Braithwaite and Co. Ltd., M/s Cognition Projects Pvt. Ltd., Consortium V. Union of India, Rep. by its Chairman and CEO, Railway Board

WP/1300/2024

AI Insights

The case involves a writ petition filed by a consortium led by Braithwaite and Co. Ltd., challenging the termination of their contract for the major up-gradation of Visakhapatnam Railway Station by the Chief Project Manager, East Coast Railways. The petitioner argued that the termination was arbitrary, illegal, and without proper authority, violating Article 19(1)(g) of the Constitution. The respondents countered that the termination was justified due to the petitioner's failure to meet project milestones and other contractual obligations. The court examined the submissions and found that the termination was in line with the contractual terms and that the petitioner had not adhered to the agreed milestones, thus upholding the termination and dismissing the writ petition.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 816596 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 14-02-2024
• Assessment Year: misc
• Other Referred Cases: Sahara India (Firm) Lucknow v Commissioner of Income Tax, Central \\u2013 1 and Another, Kisan Sahkari Chini Mills Ltd. v. Vardan Linkers, M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd., State of U.P. v. Sudhir Kumar Singh, Kerala State Electricity Board & Another v. Kurien E.Kalathil & Others, M/s.N.G.Projects Limited v. M/s.Vinod Kumar Jain
• Laws Referred To: Article 19 (1) (g) of the Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: B SHARMA
• Assessee Lawyers: C V MOHAN REDDY
• Keywords: Arbitrary; Illegal; Master Plan; Non application of mind; Termination of contract; Violation of Article 19 (1) (g); Engineering, Procurement and Construction (EPC) mode; Right of Way (RoW); Environmental Management Plan (EMP); Change of Scope
• Section: 13(2); 8(2); 4.1.3; 4(3); 9(4); 21.1.1(c)

Judgement Text

"1 NJS, J WP_1300_2024 IN THE HIGH COURT OF ANDHRA PRADESH::AMARAVATI THE HON’BLE SRI JUSTICE NINALA JAYASURYA WRIT PETITION No.1300 of 2024 Between:- Braithwaite and Co. Ltd., M/s Cognition Projects Pvt. Ltd., Consortium, 5 Hide Road, Kolkata-700043 Rep. by its Authorized Person Mr Sundara Nanda Barman S/o Ashutosh Barman, Aged about 43 years R/o D.No.220/1. Raipur Road. Regent Estate. Kolkata. West Bengal. …. Petitioner And Union of India, Rep. by its Chairman and CEO, Railway Board, Room No.256A, Rail Bhavan, Raisina Road, New Delhi, India and others …. Respondents Counsel for the Petitioner : Mr.C.V.Mohan Reddy, Senior Counsel, assisted by Mr.C.Prakash Reddy. Counsel for the Respondents: Mr.B. Narasimha Sharma, Additional Solicitor General, assisted by Mr. Jupudi V.K. Yagna Dutt. ORDER: This Writ Petition is filed, inter alia, to declare the order of the 4th respondent – Chief Project Manager, East Coast Railways, Waltair, in terminating the contract of “Major Up- gradation of Visakhapatnam Railway Station of East Coast 2 NJS, J WP_1300_2024 Railway on Engineering, Procurement and Construction (EPC) mode as arbitrary, illegal, without power or authority and suffers from total non-application of mind and in violation of Article 19 (1) (g) of the Constitution of India and to consequently set aside the same. BRIEF FACTS: 2) The relevant facts, as per the affidavit filed in support of the Writ Petition, are, in brief, set out as under: 3) The 2nd respondent-The Rail Land Development Authority issued a Request For Proposal (RFP) vide RFP Notice dated 14.06.2022, inviting proposals through e-tendering on single stage two cover bidding system from interested eligible bidders as per the conditions of bid documents for “Major UP-Gradation of Visakhapatnam Railway Station of East Coast Railway on Engineering, Procurement and Construction (EPC) Mode”. M/s. Braithwaite & Co. Ltd., (A Government of India Undertaking), whose administrative control was taken over by the Ministry of Railways from Ministry of Heavy Industries on 06.08.2010 and M/s. Cognition Projects Pvt. Ltd., formed a consortium called M/s. Braithwaite & Co. Ltd., and M/s. Cognition Projects Pvt. Ltd., (Consortium) – M/s Braithwaite & Co. Ltd., as the lead 3 NJS, J WP_1300_2024 member of the said consortium, participated in the tender process and emerged as selected bidder. Accordingly, a Letter of Acceptance (LoA) was issued on 14.09.2022 specifying that the period of the construction is 36 months from the Appointed Date. The petitioner in terms of the LoA furnished Performance Security of Rs.11,66,73,024/- on 07.10.2022 and thereafter the 2nd respondent, on behalf of Her Majesty, the President of India, entered into EPC Agreement No.RLDA/2022/CA-04 with the petitioner Consortium on 15.11.2022. 