Acurtie Contractors and Engineers vs State of U.P. and Others

Amitava Lala, J.—The writ petition has been filed by the petitioner claiming inter alia a huge sum of unpaid bills as agreed in M.O.U. between the parties, i.e., petitioner and the Allahabad Agricultural Institute, Deemed University, Allahabad. The petitioner further contended that the function of the University is in the nature of State, therefore, Article 12 of the Constitution of India is applicable.

The respondent has categorically taken a plea that such University is not a ''State'' within the meaning of Article 12 of the Constitution of India. It is managed by a private company of management, known as the "Board of Directors of Allahabad Agricultural Institute" and receives only a meagre part of its salary grant from the State of Uttar Pradesh. There is no Government control over the management of the institution. Only because the institute receives certain grant of amount of salary from the State Government, it cannot change the nature and character of a minority institution and bring it within the definition of ''State'' under Article 12 of the Constitution of India.

On the other hand, the petitioner contended before us that according to the respondents they have repeatedly requested our representative for the settlement of account. Annexure-8 to the writ petition is a Memorandum of Understanding in respect of the agreed amount, part of which has already been paid, leaving aside the remaining amount. Now a sum of Rs. 10,90,16,587 is due and payable by the University to the petitioner. Since there is no dispute with regard to the claim of the remaining part, the amount has to be paid by way of settlement of account. It is further stated that Income Tax Department has been paid certain amount on account of payment of such sum by the respondents.

However, we are of the view that whatever reason might be there for non-payment of the amount, it is a contractual liability, and not statutory liability, if any. Therefore, the same cannot be resolved in a writ court. It is not a dispute with regard to unjust enrichment, but a settlement of accounts and payment of a sum towards the petitioner.

Against this background, we are of the view that the law is very clear that the writ court cannot interfere as we have held in 2008 (9) ADJ 134 (DB) and relevant part of Supreme Court judgment in Pimpri Chinchwad Municipal Corporation and Others Vs. Gayatri Construction Company and Another, of the judgment of the Supreme Court is quoted hereunder:

In National Highways Authority of India v. Ganga Enterprises, it was inter alia held as follows: SCC p. 415, para 6)

The respondent then filed a writ petition in the High Court for refund of the amount. On the pleadings before it, the High Court raised two questions viz. (a) whether the forfeiture of security deposit is without authority of law and without any binding contract between the parties and also contrary to Section 5 of the Contract Act; and (b) whether the writ petition is maintainable in a claim arising out of a breach of contract. Question (b) should have been first answered as it would go to the root of the matter. The High Court instead considered Question (a) and then chose not to answer Question (b). In our view, the answer to Question (b) is clear. It is settled law that disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India. It has been so held in Kerala S.E.B. v. Kurien E. Kalathil; State of U.P. v. Bridge and Roof Co. (India) Ltd. and Bareilly Development Authority v. Ajay Pal Singh. This is settled law. The dispute in this case was regarding the terms of offer. They were thus contractual disputes in respect of which a writ court was not the proper forum. Mr. Dave, however, relied upon Verigamto Naveen v. Government of A.P. and Harminder Singh Arora v. Union of India. These, however, are cases where the writ court was enforcing a statutory right or duty. These cases do not lay down that a writ court can interfere in a matter of contract only. Thus, on the ground of maintainability the petition should have been dismissed.

Therefore, the writ petition cannot be held to be maintainable and as such the same is dismissed. However, passing of this order will in no way affect the right of the petitioner to proceed on the basis of letter of the respondent with regard to the settlement of dispute and recovery of amount. If the petitioner so approaches then it will be decided as expeditiously as possible.

No order is passed as to costs.

Ashok Srlvastava, J.

I agree.