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State Of Jammu And Kashmir v. Ghulam Mohd. Dar And Another
Factual and Procedural Background
The appellant issued an advertisement inviting tenders for construction works (radiotherapy mortuary workers' facility, pump house and guardroom). Respondent 1 submitted a tender which was accepted, and the parties executed an agreement dated 14-12-1979 containing an arbitration clause. The respondent completed construction by November 1983 and sought payment of 42% escalation for certain items said to be covered under the principal agreement. The Chief Engineer informed the respondent that escalation was applicable to all items as per the Standing Finance Committee. On 4-4-1981, the respondent filed a writ petition in the High Court of Jammu and Kashmir seeking mandamus directing payment of 42% escalation rates as approved under a supplementary agreement and confirmed by the Chief Engineer’s letter dated 5-5-1986.
A learned Single Judge allowed the writ petition and granted the direction sought. The appellant’s letters patent appeal was dismissed. The appellant then appealed against those judgments.
Legal Issues Presented
- Whether a writ petition seeking mandamus is maintainable to enforce the terms and conditions of a contract (contract qua contract), particularly where the contract contains an arbitration clause.
- Whether the High Court should entertain the writ petition where the matter involves disputed questions of fact.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court noted that it was undisputed that the parties’ contract contained an arbitration agreement and that the respondent’s writ petition sought enforcement of contractual terms (i.e., enforcement of a contract qua contract). Although the appellant had raised an objection regarding maintainability, the High Court had not considered it.
The Court applied settled principles that (i) a writ of mandamus would not ordinarily issue for enforcing terms and conditions of a contract qua contract, (ii) mandamus issues where questions of a public law character arise, and (iii) the High Court would not entertain a writ petition involving disputed questions of fact. On these bases, the impugned High Court judgments were held unsustainable and were set aside.
Given the arbitration clause and the parties’ proposal, the Court facilitated resolution through arbitration by requesting Justice R.P. Sethi (former Judge of the Court) to act as sole arbitrator. The parties’ counsel also stated that no limitation plea would be raised before the arbitrator. The arbitrator was to determine his remuneration, and any award would be filed before the High Court.
Holding and Implications
APPEAL ALLOWED; IMPUGNED JUDGMENTS SET ASIDE.
The immediate consequence is that the High Court’s mandamus directing payment of 42% escalation was nullified. The dispute was directed to be resolved through arbitration under the contractual arbitration clause, with Justice R.P. Sethi appointed as sole arbitrator; the parties agreed not to raise limitation before the arbitrator. The opinion does not indicate any broader implications beyond the parties’ dispute, and it does not purport to set any new precedent.
Order
1. The appellant herein issued an advertisement inviting tenders for the works, namely, construction of radiotherapy mortuary workers' facility, pump house and guardroom. Respondent 1 herein responded to the said advertisement and submitted his tender, which was accepted by the appellant herein. An agreement was entered into between the parties on 14-12-1979. The agreement contained an arbitration clause. It appears that the respondent was able to complete the construction by November 1983. Under such circumstances, he gave an application to the Chief Engineer wherein it was submitted that the escalation of 42% had not been paid in respect of certain items of which escalation was provided for under the principal agreement. However, the Chief Engineer informed the respondent that the escalation was applicable to all the items as per the decision of the Standing Finance Committee. On 4-4-1981 the respondent filed a petition in the High Court of Jammu and Kashmir seeking the mandamus that the appellant be directed to pay 42% escalation rates as approved under the supplementary agreement and confirmed by the letter dated 5-5-1986 of the Chief Engineer.
2. The learned Single Judge of the High Court allowed the writ petition and issued a direction in terms of the prayer made in the writ petition. A letters patent appeal filed by the appellant was dismissed. It is against the said judgment, the appellant is in appeal before us.
3. It is not disputed that the contract agreement entered into by and between the parties contains an arbitration agreement. Furthermore, the respondent herein filed the aforementioned writ petition for enforcing a contract qua contract. Although an objection has been taken as regards the maintainability of the writ petition by the appellant herein, the same unfortunately has not been considered by the High Court. It is well settled that writ of or in the nature of mandamus would not ordinarily issue for enforcing the terms and conditions of a contract qua contract. A writ of mandamus would issue when a question involving public law character arises for consideration. It is also well settled that the High Court would not entertain a writ petition involving disputed questions of fact. Keeping in view the aforementioned well-settled principles of law, the impugned judgments cannot be sustained. They are set aside accordingly. The appeal is allowed. However, the parties appearing before us proposed that Justice R.P Sethi, a former Judge of this Court be appointed as a sole arbitrator in terms of the arbitration agreement. Accordingly, we request Justice R.P Sethi to act as the sole arbitrator. Learned counsel appearing for the parties also submitted that no plea as regards limitation would be raised before the learned arbitrator. The parties would be at liberty to approach Justice R.P Sethi for the aforementioned purpose. The remuneration payable to the arbitrator shall be decided by the arbitrator himself. We may make it clear that the fees payable to the learned arbitrator would be decided by him and the award, if any, would be filed before the High Court.
4. In the aforesaid view of the matter, we set aside the judgment under challenge. The appeal is allowed.
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