4) The Agreement value is Rs.388,91,00,790/-. As per the Agreement, the contract work has to be completed in accordance with the specifications and drawings and conditions of the Contract on or before 29.11.2025 and the works shall be maintained for a period of 18 months from the date of issue of completion certificate. After issuance of Letter of Acceptance, joint site inspections were conducted on 19.09.2022, 16.10.2022 and 18.10.2022 and during the said visits, Railway Officials instructed some major modifications in the already approved Master Plan and the petitioner addressed a letter dated 28.10.2022 for confirmation of the modifications. 4 NJS, J WP_1300_2024 On 03.11.2022 the respondents addressed a communication, inter alia, stating that the Master Plan prepared also contain provision for Additional two (02) railway tracks and one (1) platform. 5) In view of the same, the scope of the work is revised significantly as the area of the Air Concourse to be built as well as the length of the Foot Over Bridge (FOB) is increased to a considerable magnitude, resulting in enhancement in the cost of construction. It also resulted in preparation of Master Plan afresh and the Revised Master Plan was approved by the respondents on 20.04.2023. 6) In the meanwhile, the respondents issued 15 days Notice on 24.03.2023 for termination of contract alleging failure on the part of the petitioner in achieving the project milestones. The petitioner consortium submitted its reply on 05.04.2023 and the respondents did not take any further action. Subsequently, the 4th respondent issued a Notice dated 06.11.2023 to which the petitioner submitted reply dated 16.11.2023. Thereafter, through the impugned proceedings dated 26.12.2023, 4th respondent terminated the Contract / 5 NJS, J WP_1300_2024 Agreement. Challenging the same, the present Writ Petition is filed. PETITIONER’S SUBMISSIONS: 7) Mr. C.V.Mohan Reddy, learned Senior Counsel, made elaborate submissions with reference to various Articles / Terms of the Agreement. 8) Learned Senior Counsel submits that to the initial showcause notice dated 24.03.2023, the petitioner submitted detailed replies and satisfying with the explanation no further action was taken by the respondents and the petitioner was merely asked to expedite the works. He submits that though in terms of the Agreement, the respondent authority shall provide ‘Right of Way’ (RoW) to the contractor / petitioner and provide free access for the execution of the works, the same was not complied with. On the other hand, stating that there are defaults on the part of the petitioner, another Notice dated 06.11.2023 was issued and a detailed reply, setting out all the relevant aspects, was submitted on 16.11.2023. Learned Senior Counsel submits that the 4th respondent without appreciating the reply/explanation submitted by the petitioner terminated the contract in an arbitrary manner. In elaboration 6 NJS, J WP_1300_2024 and with reference to the obligations of the Authority as provided under Article 4 of the Agreement, he submits that in terms of Clause 4.1.3, the Authority shall provide the petitioner the ‘RoW’ in accordance with Clause 8.2 and all forest clearances as required under Clause 4.3. He submits that in terms of Clause 4.3, the petitioner prepared the Environment Management Plan (EMP) and submitted for approval of the Authority on 20.02.2023 and as seen from the material filed along with Memo dated 10.02.2024 the same was approved by the authority on 13.11.2023. He submits that in the absence of approval of EMP, the petitioner cannot proceed with the work and, therefore, there was no occasion to the petitioner to proceed with the works. 9) Quoting Article 9 of the Agreement and Clause 9.4, which deals with ‘Felling of trees’, he further contends that it is the obligation of the Authority to remove the trees, which causes obstruction to the project works and as seen from the material on record there are more than 100 trees causing obstruction to the works and only in April, 2023 steps were taken for removal of the trees. Learned Senior Counsel further submits that in the process of approving General Arrangement Drawing (GAD) 7 NJS, J WP_1300_2024 / Master Plan so many changes were suggested by the respondents and thereby the scope of work changed. Referring to Article 13, more particularly Clause 13.2, which deals with the Procedure for Change of Scope, learned Senior Counsel submits that no Notice was issued as contemplated under Clause 13.2.1, but the Contractor was directed to comply with Clause 13.2.2. While contending that the authorities want to put the blame on the petitioner without complying with the Agreement conditions, he submits that detailed GAD / Master Plans were submitted on 09.12.2022, but the same were approved on 20.04.2023 as is evident from Ex.P.8. He submits that all these aspects coupled with the material on record would clearly establish that there are no defaults on the part of the petitioner and the authorities to cover up their lapses had issued notices as if the petitioner is at fault in proceeding with the works. 