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State of Kerala & Ors. Versus M.K. Jose

2016 (4) TMI 1 - SUPREME COURT

Termination of contract awarded and forfeiting the security deposit placed by the contractor for the work to the state and further stating that the work had been put an end to at the cost and risk of the contractor - High Court of Kerala has reversed the decision of the learned Single Judge whereunder he had declined to interfere with the order of the Secretary, Public Works Department, Road and Projects of the State terminating the contract - Held that:- There was no disputed question of fact, .....

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selves to say so, is quite unknown to exercise of powers under Article 226 in a contractual matter.

We can well appreciate a Committee being appointed in a Public Interest Litigation to assist the Court or to find out certain facts. Such an exercise is meant for public good and in public interest. For example, when an issue arises whether in a particular State there are toilets for school children and there is an assertion by the State that there are good toilets, definitely the Cour .....

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of making a roving enquiry. Such a step is impermissible and by no stretch of imagination subserves any public interest. Thus the appeal is allowed and the judgment and order passed by the Appellate Bench is set aside. - CIVIL APPEAL NO. 6086 OF 2015 (@ SLP(C) NO. 19380 OF 2014) - Dated:- 14-8-2015 - MISRA,DIPAK AND PANT,PRAFULLA CHANDRA, JJ). Dipak Misra, J. The present appeal, by special leave, assails the correctness of the judgment dated 24.02.2014 passed by the High Court of Kerala at Erna .....

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contractor. 2. Exposition of facts with essential details is imperative to appreciate the controversy in proper perspective and also to consider the manner in which the Appellate Bench has exercised the writ jurisdiction under Article 226 of the Constitution in respect of a matter relating to termination of contract. The respondent was awarded the work, namely, Stimulus package-improvements to Kannavam-Idumba-Trikadaripoyil Road Km. 0/000 to 9/100 in Kannur District and accordingly an agreement .....

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ible from the order of termination of the contract, despite issue of several notices and instructions, the contractor failed to complete the work even during the extended period. The Executive Engineer of the Department issued a memorandum on 14.02.2013 stopping the work. As there was some deviation of work, the revised estimate was required to be done but the same was not sanctioned by the Government. At that juncture, the respondent preferred W.P.(C) No. 5672 of 2012 seeking appropriate direct .....

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consider and pass orders on his representation. It is apt to note here that the respondent had filed series of writ petitions, namely, W.P.(C) No. 26075 of 2012 and W.P.(C) No. 5690 of 2013 and the High Court vide order dated 08.04.2013 in W.P.(C) No. 5690 of 2013, directed the Secretary, PWD to pass appropriate orders in accordance with law. Eventually, as has been stated earlier, the contract was terminated. 5. The said order of termination was assailed in WP(C) No. 22541 of 2013. The learned .....

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easurement book before finalization of the tender proceedings, if any, in respect of balance work. The learned Single Judge had also directed that the measurements should take place after notice to the contractor. 6. The aforesaid order was assailed in the writ appeal. When the appeal was listed for admission, the Appellate Bench, on 17.12.2013, passed the following order:- We heard the learned counsel for the appellant at length. Ext. P15 order shows that more than 50% of the work remains to be .....

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irements in order to complete the work and since a stop memo was issued even before the expiration of the extended period. 2. Learned counsel for the appellant submitted that the appellant is prepared to take out a commission to substantiate the contention that 90% of the work is over. Learned Government pleader sought for a short time to get instructions. Since the matter is urgent and since the courts are going to be closed on 20.12.2013, we are inclined to grant only a day s time to get instr .....

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d be free to seek the help of a competent Engineer for the purpose of enabling them to prepare a report which would throw light on the disputed question involved in the case. The appellant as well as respondents would provide all assistance to the Commissioners for execution of their work. The Commissioners would be entitled to call for any record from the appellant as well as respondents 3 and 4 for the purpose of executing the work entrusted to them. 8. The Commission appointed by the Appellat .....

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7,90,383/- which is 72.24% of the revised estimate and 97.09% of the original work (Estimate PAC). There are some minor damages in the completed portion of BT surface and white topped portion (concrete road) and the general condition of the whole work executed by the contractor is satisfactory. A detailed item wise statement is prepared and appended herewith for perusal as Annexure A. 9. The Appellate Bench on the basis of the said report came to hold that the order of termination was founded on .....

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o the contractor of being heard. It also directed that the Commission s report and the Engineer s report and the accounts shall be produced by the contractor before the competent authority who shall take the same into account before taking final decision in the matter. After so directing, the High Court eventually ruled that: Since Exhibit P15 order is passed on incorrect data and since that data was found to be incorrect by appointing Joint Commissioners, we are of the view that the Government .....

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f shall be produced by the appellant before this Court. 10. We have heard Mr. Ramesh Babu M.R., learned counsel for the appellants and Mr. K. Parmeshwar, learned counsel for the respondent. 11. The thrust of the matter is whether the Appellate Bench in intra- court appeal arising from a petition under Article 226 of the Constitution, should have carried out the exercise that it has done and eventually quashed the order terminating the contract by the competent authority of a Department on the gr .....

