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Hindustan Security Co & Another v/s State of U.P & Others


Company & Directors' Information:- SECURITY CO LTD [Active] CIN = L65929WB1948PLC016992

Company & Directors' Information:- G SECURITY (INDIA) PRIVATE LIMITED [Active] CIN = U74920MH2004PTC150235

Company & Directors' Information:- S R SECURITY PRIVATE LIMITED [Active] CIN = U74920MH2005PTC152956

Company & Directors' Information:- S R SECURITY PRIVATE LIMITED [Active] CIN = U74110MH2005PTC152956

Company & Directors' Information:- B D SECURITY PRIVATE LIMITED [Active] CIN = U74920JK2006PTC002638

Company & Directors' Information:- G I SECURITY PRIVATE LIMITED [Active] CIN = U74140WB1993PTC057724

Company & Directors' Information:- R M G SECURITY PRIVATE LIMITED [Strike Off] CIN = U74910TN1997PTC038969

Company & Directors' Information:- G D A SECURITY PVT LTD [Active] CIN = U74899DL1973PTC006424

Company & Directors' Information:- J S D SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2009PTC197167

Company & Directors' Information:- S M SECURITY PRIVATE LIMITED [Strike Off] CIN = U74899DL1996PTC007805

Company & Directors' Information:- J AND J SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2004PTC128735

Company & Directors' Information:- W B SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920RJ2012PTC040905

Company & Directors' Information:- G T I SECURITY PRIVATE LIMITED [Active] CIN = U74999MH2013PTC251541

Company & Directors' Information:- J. B. C. SECURITY PRIVATE LIMITED [Active] CIN = U74999MH2017PTC302126

Company & Directors' Information:- AT SECURITY PRIVATE LIMITED [Strike Off] CIN = U74999DL2012PTC234962

Company & Directors' Information:- AMP SECURITY PRIVATE LIMITED [Active] CIN = U74999DL2017PTC316440

Company & Directors' Information:- L N T SECURITY PRIVATE LIMITED [Strike Off] CIN = U74899DL2001PTC109776

Company & Directors' Information:- VERSUS SECURITY PRIVATE LIMITED [Strike Off] CIN = U74900DL2009PTC195274

Company & Directors' Information:- S O L SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2002PTC115968

Company & Directors' Information:- H S SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2004PTC127249

Company & Directors' Information:- M P S SECURITY PRIVATE LIMITED [Under Process of Striking Off] CIN = U74920DL2007PTC169952

Company & Directors' Information:- M AND G SECURITY PRIVATE LIMITED [Active] CIN = U74920HR2020PTC087465

Company & Directors' Information:- I S S SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2000PTC103574

Company & Directors' Information:- HINDUSTAN CORPORATION PRIVATE LIMITED [Dissolved] CIN = U74900KL1901PTC000424

Company & Directors' Information:- HINDUSTAN LTD. [Active] CIN = U99999MH1917PTC000472

Company & Directors' Information:- HINDUSTAN CORPORATION LIMITED [Dissolved] CIN = U99999MH1949PLC007790

    Writ Tax No. 707 of 2019

    Decided On, 30 May 2019

    At, High Court of Judicature at Allahabad

    By, THE HONOURABLE MR. JUSTICE BHARATI SAPRU & THE HONOURABLE MR. JUSTICE VIVEK VARMA

    For the Petitioners: Sunil Kumar Misra, Advocate. For the Respondents: Sanjay Kumar Tripathy, C.S.C.



Judgment Text


1. Heard Mr. Sunil Kumar Misra, learned Counsel for the petitioners, learned Standing Counsel and Mr. S.K. Tripathi, learned Counsel for the respondent Nos. 3 & 4.

2. The present writ petition under Article 226 of the Constitution has been filed claiming following reliefs:

(I) Issue a writ, order or direction of the nature of mandamus commanding the respondent Nos. 3 & 4 to examine, verify and honoured the petitioners bills duly generated in discharge of work order letter No. 152/2017-18 dated 18.7.2018 issued by the respondents Nagar Nigam, Gorakhpur.