10) Referring to Appointed Date as provided in Article 1, he contends that the Appointed Date shall be taken as the date on which the authority has provided the Right of Way (RoW) and forest clearances of the site for the project inconformity with the Clauses 4.3 and 8.2, that the respondent’s 8 NJS, J WP_1300_2024 assumption that the appointed date means 15th day of the Date of Agreement i.e., 30.11.2022 is incorrect. He submits that in the light of the undisputed material on record, which goes to show that the revised Master Plan (GAD) was approved on 20.04.2023, felling of trees was completed on 20.05.2023, and the Environment Master Plan was approved on 13.11.2023, the Appointed Date shall be reckoned from anyone of the said dates and if the same is taken into consideration, there is no breach of milestones by the petitioner. 11) Referring to Clause 10.4 of Article 10, which deals with Extension of time for completion, learned counsel further contends that the delay in providing the Right of Way, Environmental / forest clearance, approval of GAD (Master Plan) and change of scope of work are attributable to the respondents and the petitioner is therefore entitled for extension of time. He submits that the 4th respondent without even applying his mind to the relevant clauses of the Agreement had terminated the contract and the action under challenge smacks of arbitrariness. While pointing out that even as per the respondents’ counter there is no change in the 9 NJS, J WP_1300_2024 scope of work, that there are no disputed questions of facts and stating that the arguments at present are confined to the extent of non-compliance of the Agreement conditions by the respondents, learned Senior Counsel submits that the action of the 4th respondent in treating the appointed date as 30.11.2022 is incorrect and this Court in exercise of jurisdiction under Article 226 of the Constitution of India can interfere in the matter. 12) Quoting Article 21 of the Agreement, which provides for termination of contract, the learned Senior Counsel submits that in the notice issued to the petitioner there is no mention as to whether there was any breach of milestones / milestones not achieved and further that no Notice under Clause 21.1.1(c) granting 45 days time for achieving the project milestones was issued. He submits that the action of the 4th respondent is, therefore capricious, illegal and amounts to violation of principles of natural justice. Learned Senior Counsel referring to Memo dated 07.02.2024 further submits that in view of the suggestions made by the respondents to the Master Plan after a lapse of long time, the Authority Engineer (S.M. Private Ltd.,) submitted the plans for approval of the 4th respondent on 10 NJS, J WP_1300_2024 11.10.2023 and the approval has not been received so far. He submits that despite the lapses on the part of the respondents, the petitioner was proceeding with the work. However, in violation of Agreement conditions, without application of mind, the Agreement in question was terminated. He submits that the action of the 4th respondent amounts to disproportionate punishment and even on that ground the interference of this Court in exercise of powers under Article 226 of the Constitution of India is called for. 13) Learned Senior Counsel in support of his contentions placed reliance on the following judgments: i) Sahara India (Firm) Lucknow v Commissioner of Income Tax, Central – 1 and Another1; ii) Kisan Sahkari Chini Mills Ltd. v. Vardan Linkers2; iii) M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd.,3 iv) State of U.P. v. Sudhir Kumar Singh4 14) Learned Senior Counsel submits that had the respondents granted extension of time in terms of the Agreement conditions, the petitioner would have proceeded 1 (2008) 14 SCC 151 2 (2008) 12 SCC 500 3 (2023) 2 SCC 703 4 (2021) 19 SCC 706 = 2020 SCC OnLine 847 11 NJS, J WP_1300_2024 with the works. However, the respondent authority invited for fresh tenders in respect of the works in question at escalated estimated cost of Rs.433,56,19,990/-, which results in burden on the exchequer. Making the said submissions, the learned Senior Counsel seeks the reliefs by setting aside the proceedings under challenge. RESPONDENTS’ CONTENTIONS: 15) Refuting the said contentions, Mr. B. Narasimha Sarma, learned Additional Solicitor General of India argued the matter at length. Drawing attention of this Court to Ex.P1 i.e., the impugned Proceedings dated 26.12.2023 and the references therein, he submits that before resorting to action of the termination notices with regard to the poor progress of the work by the petitioner were issued, joint meetings were held with regard to progress of works and ultimately a final showcause notice was issued on 06.11.2023 mentioning as many as 43 defaults / lapses on the part of the petitioner. He submits that after considering reply / explanation of the petitioner, the impugned termination proceedings have been issued, meeting all the points in reply by the petitioner. He submits that the EPC is a self contained code, the terms and 12 NJS, J WP_1300_2024 conditions agreed therein are binding on both sides and the action of the 4th respondent in issuing termination proceedings is in accordance with the contractual terms. 