R.K. Swamy Bbdo Pvt. Ltd. vs Karnataka Udyog Mitra (KUM) and State of Karnataka

S. Abdul Nazeer, J.—I have heard the learned Counsel for the parties. In this case, the petitioner has sought for a declaration that the action of the first respondent in terminating the service agreement dated 13.12.2011 - Annexure A and the order of the first respondent dated 13.04.2012 - Annexure D are arbitrary, illegal, null and void and for certain other reliefs.

The agreement at Annexure A entered into between the petitioner and the first respondent provides for settlement of disputes. Clause 15.4 states that any dispute which is not resolved amicably by conciliation, as provided in Clauses 15.3, shall be finally decided by reference to arbitration by an Arbitral Tribunal appointed in accordance with Clause 15.4.2.

It is well settled that when an alternative and equally efficacious remedy is open to a litigant, he should be required to pursue that remedy and not to invoke the special jurisdiction of the High Court to issue a prerogative writ. The extraordinary jurisdiction of the Court is not a panacea for all the maladies which a litigant may suffer from. It is true that the existence of an alternative remedy does not affect the jurisdiction of the Court to issue a Writ, but the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writ. Writ jurisdiction is not to facilitate avoidance of obligation voluntarily incurred. Article 226 of the Constitution of India is not meant to supplant the existing remedies at law but only to supplement them in certain well recognised situations.

In State of U.P. and others Vs. Bridge and Roof Co. (India) Ltd., , the Apex Court has held that in cases of disputes relating to terms of private contract, proper course would be to refer the matter for arbitration or institution of civil suit and not a Writ Petition. It is held as under:

There is yet another substantial reason for not entertaining the Writ Petition. The contract in question contains a clause providing interalia 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-recognised situations.

Again in ABL International Ltd. and Another Vs. Export Credit Guarantee Corporation of India Ltd. and Others, , it has been held as under:

we have specifically inquired from the parties to the present appeal before us and has have been told that there is no such arbitration clause in the contract in question. It is well known that if the parties to a dispute had agreed to settle their dispute by arbitration, and if there is an agreement in that regard, the Courts will not permit recourse to any other remedy without invoking the remedy by way of arbitration unless of course both the parties to the dispute agree an another mode of dispute resolution.

(emphasis supplied by me)

I have gone through the different clauses of agreement and other materials placed on record. I am of the view that the contract between the parties is in the realm of private law. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated in a Writ Petition. This is a case where factual adjudication is necessary. If the parties have agreed to settle their dispute by arbitration and if there is an agreement in that regard, the Court will not permit recourse to any other remedy without invoking the remedy by way of arbitration. In the circumstances, I decline to entertain this writ petition. It is accordingly dismissed reserving liberty to the parties to pursue other remedies available to them in law. All contentions are kept open. No costs.