Scope Of Article 226 Of The Constitution Of India: Important Judgments [Part-2]
"Mandate contained in the report: ABL International Ltd & Anr V/s Export Credit Guarantee Corporation of India Ltd. & Ors., (2004) 3 SCC 553 reiterated."
It was held that: Where the State behaves arbitrarily, even in the realm of contract, the High Court can interfere under Article 226 of the Constitution of India, 1950.
IPJACKET TECHNOLOGY INDIA (P) LIMITED V/s M.D. UTTARPRADESH RAJKIYA NIRMAN NIGAM LIMITED, WRIT (C) NO. 34346 OF2018, HIGH COURT OF ALLAHABAD, DATE OF DECISION: 08.05.2019, CORAM: PANKAJ KUMARJAISWAL & YOGENDRA KUMAR SRIVASTAVA, JJ.
"In pure contractual matters the extraordinary remedy of a writ under Article 226 of the Constitution of India, 1950 cannot be invoked."
It was held that:
- Where the contract entered into between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India, 1950 so as to compel the authorities to remedy a breach of contract pure and simple.
- In pure contractual matters the extraordinary 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.
- 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 a breach of contract is complained of, a party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed, or the party may sue for damages. Such a suit would ordinarily be cognizable by the civil court. The High Court in its extraordinary jurisdiction under Article 226 of the Constitution of India, 1950 would not entertain a petition either for specific performance of contract or for recovering damages. A right to relief flowing from a contract has to be claimed in a civil court where a suit for specific performance of contract or for damages could be filed. (Divisional Forest Officer V/s Vishwanath Tea Company Ltd., (1981) 3 SCC 238)
- In the matter of: Life Insurance Corporation V/s Escorts Limited, (1986) 1 SCC 264, it was observed that:
"… If the action of the State is related to contractual obligations or obligations arising out of the tort, the court may not ordinarily examine it unless the action has some public law character attached to it. Broadly speaking, the court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field. The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances. When the State or an instrumentality of the State ventures into the corporate world and purchases the shares of a company, it assumes to itself the ordinary role of a shareholder, and dons the robes of a shareholder, with all the rights available to such a shareholder. There is no reason why the State as a shareholder should be expected to state its reasons when it seeks to change the management, by a resolution of the company, like any other shareholder…"
- In the matter of: State of Bihar V/s Jain Plastics & Chemicals Ltd., (2002) 1 SCC 216, the question that came for adjudication before the Hon'ble Supreme Court was this: "… whether the High Court ought not to have exercised its jurisdiction under Article 226 of the Constitution of India for granting relief in case of alleged breach of contract…". It was held that, it is settled law that writ is not the remedy for enforcing contractual obligations and that writ petition under Article 226 of the Constitution of India, 1950 is not the proper remedy for adjudicating contractual disputes.
- In a case where the contract entered into between the State and the person aggrieved is of a non-statutory 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 remedy under Article 226 of the Constitution of India, 1950 being an extra-ordinary 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, the High Court, ordinarily, is not obliged to exercise its prerogative writ jurisdiction to enforce such contractual obligations.
- In the matter of: Joshi Technologies International Inc. V/s Union of India & Ors, (2015) 7 SCC 728, it was observed that:
There is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when a monetary claim is raised. At the same time, discretion lies with the High Court which under certain circumstances, can refuse to exercise it. That under the following circumstances, "normally", the High Court would not exercise its discretion vested in it by virtue of Article 226 of the Constitution of India, 1950:
- The court may not examine the issue unless the action has some public law character attached to it.
- Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution of India, 1950 and relegate the party to the said mode of settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration.
- If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination.
- Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances.
"Whether appeal is maintainable against an award and/or decree rendered by a Lok Adalat under the Legal Services Authorities Act, 1987?"
It was held that:
- Where an award is made by the Lok Adalat in terms of a settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and executable as if it is a decree of a civil court, and no appeal lies against it to any court. If any party wants to challenge such award based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227 of the Constitution of India, 1950, that too on very limited grounds of fraud and/or misrepresentation.
- Section 21 (2) of the Legal Services Authorities Act, 1987 states that, every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award. Thus, an award rendered by a Lok Adalat is not amenable to appellate jurisdiction. An appeal is not to lie against any award of Lok Adalat at the instance of either of the parties, and the award is binding on all the parties to the dispute.
