The High Court · 2025

Petition Under section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to suspend the operation of impugned order dated 23.12.2024 passed by the -"{t. Learned Single ..ludge in W.P.No.18531 of 2024, pending disposal of the writ appeal. Counsel for Appellant : SRI BAGLEKAR AKASH KUMAR Counsel for Respondent No.1 : SRI $.RAMACHANDRA RAJU Counsel for Respondent Nos,2 & 3 : SRI M.AJAY KUIVU.iI Counsel for Respondent No.4 : SRI R.ANURAG The Cqurt made the following JUDGMENT : = {' THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL AND THE HON'BLE DR.JUSTICD G. RADHA RANI WRIT APPEAL No.57 of 2o25 JTIDGMENT: (Per the Hon'ble the Acting Chief Justice Sujog Paul) With the consent, frnally heard Sri Baglekar Akash Kumar, learned counsel for the appellant; Sri C. Ramachandra Raju, learned counsel for respondent No. 1; Sri M. Aj ay Kumar, learned Standing Counsel for respondent Nos.2 and 3 and Sri R.Anurag, learned Standing Counsel for the Telangana State Road Tralsport Corporation, .for respondent No.4.

2. This intra-Court appeal takes exception to the order passed by the learned Single Judge in W.P.No.1853i of 2024, dated

23.t2.2024

3. The brief facts narrated by the parties are that. on 13.05.2019, respondent No. 1/writ petitioner was given a contract/licence to run a stall at Mahabubnagar Bus Station to sell Vijaya Dairy products. The said allotment was extended from time to time.

4. Respondent No.2 allegedly found that respondent No. 1/writ selling non-Vijaya Dairy products at the stall. petitioner e,rl t': 2 Thus, uide letter dated 18.06.2024, the allolment of stall was cancelled

5. The case of the present appellant is that eLfter ceLncellation of the allotment of respondent No.1/writ petil:ioner, respondent Nos.2 and 3 gave the contract to the appellanl. on Ilj.O6.2O24 to operate the stall for selling Vijaya Da iry prroducts at Mahabubnagar Bus Station for a period of six months, {x- !,

6. Respond,:nt No. l/writ petitioner, feeling rrggrierred with the cancellation -order dated 18.06.2024, filed the lrrstant writ petition mainly on the ground that cancellation of cont.ract/licence entails civil conseque nces and therefore, the impullned rtrder dated

78.06.2024 is liable to be interfered with.

7. The learned Single Judge, after considering various judgments of the Supreme Court, came to hold thert since the impugned ordt:r dated 18.06.2024 is admitted.ly pasrsed without following the principles of natural justice and the said principles were not expressly or impliedly excluded, the said principles are indeed appliczrble. In the absence of following the saict principles, the impugned c,rder in the writ petition was set aside. ,a4 l'-, a r'-'f 3

8. Learned counsel for the appellant submits that the appellant got herself impleaded in the writ proceedings and along with the application for vacate stay, hled a three-Judge Bench judgment of the Supreme Court in M/s. Radhakrishna Agarwal v. State of Biharr. In view of this judgment, the principles of natural justice are inapplicable in contractual matters. Thus, although it is admitted that the contractual matters are not beyond the scope of judicial review, non-following the principles of natural justice cannot be a reason for interference. The said judgment cited by the appellant has not been considered by the learned Single Judge. On more than one occasion, learned counsel for the appellant submits that the judgment in the case of M/s. Radhakrishna Agarwal (supra) has not been considered and distinguished at any later point of time by the Supreme Court.

9. Learned counsel for respondent No.1/writ petitioner submits that what has been granted to respondent No. l/writ petitioner was a licence, which is evident from 'Deed of Licence' (Ex. P-a) The judgment cited by the appellant relates to contractua-l matters and therefore, no fault can be found in the order of the learned Single Judge. It is submitted that the appellant had no locus ' (tgtt) I scc +st 4 standi to participate before the Writ Court because the allotment in her favou;- was granted after cancellation of allotment of respondent No. 1/writ petitioner. Learned coursel for respondent No. 1/writ petitioner further stated that the r:ontract for respondent Nc.1/writ petitioner was extended up to Augr-rst, 2025.

10. Learnecl Standing Counsel for respondr:nt No.4 submitted that Clause '.2'7 of t]ne Deed of Licence shows bhat it is in fact a 'contract' ancl if the conditions are breached, t]re sarrLe was liable l t' 'j to be cancelle d.

