Scope Of Article 226 Of The Constitution Of India: Important Judgments [Part-2]

SURYA CONSTRUCTIONS V/s STATE OF UTTAR PRADESH &ORS., CIVIL APPEAL NO. 2610 OF 2019, SUPREME COURT OFINDIA, DATE OF DECISION: 08.03.2019, CORAM: R.F. NARIMAN & VINEET SARAN,JJ. "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 ...

Scope Of Article 226 Of The Constitution Of India: Important Judgments [Part-2]

Shivam Goel

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Scope Of Article 226 Of The Constitution Of India: Important Judgments [Part-2]

Shivam Goel

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