- When no award can be made by the Lok Adalat on the ground of compromise and settlement, the record of the case is returned to the court from which the reference had been made to the Lok Adalat. Since both the parties before the Lok Adalat consent to a particular settlement, they individually or jointly cannot be allowed to reprobate and therefore, Section 21 (2) of the Legal Services Authorities Act, 1987 provides that such award shall be final and binding and no appeal shall lie to any court against the award.
- An award rendered by a Lok Adalat can be challenged only in writ jurisdiction under Article 226 and/or Article 227 of the Constitution of India, 1950, and that too on limited grounds of fraud and/or misrepresentation.
"Principles of res judicata are applicable to writ petitions."
It was held that:
- It is well established that the principles of res judicata are applicable to writ petitions.
- Where the High Court dismisses a writ petition under Article 226 of the Constitution of India, 1950 after hearing the matter on merits, a subsequent petition in the Supreme Court under Article 32 of the Constitution of India, 1950 on the same facts and for the same reliefs filed by the same parties will be barred by the general principle of res judicata.
- A judgment of the High Court under Article 226 of the Constitution of India, 1950 passed after a hearing on the merits must bind the parties till set aside in appeal as provided by the Constitution of India, 1950 and cannot be permitted to be circumvented by a petition under Article 32 of the Constitution of India, 1950.
RAJBIR SURAJBHAN SINGH V/s THECHAIRMAN, INSTITUTE OF BANKING PERSONNEL SELECTION, MUMBAI, CIVIL APPEAL NO. 4455 OF 2019, SUPREME COURT OF INDIA,DATE OF DECISION: 29.04.2019, CORAM: L. NAGESWARA RAO & M.R. SHAH, JJ.:
"A writ petition under Article 226 of the Constitution of India, 1950 cannot be entertained against the Institute of Banking Personnel Selection (IBPS)."
It was held that:
- The question as to whether a corporation/society would fall within the meaning of Article 12 of the Constitution of India, 1950 should be decided after examining whether the body is financially, functionally and administratively dominated by or under the control of the Government, the control should be particular to the body in question and must be pervasive. A control which is merely regulatory under the statute or otherwise would not make the body 'State' under Article 12 of the Constitution of India, 1950. (Pradeep Kumar Biswas V/s Indian Institute of Chemical Biology & Ors, (2002) 5 SCC 111)
- IBPS is not constituted under a statute, and further it does not receive any funds from the Government. IBPS is not controlled by the Government.
- There is no manner of doubt that a writ petition under Article 226 of the Constitution of India, 1950 is maintainable even against a private body provided it discharges public functions. However, it is not easy to define what a public function or public duty is. It can reasonably be said that such functions as are similar to or closely related to those performable by the State in its sovereign capacity, are public functions.
- A private company carrying on banking business as a scheduled commercial bank cannot be termed as an institution or a company carrying on any statutory or public duty. (Federal Bank V/s Sagar Thomas, (2003) 10 SCC 733)
- As per the report in the matter of: K.K. Saksena V/s International Commission on Irrigation & Drainage, (2015) 4 SCC 670, it was observed that the relevant questions to be answered for the purpose of deciding whether a writ petition is maintainable under Article 226 of the Constitution of India, 1950 against an authority or body are as follows:
(i) Whether a private body which is a non-governmental organization partakes the nature of public duty or State action?
(ii) Whether there is any public element in the discharge of its functions?
(iii) Whether there is any positive obligation of a public nature in the discharge of its functions?
(iv) Whether the activities undertaken by the body are voluntary, which many a non-governmental organization perform?
- IBPS has been set up for the purpose of conducting recruitment for appointment to various posts in Public Sector Banks and other financial institutions. Conducting recruitment tests for appointment in banking and other financial institutions, is not a public duty. IBPS is not a creature of a statute and there are no statutory duties or obligations imposed on it.
- In the matter of Federal Bank (Supra) it was held that, a writ petition under Article 226 of the Constitution of India, 1950 is not maintainable against a scheduled bank on the ground that the business of banking does not fall within the expression "public duty". As the activity of IBPS of conducting the selection process for appointment to the banks is voluntary in nature, it cannot be said that there is any public function discharged by it. There is no positive obligation, either statutory or otherwise on IBPS to conduct the recruitment tests.
- IBPS is not amenable to the writ jurisdiction under Article 32 or Article 226 of the Constitution of India, 1950.