16) Referring to Article 24 which provides for Dispute Resolution and clauses contained therein, he submits that as per Clause 24.1.1 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 / petitioner to the Authority for conciliation of disputes at the first stage and in the event, the same are not settled through conciliation, the same can be referred to Dispute Adjudication Board (DAB) under Clause 24.2, which is the second stage. While referring to Clause 24.2.14, which contemplates that the parties shall not approach any Court of Law for settlement of such disputes or differences, unless an attempt has first been made by the parties to settle such disputes or differences through DAB, he further submits that a third level mechanism is provided for settlement of disputes or differences by ‘Standing Arbitral Tribunal’ under Clause 24.3. He also reference to Clause 13 NJS, J WP_1300_2024 24.3.18, which provides that in case of any dispute or differences, resulting in Court cases between Contractor & Authority, the jurisdiction shall be of Courts at Delhi only. Be that as it may. He submits that the termination of the Agreement is in terms of Clause 21.1 and that the same is legal and valid. He contends that the jurisdiction of the Writ Court under Article 226 of the Constitution of India can be invoked only in those circumstances, where there is violation of principles of natural justice, the authority acts without jurisdiction / incompetent authority or the statutory provisions are violated. He submits that the case on hand would not fall in any one of the exceptions and all the disputes can be examined / raised before the Dispute Redressal Mechanism. He also submits that there is no whisper in the affidavit as to why the alternative remedy is not effective. While contending that the matter involves examination of disputed questions of facts, based on the terms of the Agreement / contract, he submits that the petitioner cannot be permitted to seek relief in a proceeding under Article 226 of the Constitution of India for enforcement of its contractual rights or adjudication of disputed facts. 14 NJS, J WP_1300_2024 17) While contending that the Appointed Date would be 30.11.2022 i.e., fifteen days from the date of Agreement dated 15.11.2022, the learned counsel submits that pursuant to LOA, Right of Way was given to the petitioner on 19.09.2022 and again on 07.12.2022 in terms of Clause 8.2.1, that as per Clause 4.3 an obligation is cast on the petitioner to prepare the Environment Management Plan (EMP) and forest clearance is not required as mentioned in Annexure-IV Schedule – A of the Agreement (Page No.447) and the same cannot be a reason to postpone the Appointed Date. Referring to the Termination Proceedings, he submits that the petitioner has not achieved various project milestones which have an adverse effect on the execution of works, the learned counsel seeks to justify the said proceedings that the same are in conformity with the terms and conditions of the Agreement. He submits that the Appointed Date as mentioned in the Show Cause Notice is in tune with the Agreement conditions, that EPC is a special contract involving technical matters and in terms of Clause 3.1.1, the total obligation is on the petitioner / contractor to perform all the works in respect of the Project in question. He submits that as the petitioner had committed defaults, two 15 NJS, J WP_1300_2024 Notices were issued pointing out the same and after adverting to each and every submission of the petitioner in the reply to the Show Cause Notice, the 4th respondent issued the Termination Proceedings by recording findings. He contends that the scope of Judicial Review under Article 226 of the Constitution of India is limited to the extent of examination of decision making process only and the Court would not sit over the decision of the decision making Authority. While stating that the time is essence, convenience of public is of the utmost consideration and the impugned termination of the proceedings after due opportunity to the petitioner were passed twelve months after entering into the Agreement, he submits that the decision making process in the present case is in compliance with the principles of natural justice, fair play and repeated opportunities to the petitioner, pointing out the lapses shows that there is no arbitrariness as alleged by the petitioner. He further submits that it is also not a case of malafides and in such circumstances, it is not a fit case to exercise the jurisdiction of this Court under Article 226 of the Constitution of India. 