The High Court
Case Details
1 THE HIGH COURT OF MEGHALAYA AT SHILLONG. W.P.(C) No. 288 of 2012 Cement Manufacturing Company Ltd A Company incorporated under The provisions of Companies Act, 1956 And having its registered office Situated at Lumshong, P.O. Khliehriat in the district of Jaintia Hills, Meghalaya-793200 Represented by Sri Vijay Kumar Agarwal, the DGM-Accounts and Finance of the petitioner Company And resident of Mayur Garden, A.B.C., Guwahati-781005 -Vrs- 1. Union of India, Represented by The Secretary to the Government Of India, Ministry of Power, New Delhi. 2. NHPC Limited, Subansiri Lower Hydroelectric Project, P.O. Gerukamukh, District-Dhemaji, Assam ::::::: Petitioner 3. General Manager, NHPC Limited, Subansiri Lower Hydroelectric Project, P.O. Gerukamukh, District-Dhemaji, Assam. ::::::: Respondents BEFORE THE HON’BLE MR JUSTICE SR SEN For the Petitioner For the Respondent s Date of hearing : : : Dr. A. Sharaf, Advocate
Legal Reasoning
Mr. R.K. Dev Choudhury, Adv 19.11.2013 Date of Judgment & Order : 20.11.2013 2 JUDGMENT AND ORDER The instant writ petition is directed against non-reimbursing the entry tax amount @ 4% on the cement, which was supplied to the respondent No. 2. 2. The brief fact of the case in a nutshell is that: “The present petition is filed under Article 226 of the Constitution of India challenging the action of the Respondent No. 2 in not reimbursing the entry tax amount @ 4% on the cement which was supplied to respondent No. 2 by the petitioner which is the statutory rate of entry tax on cement as per the Entry Tax Act, 2008. After the submission of tender bid by the petitioner wherein the petitioner had quoted the rate of entry tax @ 2%, the rate of entry tax got changed to 4% in the Entry Tax Act, 2008. The respondent No. 2, however, even after the presence of one clause in the Tender Document stating that in case of statutory variation tax would be adjusted/reimbursed according to the variation in statute, refused to reimburse the entry tax to the petitioner @ 4%. Hence the present writ petition”. 3. Being aggrieved by the action of the respondents, the petitioner approached this court by way of this instant writ petition. 4. Heard Dr. A. Sharaf, learned Sr. counsel appearing for the petitioner who submits that inspite of the fact that respondents are bound to reimburse the entry tax amount @ 4% to the petitioner which is the statutory rate of entry tax on cement, but respondents refused to do so. The learned counsel also further argued that, on the basis of the assemble debate at Assam, petitioner quote “Entry Tax @ 2%”. However, the entry tax got changed to 4% in the Entry Tax Act, 2008. So necessary direction may be passed. 5. On the other hand, learned counsel, Mr. R.K. Dev Choudhury appearing for and on behalf of the respondent No. 2 and 3 submits that the respondent’s writ petition is not maintainable, as petitioner had alternative remedy, so the petition filed by the petitioner is not maintainable. Hence, it may be dismissed. The learned counsel further argued that it is an admitted fact that 3 at the time of tender, the rate of entry tax was 12.5% which is an admitted fact by both the parties, and to support his submission, the learned counsel relied on “State of Manipur and Others versus Moirangthem Chaoba Singh and Others” reported in GLT 2006 Vol. I Page 19. 6. The learned Sr. counsel, Dr. A. Sharaf to counteract the submission advanced by the respondent’s counsel relied on SCC 2011 Vol. V Page 697 Para 33. 7. Before examining the merits of the case, since maintainability has been raised, let me answer the said question. On perusal of the record and going through the agreement available therein at Page 63 annexed with Affidavit-in-opposition, it appears that, there is an Arbitration Clause which speaks as such: “Except as otherwise provided in Clause 36.1 herein before, all dispute or difference in respect of which the decision has not been final and conclusive arising between the Contractor and the Purchaser, in relation to or in connection with the Contract, shall be referred to arbitration”. 8. So from the record, it is undisputed that, there is an alternative remedy available to the petitioner which is the forum of arbitration. 