![Cases where writs were issued for
breach of contract
Joshi Technologies International Inc. v. Union Of India [2015] SC, 8 AD (SC).
It was held that for a writ of mandamus can be issued in a matter of private
character or purely contractual field only if public duty element is involved.
In a limited sphere such remedies are available only when the non-
Government contracting party is able to demonstrate that it is a public law
remedy which such party seeks to invoke.
Basically the governing principle was that the court will examine the issue
only if the action has some public law character attached to it.](https://image.slidesharecdn.com/29bd1e1b-3d82-46ad-a8ff-241d61ab4fc6-160612075102/85/Writs-and-Contracts-Presentation-8-320.jpg)
![ Kumari Shrilekha Vidyarthi etc. v. State of UP [1991] SC, 1 AIR (SC).
The main issue in this case was validity of a Circular issued by Law Ministry,
Government of Uttar Pradesh seeking to terminate the engagement of
Government Counsels.
The state contended that appointments to the Offices of Government
Counsel in the districts is purely contractual depending on the terms of the
Contract and is in the nature of an engagement of a counsel by a Private
Party, who can be changed at any time at the will.
If the instrumentality of the State acts contrary to the public good, public
interest, unfairly, unjustly, unreasonably discriminatory and violative of Art.
14 of the Constitution of India in its contractual or statutory obligation, writ
petition would be maintainable. However, a legal right must exist and
corresponding legal duty on the part of the State and if any action on the
part of the State is wholly unfair or arbitrary, writ courts can exercise their
power.
This principle was upheld in the case of Sushila Chemicals v. BCCL as well.](https://image.slidesharecdn.com/29bd1e1b-3d82-46ad-a8ff-241d61ab4fc6-160612075102/85/Writs-and-Contracts-Presentation-9-320.jpg)
![ State of Kerala & Ors. v. M.K. Jose [2015] SC, 7 SCJ (SC).
In the instant case jurisdiction of the High Court under Article 226 of the
Constitution was invoked on various occasions challenging every action which
pertained to extension of time, denial of revised estimate by the State -
Government and many other facets of that nature.
The High Court kept on passing orders for consideration by the appropriate
authority, for grant of opportunity of being heard to the contractor. Since in
this case the petition raised questions of fact of a complex nature, which for
their determination required oral evidence to be taken, and on that account
the High Court was of the view that the dispute to be tried in a writ petition
or not shall be a discretionary power of the High Court.
So it would depend upon facts of each case as to under what circumstances
in respect of contractual claim or challenge to violation of contract the
matter can be entertained by the writ court.](https://image.slidesharecdn.com/29bd1e1b-3d82-46ad-a8ff-241d61ab4fc6-160612075102/85/Writs-and-Contracts-Presentation-10-320.jpg)
![ Noble Resources ltd v. State of Orissa [2006] SC, 10 SCC (SC).
The Supreme Court held that the principle of judicial review cannot be
denied so far as exercise of contractual powers of government bodies are
concerned, but it is intended to prevent arbitrariness or favouritism and it is
exercised in the larger public interest or if it is brought to the notice of the
court that in the matter of award of a contract power has been exercised
for any collateral purpose.
Following this the court may issue appropriate writ.](https://image.slidesharecdn.com/29bd1e1b-3d82-46ad-a8ff-241d61ab4fc6-160612075102/85/Writs-and-Contracts-Presentation-11-320.jpg)
![Cases where writs were not issued
Kerala State Electricity Board v. Kurien E. Kalathil [2000] SC, 1 AIR (SC).
It was held that a statute may expressly or impliedly confer power on a statutory
body to enter into contracts in order to enable it to discharge its functions.
Dispute arising out of the terms of such contracts or alleged breaches have to be
settled by the ordinary principles of law of contract. The fact that one of the
parties to the agreement is a statutory or public body will not of itself affect the
principles to be applied.
The disputes about the meaning of a covenant in a contract or its enforceability
have to be determined according to the usual principles of the Contract Act.
Every act of a statutory body need not necessarily involve an exercise of
statutory power. Statutory bodies, like private parties, have power to contract or
deal with property. Such activities may not raise any issue of public law.
The disputes relating to interpretation of the terms and conditions of a contract
could not have been agitated in a petition under Article 226 of the Constitution
of India. That is a matter for adjudication by a civil Court or in arbitration if
provided for in the contract. Whether any amount is due and if so, how much and
refusal to pay it is justified or not, are not the matters which could have been
agitated and decided in a writ petition.](https://image.slidesharecdn.com/29bd1e1b-3d82-46ad-a8ff-241d61ab4fc6-160612075102/85/Writs-and-Contracts-Presentation-12-320.jpg)
Writs and Contracts Presentation
- 1. Writs and Contracts By:- Shubhra Srivastava Tamoghna Saha Vedang Tarare Shubham Bharti
- 2. What are writs? A writ is a formal written order issued by a government entity in the name of the sovereign power, government, court or other such authority, commanding an officer or other person to whom it is issued, to do or abstain for doing some act specified there in. In most cases, this government entity is a court.