16 NJS, J WP_1300_2024 18) Referring to the contentions with regard to the Appointed Date, approval of environmental plans, felling of tress and approval of GAD / Master plan, he submits that each and every default / lapse was elaborately considered by the 4th respondent and detailed reasoning / finding was recorded in the impugned proceedings. He submits that the decision of termination is not arbitrary or irrational, but supported by ample material in conformity in terms of the Agreement and there is no perversity. He submits that the project is of great importance, all the works are time bound and most of the preliminary works are not even started by the date of the Show Cause Notice, which was issued, eleven months after entering into the Agreement. He submits that by the date of issuance of Show Cause Notice, the petitioner has executed only 1.1% of the works as against the target of 33%. He submits that number of communications were addressed to the petitioner and as there is a failure on the part of the petitioner, the Agreement has been terminated. He submits that it is an administrative decision in terms of the Agreement conditions well supported by reasons and warrants no interference by this Court. 17 NJS, J WP_1300_2024 19) Adverting to the contention with regard to change of scope of work, the learned Senior Counsel referring to a Communication dated 03.11.2022(Ex.R4) submits that the Master plan prepared also contains provision for additional two tracks and End platform. While stating that as communicated to the petitioner vide Letter dated 15.11.2022(Ex.R5) that detailed procedure for execution of works not covered under the scope of EPC will be dealt with in terms of Article 13, he submits that the petitioner was not showing progress even at the elementary stage of works and repeated notices were issued with regard to poor progress of works, as is evident from the impugned proceedings. He submits that there is no dispute that the jurisdiction of the Court under Article 226 of the Constitution of India is not totally barred and can be exercised when action is challenged on the grounds of malafides, arbitrariness, irrationality, favouritism or perversity, but interpretation of the clauses in the Agreement cannot be undertaken. He contends that the Appointed Date cannot be substituted under judicial review. 20) The learned Additional Solicitor General of India while stating that there is no dispute with regard to the propositions 18 NJS, J WP_1300_2024 laid down in the decisions relied on by the learned Senior Counsel for the petitioner, submits that the said decisions are distinguishable on facts and in the present case principles of natural justice are complied with by issuing Show Cause Notices and the action of the 4th respondent is in exercise of powers in terms of the Agreement, not arbitrary or capricious as contended on behalf of the petitioner. He submits that the escalation in the Project Cost is because of levy of 18% GST as against 12% GST when the Agreement in question was entered into and also in view of the variance of costs. Making the said submissions, the learned counsel submits that there are no merits in the case warranting interference by this Court under Article 226 of the Constitution of India. 21) Mr.C.V.Mohan Reddy, learned Senior Counsel made submissions, in reply, reiterating the earlier contentions. 22) This Court has considered the submissions made and perused the material on record. 23) At the outset, it may be pertinent to state that as the disputes in relation to the Project in question which is of great public importance are between the petitioner consortium, which is led by M/s.Braithwaite & Company Limited, a 19 NJS, J WP_1300_2024 Government of India undertaking and the East Coast Railways, on the other hand, this Court initially expressed a view that the same can be resolved by the parties by mutual discussions. As seen from the Minutes of the Meeting dated 05.02.2024 which are placed for perusal of this Court by the learned Additional Solicitor General of India, it is discernable that the petitioner as well as the respondents are attributing lapses / delays / defaults against each other, which indicates that there are no chances of amicable settlement. Be that as it may. 24) The learned Senior Counsel for the petitioner, inter alia, contended that the impugned Termination Proceedings are violative of principles of natural justice, suffers from non- application of mind and smacks of arbitrariness. That if the Appointed Dates are reckoned from any of the three dates i.e., 20.04.2023 or 30.05.2023 or 13.11.2023, there is no breach of milestones. There are no disputed questions of facts involved and writ petition can be entertained. 