"Any infirmity in the detention of an individual at the initial stage cannot invalidate the subsequent detention and the same has to be judged on its own merits."
It was held that:
- It is well accepted principle that a writ of habeas corpus is not to be entertained when a person is committed to judicial custody or police custody by the competent court by an order which prima facie does not appear to be without jurisdiction or passed in an absolutely mechanical manner or wholly illegal manner.
- The act of directing remand of an accused is a judicial function and the challenge to the order of remand is not to be entertained in a habeas corpus petition. If the act of directing remand is fundamentally a judicial function, correctness or validity of such orders, if at all, has to be tested in a properly instituted proceedings before the appellate or revisional forum.
- In the matter of: Basanta Chandra Ghose V/s King Emperor, (1945) 7 FCR 81, it was held that:
"… If at any time before the Court directs the release of the detenue, a valid order directing his detention is produced, the Court cannot direct his release merely on the ground that at some prior stage there was no valid cause for detention…"
- In habeas corpus proceedings the court is to have regard to the legality or otherwise of the detention at the time of the return and not with reference to the institution of the proceedings. A fortiori the court would not be concerned with a date prior to the initiation of the proceedings for a writ of habeas corpus.
SANJAYA BAHEL V/s UNION OF INDIA & ORS, WRIT PETITION (CIVIL) NO. 981 OF 2019, HIGH COURT OF DELHI, DATE OF DECISION: 15.05.2019, CORAM: SURESH KAIT, J.:
"By no stretch of imagination an organization of United Nations which is an international body be treated as "instrumentality" and/or an "agency" of the Government."
It was held that:
- A writ under Article 226 of the Constitution of India, 1950 lies only when the petitioner establishes that his or her fundamental right or some other legal right has been infringed.
- The United Nations Organization is not a 'State' within the meaning of Article 12 of the Constitution of India, 1950 and it is not amenable to the writ jurisdiction in terms of Article 226 of the Constitution of India, 1950.
UNIVERSAL CONSORTIUM OF ENGINEERS (P) LTD. & ANR. V/s STATE OFWEST BENGAL & ORS., WP 23027 (W) OF 2017, HIGH COURT OF CALCUTTA, DATEOF DECISION: 18.02.2019, CORAM: DIPANKAR DATTA & BIBEK CHAUDHURI, JJ.
"Whether High Court has jurisdiction to entertain writ petition against the judgment/order passed by the National Commission (NCDRC), since such judgment/order can be challenged before the Supreme Court in view of the provisions of the Consumer Protection Act, 1986?"
It was held that:
- In the matter of: Cicily Kallarackal V/s Vehicle Factory, (2012) 8 SCC 524, it was observed that:
"… learned counsel for the petitioner is right that the High Court had no jurisdiction to deal with the matter against the order of the Commission (NCDRC)… we cannot help but state in absolute terms that it is not appropriate for the High Courts to entertain writ petitions under Article 226 of the Constitution against the orders passed by the Commission (NCDRC), as a statutory appeal is provided and lies to this Court (Supreme Court) under the provisions of the Consumer Protection Act. Once the legislature has provided for a statutory appeal to a higher court, it cannot be proper exercise of jurisdiction to permit the parties to bypass the statutory appeal to such higher court and entertain petitions in exercise of its powers under Article 226 of the Constitution of India…"
Thus, in Cicily Kallarackal (Supra) it was held that, orders of NCDRC are incapable of being questioned under the writ jurisdiction of the High Court as a statutory appeal in terms of Section 27-A (1) (c) of the Consumer Protection Act, 1986 (hereinafter referred to as the CPA) lies to the Supreme Court.
- Normally, in the exercise of judicial discretion, a High Court hearing a petition under Article 226 of the Constitution of India, 1950 or an application under Article 227 of the Constitution of India, 1950 thereof may decline to entertain the same if the relevant statute makes an alternative appellate remedy available. Exhaustion of such remedy is insisted upon or else the purpose of providing such appellate remedy could be frustrated. Moreover, an appeal would entitle a party to raise both questions of facts as well as law, whereas the scope of judicial review or superintendence is limited in the sense that in the former, scrutiny would be confined to the decision-making process only and not the decision, and in the latter interference could be made only if there occasions a grave miscarriage of justice.
