At, High Court of Rajasthan
By, THE HONOURABLE MR. JUSTICE ALOK SHARMA
For the Petitioner: Suresh Sahni, Advocate. For the Respondent: -------
1. This petition has been filed challenging the order dated 11-10-2011 issued by Senior Regional Manager, Rajasthan State Industrial Development and Investment Corporation Ltd. (herein after RIICO) Kota, whereby the petitioner FIRM has been informed that it having failed to undertake repair work of various roads in Indraprastha Industrial area which were its obligation under contract dated 24-1-2007, RIICO had decided to have the obligation of the petitioner firm under the said contract executed at its cost from other contractor/s and would proceed to adjust the amount expanded on such repair of roads from the security amount of petitioner.
2. The facts of the case are that the petitioner firm is AA class registered contractor, and the work for strengthening of road by paver finish at Indraprastha Industrial Area Kota was awarded to it vide order dated 24-1-2007 with the date of commencement being 7-2- 2007, and the date of completion being 6-11-2007.
3. According to petitioner firm soon after the award, the petitioner took up the work under the contract in real earnest with the intention to adhere to his contractual obligations during the entire contractual period of five years. The petitioner however alleges that owing to inadequate crust thickness of existing roads covered under its contract and constant plying of heavy traffic, the existing surface was inadequate and further weakened and worn out. It has been submitted that further due to stagnant pools of water on either sides of the roads under the contract in issue, the roads were reduced to a state where no amount of patch work as required under the contract could be successful. It is submitted that all patch work done had became unstuck in the short periods of time. Counsel for the petitioner has submitted that thus the patch work under the contract was impossible without strengthening the existing crust which strengthening of the crust was not a part of the contract of petitioner firm. It has been pointed out to emphasise the submission as to the impossibility of execution of the contract that in terms of contract the petitioner was bound only to improve the riding surface by laying 75 mm thickness of spray grout patching etc., as per various items incorporated in G schedule and nothing more. Counsel for the petitioner submitted that RIICO had itself proceeded to do the work of strengthening by increasing the crust thickness of the Hariyali to Dhakaniay railway station road (road No.5), and road No.1 Instrumentation Ltd. factory to Dhakaniya, which according to petitioner was indicative of irrationality of RIICO in asking the petitioner to do patch work on roads under its contract without similar strengthening. Counsel for the petitioner submits that all the aforesaid facts were brought to the notice of respondent RIICO through various letters and it was pointed out by the petitioner that no liability could be fastened upon the petitioner firm for alleged breach of contract unless the crust thickness of the existing surface was improved, and yet all communications have been of no avail. It has been submitted that the respondent RIICO is using its dominant position in requiring the petitioner to do the work under the contract dated 24-1-2007 in impossible conditions. It has been submitted that in the aforesaid facts of the case, the contract dated 24- 1-2007 is rendered void in terms of Section 56 of the Contract Act, and the proposed action of respondent RIICO under letter dated 11-10-2011 is illegal, arbitrary and liable to be set aside. Learned counsel for the petitioner has also submitted and argued that the weakness of the crust of the existing surface can be got ascertained by this court through the appointment of a Committee of experts of civil Engineers independent of respondent RIICO.
4. Heard learned counsel for the petitioner, and perused the material available on record of writ petition.
5. It is not in dispute that the work for strengthening of road by paver finish at Indraprastha Industrial Area Kota was awarded to petitioner vide order dated 24-1- 2007 and had to be completed by 6-11-2007. Admittedly the said work has not been completed by the petitioner firm to the satisfaction of the employer under the contract i.e. RIICO.
6. The Hon'ble Supreme Court as also this court have held that in matters arising out of contract where no public law element is involved in a dispute raised by a contractor in a writ petition, the powers under Article 226 of the constitution of India should not be exercised. It has been held that writ courts should not be inclined to address purely civil issues in contractual matters and delve into disputed question of facts. The Hon'ble Supreme Court in the case of Indian Bank Vs. Godhara Nagrik Cooperative Credit Society Ltd. [(2008) 12 SCC 541] has held that a writ court should not engage in full fledged adjudication in contractual matters and confine itself only to the public law element in such disputes when brought out before it in the course of the execution of a contract. It has been further held that where the petitioner seeks adjudication of civil issues arising in a contract in an Article 226 of the Constitution of India proceeding, the petitioner should be relegated to the remedy before a civil court.
7. "Public Law Element" is not a term with a cut and dried definition. It can however be variously described such by the Hon'ble Apex Court in Reliance Airport Developers (P) Ltd. Vs. Airports Authority of India [(2006) 10 SCC 1] to be situations which arise in cases of bribery, corruption, or implementation of unlawful policy. In the case of Indian Bank Vs. Godhara Nagrik Cooperative Credit Society Ltd. (supra) the Hon'ble Supreme Court has held that where a large number of people may be affected owing to action of the State even in a contract a public law element could also said to arise. Further public law element could also arise in cases of clear discrimination, palpable unfairness or unjustness. This proposition has been reiterated in [(2011) 5 SCC 341] State of Uttar Pradesh Vs. Rakesh Kumar Keshari, where it has been that in contractual matter only to extent of public law element, when made out, a writ petition would lie.
8. Counsel for the petitioner has relied upon Indian Bank Vs. Godhara Nagrik Cooperative Credit Society Ltd. (supra), ABL International Ltd. Vs. Export Credit Guarantee Corporation of India [(2004) 3 SCC 553], Noble Resources Ltd. Vs. State of Orissa [(2006) 10 SCC 236] and F.C.I. Vs. SEIL India Ltd. (2008) 3 SCC 440. A bare perusal of the aforesaid cases indicates that the cases are of no succour to the petitioner and therein the same proposition has been reiterated that a writ court can intervene in contractual matters only to the extent of public law element, if made out.
9. From the pleadings in the writ petition it is apparent that no element of any public law is agitated or otherwise made out. The petitioner has sought to found his case on frustration of contract under Section 56, pleading impossibility of performance and also agitated his aggrievement from the dominant position of the State in the contract. None of these two grounds can be said to constitute a public law element. Neither is the prayer to appoint a Committee independent of RIICO to inspect and report on the crust thickness of the roads can constitute a public law element. The thickness of the crust and its effect if any, on the obligations of the petitioner under on the contract in issue are questions of fact dependent on evidence to be laid before the competent court and subject to cross examination as also interpre
Please Login To View The Full Judgment!
tation of the contract in issue. The petitioner has raised issues in the writ petition which are purely civil issues to be adjudicated in accordance with terms of agreement dated 24-1- 2007 and the provisions of Indian Contract Act. 10. The counsel for the petitioner has thus not been able to make out any case of public law element, which needs to be adjudicated upon by this court. The case set up by the petitioner is based purely on a civil dispute under Article 226 of the Constitution of India. This court would loath to interfere in such a dispute in the exercise of its powers under Article 226 of the Constitution of India. 11. I therefore find no force in the writ petition, and the same is therefore dismissed. 12. Stay application also stands dismissed. Writ petition and stay application disposed of.