Research › Search › Judgment

Calcutta High Court · body

2022 DIGILAW 905 (CAL)

Messrs M. k. Basu v. Union Of India

2022-06-24

SUVRA GHOSH

body2022
JUDGMENT Suvra Ghosh, J. - As all these writ petitions pertain to similar issues of law and facts, they are taken up for consideration by a common judgment. 2. The petitioners in all the matters have prayed for issuance of writ in the nature of mandamus commanding the respondent authorities to extend the license period of the petitioners for another two years in terms of clause 40 of the contract agreement and to withdraw/rescind the letters issued on 24th February, 2022 and 25th February, 2022 and also the impugned tender notice dated 4th April, 2022. 3. It is contended on behalf of the petitioners that the petitioners were granted fishing rights in the lakes in question by virtue of contract agreement executed by and between the parties and paid licence fee in terms of the said agreement. Upon expiry of the term of the agreement, the petitioners applied for extension of the tender for a further period of two years in terms of clause 40 of the Special Specification and Special Conditions of Contract before the authority prior to expiry of the term of the contract. 4. The concerned authority accepted the proposal of the petitioners and directed them to deposit the first instalment of licence fee for the first extended year within 25th February, 2022 i.e., about a day or two from the date of the application. Expressing their inability to deposit the licence fee within such short time, the petitioners requested for 15 days? time to pay the said fees which was not acceded to by the respondents who floated a fresh tender notice with regard to the water bodies in question on 4th April, 2022. 5. In WPA 7514 of 2022, the petitioners? prayer for extension of the lease was outrightly turned down by the authority. 6. In assailing the orders of the authority, learned counsel for the petitioners has submitted that extension of lease can be made through a unilateral process on the option of one of the parties to the lease and the other party has no option but to accept the option for renewal exercised by the other. 6. In assailing the orders of the authority, learned counsel for the petitioners has submitted that extension of lease can be made through a unilateral process on the option of one of the parties to the lease and the other party has no option but to accept the option for renewal exercised by the other. Learned counsel has placed reliance on the authorities in Smt. Renuka Seal and Others v/s. Smt. Sabitri Dey and Others reported in AIR 2008 Calcutta 75 and State of U.P. and others v/s. Lalji Tandon (dead) through LRS reported in (2004) 1 Supreme Court Cases 1 in support of his contention. 7. At the outset, the respondents have challenged the maintainability of the writ petitions on two fold grounds:- firstly, clause 63 of the Indian Railways Standard General Conditions of Contract provides for arbitration for settlement of disputes arising out of or in connection with the contract, which has not been availed of by the petitioners. Secondly, the dispute arose out of a contractual obligation between the private parties and the State and there is no element of public law to invoke article 226 of the Constitution of India. Learned counsel for the respondents has taken the Court to Section 51 of the Contract Act, 1872 which deals with reciprocal promise to be simultaneously performed by the parties. No prima facie case of arbitrariness, malafide or malice has been made out by the petitioners to invoke writ jurisdiction of this Court. Public auction has been floated and the petitioners were not restrained from participating in the said auction. The petitioners have neither complied with the terms of the contract pertaining to extension, nor have participated in the auction floated by the authority and as such, are debarred from claiming any relief before the writ Court. 8. Learned counsel has placed reliance on the authorities in Silppi Constructions Contractors v/s. Union of India and Another reported in (2020) 16 Supreme Court Cases 489 and Joshi Technologies International Inc. v/s. Union of India and Others reported in (2015) 7 Supreme Court Cases 728. 9. 8. Learned counsel has placed reliance on the authorities in Silppi Constructions Contractors v/s. Union of India and Another reported in (2020) 16 Supreme Court Cases 489 and Joshi Technologies International Inc. v/s. Union of India and Others reported in (2015) 7 Supreme Court Cases 728. 9. According to the Union of India, the cause espoused by the petitioners in recalling the tender notice and extending the privilege of continuing with the fishing to the petitioners is in itself a request to the Authority to indulge in an act of discrimination in violation of Article 14 of the Constitution of India. The authority is striving to give out a uniform offer to the public at large by way of auction notice in which the petitioners were at liberty to participate. In view of the fact that the writ petitions stand on the anvil of contractual obligations by and between the parties and the option for arbitration has not been availed of by the petitioners, the writ petitions are not maintainable. 10. Learned counsel has referred to the authorities in Kedar Nath Motani and Others v/s. Prahlad Rai and Others. Reported in AIR 1960 SC 213 and Natural Resources Allocation, In Re. Special Reference No. 1 of 2012 reported in (2012) 10 SCC 1 in support of his contention. 11. In reply, learned counsel for the petitioners has submitted that the provisions of section 63 of the Contract Act, 1872 shall apply in the writ petitions, which say that every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit. 12. The facts in the authorities relied upon by the respondent being distinguishable from that of the present writ petitions, the proposition of law laid down therein has no manner of application herein. There is no complex/disputed question of fact to be determined in the writ petitions and the decision making process of the authority is under challenge. Even in a case of contractual obligation between the parties, the Court can exercise jurisdiction under Article 226 of the Constitution. There is no complex/disputed question of fact to be determined in the writ petitions and the decision making process of the authority is under challenge. Even in a case of contractual obligation between the parties, the Court can exercise jurisdiction under Article 226 of the Constitution. The following authorities have been relied upon by the learned counsel for the petitioners: - (1) Indsil Hydro Power and Manganese Limited v/s. State of Kerala and Others reported in (2020) 16 SCC 276 ; (2) Popatrao Vyankatrao Patil v/s . State of Maharashtra and Others reported in (2020) 19 SCC 241 ; (3) ABL International Limited and Another v/s. Export Credit Guarantee Corporation of India Limited and Others reported in JT 2003 (10) SC 300; (4) Jayanti Paul v/s. Kolkata Metropolitan Development Authority reported in 2017 (2) CHN (CAL) 352. 