Writ Courts Can't Adopt 'Come What May Attitude' In Contractual Matters When Actions Of Public Functionaries Are Manifestly Arbitrary: Karnataka HC
The Karnataka High Court has observed that ordinarily, Writ Courts do not grant indulgence in matters involving contract and non-payment of contractors' bills, more particularly when disputed facts are involved. Aggrieved parties can work out their remedies by an ordinary civil suit or by invoking arbitration clause, if there be one.However, it added that Courts should not adopt callousness...
The Karnataka High Court has observed that ordinarily, Writ Courts do not grant indulgence in matters involving contract and non-payment of contractors' bills, more particularly when disputed facts are involved. Aggrieved parties can work out their remedies by an ordinary civil suit or by invoking arbitration clause, if there be one.
However, it added that Courts should not adopt callousness or 'come what may attitude' in contractual matters if the actions of public functionaries are manifestly arbitrary and unjust.
"This is not a happy thing to happen. In every such case the contention of matter being contractual in nature cannot silence the inner voice of the Constitution. Judges, to be judicious ought to keep themselves abreast of what is happening around."
"Where the arbitrariness and unjustness in actions of the public functionaries/bodies galore from the record, the contention of 'contract', disputed facts, alternate remedy (like suit or arbitration) cannot be countenanced to deny rightful relief to a scrupulous litigant in constitutional jurisdiction. The deserving litigants cannot be driven away from the portals of court by quoting some theories of constitutional jurisprudence or of administrative law. The mandate for fairness in the public functions will fail, if the functionaries do not keep in view the angle of justice to the aggrieved. A view to the contra, would defeat the broad delineation of writ remedies constitutionally internalised freeing the system from the shackles of traditional English Law of Writs."
A single judge bench of Justice Krishna S Dixit thus allowed the petition filed by a contractor M Chiranjeevi who was not paid by the Government and its Tourism Development Corporation his final bills despite certificate of completion of the tender work.
The bench said, "A message should loudly go to the quarters that be, that the courts would not tolerate indolence on the part of public bodies when interest of the citizen is put to peril."
Accordingly it directed the Corporation to pay to the petitioner a sum of almost Rs. 35 lakhs plus the retention amount, if any, with interest at the rate of 12% per annum along with a cost of Rs. 2 lakhs.
Case Details:
The building in question after renovation in terms of the tender was handed over in April 2017 and Certificate of completion of work was issued in November that year. However, in April 2018, the Managing Director of the Corporation issued a notice refusing to clear the Petitioner's bills, stating that the work was not satisfactorily accomplished. The Assistant General Manager of the Corporation sent another notice in May 2018, enlisting 7 defects in the work and warning the petitioner of deducting 10% of the amount if the said defects are not addressed in 10 days.
The Petitioner moved the High Court against such notices. He claimed that the District in-charge Minister, the Transport Minister, the Vice-Chairman of the Vidhana Sabha and MPs & MLAs of the area concerned had attended the inaugural function of the accomplished structure in April 2017. However, not even one them had raised a little finger about the quality of the work back then. It was only after that the bills were generated that such notices came to be issued.
Findings:
The Court noted that the respondent-authorities had already taken possession of the property back in April 2017 and having certified satisfactory completion of the work, they could not now turn around to complain that the work has not been done satisfactorily.
"It hardly needs to be stated that the 'State' and its instrumentalities should conduct themselves as model litigants than to tread on lose soil of technical objections...What bewilders this Court is, the enormous delay culpably brooked by the respondents in sending negative response to the petitioner."
Dismissing the contentions of the respondents that petitioner should be relegated to arbitration, the bench said that only a genuine dispute merits reference for arbitration and not 'fictional disputes'.
"Question of invoking arbitration clause arises when there is a "true dispute" between the parties. There being no contentious issue about the completion of the tender work and there being specific reports about satisfactory completion of the work, petitioner cannot be compelled to go for arbitration on the basis of a "make believe dispute"."
The contention of the respondents that the petition involves disputed questions of fact and therefore, a Writ Court cannot undertake the adjudication, was also dismissed by the court. It observed,
"It is not that every disputed question of fact should deter the Writ Court from examining the matter. A dispute which otherwise can be fairly adjudged on the basis of pleadings of the parties accompanied by the evidentiary material on record, cannot be relegated to adjudication elsewhere, more particularly when the respondents happen to be the governmental bodies answering the definition of 'State' under Article 12."
It added, "It is not that the so-called dispute squarely falls within the realm of private law, either; there is Karnataka Transparency in Public Procurements Act, 1999 and Rules promulgated thereunder. There are sufficient elements of public law. A contract to which the State is a party, does not create an island completely immune from judicial review under Article 226 & 227."
Case Title: M Chiranjeevi v. State of Karnataka
Case No: WP NO 46302 of 2018
Citation: 2022 LiveLaw (Kar) 350
Date of Order: September 3, 2022
Appearance: Advocate Ashok B Patil for petitioner. AGA Vinod Kumar M for R1 & R3. Advocate Gururaj Joshi for R2.