed to elicit any response but finally the NHAI vide communication dated 06.02.2019, issued to CMPI-respondent No.4 proposed a deduction equivalent to the amount payable to the petitioners from the annuity payment, which was due for payment to respondent No.4-CNTL. This communication issued by the Project Director of NHAI required the respondent No. 4 to submit its consent, failing which it was made clear that the deduction would be effected. 16. This communication issued by the Project Director of NHAI required the respondent No. 4 to submit its consent, failing which it was made clear that the deduction would be effected. 16. Learned counsel for the petitioners urged that since the requisite completion certificates had been issued in favour of the petitioners and the amount payable to the petitioners stood admitted, the withholding of the amount by respondent No. 4 was totally arbitrary and, therefore, in such circumstances, a writ of mandamus could be issued against the respondents, directing them to make the payment from the annuity amount, which was receivable by respondent No. 4 from the NHAI. It was urged that notwithstanding the fact that the contract stood concluded between the petitioners and respondent No. 4, yet on the principles laid by the Apex Court in “ABL International Limited Vs Export Credit Guarantee Corporation of India Limited” (2004)3 SCC 553 subsequently followed in case of “Surya Constructions Vs The State of Uttar Pradesh and ors,” passed in Civil Appeal No.2610 of 2019 such a mandamus could be issued. 17. It was next contended that since there was an ESCROW account, which was to be operated by the NHAI in terms of the provisions of Clause 31.1. and 31.3.1. (b), the NHAI was under an obligation to release the amount directly in favour of the petitioners, notwithstanding the fact that the developer-ITNL with whom the petitioners had entered into agreement was not a party respondent in the present petition. 18. In the objections to the writ petition, respondent No. 4 has taken the following objections:- (i) That there was no privity of contract between the petitioners and the respondent No. 4, inasmuch as, the petitioner had entered into an agreement with ITNL and not respondent No. 4 and that ITNL was not a party respondent and in the present petition, therefore, no relief could be claimed against the said respondent No. 4. (ii) That the contract purportedly executed between the petitioners and the ITNL having been concluded, no writ would lie. Reliance in this regard was placed upon “National Highway Authority of India Vs Ganga Enterprises” (2003)7 SCC 410 . (ii) That the contract purportedly executed between the petitioners and the ITNL having been concluded, no writ would lie. Reliance in this regard was placed upon “National Highway Authority of India Vs Ganga Enterprises” (2003)7 SCC 410 . (iii) That payment of annuity to respondent No. 4, CNTL, could not be stopped as the NHAI was under an obligation to pay the same on the successful completion and commissioning of the project in question and further that any deduction or reduction in the annuity amount could only be made in the manner and for the reasons detailed in Clauses 28.2 and 28.4 of the concession agreement and not otherwise and further that no deduction could be made on account of payments due under contracts between third parties. (iv) That immediately after the receipt of communication dated 06.02.2018, a detailed response was submitted by respondent No. 4 to respondent No. 2 denying any liability in the matter. Reliance in this regard was placed upon communication dated 25.02.2019 and further that the plea that the amount payable to the petitioners was admitted. 19. In the backdrop of the aforementioned facts, the following issues arise for consideration:- Maintainability of the writ petition under Article 226 20. One of the issues raised by learned counsel for the respondents was with regard to the maintainability of the petition under Article 226 for purposes of enforcing contractual obligations. 21. The extent of applicability of Article 14 in contractual matters, where the State was a party, came up for consideration in the case of “M/s Radhakrishna Agarwal and ors Vs State of Bihar & ors,” (1977) 3 SCC 457 , wherein the Apex Court held as under:- “10. It is thus clear that the Erusian Equipment & Chemicals Ltd.’s case (supra) involved discrimination at the very threshold or at the time of entry into the field of consideration of persons. with whom the Government could contract at all. At this stage, no doubt, the State acts purely in its executive capacity and is bound by the obligations which dealings of the State with the individual citizens import into every transaction entered into in exercise of its constitutional powers. with whom the Government could contract at all. At this stage, no doubt, the State acts purely in its executive capacity and is bound by the obligations which dealings of the State with the individual citizens import into every transaction entered into in exercise of its constitutional powers. But, after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Article 14 or of any other constitutional provision when the State of its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart from contract.” 