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Smart Summary

Factual and Procedural Background

The petitioner, a contractor, filed a writ petition seeking a writ of mandamus for payment of his alleged outstanding bills. The petitioner had earlier approached this Court in C.W.J.C No. 5 of 1992 (R), which was disposed of on 6.1.1992 with an order stating that under Article 226 no writ of mandamus could be issued and that the petitioner should seek remedy before higher authorities, enforce any arbitration agreement, or file a suit; that earlier application was permitted to be withdrawn.

The present writ application was filed on 19.2.1992, stating that a representation had been filed on 10.1.1992 but no order issued by respondents. At preliminary hearing on 5.3.1992, the Court directed respondents 3 and 4 to make payment of pending bills as expeditiously as possible before 31.3.1992. Respondents (State of Bihar and its officials) filed a review application on 8.4.1992; after hearing the review application was allowed on 12.5.1992 and the writ application was directed to be heard with the review application being treated as the counter affidavit. The matter was then finally heard with the consent of the parties.

The respondents' pleaded position included denial of the correctness of the claimed bills, an explanation that a letter dated 30.6.1989 (Annexure-4) by the then Executive Engineer stating bills had been passed was not properly reflective of entitlement and was issued by the then Executive Engineer on transfer; the successor Executive Engineer asked contractors to substantiate claims (6.10.1989) and issued reminders (9.3.1990); allegations that the petitioner coerced the successor Executive Engineer and forcibly took and encashed a cheque for Rs. 2,38,585; and initiation of an enquiry and a First Information Report (Bistupur P.S. Case No. 91/92) on 4.4.1992 against certain officials and the petitioner for alleged misappropriation, forgery and intimidation.

The writ petition was ultimately dismissed by the Court for lack of merit and on the ground that the writ of mandamus was not maintainable in the circumstances; Narayan Roy, J. concurred.

Legal Issues Presented

  1. Whether a writ of mandamus under Article 226 can be issued directing payment of contractors' bills by the State.
  2. Whether the present petition is barred by the principle of res judicata or by the effect of the petitioner's earlier proceeding (C.W.J.C No. 5 of 1992 (R) and the order dated 6.1.1992).
  3. Whether the dispute falls within the category of matters in which writ jurisdiction under Article 226 is maintainable, in light of the categorisation in Radha Krishna Agrawal v. State of Bihar and subsequent authorities (i.e., whether the case is a non-statutory purely contractual dispute or an exceptional case falling within a permissible category for writ relief).
  4. Whether serious disputed questions of fact exist such that exercise of the writ jurisdiction would be an improper exercise of discretion.

Arguments of the Parties

Petitioner's Arguments

  • The petitioner disclosed the earlier proceeding in paragraph 13 of the writ petition and therefore did not suppress the fact of the earlier petition.
  • Relied on Daryao v. State of U.P. (AIR 1961 SC 1457) for the proposition that dismissal of a writ petition on the ground of availability of an alternative remedy does not constitute res judicata.
  • Attempted to place the case within an exceptional category (a fourth category) whereby writ relief would be maintainable even in contractual disputes, relying on several precedents (Sharif Ahmed v. RTA Meerut; Surya Narain Yadav v. Bihar State Electricity Board; Assistant Commissioner of Commercial Taxes v. Dharmendra Trading Company; Star Enterprises v. CIDCO).
  • The petitioner argued for the grant of mandamus directing payment of the allegedly outstanding bills.