9. Hon’ble Supreme Court in the case of “State of UP and Others versus Bridge and Roof Company (INDIA) Ltd” reported in (1996) 6 SCC 22. Para 21 of the SCC in State of UP case (Supra) reads as follows: “There is yet another question substantial reason for not entertaining the writ petition. The contract in question contains a clause providing inter alia for settlement of disputes by reference to arbitration (clause 67 of the contract). The arbitrators can decide both questions of fact as well as question of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should not follow and adopt that remedy and invoke the extraordinary jurisdiction of the High Court under Article 226. The existence of an effective alternative remedy – in this case, provided in the contract itself – is a good ground for the court to decline to exercise its extraordinary jurisdiction under Article 226. The said article was not meant to supplant the existing remedies at law but only to supplement them in certain well-recognized situations. As pointed out above, the 4 prayer for issuance of a writ of mandamus was wholly misconceived in this case since the respondent was not seeking to enforce any statutory right of theirs nor was it seeking the enforce any statutory obligation case upon the appellants. Indeed, the very resort to Article 226 – whether for issuance of mandamus or any other writ, order or direction – was misconceived for the reasons mentioned supra”. 10. Similarly, on perusal of the Judgment given by the Division Bench of the Gauhati High Court as referred above, Para 26 reads as follows: “For the aforesaid reasons, we hold that a writ of mandamus does not issue for enforcement of private rights, nor is it available for obtaining interim relief till cross-claims between the parties are determined in arbitration wherefrom such a provision is made in the contract itself. It is axiomatic that relations between the parties in concluded non-statutory contract are governed by the terms and conditions thereof; and rights and obligations of parties inter se are required to be decided elsewhere. The relations are purely contractual and rights and obligations are governed only by the contract. A writ does not lie for enforcement of contractual rights. This position is clear from long line of authorities some of which are hereinabove. We do not propose to burden this judgment with other authorities or pronouncements and we have referred to the most relevant judgment from out of the catena of decisions. The view taken by the learned Single judge of this Court in Swadesh Lal Ropy vs. State of Assam and Ors., reported in 2001 (1) GLT 332 and Tayum Balli and Ors. Vs. Union of India and Ors. reported in 2002 (3) GLT 416 is required to be confined to the relief that was granted to the petitioners therein. The observations made therein that “there is need to protect public interest and also to protect individuals against unfair exercise of administrative power, such as, estoppels, natural justice, fundamental rights, writ jurisdiction etc. “ are unsustainable. The observation made therein that contract between Government and private individuals is not merely a matter of private law but, to some extent, of public law as well is untenable being contrary to the decisions of the Apex Court referred to hereinabove. The view taken in the decisions completely overlooked and ignored the distinction between the dispute that arise out o concluded non-statutory contract and the dispute arising even at the threshold before entering into the contract. The proposition has been too broadly stated relying upon International Airport authority’s case, which is an authority for the proposition that the State on its accord cannot confer the benefit of any contract in an arbitrary manner and contrary to the terms and conditions notified in the matter of inviting tenders. The decisions are accordingly overruled. In Green Valley Industry Vs. State of Assam and Ors. , reported in 7999 (1) GLT 604 there is no ratio as such laid down since the Division Bench of this Court did not decide any question as to maintainability of the writ petition in the matter of 5 enforcement of contractual obligations. There is no declaration of any law as such touching upon and which may have any bearing upon the distinction between the private law and public law. The decision is confined to the facts of the case” 11. After considering the facts and circumstances of the case, and taking into consideration the observation made by the Hon’ble Apex Court as well as the Division Bench of the Gauhati High Court, I am of the considered view that the petitioner had alternative remedy to redress their grievances. Hence, I am of the further view that, they should not have approached the writ court to invoke the power under Article 226 of the Constitution of India. We must remember that Article 226 should not be allowed or used unnecessarily, unless and until all other alternative remedy is exhausted. Petitioner is at liberty to approach the appropriate forum as per the terms and conditions of the agreement. 12. Since the petition is not maintainable as discussed above, I am not further discussing or commenting anything on the merit of the case. Let the party approach the appropriate forum as per the terms and conditions of the
Decision
agreement. Hence, the instant writ petition is dismissed and stands disposed of. 13. No order as to cost. JUDGE D. Nary