Dismissed

Prabhat Enterprises and Another v. State of U.P. and 2 Others

Allahabad HC25 Feb 2019WRIC/8497/2018

Case brief

AI extract

What is this about?

Writ petition challenging non-payment of contract dues was dismissed. The court held that the presence of an arbitral mechanism in the agreement barred intervention under Article 226, despite no dispute over the quantum of dues, as the legislature intended disputes to be resolved via arbitration.

What did the court decide?

Writ petition dismissed; petitioner directed to avail the remedy under the arbitral clause in the agreement.

Prabhat Enterprises and Another Vs State of U.P. and 2 Others — Allahabad HC (2019) — LawSathi Research

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Chief Justice's Court

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Case :- WRIT - C No. - 8497 of 2018

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Petitioner :- Prabhat Enterprises And Another Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Nalin Kumar (Sharma),J.P. Pandey Counsel for Respondent :- C.S.C.

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Hon'ble Govind Mathur,Chief Justice Hon'ble Saurabh Shyam Shamshery,J.

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Heard learned counsel for the petitioner and learned Standing Counsel.

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This petition for writ is preferred to have an appropriate writ, order or direction for the respondents to pay a sum of Rs.94,29,665.40 with 18% interest to the petitioner for the work done by him in pursuance to an agreement no.5/SE/2013-14 executed between the petitioner and the Superintending Engineer, Ganga Nahar Sanchalan Mandal, Meerut.

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It is submitted by learned counsel for the petitioner that there is no just and valid reason for not making the payment aforesaid to the petitioner after completion of the work given. It is further submitted that there is no dispute between the parties about the dues which are to be satisfied by the respondents.

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Per contra, the stand of learned Standing Counsel is that the work awarded to the petitioner under the agreement concerned was a part of a scheme that was partly funded by the Central Government and the amount due is required to be paid by the Central Government and that is not a liability of the State Government.

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The Union of India and its functionaries are not party to the writ proceedings.

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An application is preferred by the petitioner to implead Secretary to the Government of India, Jal Sansthan Ganga Sanrakshan Evam Nadi Vikas Mantralaya, Sharam Shakti Bhawan, Rafi Marg, New Delhi.

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On going through the agreement concerned, we have noticed that clause 36 of that prescribes a complete mechanism for dispute redressal between the parties through arbitral proceedings.

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The only argument advanced by learned counsel appearing on

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behalf of the petitioner for not availing the arbitral proceedings and to approach this Court under Article 226 of the Constitution of India is that the amount said to be due is not at all disputed and as such there is no need to go for arbitral proceedings. To substantiate the argument, reliance is placed by him on a judgment dated 3rd July, 2015 passed by Hon'ble Supreme Court in Civil Appeal No.4932 of 2015, Naseem Ahmad Vs. State of U.P. and others.

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On going through the judgment aforesaid, it is apparent that in the case aforesaid the Apex Court allowed the writ proceedings looking to the peculiar facts of the case. The Apex Court noticed that amount being admitted by the respondentgovernment that may be paid without entering into any arbitration.

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In the case in hand, there is a dispute as to whether the due amount is required to be paid by the Central Government or by the State Government or by the State Government only after receiving the necessary grant from the Central Government. The law making authority enacted the Arbitration and Conciliation Act, 1996 with an object for expeditious and adequate disposal of disputes, especially the commercial dispute between the parties through arbitral proceedings and a complete mechanism for resolution of such disputes is prescribed in the legislation aforesaid.

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The mechanism given under the Act of 1996 can be avoided by entertaining a petition for writ under Article 226 of the Constitution of India sparingly and only in exceptional circumstances. Merely on the count that the amplitude of the dispute is narrow or the dispute may be admitted by a party to the dispute is not a reason sufficient to ignore the alternative dispute resolution mechanism prescribed under an agreement.

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In view of whatever stated above, we are not inclined to interfere in the matter under Article 226 of the Constitution of India. The petition for writ is dismissed. The petitioner is at liberty to avail the remedy under clause 36 of the agreement concerned.

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Order Date :- 25.2.2019 Bhaskar

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(Saurabh Shyam Shamshery, J.) (Govind Mathur, C.J.)

Prabhat Enterprises and Another v. State of U.P. and 2 Others

Case brief

What is this about?

What did the court decide?

Prabhat Enterprises and Another v. State of U.P. and 2 Others

Case brief

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What did the court decide?

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