Presence Of An Arbitration Clause Is Not A Limit To The HC Writ Jurisdiction:
Union of India & Ors. v Tantia Construction Pvt. Ltd, [2011 (4) SCALE 745]
The Respondent (Tantia Construction Pvt. Ltd) filed a writ petition in the Patna High Court against the Petitioners (Union of India & Ors.), seeking, among other things, the issuance of a writ like Certiorari to quash the order dated August 18, 2008, issued by the Deputy Chief Engineer (Construction), Ganga Rail Bridge, East Central Railway, Dighaghat, Patna, directing the Respondent to execute the enlarged/extended quantity of the contract. The Respondent also requested a writ of mandamus directing the Petitioners to allow it to finish the reduced amount of work relating to the construction of the Rail Over-Bridge at Bailey Road, which did not include the additional work in respect of the extended portion of the Viaduct, close the contract, and make payment for the contract work that it had completed.
The Single Judge Bench of the Patna High Court accepted the Respondent's plea, ruling that there had been no breach of the agreement between the Petitioners and the Respondent because the Petitioners had amended the arrangement by tendering the extended work separately. As a result, the High Court held that the Respondent could not be forced to do the complete job and that the Railways were free to have the Viaduct built independently by any other contractor, as it had planned previously. The High Court went on to say that while the Respondent was willing to do the remaining work from the left-over tender, the Railways' decision to cancel the entire contract and re-tender the entire block could not be at the risk and expense of the Respondent. The High Court also stated that the Respondent could not be forced to pay for work that it had never agreed to do. The Writ Petition was granted based on these findings, and the Railways were advised to clear the Respondent's payments for work previously accomplished as soon as possible.
The Petitioners subsequently took the case to the High Court's Division Bench for review. The Division Bench upheld the verdict of the learned Single Judge and rejected the appeal in its judgement and order of July 29, 2009. A response to the Division Bench's dismissal of the Petitioners' appeal, the Petitioners filed a Special Leave Petition in the Supreme Court.
On the writ petition's maintainability due to the Arbitration Clause in the parties' agreement, the Supreme Court concluded that it is now well-established that an alternative remedy is not an absolute bar to the invocation of the High Court or Supreme Court's writ jurisdiction. The court decided that the constitutional powers vested in the High Court or the Supreme Court cannot be fettered by any other remedy available to the authorities, based on the many precedents relied on by the respondent. Injustice, whenever and wherever it occurs, must be declared anathema to the rule of law and the principles of the Constitution.
The Court's reasoning was concentrated on assessing the nature of the bar created to Writ Remedy by the availability of an alternative effectual remedy, even though the Petitioners' argument revolved around the legislative provisions under Sec. 5 of the Act.
The Court appears to have believed that the inclusion of an arbitration agreement limits writ jurisdiction only to the extent that an arbitration clause qualifies as an effective alternative remedy rather than as a legislative bar to Writ Jurisdiction.
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