(II) Issue a writ, order or direction of the nature of mandamus commanding the respondent No. 4 to decide the petitioner's application dated 18.2.2019 (Annexure No. 6) and application dated 1.3.2019 (Annexure No. 7), pending for release of the payment of bill duly generated in discharge of work order letter No. 152/2017-18 dated 18.7.2018 issued by the respondent-Nagar Nigam, Gorakhpur.

3. The petitioners entered into a contract with the Municipal Corporation, Gorakhpur for providing personnel for cleaning and door to door garbage collection.

4. The respondent No. 4, on 4.2.2019 cancelled the contract and black-listed the petitioner. The petitioner challenged the said order by filing Writ-C No. 8451 of 2019 and this Court by order dated 14.3.2019 passed the following order:

“Heard Mr. Sunil Kumar Misra, learned Counsel for the petitioner, learned Standing Counsel appearing for respondent Nos. 1 and 2 and Mr. Sanjay Kumar Tripathi, learned Counsel appearing for respondent Nos. 3, 4 and 5.

By means of this writ petition, the petitioners have challenged the order dated 4.2.2019 cancelling the contract entered into between the petitioners and respondent Nos. 3 and 4. The contract that was entered into between the petitioners and respondent Nos. 3 and 4 with regard to the providing personnel for cleaning and door to door garbage collection.

The petitioners claim that they have been performing their part of the contract in accordance with the terms and condition of the contract and without any opportunity being given to the petitioners the contract itself has been cancelled and the petitioners' firm has been blacklisted.

So far as the cancellation of the contract is concerned, we cannot go into that question. The petitioners can raise the dispute before the arbitrator or file a suit for breach of contract in case the terms and conditions of the contract have not been followed by respondent Nos. 3 and 4.

So far as the blacklisting of firm of the petitioners is concerned, from the order impugned it does not appear that before blacklisting the petitioners' firm any opportunity was given to the petitioners.

So far as the blacklisting of the petitioners' firm is concerned, that part of the order cannot be sustained and is quashed with the liberty to the authority to pass a fresh order with regard to the black listing of the petitioers' firm after giving an opportunity to the petitioners.

With the aforesaid observations, the writ petition is disposed of.”

5. The aforesaid order attained finality. Thereafter, the petitioners submitted an application before respondent No. 3 seeking arbitration but no action was taken. In the meantime, the period of contract came to an end on 31.3.2019. By means of present writ petition, petitioners are claiming payment on account of work carried out by it under the contract.

6. It is contended by learned Counsel for the petitioners that the action of the respondents withholding the legal dues is arbitrary and whimsical as it would badly affect his business prospects.

7. Per contra, learned Counsel for respondents submitted that it is purely a contractual matter and alternate remedy for institution of suit for recovery of money/amount due is available, therefore, writ petition is not maintainable.

8. We have heard learned Counsel for the parties and perused the record.

9. It is trite that a writ of mandamus cannot be issued for enforcement of private rights. The rights of the parties, who have entered into a contract, fall under the domain of private law irrespective of the fact whether the contract has been entered into by two private individuals or by an individual, and the State. For the performance of the contract, the remedy of the parties for breach of any of the terms and conditions of the contract would, ordinarily, lie in the Civil Court of competent jurisdiction.

10. The Apex Court in Suganmal v. State of Madhya Pradesh, 1964 (SLT SOFT) 327=AIR 1965 SC 1740, has observed that:

"… On the first point, we are of opinion that though the High Courts have power to pass any appropriate order in the exercise of the powers conferred under Article 226 of the Constitution, such a petition solely praying for the issue of a writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax. We have been referred to cases in which orders had been issued directing the State to refund taxes illegally collected, but all such cases had been those in which the petitions challenged the validity of the assessment and for consequential relief for the return of the tax illegally collected. We have not been referred to any case in which the Courts were moved by a petition under Article 226 simply for the purpose of obtaining refund of money due from the State on account of its having made illegal exactions… The parties had the right to question the illegal assessment orders on the ground of their illegality or unconstitutionality and therefore could take-action under Article 226 for the protection of their fundamental right, and the Courts, on setting aside the assessment orders, exercised their jurisdiction in proper circumstances to order the consequential relief for the refund of the tax illegally realized. We do not find any good reason to extend this principle and therefore hold that no petition for the issue of a writ of mandamus will be normally entertained for the purpose of merely ordering a refund of money to the return of which the petitioner claims a right… We, therefore, hold that normally petitions solely praying for the refund of money against the State by a writ of mandamus are not to be entertained. The aggrieved party has the right of going to the Civil Court for claiming the amount and it is open to the State to raise all possible defences to the claim, defences which cannot, in most cases be appropriately raised and considered in the exercise of writ jurisdiction…”

