M. Wig Vs. Hindustan Petro Corporation Ltd  Insc 484 (15 September 2005)
Sinha & C.K. Thakker S.B. Sinha, J:
scope and ambit of judicial review vis-`-vis availability of alternative remedy
is in question in this appeal which arises out of a judgment and order dated
29.04.2004 passed by a Division Bench of the High Court of Bombay in Writ
Petition No.830 of 2004 whereby and whereunder the writ petition filed by the
Appellant herein was dismissed in limine.
Appellant herein and one Smt. Bimladevi T. Obhan, who were partners in 'M/s Tilak
Automobiles' and the Respondent herein entered into a dealership agreement.
Admittedly the said agreement was terminated by the Respondent herein by a
notice dated 19.03.2004 in terms of Clause 55 of the said agreement which reads
Notwithstanding anything to the contrary herein contained, the Corporation
shall be at liberty to terminate this Agreement forthwith upon or at any time
after the happening of any of the following, namely :-
the Dealer shall commit a breach of any of the covenants and stipulations
contained in the Agreement, and fail to remedy such breach within four days of
the receipt of a written notice from the Corporation in that regard;
The death or adjudication as insolvent of the Dealer, if he be an individual;
The dissolution of the partnership of the dealers firm or the death or
adjudication as insolvent of any partner of the firm if the Dealer be a firm.
The liquidation, whether voluntary or otherwise or the passing of an effective
resolution for the winding up, if the dealer be a company or a co-operative
to the Respondent, the said agreement came to an end on the death of the said Bimladevi.
However, the dealership was allowed to continue having regard to a
representation made by the Appellant herein that the firm had certain outstandings
in the market which were in danger of becoming unrecoverable, 'if the supplies
were suddenly stopped'. The Respondent agreed to continue supplies to the
Appellant on purely ad hoc basis.
Respondent alleging violation of various conditions of the said agreement,
sales volume of the dealership;
outs at the outlet; and
active interest/participation in operation of the dealership, issued a show
cause notice dated 20.12.2002 as to why suitable action should not be taken for
gross violation of clauses 9, 42, 44 and 55(a) of the said dealership agreement
further notice was issued to the Appellant by the Respondent on 7.11.2003
drawing its attention to the defaults made by her and warned that any future
default would be viewed seriously and very stringent action will be taken.
Thereafter, allegedly a further default occurred and, thus, on the grounds
stated in the notice dated 20.12.2002 as also on the ground of default, the
agreement was terminated in terms of a notice dated 19.03.2004.
Appellant contended that on 19.03.2004 itself at about 5.00 p.m. , the staff members of the Respondent along with the
police authority forcibly entered the premises of the partnership firm and
while handing over the said notice, the staff members thereof were forcibly
ousted from the business premises.
writ petition filed by the Appellant herein, as noticed hereinbefore, was
dismissed in limine by the impugned order.
Umesh Lalit, the learned Senior Counsel appearing on behalf of the Appellant,
at the outset drew our attention to the subsequent events which took place,
namely, that referral of the disputes and differences between the parties were
referred to an arbitrator on 07.06.2004 and consequent passing of a consent
award by him which reads as under :
terms of statement of settlement dated December 15, 2004, I pass the award as follows :
Net payable amount of Rs.431416.39 as agreed to by both the parties plus
interest of Rs.33170/- from 1.4.04 till 31.12.04 aggregating to Rs.464586/-
shall be paid by the Respondent to the Claimant.
view of the financial difficulties of the Respondent, the above amounts shall
be paid in 5 installments with the first installment commencing in the first
week of Jan. 05 and the last installment to be paid in the last week of March
Interest at the rate of 12% per annum will be payable for any default i.e.
amount outstanding to be paid as 31st March, 05 by the Respondent to the
All the claims of both the Claimant and the respondent which are contrary to or
other than the aforesaid terms of settlement are rejected.
