2001 JTR(SC) 1599
2002 AIR(Jhar)(R) 73 ; 2002 AIR(SC) 206 ; 2001 AIR(SCW) 4858 ; 2002 46 AllLR 194 ; 2001 3 ArbLR 686 ; 2002 1 BBCJ(SC) 23 ; 2002 1 BLJR 35 ; 2002 1 CHN(SC) 101 ; 2002 1 CTC 254 ; 2002 1 ICC 73 ; 2002 1 JCR(SC) 303 ; 2001 9 JT 582 ; 2002 1 PLJR(SC) 142 ; 2001 8 Scale 250 ; 2002 1 SCC 216 ; 2001 SCR 313 ; 2002 1 WBLR 75 ; 2002 KHC 1091 ; 2001 3 KLT(Online) 1039 ; 2001 8 Supreme 334
2001(8) Supreme 334
SUPREME COURT OF INDIA
(From Patna High Court)
M.B. Shah and B.N. Agrawal, JJ.
State of Bihar & Ors. -Appellants
versus
Jain Plastics & Chemicals Ltd. -Respondent
Civil Appeal No. 7932 of 2001
(@ SLP (C) No. 10003 of 2001)
Decided on 21-11-2001
Counsel for the Parties :
For the Appellant : Kumar Rajesh Singh and B.B. Singh, Advocates.
For the Respondent : Shri Narain, Sandeep Narain and Ms. Anjali, Advocates for M/s. S. Narain & Co., Advocates.
IMPORTANT POINT
Disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined on the basis of evidence which may be led by the parties in a properly instituted civil suit rather than by a High Court exercising prerogative of issuing writs in exercise of its extra ordinary jurisdiction under Article 226 of the Constitution.
Act Referred :CONSTITUTION OF INDIA : Art.226
(A) The relevant statutory provision is Article 226 of the Constitution of India, which empowers the High Court to issue writs for the enforcement of rights. Its application is not available to enforce contractual obligations where the remedy lies in a civil suit, as a writ petition is not the proper or efficacious remedy for alleged breach of contract, especially when an alternative civil remedy exists.
(B) The key legal principles are that writ jurisdiction under Article 226 is not the appropriate forum for enforcing contractual rights; if an equal or more effective remedy is available, the writ jurisdiction should not be invoked; and adjudicating factual disputes regarding breach of contract is the role of a civil court, not the High Court under its writ jurisdiction.
Facts of the case:
The respondent-Company entered into an agreement to supply PVC pipes and fittings, which was later suspended by the appellants. The contract was ultimately terminated, and the appellants deducted amounts from the final payment for losses incurred. The respondent filed a writ petition under Article 226 challenging the deduction, alleging the appellants were responsible for delays due to non-supply of road permits.
Findings of Court:
The High Court erroneously exercised its writ jurisdiction to decide factual issues arising from a contractual dispute. The court improperly resolved tangled factual questions and directed monetary relief based on affidavits, rather than allowing the matter to be determined through a proper civil suit.
Issues:
Whether the High Court was correct in exercising jurisdiction under Article 226 to resolve a claim of breach of contract and to determine factual issues best suited for a civil trial.
Ratio Decidendi:
The writ jurisdiction under Article 226 is not the appropriate legal avenue for enforcing or adjudicating contractual breaches. Such disputes must be resolved in a civil court, and the availability of an effective alternative remedy warrants refusal of writ relief.
Result:
The appeal is allowed, the impugned order is set aside, and the respondent is directed to pursue an appropriate civil remedy.
(A) The relevant statutory provision is Article 226 of the Constitution of India, which empowers the High Court to issue writs for the enforcement of rights. Its application is not available to enforce contractual obligations where the remedy lies in a civil suit, as a writ petition is not the proper or efficacious remedy for alleged breach of contract, especially when an alternative civil remedy exists.
(B) The key legal principles are that writ jurisdiction under Article 226 is not the appropriate forum for enforcing contractual rights; if an equal or more effective remedy is available, the writ jurisdiction should not be invoked; and adjudicating factual disputes regarding breach of contract is the role of a civil court, not the High Court under its writ jurisdiction.
Facts of the case:
The respondent-Company entered into an agreement to supply PVC pipes and fittings, which was later suspended by the appellants. The contract was ultimately terminated, and the appellants deducted amounts from the final payment for losses incurred. The respondent filed a writ petition under Article 226 challenging the deduction, alleging the appellants were responsible for delays due to non-supply of road permits.