11. The parties confined their arguments to 1_he extent indicated above.

12. We have heard the parties at length and pe.rused the record Findings:-

13. The case of the present appellant is solely based on the judgment of thr: guplsrne Court in the case of M/s. Radhakrishna Agarwal (supra). As noticed above, learned counsel for the appellant reitr:rated that the said judgment has not been considered strtrsequently. We find that the said cc,ntention is incorrect for the reason that the judgment in the case of M/s. #r 'a ,T. 5 Radhakrishna Agarwal (supra) was recently considered by the Supreme Court in the case of Subodh Kumar Singh Rathour v. The Chief Executive Officer and othersz. In paragraph No.35 of the said judgment, the Supreme Court considered the earlier judicial pronouncement in the case of M/s. Radhakrishna Agarwal (supra), thereafter, the legal journey was considered in ertenso in paragraph No.49, which was recorded as under: I "49.In Verigamto Naveen v. Govt. of A.P. & Ors. reported in (2OO 1) 8 SCC 344 this Court held that where a breach of contract involves the decision-making authorit5z exceeding its power or violating the principles of nature justice or its decision being borne out of perversity, then such cancellation of contract can certainly be scrutinized under the writ jurisdiction. This is because such an exercise of power by the authority is apart from the contract. The relevant observation reads as under: - "21. I.) Though there is one set of cases rendered by this Court of the type arising in Radhakrishna Agarwal case 1,1977) 3 SCC 457 : AIR 1977 SC 14961 much water has flown in the stream of judicial review in contractual field. In cases where the decision-making authority exceeded its statutory power or committed breach of rules or principles of natural justice in exercise of such power or its decision is perverse or passed an irrational order, this Court has interceded even after the contract was entered into between the parties ald the Government and its agencies.. [...] Where the breach of contract involves breach of statutory obligation when the order complained of was made in exercise of statutory power by a statutory authority, though cause of action arises out of or pertains to contract, brings it within the sphere of public 1aw because the power exercised is apart from contract. The freedom of the Government to enter into business wittr anybody it likes is subject to the condition of reasonableness and fair play as well as public interest. After entering into a contract, in caacelling th.e contract which is subject to terms of the statutory provisions, as in the present '? Civil Appeat No.6't4l ot 2024 decidBd on09.o7.2024 & a4\' I i I 6 case, i t cannot be said that the matter fal ls pure Ly in a tua.l field. Therefore, we do not think il wr,uld be contr.r€ alprop:iate to suggest that the case on harLd is a matter aris_ing purely out of a contract and, theref<rre, interference under .,\rticle 226 of the Constitution is not <:alled fc,r. 11_,i" contention also stands rejected.,, (Emphasis supplied),,