The award is given without prejudice to any rights and contentions in respect
of Special Leave Petition pending with the Hon'ble Supreme Court." Mr. Lalit
would contend that the High Court committed a manifest error in dismissing the
said writ petition in limine on the premise that there existed an arbitration
clause in the agreement, without considering the question that the arbitrator
had no jurisdiction to pass an award in relation to the said second prayer made
by the Appellant herein, namely, restoration of possession to her by the
learned counsel would submit that a public law remedy cannot be held to be not
available to a person aggrieved only on the ground of existence of an
arbitration clause; although fundamental right at the hands of the State is
alleged to have been breached. It was further submitted that from the chain of
events, it would appear that the Respondent had condoned the lapses on the part
of the Appellant in the matter of alleged violations of the conditions of the
agreement and only insisted on payment of the alleged dues in terms of its
notice dated 07.11.2003 . It was urged that in terms of clause 9, the Appellant
was entitled to three months' notice. In support of his aforementioned
contentions, Mr. Lalit placed strong reliance on E. Venkatarishna vs. Indian
Oil Corporation and Another [(2000) 7 SCC 764], Indian Oil Corporation Ltd. vs.
Amritsar Gas Service and Others [(1991) 1
SCC 533], Harbanslal Sahnia and Another vs. Indian Oil Corporation Ltd. and
Another (2003) 2 SCC 107]; and State of H.P. and Others vs. Gujarat Ambuja
Cement Ltd. and Another [2005 AIR SCW 3727] Mr. L. Nageshwara Rao, the learned
Senior Counsel appearing for the Respondent, on the other hand, would contend that
as the High Court exercises a discretionary jurisdiction under Article 226 of
the Constitution of India; refusal to entertain a writ petition on the ground
of existence of an alternative remedy should not be interfered with by this
Court. The learned counsel submitted that the agreement having stood terminated
by reason of the death of one of the partners, the petitioner was not entitled
to claim any right of property in the premises in question and in that view of
the matter this Court should not interfere with the impugned order. Mr. Nagheshwara
Rao, in this behalf, placed strong reliance on The State of Uttar Pradesh vs.
Mohammad Nooh [1958 SCR 595]; A.V. Venkateswaran, Collector of Customs, Bombay vs. Ramchand Sobhraj Wadhwani and
Another [1962 (1) SCR 753]; State of U.P. and Others vs. Bridge & Roof
Company (India) Ltd. [(1996) 6 SCC 22]; Seth Chand
Ratan vs. Pandit Durga Prasad (D) By Lrs. and Others [(2003) 5 SCC 399]; and Asgar
S. Patel and Others vs. Union of India and Others [(2000) 5 SCC 311].
principal question which arises for consideration is as to whether a
discretionary jurisdiction would be refused to be exercised solely on the
ground of existence of an alternative remedy which is more efficacious.
when a dispute between the parties requires adjudication of disputed question
of facts wherefor the parties are required to lead evidence both oral and
documentary which can be determined by a domestic forum chosen by the parties,
the Court may not entertain a writ application. [See M/s Titagarh Paper Mills
Ltd. vs. Orissa State Electricity Board and Another [(1975) 2 SCC 436] and M/s Bisra
Stone Lime Co. Ltd. etc. vs. Orissa State Electricity Board and Another [AIR
1976 SC 127] However, access to justice by way of public law remedy would not
be denied when a lis involves public law character and when the forum chosen by
the parties would not be in a position to grant appropriate relief.
Division Bench of this Court in ABL International Ltd. & Anr. vs. Export
Credit Guarantee Corporation of India Limited & Ors. [JT 2003 (10) SC 300],
observed that in certain cases even a disputed question of fact can be gone
into by the court entertaining a petition under Article 226 of the Constitution
of India, holding :
However, while entertaining an objection as to the maintainability of a writ
petition under Article 226 of the Constitution of India, the court should bear
in mind the fact that the power to issue prerogative writs under Article 226 of
the Constitution is plenary in nature and is not limited by any other
provisions of the Constitution.
High Court having regard to the facts of the case, has a discretion to
entertain or not to entertain a writ petition.