25) On the other hand, the learned Additional Solicitor General of India had pointed out that notices were issued to the petitioner from time to time with regard to poor progress of 20 NJS, J WP_1300_2024 work, two Show Cause Notices were issued setting out the deficiencies / defaults in execution of the works and thereafter a detailed order is passed by dealing with all the points in reply to the notices, that in such circumstances, there is no violation of principles of natural justice, the Writ Court cannot sit in appeal over the decision of the decision making authority / 4th respondent, Agreement provides for conciliation and arbitration, matter involves examination of disputed questions of facts, that the Appointed Date cannot be substituted. 26) On an appreciation of the matter and perusal of the material, it is discernible that before passing the Termination Proceedings impugned in the present Writ Petition, opportunity was afforded to the petitioner and therefore, it is not a case where the proceedings under challenge are without any notice. As is evident from the references in the impugned proceedings and which is not contradicted, notices on different dates were issued to the petitioner regarding poor progress of work. Thus, there is compliance with principles of natural justice. 27) Whether poor progress of work is a consequence of not giving RoW as per the Agreement conditions or due to delay in seeking or granting approval of plans, whether the petitioner / 21 NJS, J WP_1300_2024 contractor could as well proceeded with the preliminary works etc., without approvals, are all matters which involve a deep probe. 28) That delays are attributable to the Authority and though the Agreement provides for extension of time, without application of mind to the Agreement conditions the impugned proceedings are issued are matters that require examination of Agreement conditions with reference to factual aspects which cannot be undertaken by this Court in a proceeding under Article 226 of the Constitution of India. 29) Though elaborate contentions were raised with reference to reckoning of Appointed Date either from the approval of environment plan or felling of tress or the approval of GAD plans i.e., dated 20.04.2023, 30.05.20223 and 13.11.2023 respectively, in the light of the rival contentions about non- adherence to the obligations by the respective parties, this Court is of the opinion that these matters cannot be gone into as the same fall in the realm of disputes between the parties. It is also not a case of malafides nor was there any challenge that the proceedings of the 4th respondent are without jurisdiction. Suffice to state that by virtue of novation of the Agreement vide 22 NJS, J WP_1300_2024 Ex.P.37, respondent No.4 has power to terminate the Agreement. As to whether termination proceedings are justified or not, involves examination of factual aspects / disputed questions of fact, which cannot be undertaken in the present proceedings under Article 226 of the Constitution of India. It is not in dispute that the Agreement provides for dispute redressal mechanism at different levels and arbitration in terms of the Arbitration and Conciliation Act. 30) In State of U.P. & Others v. Bridge & Roof Company (India) Ltd.5, the Hon’ble Supreme Court was dealing with a judgment of a Division Bench of the Allahabad High Court, wherein the dispute relates to certain payments in respect of a works contract, which the respondent-Company claims are due to it, whereas the appellant contends that it is entitled to retain it. The Hon’ble Supreme Court while opining that the contract between the parties therein is the contract in the realm of private law, not a statutory contract and it is governed by the provisions of the Contract Act or, may be, also by certain provisions of the Sale of Goods Act, inter alia , held that “any dispute relating to interpretation of the terms and 5 (1996) 6 SCC 22 23 NJS, J WP_1300_2024 conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition, that it is a matter either for arbitration as provided by the contract or for the civil court or as the case may be.” The Hon’ble Supreme Court at Para No.21 further held as follows: “21.There is yet another substantial reason for not entertaining the writ petition. The contract in question contains a clause providing inter alia 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 extraordinary jurisdiction of the High Court under Article 226. The existence of an effective alternative remedy – in this case, provided in the contract itself – is a good ground for the court to decline to exercise its extraordinary jurisdiction under Article 226. The said article was not meant to supplant the existing remedies at law but only to supplement them in certain well-recognized situations. As pointed out above, the prayer for issuance of a writ of mandamus was wholly misconceived in this case since the respondent was not seeking to enforce any statutory right of theirs nor was it seeking to enforce any statutory obligation cast upon the appellants. Indeed, the very resort to Article 226 – whether for issuance of mandamus or any other writ, order or direction – was misconceived for the reasons mentioned supra.” 