11. Then Apex Court in the case of Hindustan Petroleum Corporation Ltd. and Another v. Dolly Das, III (1999) SLT 590=(1999) 4 SCC 450 by observing as follows:

“7. In the absence of constitutional or statutory rights being involved a writ proceeding would not lie to enforce contractual obligations even if it is sought to be enforced against the State or to avoid contractual liability arising thereto. In the absence of any statutory right Article 226 cannot be availed to claim any money in respect of breach of contract or tort or otherwise.”

12. The above view was reiterated by the Apex Court in the case of Kerala State Electricity Board & Anr. v. Kurien E. Kalathil & Ors., V (2000) SLT 538=III (2000) CLT 229 (SC)=(2000) 6 SCC 293 by observing as follows:

“10. ..... The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract? If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature.

11. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not of itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law......

....... The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a 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. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition.”

13. Further, the Division Bench of this Court in the case of Kaka Advertising Agency v. U.P. Technical University and Ors., 2014(11) ADJ 227, and has observed as follows:

“7. In the present case, once a serious matter relating to the evasion of service tax is alleged and drawn to the notice of the first respondent by the revenue authorities and the first respondent has been informed both of the pending investigation as well as to disclose documentary material, it cannot be held that the claim falls within that category where it can be ascertained that there is absolutely no defence or that a mandamus would be warranted. Even in the present case, we may reiterate that while exercising the discretion on whether or not to entertain a writ petition under Article 226 in a contractual matter where a mandamus is sought which would have the effect of decreeing a money claim, the Court must also deal with the issue as to whether a writ petition would be an appropriate remedy when other remedies under the ordinary civil law are available. For instance, a summary remedy in accordance with the procedure established under Order 37 of the Code of Civil Procedure, 1908 is available even where the claim is founded inter alia on a written contract for a liquidated sum. If such a claim is filed, the recipient is required to make a suitable defence for being granted leave to defend and the plaintiff is not relegated to the remedy of pursuing a long drawn trial, if the defence is frivolous. Exercising the jurisdiction under Article 226 evidently forecloses a defence of this nature, which would have to be evaluated on the facts of each case. This can more appropriately be carried out when a suit is filed. In the light of the facts which have been brought to the notice of the Court, we are of the view that this is not a fit and proper case for exercising the discretion by the Court under Article 226 to entertain a petition seeking a mandamus for the payment of bills and the petitioner ought to be relegated to the ordinary civil remedy. We clarify that we have not made any finding on the merits of the case since we have declined to exercise the extraordinary jurisdiction under Article 226. The petition is, accordingly, dismissed. There shall be no order as to costs.”

14. Again the Division Bench of this Court in the case of Budh Gramin Sansthan v. State of U.P., 2014 (7) ADJ 29, has observed as follows:

“3. In view of the defence which has been set up by the State, it would not be appropriate, in our view, to entertain the petition under Article 226 of the Constitution and pass an order, that would essentially be a money decree. At the least, the defence would raise issues on which evidence would have to be adduced before a Civil Court. Quite independently of that, in a matter of this nature, remedies are available either in the form of a suit under Order 37 of the Code of Civil Procedure, 1908 or in the form a complaint under Section 138 of the Negotiable Instruments Act, 1881. The High Court must exercise a great deal of circumspection in granting relief of the nature sought, particularly when facts are brought to the notice of the Court which indicate that the State seeks to establish a defence on facts.

15. In a judgment of this Court dated 24 February, 2014 in M/s. R.S. Associate v. State of U.P. and Others, (Writ-C No. 11544 of 2014), Division Bench of this Court declined to entertain a similar petition. The Court, inter alia, held as follows:

“2. These are purely contractual matters and we are not inclined to entertain a petition under Article 226 of the Constitution in this regard. Whether the work under the contract has been satisfactorily carried out; whether the rates quoted are in accordance with the terms of the agreement and the applicable schedule of rates; whether the work has been carried out properly are issues which have to be addressed, among other questions, by the Competent Authority before an appropriate decision is taken. The jurisdiction of the Court under Article 226 of the Constitution cannot appropriately be exercised in such matters. The remedy of the contractor, if he is aggrieved by non-payment, would be to either file an ordinary civil suit or if there is an arbitration agreement between the parties, to invoke the terms of the agreement.