Respondents' Arguments

  • The respondents denied entitlement to the claimed payments and explained that the letter dated 30.6.1989 (Annexure-4) was issued by the then Executive Engineer on transfer and was not a valid basis for payment.
  • They asserted that the petitioner failed to substantiate claims when requested by the successor Executive Engineer despite reminders, and that the petitioner obtained payment by coercion and forcibly taking a cheque which was encashed.
  • The respondents referred to an enquiry and an FIR (Bistupur P.S. Case No. 91/92) involving allegations of misappropriation, forgery and intimidation against officials and the petitioner.
  • The respondents contended that the petitioner had not come to the Court with clean hands (suppression or misstatement regarding the outcome of the previous writ petition) and relied on the plea of res judicata arising from the previous order in C.W.J.C No. 5 of 1992 (R).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Daryao v. State of U.P. (AIR 1961 Supreme Court, 1457) The proposition that dismissal of a writ petition on the ground of availability of an alternative remedy does not constitute res judicata. The petitioner relied on this case to argue that the earlier order did not operate as res judicata; the Court recorded the reliance but found suppression/misstatement of material facts and applied other authorities to hold the writ not maintainable.
Sharif Ahmed v. Regional Transport Authority, Meerut ((1978) 1 SCC 1 : AIR 1978 SC 209) Authority relied upon by petitioner in support of availability of writ relief in certain circumstances. The petitioner relied on this precedent; the Court noted the reliance but observed there is no Supreme Court decision holding that a writ of mandamus can be issued directing payment of contractors' bills and did not accept that writ relief was appropriate here.
Surya Narain Yadav v. Bihar State Electricity Board ((1985) 3 SCC 38 : AIR 1985 SC 941) Authority relied upon by petitioner regarding scope of writ jurisdiction. The petitioner relied on this case; the Court considered it among others but found the instant matter to be a non-statutory contractual dispute (category (iii)) where Article 226 is not ordinarily maintainable.
Assistant Commissioner of Commercial Taxes (Astt.) v. Dharmendra Trading Company (AIR 1988 Supreme Court, 124) Authority relied upon by petitioner regarding circumstances for writ relief. The petitioner relied on this authority; the Court noted the reliance but concluded that no Supreme Court decision supports issuing mandamus for payment of contractors' bills and thus rejected the claim to writ relief in this case.
Star Enterprises v. City and Industrial Development Corporation (1990 (2) Judgments Today, 401) Authority relied upon by petitioner in support of writ jurisdiction in certain contexts. Relied on by the petitioner; the Court noted the reliance but found the facts and legal classification here (category (iii)) did not permit mandamus.
Radha Krishna Agrawal v. State of Bihar ((1977) 3 SCC 457 : AIR 1977 SC 1496) Classification of cases involving alleged breaches by the State into categories: (i) non-contractual assurances acted upon to one's prejudice (maintainable), (ii) contracts entered into in exercise of statutory power (maintainable), and (iii) non-statutory/purely contractual disputes (not maintainable under Article 226). Also noted the limited fourth category where cancellation is arbitrary in violation of Article 14. The Court applied this categorisation: it held the instant case fell squarely within category (iii) (a non-statutory, purely contractual dispute) and was therefore not amenable to writ relief under Article 226; the petitioner's attempt to invoke the fourth category failed on the facts.
Pancham Singh v. State of Bihar (1991 (1) PLJR, 352) Full Bench decision noticing Radha Krishna Agrawal and related decisions, and recognition that Radha Krishna's law continues to hold the field while carving out a fourth category in certain circumstances. The Court relied on the Full Bench's treatment as supporting the continued application of Radha Krishna Agrawal's categorisation and the availability of writ relief only in the exceptional fourth category, which was not made out on the facts here.

Court's Reasoning and Analysis

The Court proceeded by reference to the petitioner's earlier litigation and the contents of the record. It noted the earlier order in C.W.J.C No. 5 of 1992 (R) (dated 6.1.1992) which expressly held that no writ of mandamus could be issued under Article 226 to direct payment of contractors' bills and that the petitioner should pursue representation to higher authorities or arbitration or a suit. The Court found that paragraph 13 of the present petition contained an omnibus statement that the earlier petition was permitted to be withdrawn with an observation that the petitioner would file representation, and held that this amounted to suppression or misstatement of material facts.

On the substantive question of maintainability, the Court analysed the matter in the light of Radha Krishna Agrawal's classification of disputes involving the State into categories (i), (ii) and (iii), and the subsequently-recognised limited fourth category (where cancellation is per se violative of Article 14). The Court concluded that the dispute here is a non-statutory, purely contractual grievance arising out of a contract between the State and the petitioner (category (iii)). The petitioner's attempt to bring the case within the fourth category failed because there was no case of cancellation of contract or breach de hors the contract terms nor any finding that the breach, if any, was arbitrary.

The Court further observed that the respondents' counter-affidavit disclosed serious disputed questions of fact (including allegations of coercion, improper encashment of a cheque, and ongoing criminal inquiry), and that in such circumstances the exercise of writ jurisdiction under Article 226 would be an improper exercise of discretion. The Court noted that the earlier interim order dated 5.3.1992 had been recalled by the review order dated 12.5.1992 which allowed the civil review application and directed that the review be treated as a counter-affidavit.

For these reasons — the binding nature of the prior order, suppression/misstatement of material facts by the petitioner, the classification of the dispute as a non-statutory contractual matter under Radha Krishna Agrawal, and the existence of serious disputed factual questions — the Court held the writ petition to be not maintainable and without merit.

Holding and Implications

Holding: The writ petition was dismissed. The Court held that a writ of mandamus under Article 226 was not maintainable in the instant case because the dispute is a non-statutory, purely contractual matter (category (iii) under Radha Krishna Agrawal) and because serious disputed questions of fact existed; the earlier order in C.W.J.C No. 5 of 1992 (R) is binding on the petitioner.