13. As both the writ petitioners and the respondents have canvassed their respective arguments on the issue of maintainability of the writ petitions, I propose to deal with the limited issue of maintainability in this judgment. 14. It is trite law that in dealing with contractual or commercial matters, the Court should exercise utmost restraint in exercising power of judicial review and such intervention is justified when there is arbitrariness, irrationality, malafide or bias. [Silppi Constructions Contractors (supra)]. It is also settled law that when a particular mode of settlement of dispute is provided in the contract the High Court should refuse to exercise discretion under Article 226 of the Constitution and relegate the party to the said mode of settlement. [Joshi Technologies (supra)]. [Silppi Constructions Contractors (supra)]. It is also settled law that when a particular mode of settlement of dispute is provided in the contract the High Court should refuse to exercise discretion under Article 226 of the Constitution and relegate the party to the said mode of settlement. [Joshi Technologies (supra)]. Clause 63 of the Indian Railways Standard General Conditions of Contract provides for arbitration clause which is reproduced below:- 'Settlement of Disputes - Indian Railway Arbitration Rules Matters Finally Determined By the Railway:- All disputes and differences of any kind whatsoever arising out of or in connection with the contract; whether during the progress of the work or after its completion and whether before or after the determination of the contract, shall be referred by the contractor to the GM and the GM shall, within 120 days after receipt of the contractor?s representation, make and notify decisions on all matters referred to by the contractor in writing provided that matters for which provision has been made in Clauses 8, 18, 22(5), 39, 43(2), 45(a), 55, 55- A(5), 57, 57A, 61(1), 61(2) and 62(1) to xiii (B) of Standard General Conditions of Contract or in any Clause of the Special Conditions of the Contract shall be deemed as excepted matters? (matters not arbitrable) and decisions of the Railway authority, thereon shall be final and binding on the contractor; provided further that excepted matters? shall stand specifically excluded from the purview of the Arbitration Clause.' 15. Admittedly this option was not availed of by the petitioners. Nevertheless, it has been held by the Hon?ble Supreme Court on several occasions that existence of an arbitration clause does not debar the Court from entertaining a writ petition. The authority in Uttar Pradesh Power Transmission Corporation Limited and Another v/s. CG Power and Industrial Solutions Limited and Another reported in (2021) 6 SCC 15 endorsed the said proposition of law. With regard to maintainability of writ petitions in a case arising out of a contract, a plethora of decisions of the Hon?ble Supreme Court as well as this Court unanimously hold that unless a writ petition involves adjudication of disputed questions of fact which may require analysis of evidence of witnesses, relief may be granted by the Writ Court against the State or its instrumentality in a writ petition arising out of a contractual obligation. Some disputed facts arising for consideration cannot be a ground for refusal to entertain a writ petition. 16. In the present writ petitions the decision making process of the respondents in refusing to extend the license period of the petitioners for another two years in terms of clause 40 of the contract agreement has been challenged on the ground of arbitrariness, malafide and malice. It is trite law that the State or its instrumentalities cannot act arbitrarily in dealing with private parties. Despite the fact that the matter undoubtedly pertains to contractual obligation between the parties, the allegation of arbitrariness, malafide and malice can be dealt with by this Court in exercise of extraordinary jurisdiction under Article 226 of the Constitution. The said proposition of law has been endorsed by the Hon?ble Supreme Court in the authorities in ABL International Limited, Popatrao Vyankatrao Patil and Indsil Hydro Power (supra). Placing reliance on the authority in Whirlpool Corporation v/s. Registrar of Trade Marks reported in (1998) 8 SCC 1 and Pimpri Chinchwad Municipal Corporation v/s. Gayatri Constructions Company reported in (2008) 8 SCC 172 , the Hon?ble Supreme Court, in Uttar Pradesh Power Transmission (supra) has observed that ' the High Court may entertain a writ petition, notwithstanding the availability of an alternative remedy, particularly: (i) where the writ petition seeks enforcement of a fundamental right; (ii) where there is failure of principles of natural justice or (iii) where the impugned orders or proceedings are wholly without jurisdiction or (iv) the vires of an Act is under challenge.' 17. In view of the same, this Court is inclined to hold that the writ petitions are maintainable in their present forms and may be dealt with by this Court on merits. 18. The Authorities relied upon by the Union of India shall be relevant while dealing with the merits of the cases. 19. Accordingly the writ petitions are held to be maintainable. 20. With regard to merits, the matter needs to be heard upon exchange of affidavits. 21. Accordingly, affidavit in opposition be filed within two weeks from date. 22. Affidavit in reply, if any, be filed within a week thereafter. 23. Let the matter go out of list for the time being. Liberty to mention. 24. In the facts and circumstances of the cases, the interim order granted earlier be extended till disposal of the writ petitions. 25. 22. Affidavit in reply, if any, be filed within a week thereafter. 23. Let the matter go out of list for the time being. Liberty to mention. 24. In the facts and circumstances of the cases, the interim order granted earlier be extended till disposal of the writ petitions. 25. Urgent certified website copies of this judgment, if applied for, be supplied to the parties expeditiously on compliance with the usual formalities