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actual narration would reveal, the respondent has been invoking the jurisdiction of the High Court under Article 226 of the Constitution on various occasions challenging every action which pertain to extension of time, denial of revised estimate by the State Government and many other facets of that nature and the High Court, we must say, has been generously passing orders for consideration by the appropriate authority, for grant of opportunity of being heard to the contractor and to consider his .....

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nt Engineer. As the report would show, the Commission of two Advocates have taken assistance of a retired Assistant Executive Engineer and submitted the report. Though, learned counsel for the State had not objected to the same, yet we really fail to fathom how a writ jurisdiction can be extended to cause a roving enquiry through a Commission and rely on the facts collected without granting opportunity to the State to file objections to the same and in the ultimate eventuate, cancel the order of .....

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ch reiterating the exercise of power under Article 226 of the Constitution in respect of enforcement of contractual obligations has stated:- It is to be reiterated that writ petition under Article 226 is not the proper proceedings for adjudicating such disputes. Under the law, it was open to the respondent to approach the court of competent jurisdiction for appropriate relief for breach of contract. It is settled law that when an alternative and equally efficacious remedy is open to the litigant .....

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ld hardly be a ground for exercise of extraordinary jurisdiction under Article 226 of the Constitution in case of alleged breach of contract. Whether the alleged non-supply of road permits by the appellants would justify breach of contract by the respondent would depend upon facts and evidence and is not required to be decided or dealt with in a writ petition. Such seriously disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined .....

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e parties and also contrary to Section 5 of the Contract Act; and (b) whether the writ petition is maintainable in a claim arising out of breach of contract. While dealing with the said issue, this Court opined that:- It is settled law that disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India. It has been so held in the cases of Kerala SEB v. Kurien E. Kalathil[(2000) 6 SCC 293], State of U.P. v. Bridge & Roof Co. (India) Ltd.[ (1996) 6 SCC 22] and .....

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es do not lay down that a writ court can interfere in a matter of contract only. Thus on the ground of maintainability the petition should have been dismissed . 15. Having referred to the aforesaid decisions, it is obligatory on our part to refer to two other authorities of this Court where it has been opined that under what circumstances a disputed question of fact can be gone into. In Gunwant Kaur v. Municipal Committee, Bhatinda[(1969) 3 SCC 769], it has been held thus:- 14. The High Court ob .....

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der Article 226 the High Court has jurisdiction to try issues both of fact and law. Exercise of the jurisdiction is, it is true, discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account the High Court is of the view that the dispute may not appropriately be tried in a writ petition, the High Court may decline to try a pe .....

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ants it is clear that in proof of a large number of allegations the appellants relied upon documentary evidence and the only matter in respect of which conflict of facts may possibly arise related to the due publication of the notification under Section 4 by the Collector. 16. In the present case, in our judgment, the High Court was not justified in dismissing the petition on the ground that it will not determine disputed question of fact. The High Court has jurisdiction to determine questions o .....

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judgments as well as the pronouncement in Gunwant Kaur (supra) and Century Spg. And Mfg. Co. Ltd. v. Ulhasnagar Municipal Council[(1970) 1 SCC 582], has held thus:- 19. Therefore, it is clear from the above enunciation of law that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the court entertaining such petition under Article 226 of the Constitution is not always bound to relegate the parties to a suit. In the above case of Gunwant Kaur .....

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the following legal principles emerge as to the maintainability of a writ petition: (a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation 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 a consequential relief of monetary claim is also maintainab .....

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ertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks[(1998) 8 SCC 1].) And this plenary right of the High Court to issue a 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 o .....

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ontract between the exporter and the importer were executed which included the addendum, therefore, without hesitation we must proceed on the basis that the first respondent issued the insurance policy knowing very well that there was more than one mode of payment of consideration and it had insured failure of all the modes of payment of consideration. From the correspondence as well as from the terms of the policy, it is noticed that existence of only two conditions has been made as a condition .....

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other construction than the one already accepted by us. We have also noted that reliance placed on sub-clause (d) of the proviso to the insurance contract by the Appellate Bench is also misplaced which is clear from the language of the said clause itself. Therefore, in our opinion, it does not require any external aid, much less any oral evidence to interpret the above clause. Merely because the first respondent wants to dispute this fact, in our opinion, it does not become a disputed fact. If s .....

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Stores v. Indian Oil Corp.[ (1990) 3 SCC 752] and Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai[(2004) 3 SCC 214] and opined thus:- Although the scope of judicial review or the development of law in this field has been noticed hereinbefore particularly in the light of the decision of this Court in ABL International Ltd. each case, however, must be decided on its own facts. Public interest as noticed hereinbefore, may be one of the factors to exercise the power of judicial review. I .....

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l was dismissed. 20. We have referred to the aforesaid authorities to highlight under what circumstances in respect of contractual claim or challenge to violation of contract can be entertained by a writ court. It depends upon facts of each case. The issue that had arisen in ABL International (supra) was that an instrumentality of a State was placing a different construction on the clauses of the contract of insurance and the insured was interpreting the contract differently. The Court thought i .....

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