24 NJS, J WP_1300_2024 31) Looking to the facts of the present case and the stand taken by the petitioner that the delay is occurred at the instance of the respondents, which is contradicted in the counter-affidavit by attributing defaults on the part of the petitioner, this Court is of the view that whether the delays are due to lapses on the part of the respondents and the termination is not lawful are matters for adjudication by the Arbitral Tribunal. In the event, it is found that the delays are attributable to the respondents, the petitioner can as well be compensated suitably. 32) Further, the decision of the 4th respondent was rendered after examination of the explanation with reference to the several alleged defaults. This Court has no expertise to examine the same nor expected to do so. As contended by the learned Additional Solicitor General of India, this Court is concerned with the decision making process and would not sit as an Appellate Authority. In view of the Arbitration Clause, it is not desirable to record any finding or conclusion with regard to the contention that the impugned Termination Proceedings smacks of arbitrariness, vitiated by non-application of mind or violative of terms of the Agreement conditions. 25 NJS, J WP_1300_2024 33) The Hon’ble Supreme Court in Kerala State Electricity Board & Another v. Kurien E.Kalathil & Others6 was dealing with an Appeal against the orders of the High Court and with regard to contention about the maintainability of the writ petition opined that “interpretation and implementation of a Clause in a Contract cannot be the subject matter of a writ petition and that “if a term of contract is violated, ordinarily the remedy is not the writ petition under Article 226 of the Constitution of India. That is a matter for adjudication by a Civil Court or in arbitration if provided for in the contract.” The Hon’ble Supreme Court, however, in the facts of the said case while holding that alternative remedy is no longer efficacious due to lapse of time, modified the order of the High Court by reducing the interest. 34) There can be no second opinion that violation of principles of natural justice or public law element would justify the exercise of powers under Article 226 of the Constitution of India. It all depends upon the facts of each case as to whether having regard to the scope of dispute to be resolved, the Court will still entertain the petition. 6 (2000) 6 SCC 293 26 NJS, J WP_1300_2024 35) In M.P.Power Management Company Limited v. Sky Power Southeast Solar India Private Limited7, on which reliance was placed by the learned Senior Counsel for the petitioner, the Hon’ble Supreme Court was dealing with the decision of High Court, wherein the writ petition challenging the order of termination of power projects agreement was allowed. The Hon’ble Supreme Court while elaborately dealing with the scope of judicial review of State action in a matter arising from non-statutory contract in the attending facts and circumstances of the said case, was not inclined to interfere with the decision of the High Court. The Hon’ble Supreme Court while recording its conclusions at Para No.82.1 that the writ jurisdiction is a public law remedy and a matter which lies entirely within a realm of affairs of public body, may not lend itself for being dealt with under the writ jurisdiction of the Court, at Para No.82.3 held that “the mere fact that relief is sought under a contract which is not statutory, will not entitle the respondent State in a case by itself to ward off scrutiny of its action or inaction under the contract, if the complaining party is able to establish that the action / inaction is, per se, 7 (2023) 2 SCC 703 27 NJS, J WP_1300_2024 arbitrary.” At Para No.82.7, the Hon’ble Supreme Court opined as follows: “82.7. The existence of an alternate remedy, is undoubtedly, a matter to be borne in mind in declining relief in a writ petition in a contractual matter. Again, the question as to whether the writ petitioner must be told off the gates, would depend upon the nature of the claim and relief sought by the petitioner, the questions, which