22. Subsequently, in “Verigamto Naveen Vs Govt. of A.P. & Ors,” (2001) 8 SCC 344 , the Apex Court held that if the breach of contract involved breach of statutory obligation when the order complained of was made in exercise of statutory power by a statutory authority, though cause of action even when arising out of contract, brought it within the sphere of public law. It was held in paragraph 21 as under:- “21……. In cases where the decision making authority exceeded its statutory power or committed breach of rules or principles of natural justice in exercise of such power or its decision is perverse or passed an irrational order, this Court has interceded even after the contract was entered into between the parties and the Government and its agencies. We may advert to three decisions of this Court in M/s Dwarkadas Marfatia & Sons vs. Board of Trustees of the Port of Bombay; Mahabir Auto Stores & Ors. vs. Indian Oil Corporation & Ors.; and Srilekha Vidyarthi vs. State of U.P.. Where the breach of contract involves breach of statutory obligation when the order complained of was made in exercise of statutory power by a statutory authority, though cause of action arises out of or pertains to contract, brings within the sphere of public law because the power exercised is apart from contract.” 23. Where the breach of contract involves breach of statutory obligation when the order complained of was made in exercise of statutory power by a statutory authority, though cause of action arises out of or pertains to contract, brings within the sphere of public law because the power exercised is apart from contract.” 23. In “Kumari Shrilekha Vidyarthi and others Vs State of UP and others” (1991)1 SCC 212 , it was held:- “20. ..................Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, can it be said that the State can thereafter cast off its personality and exercise unbridled power unfettered by the requirements of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more? We have no hesitation in saying that the personality of the State, requiring regulation of its conduct in all spheres by requirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirements of Article 14 and contractual obligations are alien concepts. which cannot co-exist. 21. The Preamble of the Constitution of India resolves to secure to all its citizens Justice, social, economic and political; and equality of status and opportunity. Every State action must be aimed at achieving this goal. Part IV of the Constitution contains `Directives Principles of State Policy which are fundamental in the governance of the country and are aimed at securing social and economic freedoms by appropriate State action which is complementary to individual fundamental rights guaranteed in Part III for protection against excesses of State action to realise the vision in the Preamble. This being the philosophy of the Constitution, can it be said that it contemplates exclusion of Article 14--non-arbitrariness which is basic to rule of law from State actions in contractual field when all actions of the State are meant for public good and expected to be fair and just? This being the philosophy of the Constitution, can it be said that it contemplates exclusion of Article 14--non-arbitrariness which is basic to rule of law from State actions in contractual field when all actions of the State are meant for public good and expected to be fair and just? We have no doubt that the Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the Preamble. In our opinion, it would be alien to the Constitutional Scheme to accept the argument of exclusion of Article 14 in contractual matters. The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion. This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals.” 24. In paragraph 22, the Court further proceeded to hold:- “22. There is an obvious difference in the contracts between private parties and contracts to which the State is a party, Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes failing within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also fails within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also fails within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 of non-arbitrariness at the hands of the State in any of its actions. 25. The issue was also considered at length in ABL International and after noticing the various judgments on the point, the following legal principles were crystallized regarding maintainability of the writ petition:- a. In an appropriate case, a writ petition as against the State or an instrumentality of the State arising out of the contractual obligations is maintainable. b. Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases, as a matter of rule. c. A writ petition involving the consequential benefit of monetary claims is also maintainable. 