Court has imposed upon itself certain restrictions in the exercise of this
power. (See Whirlpool Corpn. v. Registrar of Trade Marks) And this plenary
right of the High Court to issue a prerogative writ will not normally be
exercised by the Court to the exclusion of other available remedies unless such
action of the State or its instrumentality is arbitrary and unreasonable so as
to violate the constitutional mandate of Article 14 or for other valid and
legitimate reasons, for which the Court thinks it necessary to exercise the
said jurisdiction." In Harbanslal Sahnia (supra), Lahoti, J, (as His
Lordship then was), relied upon Whirpool Corporation vs. Registrar of Trade
Marks [(1998) 8 SCC 1] observing that in an appropriate case, in spite of
availability of the alternative remedy, the High Court may still exercise its
writ jurisdiction in at least three contingencies :
the writ petition seeks enforcement of any of the fundamental rights;
there is failure of principles of natural justice; or
the orders or proceedings are wholly without jurisdiction or the vires of an
Act is challenged.
may, however, notice that the Bench did not notice the earlier decisions in M/s
Titagarh Paper Mill Ltd. (supra) and M/s Bisra Stone Lime Co. Ltd. (supra).
However, there cannot be any doubt whatsoever that the question as to when such
a discretionary jurisdiction is to be exercised or refused to be exercised by
the High Court has to be determined having regard to the facts and
circumstances of each case wherefor, no hard and fast rule can be laid down.
three-Judge Bench of this Court in Gujarat Ambuja Cement Ltd. (supra),
referring to Harbanslal Sahnia, (supra) held :
are two well recognized exceptions to the doctrine of exhaustion of statutory
remedies. First is when the proceedings are taken before the forum under a
provision of law which is ultra vires, it is open to a party aggrieved thereby
to move the High Court for quashing the proceedings on the ground that they are
incompetent without a party being obliged to wait until those proceedings run
their full course. Secondly, the doctrine has no application when the impugned
order has been made in violation of the principles of natural justice. We may
add that where the proceedings itself are an abuse of process of law the High
Court in an appropriate case can entertain a writ petition.
Where under a statute there is an allegation of infringement of fundamental
rights or when on the undisputed facts the taxing authorities are shown to have
assumed jurisdiction which they do not possess can be the grounds on which the
writ petitions can be entertained. But normally, the High Court should not
entertain writ petitions unless it is shown that there is something more in a
case, something going to the root of the jurisdiction of the officer, something
which would show that it would be a case of palpable injustice to the writ
petitioner to force him to adopt the remedies provided by the statute." It
may be true that in a given case when an action of the party is de'hors the
terms and conditions contained in an agreement as also beyond the scope and
ambit of domestic forum created therefor, the writ petition may be held to be
maintainable; but indisputably therefor such a case has to be made out. It may
also be true, as has been held by this Court in Amritsar Gas Service (supra)
and E. Venkatakrishna (supra), that the arbitrator may not have the requisite
jurisdiction to direct restoration of distributorship having regard to the
provisions contained in Section 14 of the Specific Relief Act, 1963; but while
entertaining a writ petition even in such a case, the court may not loose sight
of the fact that if a serious disputed question of fact is involved arising out
of a contract qua contract, ordinarily a writ petition would not be
entertained. A writ petition, however, will be entertained when it involves a
public law character or involves a question arising out of public law functions
on the part of the respondent.
a case of this nature, while exercising a plenary jurisdiction, we must take
the supervening circumstances into consideration. The parties admittedly
invoked the arbitration agreement before the arbitrator.
entered into a settlement. Pursuant to or in furtherance of the said
settlement, the Appellant herein was to pay a sum of Rs.4,64,586/- unto the
Respondent in five installments with interest. The Appellant herein for
violation of the terms of contract presumably prayed for award of damages but
no reference thereto has been made in the award. In any event such claim of
damages could have been made before the Arbitrator on the ground of alleged
breach of contract.
further of opinion that in this matter no case has been made out for grant of a
relief of restoration of the dealership. The contract stood terminated on the
death of the Appellant's partner. No case of novation of contract has been made
out. It is also not the case of the parties that any other or further agreement
between the parties came into being. The arrangement was an ad hoc one. The
Appellant did not derive any legal right to continue the business for an
indefinite period. Moreover, she allegedly violated the terms of the contract.
be true that the said award has been made without prejudice to the interest of
the parties in this appeal; but keeping in view the admitted fact that the
Appellant committed a default in payment of dues towards supplies made and
having regard to the fact that the dealership agreement has come to an end, we
are of the opinion that it is not a fit case where we would set aside the
impugned order of the High Court and direct it to dispose of the writ petition
the reasons aforementioned, there is no merit in this Appeal which is dismissed
accordingly. However, in the facts and circumstances of the case, there shall
be no order as to costs.