would have to be decided, and, most importantly, whether there are disputed questions of fact, resolution of which is necessary, as an indispensible prelude to the grant of the relief sought. Undoubtedly, while there is no prohibition, in the writ court even deciding disputed questions of fact, particularly when the dispute surrounds demystifying of documents only, the Court may relegate the party to the remedy by way of a civil suit.” 36) The Hon’ble Supreme Court at Para No.82.10 while opining that “the reach of Article 14 enables a writ court to deal with arbitrary State action even after a contract is entered into by the State and wide variety of circumstances can generate causes of action for invoking Article 14 and the Court’s approach in dealing with the same, would be guided by, undoubtedly, the overwhelming need to obviate arbitrary State action, in cases where the writ remedy provides an effective and fair means of preventing miscarriage of justice 28 NJS, J WP_1300_2024 arising from palpably unreasonable action by the State”, at Para No.82.11, inter alia , opined as follows: “82.11…………Ordinarily, the cases of termination of contract by the State, acting within its contractual domain, may not lend itself for appropriate redress by the writ court. This is, undoubtedly, so if the Court is duty- bound to arrive at findings, which involve untying knots, which are presented by disputed questions of facts. Undoubtedly, in view of ABL(ABL International Ltd., v. Export Credit Guarantee Corpn.of India Ltd., (2004) 3 SCC 553), if resolving the dispute, in a case of repudiation of a contract, involves only appreciating the true scope of documentary material in the light of pleadings, the Court may still grant relief to an applicant. We must enter a caveat. The Courts are today reeling under the weight of a docket explosion, which is truly alarming. If a case involves a large body of documents and the Court is called upon to enter upon findings of facts and involves merely the construction of the document, it may not be an unsound discretion to relegate the party to the alternate remedy. This is not to deprive the Court of its constitutional power as laid down in ABL. It all depends upon the facts of each case as to whether, having regard to the scope of the dispute to be resolved, whether the Court will still entertain the petition.” 37) In view of the self imposed restraints and as the matter involves examination of disputed questions of facts, in the considered opinion of this Court, the exercise of jurisdiction under Article 226 of the Constitution of India, 29 NJS, J WP_1300_2024 more particularly in view of the availability of arbitration Clause in the Agreement, is not warranted. 38) M/s.N.G.Projects Limited v. M/s.Vinod Kumar Jain8 is a case where the Hon’ble Supreme Court was dealing with an appeal filed against the decision of a Division Bench of High Court of Jharkhand at Ranchi, whereby the Order of the learned Single Judge allowing the Writ Petition was confirmed. The issue relates to awarding of tender in respect of the works for reconstruction of Nagaruntari – Dhurki – Ambakhoriya Road. Referring to a catena of cases relating to Award of tenders and the scope of interference by the Court, the Hon’ble Supreme Court while opining that the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer, inter alia , held that “Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its 8 2022 LiveLaw(SC) 302 30 NJS, J WP_1300_2024 hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract.” 39) Though the said judgment of the Hon’ble Supreme Court was rendered against the background of granting of tenders, this Court is of the opinion that the expressions of the Hon’ble Supreme Court referring to the various earlier precedents are guiding factors where the issues involve interpretation of terms and conditions of the Agreement entered into between the parties. 40) For the aforegoing reasons and the conclusions arrived at, the matter involves disputed questions of fact and interpretation of terms and conditions of the Agreement. Therefore, this Court is not inclined to exercise powers under Article 226 of the Constitution of India. 31 NJS, J WP_1300_2024 41) The writ petition, is, however disposed of, leaving it open to the petitioner to avail the remedy of arbitration in terms of the Agreement and raise all contentions, in the event of which, the same shall be dealt with uninfluenced by the observations, if any made by this Court. There shall be no order as to costs. As a sequel, pending miscellaneous petitions, if any, shall stand closed. _______________________ NINALA JAYASURYA, J. Date: 14.02.2024. Ssv/BLV 32 NJS, J WP_1300_2024 IN THE HIGH COURT OF ANDHRA PRADESH::AMARAVATI THE HON’BLE SRI JUSTICE NINALA JAYASURYA WRIT PETITION No.1300 of 2024 Date:14.02.2024. Ssv/BLV "