26. The Court further proceeded to hold that in entertaining the writs under Article 226, the Court has the discretion to entertain or not to entertain the petition and with reference to “Whirlpool Corporation Vs Registrar of Trade Marks, Mumbai & ors,” 1998(8) SCC 1 , it was held that the Court has imposed upon itself certain restrictions in the exercise of this power. It was further held that the prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the writ jurisdiction. 27. On the issue of the right to issue prerogative writ to the exclusion of other available remedies, reliance was placed upon “State of U.P. & ors Vs Bridge & Roof Company (India) Ltd.” (1996)6 SCC 22 , the Court held:- “16. 27. On the issue of the right to issue prerogative writ to the exclusion of other available remedies, reliance was placed upon “State of U.P. & ors Vs Bridge & Roof Company (India) Ltd.” (1996)6 SCC 22 , the Court held:- “16. .........The contract in question contains a clause providing inter a1ia for settlement of disputes by reference to arbitration [Clause 67 of the Contract]. The Arbitrators can decide both questions of fact as well as questions of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should not follow and adopt that remedy and invoke the extra-ordinary jurisdiction of the High Court under Article 226.........” 28. In “Joshi Technologies International Inc. Vs Union of India & ors.” 2015(7) SCC 728 , the Apex Court on a detailed conspectus of the ratio of the judgment rendered from the said Court from time to time crystallized the legal position in regard to exercise of writ jurisdiction in paragraph Nos. 68 & 69. It was held thus:- “68. The position thus summarized in the aforesaid principles has to be understood in the context of discussion that preceded which we have pointed out above. As per this, no doubt, there is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when monetary claim is raised. At the same time, discretion lies with the High Court which under certain circumstances, can refuse to exercise. It also follows that under the following circumstances, ‘normally’, the Court would not exercise such a discretion: (a) the Court may not examine the issue unless the action has some public law character attached to it. (b) Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate the party to the said made of settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration. (c) If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination. (d) Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances. 69. (c) If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination. (d) Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances. 69. Further legal position which emerges from various judgments of this Court dealing with different situations/aspects relating to the contracts entered into by the State/public Authority with private parties, can be summarized as under: (i) At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness. (ii) State in its executive capacity, even in the contractual field, is under obligation to act fairly and cannot practice some discriminations. (iii) Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, Involving examination and cross- examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. In such cases court can direct the aggrieved party to resort to alternate remedy of civil suit etc. (iv) Writ jurisdiction of High Court under Article 226 was not intended to facilitate avoidance of obligation voluntarily incurred. (v) Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the license if he finds it profitable to do so: and he can challenge the conditions under which he agreed to take the license, if he finds it commercially inexpedient to conduct his business. (vi) Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages. (vi) Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages. (vii) Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice. (viii) If the contract between private party and the State/instrumentality and/or agency of State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitutional of India and invoking its extraordinary jurisdiction. (ix) The distinction between public law and private law element in the contract with State is getting blurred. However, it has not been totally obliterated and where the matter falls purely in private field of contract. This Court has maintained the position that writ petition is not maintainable. Dichotomy between public law and private law, rights and remedies would depend on the factual matrix of each case and the distinction between public law remedies and private law, field cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision making process or that the decision is not arbitrary. (x) Mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirements of due consideration of a legitimate expectation forms part of the principle of non-arbitrariness. (xi) The scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes.” 29. In regard to the first issue, I am of the opinion that this is not a case in which discretion can be exercised to invoke the inherent jurisdiction of this Court under 226 for the simple reason firstly that there is no decision taken which can be said to be a decision taken by the State or its instrumentality of the State and consequently which can be said to be arbitrary or violative of Article 14 of the Constitution. Secondly, the