Implications:

  • Direct effect on the parties: The writ application seeking mandamus for payment of the contractor's bills was dismissed and the petitioner cannot obtain the demanded relief by way of a writ of mandamus in this proceeding. Consistent with the earlier order, the petitioner was to pursue representation before higher authorities, enforce any arbitration agreement if applicable, or file a suit.
  • Broader precedent: The opinion applies and follows the classification in Radha Krishna Agrawal and the Full Bench in Pancham Singh; the Court did not depart from those principles. The opinion does not announce a new principle expanding writ jurisdiction in respect of payment of contractors' bills.

Disposition: S.N. Jha, J. delivered the opinion dismissing the writ petition; Narayan Roy, J. concurred.

    Binod Kumar Srivastava v. The State Of Bihar & Ors.

    S.N Jha, J.:— The petitioner, a contractor, seeks mandamus for payment of his so called outstanding bills. He had come to this Court earlier in C.W.J.C No. 5 of 1992 (R) for the same very relief, which was disposed of on 6.1.1992 in the following terms:

    “In exercise of our jurisdiction under Article 226 of the Constitution of India, no writ of mandamus can be issued and the remedy of the petitioner is to raise grievance before the higher authorities which, we are sure, shall receive due consideration.”

    If the petitioners are still not paid their bills, the remedy of the petitioner would be either to enforce the arbitration agreement, if any, or to file a suit.

    This application is permitted to be withdrawn as prayed for.”

    2. This writ application was filed on 19.2.1992 stating that pursuant to the aforesaid orders of this Court the petitioner filed representation on 10.1.1992 but no orders were passed by the concerned respondents. The writ application came up for preliminary hearing at the stage of admission on 5.3.1992 and was disposed of with a direction to respondents 3 and 4 to make payment of the pending bills, said to have been passed on 30.9.1989 itself, as expeditiously as possible before 31st March 1992. An application seeking review of the said order dated 5.3.1992 was filed on behalf of the respondents, namely, State of Bihar and its officials, on 8.4.1992 After hearing the parties, the review application was allowed on 12.5.1992 and the writ application was directed to be heard observing that the review application will be treated as counter affidavit in the instant writ application. This matter, accordingly, was listed before us and heard finally with the consent of the parties.

    3. Before we notice the submissions made on behalf of the petitioners, it would be appropriate to briefly refer to the stand of the respondents. The sheet-anchor of the claim of the petitioner is the letter no. 627 dated 30.6.1989 said to have been issued by the then Executive Engineer, a copy whereof has been marked Annexure-4 to the writ petition, informing the petitioner that his pending bills have been passed and steps are being taken to make payment within 15 days. According to the respondents, the then Executive Engineer, Sri Kailash Sinha, made over charge of his office on 30.6.1989 on transfer. The letter as contained in Annexnre-4 was apparently issued in order “to give handle to the writ petitioner for the unfounded claim he has made”. The successor Executive Engineer by his letter dated 6.10.1989 asked all the contractors including the petitioner herein to substantiate their claims. However, no response came from the contractors including the petitioner in spite of reminder to that effect by letter no. 115 dated 9.3.1990 The petitioner coerced the successor Executive Engineer Sri Upendra Bahadur to make payment and he also forcibly took away a cheque for Rs. 2,38,585 which was also encashed. The matter was referred to the State Government and finally after necessary enquiry and verification first information report has been lodged by the Superintending Engineer on 4.4.1992 being Bistupur P.S Case No. 91/92 against the then Executive Engineer Sri Kailash Sinha, Junior Engineer, as also the petitioner making various allegations regarding misappropriation of Government money and material, forgery, criminal intimidation etc. It would, thus, appear that the respondents have denied the correctness of the impugned bills and have asserted that the petitioner is not entitled to claim payment of the bills. The respondents have further taken the stand that the petitioner has not come to this Court with clean hands inasmuch as material facts regarding the outcome of his previous writ petition have not been stated correctly and, therefore, the writ petition is fit to be dismissed on this very ground. The plea of res judicata, by reason of the previous order in C.W.J.C No. 5 of 1992 (R) has also been taken.

    4. On behalf of the petitioners it was submitted that the fact that the petitioner had moved this Court earlier in C.W.J.C No. 5 of 1992 (R) has not been suppressed, as would be evident from paragraph 13 of the writ petition. It was also stated relying on Daryao v. State of U.P (AIR 1961 Supreme Court, 1457) that the dismissal of writ petition on the ground of alternative remedy does not constitute res judicata.

    5. The petitioner has, no doubt, stated in paragraph 13 that he had moved this Court in C.W.J.C No. 5 of 1992 (R). However, about the order passed in the said writ petition, it has been stated:

    “This Hon'ble Court vide order dated 6.1.1992 has been pleased to permit the petitioner to withdraw his writ application with the observation that the petitioner shall file representation before the higher authorities.”