- In terms of Cicily Kallarackal (Supra) it cannot be stated that, High Court has no jurisdiction to entertain writ petitions/applications under Articles 226 and 227 of the Constitution of India, 1950 respectively, questioning orders of the State Commission (SCDRC) or the District Forum (DCDRF). The State Commission (SCDRC) and the District Forum (DCDRF) in a particular State are quasi-judicial bodies inferior to the relevant High Court and therefore, the special reason for which orders passed by the National Commission (NCDRC) were held in Cicily Kallarackal (Supra) to be immune from challenge before the High Courts would not apply. Therefore, Cicily Kallarackal (Supra) cannot be pressed into service unless an order of the National Commission (NCDRC) is challenged in a writ petition before the High Court.
- The dicta in Cicily Kallarackal (Supra) is in stark contrast to the law on the point of entertainability of a writ petition when an alternate remedy is available but not exhausted by the party approaching the High Court; it has never been the position of law that a writ petition would not be maintainable if the alternate remedy that is available is not exhausted. Article 226 of the Constitution of India, 1950 does not, in terms, impose any limitation or restraint on a High Court from entertaining a writ petition if an efficacious alternate remedy is available to the party approaching it. That a High Court ought not to entertain a writ petition where an efficacious alternate remedy is available to such party is part of the several 'self-imposed restrictions' evolved by the Supreme Court in its various pronouncements; requiring a party to exhaust the alternate remedy prior to approaching the court of writ is not a rule of law but a rule of convenience and discretion which, at any rate, does not oust the jurisdiction of the High Court.
- Alternate Remedy Argument: In the matter of: Whirlpool Corporation V/s Registrar of Trademarks, (1998) 8 SCC 1, it was observed that:
"… The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for 'any other purpose'… Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field…"
- The power of the High Court under Article 226 of the Constitution of India, 1950 cannot be whittled down, nullified, curtailed, abrogated, diluted or even taken away by judicial pronouncement or legislative enactment or even by amendment of the Constitution of India, 1950. The power of judicial review is an inherent part of the basic structure of the Constitution of India, 1950 and it cannot be abrogated without affecting the basic structure of the Constitution of India, 1950.
- The question of jurisdiction of the High Courts under Article 226 of the Constitution of India, 1950 has also to be viewed in the broad perspective of what the Constitution of India, 1950 says and its interpretation by the Supreme Court in its decision in L. Chandra Kumar V/s Union of India, AIR 1997 SC 1125, and not from any perceived narrow or constricted view that one might choose to take to shield decisions of tribunals set up at the national level from judicial scrutiny under Article 226 of the Constitution of India, 1950 on the specious ground that an appeal lies to the Supreme Court.
- In the matter of: State of Karnataka V/s Vishwabharathi House Building Coop. Society, (2003) 2 SCC 412, while upholding the constitutionality of the CPA, the Hon'ble Supreme Court of India observed that:
"… By reason of the provisions of the said Act, the power of judicial review of the High Court, which is a basic feature of the Constitution, has not been nor could be taken away…"
Thus, the decision rendered in the matter of Cicily Kallarackal (Supra) runs contrary to the decision rendered in the matter of Vishwabharathi House Building Coop. Society (Supra).
- In terms of the CPA, an appeal lies under Section 23 of the CPA to the Supreme Court from an order passed by the NCDRC under Section 21 (a) (i) of the CPA, that is, an order passed by NCDRC in exercise of its original jurisdiction. Similarly, an appeal also lies to the Supreme Court under Section 27-A (1) (c) of the CPA against an order passed by the NCDRC under Section 27 of the CPA, that is, an order passed by NCDRC imposing penalties. If an order passed by the NCDRC is not open to challenge before a High Court within whose territorial limits the cause of action may have arisen and the appellate remedy before the Supreme Court is made the only remedy available by the CPA, thereby excluding the power of judicial review of the High Court, then it will be in derogation of the mandate contained in the report Vishwabharathi House Building Coop. Society (Supra).
- In an appropriate case, where a party without exhausting the alternate remedy that is available to it, invokes the writ jurisdiction of a High Court and while challenging an order of NCDRC sets up a case of any of the exceptional situations to exist, that is, the writ petition is claimed for enforcement of a Fundamental Right, or to remedy a breach of natural justice, or for quashing an order that is wholly without jurisdiction, then there ought to be no valid reason as to why the High Court should not look into the writ petition to ascertain whether what is claimed is correct, instead of dismissing the writ petition at the threshold on the ground that the impugned order has been passed by NCDRC.