- 3. Who can issue writs? In India, both Supreme Court and High Court have been empowered with writ jurisdiction. The Supreme Court can issue a writ under Article 32 and a High Court can issue it under Article 226 of the Indian Constitution. Article 32 grants and extensive original jurisdiction to the Supreme Court of India in regard to enforcement of Fundamental Rights. On the other hand, Article 226 has a wider jurisdiction and can be issued for other constitutional rights as well.
- 4. Types of Writs Available Habeas Corpus- produce the body Certiorari- to be certified Mandamus- we command Quo Warranto- with what authority Prohibition- stay order
- 5. Can writs be issued if there is a breach of contract? The State is the largest Employer of Contractors for execution of Public Works, through open tenders and Contracts executed between the Parties. During implementation of the Contract, disputes are bound to occur and the same are to be resolved either through the Dispute Resolution Mechanism provided in the Contract or appropriate legal recourse
- 6. Who is the State? The Writ Jurisdiction mainly provides for the protection of fundamental rights, which are to be enforced against the State. Article 12 of the Constitution defines “State” as “the State includes the Government and Parliament of India and the Government and Legislature of each of the States and all local or other Authorities within the territory of India or under the control of the Government of India.” With the growing horizon of Law, in respect of enforcement of fundamental rights, the concept of the “State” has been extended by way of judicial construction.
- 7. Writ Jurisdiction in contractual matters • In India, normally a writ is not the available remedy in contractual matters. A writ court may entertain disputes arising out of contract in exceptional circumstances. Article 226 of the Constitution of India (Constitution) confers a writ jurisdiction with the High Court. This is an extra ordinary jurisdiction and extends to the action of the State or any authority endowed with State authority and empowers the High Court to issue direction to the State and the authorities to act in accordance with those directions.
- 8. Cases where writs were issued for breach of contract Joshi Technologies International Inc. v. Union Of India [2015] SC, 8 AD (SC). It was held that for a writ of mandamus can be issued in a matter of private character or purely contractual field only if public duty element is involved. In a limited sphere such remedies are available only when the non- Government contracting party is able to demonstrate that it is a public law remedy which such party seeks to invoke. Basically the governing principle was that the court will examine the issue only if the action has some public law character attached to it.
- 9. Kumari Shrilekha Vidyarthi etc. v. State of UP [1991] SC, 1 AIR (SC). The main issue in this case was validity of a Circular issued by Law Ministry, Government of Uttar Pradesh seeking to terminate the engagement of Government Counsels. The state contended that appointments to the Offices of Government Counsel in the districts is purely contractual depending on the terms of the Contract and is in the nature of an engagement of a counsel by a Private Party, who can be changed at any time at the will. If the instrumentality of the State acts contrary to the public good, public interest, unfairly, unjustly, unreasonably discriminatory and violative of Art. 14 of the Constitution of India in its contractual or statutory obligation, writ petition would be maintainable. However, a legal right must exist and corresponding legal duty on the part of the State and if any action on the part of the State is wholly unfair or arbitrary, writ courts can exercise their power. This principle was upheld in the case of Sushila Chemicals v. BCCL as well.
- 10. State of Kerala & Ors. v. M.K. Jose [2015] SC, 7 SCJ (SC). In the instant case jurisdiction of the High Court under Article 226 of the Constitution was invoked on various occasions challenging every action which pertained to extension of time, denial of revised estimate by the State - Government and many other facets of that nature. The High Court kept on passing orders for consideration by the appropriate authority, for grant of opportunity of being heard to the contractor. Since in this case the petition raised questions of fact of a complex nature, which for their determination required oral evidence to be taken, and on that account the High Court was of the view that the dispute to be tried in a writ petition or not shall be a discretionary power of the High Court. So it would depend upon facts of each case as to under what circumstances in respect of contractual claim or challenge to violation of contract the matter can be entertained by the writ court.
- 11. Noble Resources ltd v. State of Orissa [2006] SC, 10 SCC (SC). The Supreme Court held that the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any collateral purpose. Following this the court may issue appropriate writ.
- 12. Cases where writs were not issued Kerala State Electricity Board v. Kurien E. Kalathil [2000] SC, 1 AIR (SC). It was held that a statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not of itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. The disputes relating to interpretation of the terms and conditions of a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a civil Court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition.