facts and circumstances of the case do not at all reflect that terms and conditions of the agreement, which the petitioners seek to enforce in the writ petition have any statutory or public law element in it. The agreements executed between the parties are purely within the realm of private law for which it would be open to the petitioner to invoke the appropriate remedy as is available to them in law. 30. Interestingly, even ITNL is not a party respondent in the present petition and in the absence of ITNL being a party respondent in the present petition, no relief at al could be granted, especially in view of the fact that it was ITNL alone who entered into an agreement with the petitioners and were to be governed with the terms and conditions agreed upon between the parties to the said agreement. Creation of an ESCROW account, whether makes the contract statutory 31. It is pertinent to mention that during the course of arguments, it was not a case urged that respondent No. 4 or for that matter ITNL was an authority of instrumentality of State under Article 12 of the Constitution. Creation of an ESCROW account, whether makes the contract statutory 31. It is pertinent to mention that during the course of arguments, it was not a case urged that respondent No. 4 or for that matter ITNL was an authority of instrumentality of State under Article 12 of the Constitution. On the other hand, what was sought to be urged was that the NHAI being an instrumentality of the State was under an obligation to release the annuity payments in favour of respondent No. 4 to ensure that all payments and obligations towards the petitioners were duly satisfied and discharged and to that extent it was urged that a writ in the nature of mandamus could be issued. This argument has its genesis, it was urged, in the fact that in terms of the agreement pertaining to the operation of ESCROW account it was the NHAI, which was required to operate the said account and thus a writ would lie against the NHAI, being an instrumentality of the State, to release the amounts directly in favour of the petitioners. This argument, however also is untenable, for the simple reason that the conditions in the agreement with regard to the ESCROW account was an obligation cast upon the ITNL, which was supposed to open such an account and further it was the ITNL that was required to issue unequivocal instructions to the ESCROW Bank to appropriate the amount deposited in such an ESCROW account in the order of preference which was prescribed in terms of Clause 31.3.1. of the Concession Agreement. The said clause nowhere obliged the NHAI to either open the account or to operate the same to the exclusion of respondent No. 4 herein. Nor it can be deciphered from the agreement that the respondent No. 4 did not have the exclusive authority to operate the said ESCROW account after the payment had been credited into the sub-accounts created in the ESCROW Bank under various heads especially those reflected in Clause 3.1 (B, C, D & J). 32. Even otherwise sanction of an ESCROW account by itself does not have the effect of making the contract a statutory contract and thus liable to be enforced. 33. 32. Even otherwise sanction of an ESCROW account by itself does not have the effect of making the contract a statutory contract and thus liable to be enforced. 33. In “Thermal Power Ltd Vs State of U.P. & ors.,” 2000(3) SCC 379 , the Court was dealing with an argument where it was urged that an agreement entered into between the State and a private party under Section 43 & 43 A of the Electricity (Supply) Act were statutory contracts and, therefore, the Electricity Board had no authority to alter their terms and conditions. The Apex Court in paragraph 11 held:- “11. ............This contention has been upheld by the High Court. In our opinion the said contention is not correct and the High Court was wrong in accepting the same. Section 43 empowers the Electricity Board to enter into an arrangement for purchase of electricity on such terms as may be agreed. Section 43-A(1) provides that a generating company may enter into a contract for the sale of electricity generated by it with the Electricity Board. As regards the determination of tariff for the sale of electricity by a generating company to the Board, Section 43(1)(2) provides that the tariff shall be determined in accordance with the norms regarding operation and plant-load factor as may be laid down by the authority and in accordance with the rates of depreciation and reasonable return and such other factors as may be determined from time to time by the Central Government by a notification in the Official Gazette. These provisions clearly indicate that the agreement can be on such terms as may be agreed by the parties except that the tariff is to be determined in accordance with the provision contained in Section 43-A(2) and notifications issued thereunder. Merely because a contract is entered into in exercise of an enabling power conferred by a statute that by itself cannot render the contract a statutory contract. If entering into a contract containing the prescribed terms and conditions is a must under the statute then