Findings of Court:
The High Court erroneously exercised its writ jurisdiction to decide factual issues arising from a contractual dispute. The court improperly resolved tangled factual questions and directed monetary relief based on affidavits, rather than allowing the matter to be determined through a proper civil suit.
Issues:
Whether the High Court was correct in exercising jurisdiction under Article 226 to resolve a claim of breach of contract and to determine factual issues best suited for a civil trial.
Ratio Decidendi:
The writ jurisdiction under Article 226 is not the appropriate legal avenue for enforcing or adjudicating contractual breaches. Such disputes must be resolved in a civil court, and the availability of an effective alternative remedy warrants refusal of writ relief.
Result:
The appeal is allowed, the impugned order is set aside, and the respondent is directed to pursue an appropriate civil remedy.
JUDGMENT
Shah, J.-Leave granted.
2. Limited question involved in this appeal is - whether the High Court ought not to have exercised its jurisdiction under Article 226 of the Constitution of India for granting relief in case of alleged breach of contract.
3. Settled law -writ is not the remedy for enforcing contractual obligations. It is to be reiterated that writ petition under Article 226 is not the proper proceeding 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, he should be required to pursue that remedy and not invoke the writ jurisdiction of the High Court. Equally, the existence of alternative remedy does not affect the jurisdiction of the Court to issue writ, but ordinarily that would be a good ground in refusing to exercise the discretion under Article 226.
4. Despite the settled law, respondent filed CWJC No. 3968 of 1997 before the High Court of Patna challenging the decision taken by the appellants to deduct a sum of Rs. 15.24 lacs for the loss suffered, from the bills of respondent-Company while making the full and final payment. That writ petition was allowed despite the objection raised by the appellants that respondent committed breach of contract and the Court should not exercise its writ jurisdiction in such cases. L.P.A. No. 945 of 2000 was also dismissed by the High Court by its judgment and order dated 11.1.2001. Hence this appeal.
5. The short facts are that the tender of respondent-Company having its registered office at Jalgaon. Maharashtra for supply of PVC pipes and fittings at pama and Hazipur was accepted and an agreement was executed on 22.2.1994. Estimated value for supplies was Rs. 5,81,92,584.84 p. and Rs. 7,37,27,421.96 p. at Patna and Hazipur respectively. As per the say of the appellants respondent-Company delayed the supplies. By letter dated 2.4.1994, supply of PVC pipes and fittings was suspended in respect of certain fittings. However, for immediate use, some pipes were ordered to be supplied. On record, it appears that parties exchanged correspondence for a long period. It was contended by the respondent-Company that the authorities have wrongfully refused to return requisite road permits and other relevant papers and, therefore, it could not supply the PVC fittings within stipulated time. Finally, appellants terminated the contract on 10.12.1996 and purchased the fittings at a higher price. Thereafter, while paying the final bill to the respondent, the difference of amount which was required to be incurred by the appellants was deducted.
6. Respondent preferred the writ petition before the High Court. The learned Single Judge arrived at the conclusion that the respondent - company was unable to supply the PVC fittings on account of failure or the refusal on the part of the appellants to supply the road permits and that the company cannot be faulted for non supply of PVC fittings. Hence, the appellants cannot realise or deduct the extra money which they had to spend over purchase of the same. With regard to the adjudication of tangled question of facts in writ jurisdiction, the learned Single Judge observed: "This Court has not in the present case felt any difficulty in deciding the question of facts on the basis of affidavit evidence, and I have not felt the necessity of evidence of a civil suit in deciding the question of facts which is needed for disposal of the present writ petition". Finally, the learned Judge directed the appellants to make the due amount of respondent - company with interest at the rate of 6%, within six months. The aforesaid order was confirmed in LPA.
7. In our view, it is apparent that the order passed by the High Court is on the face of it illegal and erroneous. It is true that many matters could be decided after referring to the contentions raised in the affidavits and counter-affidavits, but that would hardly be 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 on the basis of evidence which may be led by the parties in an properly instituted civil suit rather than by a Court exercising prerogative of issuing writs.
8. In the result, the appeal is allowed and the impugned order passed by the High Court is set aside. There will be no order as to costs. It would be open to the respondent to have recourse to other appropriate remedy.
(N.K.R.) Appeal allowed.
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