74. In paragraph No.55 (iv) ald (v), it was lroigna ntly held AS under: "55. The::e.after, this Court in its decision in M.p. power Management Co. Ltd., Jabalpur v. Sky power Southeast Solar India h/t. Ltd. & Ors. reported ii 12ctZs1 2 SCC 703 exhaustivell. delineated the scopi of judicial review of the courts in contractual disputes .o.r."..,i.rg ptLblic atrthorities. The aforesaid decision is in the following paits:_ (i) to (iii) {'l-';* (iv) Exe r,:ise of Writ Jurisdiction after Termination or Breach of the Contract: - A relief by way of a writ unde:: Article 226 of the Constitution will also lie against " t"r-i.r.1ior. o. , .breach of a contract, wherever such action is fctrnd to either be palpably unauthorized or arbitrary. e"f"." t,ii.rirg ,r*ry the p-artr es to the remedy of civil suit, the courts -Lst O. mindful to see whether such termination or b."r"f, *." within the contractual domain or whether tht: Siat" was merely purporting to exercise powers under thc contract for afly ulte nor motive. Any action of the State to car_rcr:l or terminatr: a contract which is beyond the terms agreed thereunder will be amenable to ihe writ ju risJiction to ascertai.n if such decision is imbued with aih,ir:rariness or influenr:ed by aly extraneous considerations. .Ihe rele.*ant observati)ns read as under: - , bya of sit "xi. Termina tion of coutract can a tions. If for instance a cont varl€. terminated person who is demonstra ted, v anv n eed for anv arzument,tobe the per son, comDletelv unauthori sed to cancel the contract mav not be arrv necessitv to drive the party unnecessary grdeal of a prolix and avoidable ro lit.i IT a case where there is no dis e to be resol ved also be conducive in public interest. aDart ensu1.1n g the tal Risht of the Det n arlse in a wide ="t t" /ithout who is , there to the und of r such q,ould itioner ention b the tion. The in Court #r.:. \ '7 under Article 14of the Constitution of India When it cbrnes to a cha.llenge to the termination of a contract bv the State . which is a non-statutorv bodv. which is acting in DurDorted exercise of the power s/rishts under such a contract. it would be over s1m a comolex issue to lay down any inflexible Rule in favour of the Court turnin awav the petitioner to alternate Fora. Ordinarily, the cases of termination of contract by the State, acting within its contractual domajl, may not lend itself for appropriate redress by the Writ Court. This is, undoubtedly, so if the Court is duty- bound to arrive at hndings, which involve. untying knots, which are presented by disputed questions of facts. Undoubtedly, in view of ABL Limited (supra), if resolving the dispute, in a case of repudiation of a contract, involves only appreciating the true scope of documentary material in the tight of pleadings, the Court may still grant relief to an applicalt We must enter a caveat. The Courts are today reeling under the weight of a docket explosion, which is truly alarming' If acase involves a large body of documents and the Court is called upon to enter upon findings of facts and involves merely the construction of the document, il may not be an unsound discretion to relegate the party to the alternate remedy. This is not to deprive ihe Court of its constitutional power as laid down in ABL {supra)- It all depends upon the facts of each case as to whether, having regard to the scope of the dispute to be resolved, whether the Court will still entertain the petition. xii- In a case the State is a parw to the contract and a breach of a contract is alle d again st the State, a civil ro riate Forum is undoubtedl action in the a maintainable But this is not the end of the matter Having reoard to the oosition of the State and its dutv to act fairlv and to eschew arbitrariness in all its remedy on the resort to the constitutional actions cause of action . that the action is arbit IS permissible (See in this regard Kumari Shrilekha State of U.P. and others). Vidyarthi and others v However, it must be made clear that every case involving breach of contract by the State, cannot be dressed up arrd disguised as a case of arbitrary State action. While the concept of arr arbitrary action or inaction cannot be cribbed or confined to any immutable mantra, and must be laid bare, with reference to the facts of each case, it cannot be a mere of breach of contract that would suffice allegation tbe involved in the case must he What mu action /inaction. which must be palpablv unreasona ble v Dnncl e. An or absolutelv irrational and bereft of action . which is completel malaftde dins on the described as a fair action and may, The question must facts. anount to arbitrarv action. x {:- :e ^4 ,{; I I l l-a 8 be posed and answered by the Court and all vre intencl to lay down is that there is a discretion available to the Court to gralt relief in appropriate cases." (Emphasisr r;upplied) (v) O:her relevant considerations for Exer,:ise of Writ Jurisdit:tion: - Lastly, this Court held that the courts, may entertain a cofltractual dispute under its writ jurisdiction where (I) there is any violation of natural justice or (II) where doing so would serve the public interest or (III) rvhqlg though the facts are convoluted or dispruted, but th,: courts have already undertaken aI in-.Cepth scrutinv of the same provided that the it was p,1115gsn1 16 2 sound exercise of its writ jurisdiction. 'l'he relevant observations read as under: - tiii. A lodestar. which mav illumine the r)ath of the Co-rrt. would be the dimension of publi<: interest subserved by the Court interferi nq in the matlrer. rather than relesatins the matter to the alternate Fonrm xiv Another relevant criteria is, if the Court has entertained the matter, then while it is not tert,ooed that the Court should not relesate the parw at a le.ter stag,l- qrylinarilv. it would be a qermane considerarjpn, whiqh to com Dlete whe.t it herd Irrav sl.arted prov.ided it is otherwise a sound e:<ercise of ur..sdiction to decide the matter on merits rn the Writ Petition itself. xv- Violation of natural iustice has been recogrrised as a qlound s the pre sence of a public leivr elemerLt alc[ cal found a cause of action premised orr breach of ArJcle 14. Singh a::rl Other.s (su:ra)1." ISee Sudhir Kumar rsuade the Court (Emphasis s;upplied)" (Emphasrs Supplied)

15. Since a subsequent three-Judge Bench in Subodh Kumar Singh Rathour (supra) has considered and distinguistred the view taken in M/s,, Radhakrishna Agarwal (supra), the said view cannot improvr: the case of the present appellar:.t. Sir:Lce the case of the present. appellant is solely based on the r:ontention that in contractual matters the principles of natural. justice are not required to be followed, the same cannot be uptLeld in view of the 9 recent judgment, as such, no relief is due to the appellant. other words, the writ jurisdiction cal be invoked even In contractual matters if the principles of natural justice are violated.

16. Siqce the principal argument of the appellant failed, the appeal must also fail. The learned Single Judge has taken a plausible view, which does not warrant any interference (see Narendra & Co. (P) Ltd. v. Workmen3) **.-rl L7 . In the result, the Writ Appeal is disrnissed. There shall be no order as to costs. Miscellaneous applications, if any, pending shall stand closed. 3(2016) 3 scc 340 //TRUE COPY// SD/. K. SAILESHI D PUW REGISTRAR SECTION OFFICER

1. one CC to SRI BAGLEKAR AKAIHIPlVllR'.Advocate [QPUQI i. il; cc i" snTC.MMACHANDRA RAJU' Advo91!e [oPUC] ;. il; cd i" sCr r/.AJAY KUMAR' Advocate (oPUC) 4. O;" CC io Eni R.ANURAG, Advocate (OPUQ) 5 Two CD CoPies To SA : _t *:. ,? -{ 0 i (i,t iir5 I 1, - ii -;. t'..?t s -- t./ HIGH COURT DATED:27 t0112025 JUDGMENT {'-';' WA.No.S7 of 2025 DISMISSING THE W.A WITHOUT COSTS. 7 5 /f)2/ /7