Invocation of Writ Jurisdiction in Contractual matters: What Allahabad High Court held [Read Judgment]May 12 2019
The Allahabad High Court recently had occasion to reiterate that the Court's extraordinary writ jurisdiction under Article 226 of the Constitution cannot be invoked in purely contractual matters that only involve private rights.
As observed by the Division Bench of Justices Pankaj Kumar Jaiswal and Yogendra Kumar Srivastava,
"The remedy under Article 226 of the Constitution being an extraordinary remedy, it is not intended to be used for the purpose of declaring private rights of the parties. In the case of enforcement of contractual rights and liabilities the normal remedy of filing a civil suit being available to the aggrieved party, this Court may not exercise its prerogative writ jurisdiction to enforce such contractual obligations."
The case before the Court involved a tender bid for the maintenance of the CCTV surveillance system at the Allahabad High Court. The Uttar Pradesh Rajkiya Nirman Nigam Ltd. (UPRNN) eventually awarded the contract (an 'Annual Maintenance Contract') to the UP Small Industries Corporation (UPSIC). The UPSIC is then said to have tasked the petitioner with certain tasks related to the execution of this contract. The petitioner, Ipjacket Technology India Private Limited (ITPL) also contended that an agreement had been entered into between ITPL and UPSIC in this regard.
ITPL was prompted to approach the High Court by invoking its writ jurisdiction to claim relief over certain disputes arising out of this agreement. However, UPRNN and other respondents contested the maintainability of this writ petition, pointing out that the matter was contractual in nature. It was contended that the appropriate forum to settle the contractual rights and obligations referred to in the dispute was a civil court.
Concurring with this stance, the Bench observed that the writ jurisdiction of High Courts cannot be invoked in contractual disputes, unless a public law remedy is involved. As noted in the judgment,
"We may note that the law in this regard as developed through a catena of judgments is that in pure contractual matters the extra ordinary remedy of a writ under Article 226 of the Constitution of India cannot be invoked, and such remedies are available in a limited sphere only when the contracting party is able to demonstrate that the remedy it seeks to invoke is a public law remedy, in contradistinction to a private law remedy under a contract."
This principle would apply even if a State authority is involved in the dispute. The Court held,
"The legal position in this regard is that where the rights which are sought to be agitated are purely of a private character no mandamus can be claimed, and even if the relief is sought against the State or any of its instrumentality the pre condition for the issuance of a writ of mandamus is a public duty. In a dispute based on a pure contractual relationship there being no public duty element, a mandamus would not lie.
... where the contract entered into between the State and the person aggrieved is of a nonstatutory character and the relationship is governed purely in terms of a contract between the parties, in such situations the contractual obligations are matters of private law and a writ would not lie to enforce a civil liability arising purely out of a contract.
The proper remedy in such cases would be to file a civil suit for claiming damages, injunctions or specific performance or such appropriate reliefs in a civil court. Pure contractual obligation in the absence of any statutory complexion would not be enforceable through a writ."
The Court also admitted that in the bar on entertaining contractual matters by invoking writ jurisdiction is not an absolute bar. However, the Court's discretion to entertain such contractual matters would depend on whether there is a claim for a public law remedy. As stated in the judgment,
"... though in contractual matters where disputed questions of fact or monetary claims have been raised, there may not be an absolute bar to the maintainability of the writ petition, the discretion can be exercised by the High Court only in a case where the contracting party is able to demonstrate that it is a public law remedy it seeks to invoke in contradistinction to a private law remedy simpliciter under the contract.
In the case at hand, however, no such public law remedy was found to be involved. Therefore, the Court dismissed the petition.
Senior Advocate Arvind Kumar Verma led arguments for the petitioner, assisted by Advocate Swati Agrawal. Advocate Pranjal Mehrotra appeared for UPRNN. Other State respondents were represented by AAG Manish Goyal, assisted by Standing Counsel Akanksha Sharma.
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