3. .....

4. On the other hand, we have heard this petition for final disposal and we are firmly of the view that it will not be appropriate for this Court to exercise jurisdiction in the matter. It is true that there is no absolute bar in entertaining a petition in a contractual matter. However, in cases such as the present, several issues on facts which have been noted in the earlier part of this judgment have to be determined by the Competent Authority. The exercise of jurisdiction under Article 226 is not warranted for what the petitioner seeks in essence is a decree in a civil suit which cannot be granted in this proceeding, particularly having regard to the nature of the issues involved. The Court, therefore, declines to entertain this petition.”

16. Yet another Division Bench of this Court in Misc. Bench No. 3898 of 2015, Uttaranchal Paper Converters & Publishers Thru. Prop. v. State of U.P. Thru. Secy. Basic Education & 10 Ors. followed M/s R.S. Associate (supra) and observed as follows:

“In our view, granting the relief which is sought in these proceedings, would virtually amount to a money decree. Since there is an arbitration agreement between the parties, the petitioner will have to invoke the terms of the agreement.”

17. Again a Division Bench of this Court in the case of Misc. Bench No. 3472 of 2014, Major Travels Thru. Prop. Mujtaba Ali Khan v. State of U.P. Thru Princ. Secy. Minorities Welfare Waqf, has observed as follows:

“......The reliefs which are claimed are purely in terms of money decree for the payment of work allegedly due in respect of bills submitted for execution of certain work orders. Such reliefs cannot be granted in exercise of a writ jurisdiction under Article 226 of the Constitution. Significantly, the contract in the present case is not a statutory contract where a limited exception has been made by the Supreme Court. The petitioner would have to take recourse to the ordinary civil remedy for espousing the claim.

The petition is, accordingly, dismissed. There shall be no order as to costs.”

18. The same view has been reiterated in Misc. Bench No. 10971 of 2015, M/S Goyal Stationary Mart Thru its Prop. Ajay Kr. Goyal v. State of U.P.Thru Prin. Secy. Medical and Health Lko. & Ors. has observed as follows:

“.......We may observe that while exercising the discretion as to whether a writ petition under Article 226 of the Constitution of India, in a contractual matter, where a writ in the nature of mandamus is sought for payment of money (which would have the effect of passing a money decree) may be entertained, the Court has also to deal with the issue as

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to whether the writ petition would be an appropriate remedy when other remedies are available under ordinary civil law.” 19. It is thus trite whether any amount is due under a contract is not a matter that may be agitated and decided under writ jurisdiction, since disputes arising out of the terms of the contract or alleged breach have to be settled by the ordinary principles of law of contract. It is, therefore, not appropriate to exercise extraordinary equitable jurisdiction under Article 226 of the Constitution of India. 20. In the case in hand, petitioner is claiming payment due to him on account of work carried out in performance of a contract. However, the claim is not admitted to the respondent Nagar Nigam in as much as the contract of the petitioners was cancelled on 4.2.2019. Upon earlier writ petition filed by the petitioner challenging the cancellation order, the parties were relegated to seek arbitration or to file a civil suit. Therefore, in absence of any order to set aside cancellation of contract awarded to the petitioners, the claim for money can never be examined in writ jurisdiction as such a claim is inherently and wholly a disputed liability. These disputes can only be decided on the basis of evidence adduced by both the parties. 21. A writ of mandamus can only be issued when a person has legally enfor-ceable right. The right as claimed by the petitioner is yet to be determined or adjudicated. It is, therefore, in the realm of a disputed claim. A writ will, therefore, not be issued to enforce such disputed claim. It is always open to the petitioner to seek determination of his claim in an appropriate forum. 22. In view of above, we decline to entertain this petition in writ jurisdiction. 23. Consequently, the petition is dismissed. No order as to costs. Writ Petition dismissed.
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