When State Constitutes Proper Dispute Redressal System, Party Cannot Directly Approach High Court Under Writ Petition: Madhya Pradesh High Court
The Madhya Pradesh High Court single bench of Justice Gajendra Singh held that when the government constitutes a proper dispute redressal system for resolution of any dispute between the parties, the party cannot directly approach the High Court and file a writ petition. It held that when the statute provides for statutory appeal, the said remedy is to be availed by the litigating...
The Madhya Pradesh High Court single bench of Justice Gajendra Singh held that when the government constitutes a proper dispute redressal system for resolution of any dispute between the parties, the party cannot directly approach the High Court and file a writ petition. It held that when the statute provides for statutory appeal, the said remedy is to be availed by the litigating parties (referred to Hindustan Coca Cola Beverage Private Ltd vs. Union of India and others reported in (2014) 15 SCC 44).
Brief Facts:
The matter pertained to a letter issued by the General Manager, Mp Rural Road Development Authority. The letter directed the Petitioners to deposit an alleged demand of Rs. 38,19,951/- due to the submission of private bills of bitumen not issued by government refineries. The Petitioners were allotted a tender for construction work under the Pradhan Mantri Gram Sadak Yojna and faced audit objections regarding alleged fake bitumen bills and consumption from non-government refineries. Despite providing verification of bills and completing the construction within stipulated timelines, a demand was raised post-completion. Feeling aggrieved, the Petitioners approached the Madhya Pradesh High Court (“High Court”) and filed a writ petition.
In response, the Petitioners argued that grievances were raised with the respondents, and requests were made to halt the false demand. However, the Respondents failed to address these concerns, disregarding principles of natural justice. The Petitioners argued that they were neither granted an opportunity to be heard nor were their submitted documents considered. Thus, they contended that this violated the fundamental principle of 'audi altrem partem', necessitating a fair hearing before any order is passed by a state functionary.
Observations by the High Court:
The High Court referred to the Clause 24 and 25 of the 'General Conditions of Contract' outlined in the tender document. Clause 24 delineates a comprehensive dispute redressal mechanism, empowering a competent authority to settle any disputes arising from or in connection with the contract. It mandates that such disputes be referred to the competent authority within 45 days and necessitates the authority to convey its decision within 60 days of the contractor's written request. The decision rendered by the competent authority is deemed final and binding upon the contractor, allowing the execution of works to proceed pending the authority's decision. Clause 25 provides the provision for arbitration, allowing either party to appeal against the decision of the competent authority to the Madhya Pradesh Arbitration Tribunal if the claim amount exceeds Rs. 50,000.
The High Court held that a structured dispute redressal system was established by the State for resolving conflicts between the contracting parties. Notably, it held that the Petitioners had bypassed this system and directly approached the High Court by filing the writ petition without resorting to the competent authority stipulated in the contract.
The High Court referred to the decision of the Supreme Court in Hindustan Coca Cola Beverage Private Ltd, where it was held that when a statutory appeal is provided, parties should avail themselves of that remedy.
Therefore, the High Court held that the writ petition was not maintainable.
Case Title: M/S Kamla Construction Company And Anr. Vs M/S Kamla Construction Company And Ors.
Case Number: WRIT PETITION No. 10781 of 2024
Advocate for the Petitioner: Piyush Goyal
Advocate for the Respondent: Bhuwan Gautam
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