Dismissed

M/s Ramesh Metals v. The Principal Secretary

Telangana HC16 Oct 2014WP/30917/2014

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging the termination of a construction agreement. Holding that disputes arising from concluded contracts belong to the private law field and require adjudication by civil courts, the Court refused to entertain the petition under Article 226. An interim application was disposed of as infructuous.

What did the court decide?

The Writ Petition is dismissed with liberty to the petitioner to file a civil suit for adjudication of the contract dispute.

M/s Ramesh Metals Vs The Principal… — Contract and Commercial Disputes | Telangana HC (2014)

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HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY

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WRIT PETITION No.30917 of 2014

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Date:16.10.2014

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Between: M/s Ramesh Metals, Vijayawada, Reptd by its Managing Partner-M.Ramesh

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..... Petitioner

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And: The Govt of A.P., reptd by its Principal Secretary, I & CAD Department, Hyderabad and two others.

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.....Respondents Counsel for the Petitioner: Sri Prasad Rao Vemulapalli Counsel for the Respondents: AGP for Irrigation and CAD (Andhra Pradesh)

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The Court made the following:

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ORDER:

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This Writ Petition is filed for a Mandamus to declare the action of respondent No.2 in terminating the L.S. agreement bearing No.29DC/2007-08, dated 03.08.2007, through letter No.DB/ATO.4/718M, dated 09.04.2014, as illegal and arbitrary. I have heard Sri Prasad Rao Vemulapalli, learned counsel for the petitioner and perused the record.

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The petitioner entered into an agreement on 03.08.2007 with respondent No.2 for execution of work relating to raising and widening of flood banks to 1986 standards of VLB from Km.70.000 to Km.90.600 including formation of W.B.M.Road. The petitioner pleaded that due to several breaches of the contractual obligations committed by the respondents, it could not maintain the desired progress in execution of the work, as a result of which, the work

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could not be completed within the stipulated contract period; that on the instructions of the respondents, the petitioner has applied for extension of contract from 24.07.2009 up to 20.03.2010; that the contract was accordingly extended up to 31.10.2011; that the petitioner has extended the validity of the bank guarantee up to 31.07.2015; and that subsequently, the petitioner has requested the respondents to close the agreement and release the amount, vide its letter, dated 11.09.2014. However, the petitioner has received the communication, dated 08.10.2014, along with which impugned letter, dated 09.04.2014, was also received to the effect that the agreement is cancelled with effect from 09.04.2014. The petitioner has questioned this action on the ground that this is in violation of principles of natural justice besides being against “canons of contract management.” Sri Prasad Rao Vemulapalli, learned counsel for the petitioner, made strenuous efforts to impress upon this Court to entertain the Writ Petition for adjudication on merits. He has submitted that due to fundamental breaches committed by the respondents, the petitioner could not complete the work in time and that, therefore, there is no justification for terminating the contract. But, however, this Court has not felt persuaded to entertain this Writ Petition for the reason that the dispute involved in the Writ Petition arises under a concluded contract. Ordinarily, Writ Petitions filed raising disputes arising out of concluded contracts are not entertained by this Court under Article 226 of the Constitution of India as such disputes fall in private law field. (See: M/s. Radhakrishna Agarwal & others vs State of Bihar & others, State of U.P. v. Bridge & Roof Co.(India) Ltd., Asstt. Excise Commr. v. Issac Peter). The present case does not fall in the line of cases where the exceptions are carved out by the Supreme Court such as ABL International Limited v. Export Credit Guarantee Corporation of India Limited and Mahabir Auto Stores & others Vs Indian Oil Corporation & others.

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The question whether the termination of contract in the instant case is illegal or not, needs to be adjudicated on appreciation of various disputed questions of fact. Such an exercise can be undertaken only by the competent civil Court in a properly instituted suit as the agreement does not appear to contain an arbitration provision.

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For the above-mentioned reasons, the Writ Petition is dismissed with liberty to the petitioner to avail the remedy of a civil suit.

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As a sequel to disposal of the Writ Petition, W.P.M.P.No.38661 of 2014 filed by the petitioner for interim relief is disposed of as infructuous.

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JUSTICE C.V.NAGARJUNA REDDY

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16^th October, 2014 DR

M/s Ramesh Metals v. The Principal Secretary

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M/s Ramesh Metals v. The Principal Secretary

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