    6. The contents of the order dated 6.1.1992 have been quoted above. It would appear therefrom that this Court specifically held that no writ of mandamus could be issued, directing the respondents to make payment of the contractors bills in the writ jurisdiction of this Court and, therefore, the petitioner could raise his grievance before the higher authority, failing which he could avail of the arbitration clause in the agreement or file a suit. However, an omnibus statement was made in paragraph 13 of the petition, as noticed above, that the writ petition was permitted to be withdrawn with observation that the petitioner would file representation. The suppression of the material facts is writ large. Suppressio very suggestio falsi. If on previous occasion this Court being cognisant of the limitations of the writ jurisdiction in issuing writ of mandamus directing payment of contractors' bills, refused to pass any positive order relegating the petitioner to arbitration or suit, it is difficult to appreciate how on selfsame facts, the same very relief can be granted in this application. In our opinion, the order passed in C.W.J.C No. 5 of 1992 (R) is binding on the petitioner on all fours.

    7. However, in deference to Mr. Basudeva Prasad, learned counsel appearing for the petitioner, we heard him on the question as to whether a writ of mandamus can be issued in the matter. Learned counsel placed reliance on Sharif Ahmed v. Regional Transport Authority, Meerut, ((1978) 1 SCC 1 : AIR 1978 Supreme Court, 209), Surya Narain Yadav v. Bihar State Electricity Board ((1985) 3 SCC 38 : AIR 1985 Supreme Court, 941), Assistant Commissioner of Commercial Taxes (Astt.) v. Dharmendra Trading Company (AIR 1988 Supreme Court, 124) and Star Enterprises v. City and Industrial Development Corporation (1990 (2) Judgments Today, 401). Learned counsel, however, admitted that there is no decision of the Supreme Court holding that a writ of mandamus can be issued directing payment of contractors' bills.

    8. In Radha Krishna Agrawal v. State of Bihar ((1977) 3 SCC 457 : AIR 1977 Supreme Court, 1496) the Supreme Court upheld the categorization of cases arising out of breaches of alleged obligations by the State or its agents into three types of cases, namely, (i) where petitioner makes a grievance of breach of terms on the part of the State in cases where on assurance or promise made by the State, he has acted to his prejudice and predicament but the agreement is short of a contract within the meaning of Article 299 of the Constitution, (ii) where the contract entered into between the party aggrieved and the State is in exercise of a statutory power under certain Acts or Rules framed thereunder and the petitioner alleges a breach on the part of the State; and (iii) where the contract entered into between the State and the person aggrieved is non-statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract and the petitioner complains about breach of such contract by the State. It was-held that so far as cases coming under categories (i) and (ii) are concerned, writ application under Article 226 of the Constitution is maintainable whereas, in cases falling in category (iii) no application invoking the jurisdiction of the High Court under Article 226 was maintainable. A Full Bench of this Court in Pancham Singh v. State of Bihar, (1991 (1) PLJR, 352) noticed the decision in Radha Krishna Agrawal's case (supra) as also several later decisions of the Supreme Court and held that in spite of the aforementioned later judicial pronouncements as mentioned therein, the law laid down in Radha Krishna Agrawal's case (supra) holds the field. However, a fourth category of cases was carved out, namely, where the contract entered into between the State and the person aggrieved although non-statutory and purely contractual is cancelled on a ground de hors any of the terms of the contract which is also per se violative of Article 14 of the Constitution as being arbitrary, and it was said that even in such cases applications under Article 226 are maintainable.

    9. Learned counsel for the petitioner made a vain attempt to bring the instant case in the fourth category. However, it is obvious that it is not a case of cancellation of contract nor the alleged breach, namely, non-payment of the bill can be said to be de hors the terms of the contract. We are also satisfied on the facts of the case that breach, if any, is not arbitrary. We have no manner of doubt that the instant case falls in category (iii) as enumerated in Radha Krishna Agrawal's case (supra), since the grievance of the petitioner emanates from a contract entered into between the State and the petitioner which as it is non-statutory and purely contractual and, therefore, this writ petition seeking mandamus is not maintainable.

    10. From the stand of the respondents as set out in the counter affidavit, briefly noticed above, it is obvious that serious disputed questions of facts are involved and exercise of jurisdiction under Article 226 of the Constitution cannot be said to be a proper exercise of discretion. We find ourselves in respectful agreement with the order passed in C.W.J.C No. 5 of 1992 (R). The previous order dated 5.3.1992 in the instant writ petition was passed without giving opportunity to the respondents to file counter affidavit. The said order already stands recalled by reason of the order dated 12.5.1992 allowing the civil review application. For the reasons stated above, this writ application has no merit and is, accordingly, dismissed.

    Narayan Roy, J.:— I agree.

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    Binod Kumar Srivastava v. The State Of Bihar & Ors.
    (May 21, 1992)