- 13. Rajasthan State Industrial Development & Investment Corporation. v. Diamond & Gem Development Corporation. Ltd In the above case it was decided that, generally the Court should not exercise its writ jurisdiction to enforce the contractual obligation. The primary purpose of a writ of mandamus is to protect and establish rights and to impose a corresponding imperative duty existing in law. It is designed to promote justice (ex debito justitiae). The grant or refusal of the writ is at the discretion of the court. The writ cannot be granted unless it is established that there is an existing legal right of the applicant, or an existing duty of the respondent. Thus, the writ does not lie to create or to establish a legal right, but to enforce one that is already established. While dealing with a writ petition, the court must exercise discretion, taking into consideration a wide variety of circumstances, inter alia, the facts of the case, the exigency that warrants such exercise of discretion, the consequences of grant or refusal of the writ, and the nature and extent of injury that is likely to ensue by such grant or refusal.
- 14. State of Kerala v. Anil A Full Bench of Kerala High Court emphatically held that it cannot be said in absolute terms that a writ petition is not maintainable in contractual matters including where the contractors seek enforcement of the obligation on the part of the state to pay the bill amounts admitted by the state. The Court had observed that all the activities of the state are in public interest and for public good. The Court has eventually set out the circumstances under which the writ petition is maintainable, thus: (1). When there is no disputed question of fact requiring adjudication on detailed evidence. (2). When no alternative form is provided in the resolution of any disputes pertaining to the contract. (3). When claim by one party is not contested by the other and the contest does not require adjudication requiring detailed enquiry into facts.”
- 15. M/s. Planet Home and Villas (P) Ltd., Kannur v.. State of Kerala The judgement of this case held that it is not the case of the petitioner that the contract is statutory in nature involving any depravation of fundamental rights or negation of Article 14 in terms of arbitrary approach of the authorities. At best, it is to be observed, without prejudice to the cause of either of the parties, it is pure and simple a contractual dispute, the negation of which is to be determined. Under those circumstances, this Court has felt it desirable to dismiss the writ petition, preserving the petitioner’s liberty to approach an appropriate forum such as a competent Civil Court seeking a proper remedy on the ground of contractual dispute, on the same cause of action.
- 16. The Supreme Court examined various case laws on the subject and legal position emerging from them. The same can be summarized as under: At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness. In its executive capacity, even in the contractual field, the state cannot practice discriminations. It has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if State or instrumentality of the State has acted in contravention of the above said requirement of Article 14 then a writ court can issue suitable directions to set right the arbitrary actions.
- 17. ii) In cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found. If those facts are disputed and require assessment of evidence, the correctness of which can only be tested satisfactorily by taking detailed evidence, examination and cross- examination of witnesses, the case could not be decided in proceedings under Article 226 of the Constitution. In such cases court can direct the aggrieved party to resort to alternate remedy of civil suit etc. (iii)Writ jurisdiction of High Court under Article 226 cannot be used to avoid voluntarily obligation undertaken. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract cannot provide justification in not complying with the terms of contract which the parties had accepted with open eyes. Writ petition cannot be maintained in such cases. (iv)Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages (v) Writ can be issued where there is executive action unsupported by law or there is denial of equality before law or equal protection of law or it can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice.
- 18. (vi) If the contract between private party and the State/instrumentality and/or agency of State is under the realm of a private law and there is no element of public law, writ jurisdiction generally would not survive .In such cases the aggrieved party should invoke the remedies provided under ordinary civil law. (vii) The distinction between public law and private law element in the contract with State is getting blurred. However, it has not been totally obliterated. Dichotomy between public law and private law, rights and remedies would depend on the factual matrix of each case and the distinction between public law remedies and private law, field cannot be demarcated with precision. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court under Article 226 of the Constitution to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision making process or that the decision is not arbitrary.
- 19. (viii) Failure to consider and give due weight to reasonable or legitimate expectation of a citizen, may render the decision of the state or its instrumentality arbitrary, and this is how the requirements of due consideration of a legitimate expectation be made part of the principle of non-arbitrariness. (ix) If the rights are purely of private character, no mandamus can be issued. The condition which has to be satisfied for issuance of a writ of mandamus is the public duty. In a matter of private character or purely contractual field, no such public duty element is involved and, thus, mandamus will not lie. (x) Where an authority appears acting unreasonably, a writ of mandamus can be issued for enforcing it to perform its duty free from arbitrariness or unreasonableness. (xi) When an authority has to perform a public function or a public duty if there is a failure a writ petition under Article 226 of the Constitution is maintainable.