that contract becomes a statutory contract. If a contract incorporates certain terms and conditions in it which are statutory then the said contract to that extent is statutory. A contract may contain certain other terms and conditions which may not be of a statutory character and which have been incorporated therein as a result of mutual agreement between the parties. If a contract incorporates certain terms and conditions in it which are statutory then the said contract to that extent is statutory. A contract may contain certain other terms and conditions which may not be of a statutory character and which have been incorporated therein as a result of mutual agreement between the parties. Therefore, the PPAs can be regarded as statutory only to the extent that they contain provisions regarding determination of tariff and other statutory requirements of Section 43-A(2). Opening and maintaining of an escrow account or an escrow agreement are not the statutory requirements and, therefore, merely because PPAs contemplate maintaining escrow accounts that obligation cannot be regarded as statutory.” This was followed by the Apex Court in “Pimpri Chinchwad Municipal Corporation and others Vs M/s Gayatri Construction Company & anr.” (2008)8 SCC 172 . 34. Apart from the above, the prayer of the petitioners even otherwise cannot be accepted for the simple reason that there is no privity of contract between the petitioners and the respondent No. 4 herein. The agreement executed by the petitioners was with ITNL. The role of NHAI if at all in regard to the provisions regarding ESCROW account arise only in reference to that agreement. The provisions of the said agreement cannot be in any case enforced against respondent No. 4 herein. Although an effort was made by learned counsel for the petitioner to show that in effect respondent No. 4 is nothing but reflection of ITNL. Even that argument cannot be accepted, inasmuch as, both the companies are separate legal entities having been incorporated under the provisions of Companies Act, 1956. Another fact, which needs to be noticed is that according to the provisions of Clause 3.1.2.(g) of the Concession Agreement executed between respondent No.4- the concessionaire and the NHAI, the contract in question could not have been transferred or sublet either in whole or in part. Neither could the same be leased nor the possession parted save and except as expressly permitted by the agreement. It is not clear whether the back to back agreement executed between the respondent No. 4 and ITNL dated 02.11.2010 was therefore, at all in violation of the provisions of aforementioned clause. Neither could the same be leased nor the possession parted save and except as expressly permitted by the agreement. It is not clear whether the back to back agreement executed between the respondent No. 4 and ITNL dated 02.11.2010 was therefore, at all in violation of the provisions of aforementioned clause. It is also not clear whether in the light of the provisions of clause 3.1.3(g) referred hereinabove, whether the ITNL could at all create a sub-contract in favour of the petitioners for executing the work on the project and whether there was any such permission envisaged or granted in the Concession Agreement. In any case, these issues have not been highlighted or debated during the course of arguments. The purpose of noticing the aforementioned issue at this stage is only with a view to highlight the fact that it may be difficult for the petitioners and more so this Court, in the absence of the aforementioned clarifications, which ought to have been projected by the petitioners before seeking enforcement of a contractual condition in an agreement which apparently would run contrary to the clauses of the concession agreement regarding subletting etc. For purposes of reference Clause 3.1.2.(g) is reproduced hereunder:- “3.1.2.(g) neither assign, transfer or sublet or create any lien or Encumbrance on this Agreement, or the concession hereby granted or on the whole or any part of the Project Highway nor transfer, lease or part possession thereof, save and except as expressly permitted by this Agreement of the Substitution Agreement.” It is made clear that anything observed hereinabove in the paragraph would not in any manner operate to prejudice the interest of the petitioners in any subsequent proceedings, which they may choose to avail, to enforce their rights under the agreement, in appropriate proceedings, if so advised. 35. Additionally, considering the fact that the petitioners have an equally efficacious and alternate remedy available to them in terms of the arbitration Clause 18 of the agreement executed between them and the ITNL, and considering the ratio of the judgment in State of U.P. & ors Vs Bridge & Roof Company (India) Ltd., in the light of the availability of an equally efficacious alternate remedy, I deem it proper to decline the prayer for exercising the extraordinary jurisdiction under Article 226. 36. 36. For the reasons mentioned above, this petition is found to be without any merit and is, accordingly, dismissed along with connected CMs. 37. Interim direction shall also stand vacated.