Moreover, if in a writ petition constitutionality of a provision of the CPA is under challenge along with an order of NCDRC, and the petition contains dual prayers to declare the impugned statutory provision as ultra vires the Constitution of India, 1950 as well as a writ of certiorari to quash such order, then the remedy of an appeal being available before a higher court (the Supreme Court) will be of no immediate significance or relevance. Ordinarily, the Supreme Court would not be in a position to declare a provision of the CPA unconstitutional while exercising its appellate power under the CPA. Any declaration on the vires of a statute/statutory provision ideally would come from the Supreme Court exercising original writ powers (Article 32 of the Constitution of India, 1950) or writ powers while hearing a civil appeal arising out of a writ petition after grant of special leave (Article 136 of the Constitution of India, 1950).
11. With certainty, it can be said that, Cicily Kallarackal (Supra) is a judicial pronouncement that whittles down, nullifies, curtails, abrogates, dilutes and takes away the power conferred on the High Courts by the Constitution of India, 1950 to enforce Fundamental Rights and other rights that can validly be claimed by a party which, in terms of previous decisions of the Supreme Court itself [L. Chandra Kumar (Supra)], the Supreme Court cannot.
12. Dismissing a writ petition or a civil revisional application wherein an order of the SCDRC or the DCDRF is under challenge without even looking into the ground of challenge and the nature of right sought to be enforced by blindly following the decision in Cicily Kallarackal (Supra) is not a proper exercise of discretion.
13. To reconcile the conflicting views, the decision in Cicily Kallarackal (Supra) should be read as one which lays down the law that interference with the orders of NCDRC under Section 21 (a) (i) and Section 27 of the CPA would not be permissible by way invoking the writ jurisdiction of the High Court in absence of any of the exceptions summarized in Whirlpool Corporation (Supra) being satisfied.
14. NCDRC, which is a creature of the CPA, does not have the power to decide on the question of constitutionality of the provisions of the CPA, and if such question incidentally arises while the order of NCDRC is under challenge in any writ petition preferred under Article 226 of the Constitution of India, 1950, then it would be proper to hold that the High Court should decide the same at the first instance exercising the powers of judicial review contained in Article 226 of the Constitution of India, 1950. Moreover, NCDRC does not enjoy any exalted status that its orders would not be subject to judicial review, whatever be the nature of grievance that a party may have in relation to it.
15. It is important to note that, apart from the power that NCDRC is empowered to exercise under Section 21 (a) (i) and Section 27 of the CPA, it can exercise appellate power under Section 21 (a) (ii) of the CPA and revisional power under Section 21 (b) of the CPA thereof. No doubt, an appeal would lie before the Supreme Court against an order passed by the NCDRC either under Section 21 (a) (i) or Section 27 of the CPA, but Cicily Kallarackal (Supra) fails to answer as to what would be the legal position if a writ petition is presented before a High Court challenging an appellate order under Section 21 (a) (ii) of the CPA, or a revisional order under Section 21 (b) of the CPA, against which a statutory right of appeal before the Supreme Court is not provided in the CPA. Thus, Cicily Kallarackal (Supra) cannot be read as an authority laying down the law that no order passed by NCDRC, irrespective of the power exercised by it, would be amenable to challenge before the High Courts, given the limited right that the CPA confers for presenting appeals to the Supreme Court and that an appeal cannot be presented against an order passed by the NCDRC either under Section 21 (a) (ii) of the CPA or Section 21 (b) of the CPA.
16. The High Courts have the jurisdiction to entertain writ petitions against appellate (Section 21 (a) (i) of the CPA) and revisional (Section 21 (b) of the CPA) orders of the NCDRC.
17. It is incorrect in law to state that if in a writ petition under Article 226 of the Constitution of India, 1950, the order of NCDRC is under challenge, the High Court must dismiss the writ petition irrespective of the grounds on which such order is challenged.
18. Caution: Under Article 227 of the Constitution of India, 1950, the High Courts have the power of superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction. Clauses (2) and (3) of Article 227 of the Constitution of India, 1950 contain provisions empowering the High Courts to exercise control over the courts subordinate to it in the manner as ordained. Reading Article 227 of the Constitution of India, 1950 as it is, it admits of no doubt that NCDRC is not a tribunal over which the High Courts can or may exercise its power of superintendence. Any application under Article 227 of the Constitution of India, 1950 challenging an order of NCDRC would, therefore, not be maintainable before a High Court.