Writ Jurisdiction Can't Be Invoked In View Of Arbitration Clause Except For Specific Circumstances: Gauhati High Court

Brief Facts:

The matter pertained to a termination order issued by Addl. Principal Chief Conservator of Forests (Respondent No.3) which terminated the Anupam Saikia's (Petitioner) contract for providing consultancy services for the supervision of widening/improvement of a four-lane road. The termination was made under clause 2.9.1 of the General Conditions of Contract. The Petitioner argued that the show-cause notice which formed the basis of the termination order, was vague and did not specify the alleged breach of contract.

The Petitioner further contended that the termination order prevented the Petitioner from participating in other tenders, as many tenders contain clauses that bar parties with terminated contracts from participating.

The Respondents argued that the Petitioner should utilize the arbitration clause in the contract agreement to challenge the termination. They contended that the show-cause notice was not vague and clearly indicated that the Petitioner's failure to deploy key personnel delayed the road widening project.

Observations by the High Court:

The High Court noted that the notice outlined several failures by the Petitioner, including not deploying key personnel at the project site, resulting in inadequate supervision of the road construction.

Despite receiving the show-cause notice, the Petitioner did not respond. Consequently, an order was issued terminating the contract. The termination order reiterated the consultant's consistent non-performance and lack of response.

The High Court noted that the contract agreement included an arbitration clause (Clause 8.4), which mandated that any unresolved disputes between the parties be referred to arbitration. Given this provision, the High Court held that the Petitioner should seek redress through arbitration rather than pursuing a writ petition.

Further, the Petitioner argued that the termination order effectively blacklisted or debarred them from participating in other tenders. However, the High Court found no evidence in the termination order indicating such a blacklisting.

The High Court referred to the decision of the Supreme Court in Union of India & Others vs. Tantia Construction Private Limited where it was held that the presence of an arbitration clause does not preclude the invocation of writ jurisdiction, but such invocation is discretionary. Similarly, in Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai & Others, it was held that writ jurisdiction could be invoked under specific conditions. The High Court noted that the Petitioner neither demonstrated a violation of fundamental rights nor principles of natural justice, nor did they showed that the proceedings were without jurisdiction.

Therefore, the High Court dismissed the petition but granted the Petitioner liberty to pursue arbitration as stipulated in the contract agreement.

Case Title: Anupam Saikia vs The State Of Assam And 6 Ors

Case Number: WP(C)/3688/2024

Advocate for the Petitioner: Mr. B D Konwar

Advocate for the Respondent: SC, Forest

Date of Judgment: 23.07.2024

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