EAGLE CONSTRUCTION Vs. UNION OF INDIA

JUDGEMENT

(1.) These two Writ Appeals are appeals invoking the discretion of the Court for passing interim directions. By notice No. W/60/Con/ LD/SR/95/19/141 dated 21.2.97, Annexure 'C to Civil Rule No. 936 of 1997 and notice No. W/60/Con/P.Way/10/95/42/161 dated 24.2.97, Annexure 'C' to Civil Rule No. 938 of 1997, the Chief Engineer (C), the respondent No. 4 in both the appeals communicated a decision of recession of the contract in terms of the provisions of Clause 62 of the General Conditions of the contract. The appellant as writ petitioner moved this Court by two separate writ petitions assailing the cancellation of the contract in question. By order dated 3.3.97 the learned Single Judge issued notice of motion on both the writ petitions calling upon the respondents to show cause as to why a Rule should not be issued,' as prayed for or why such further order or orders should not be passed as the Court may deem fit and proper. The said writ petitions were numbered and registered as Civil Rule Nos. 936 of 1997 and 938 of 1997. The learned Single Judge upon hearing the respective counsel for the parties and upon considering the fact situation refused to pass interim direction restraining the Railways from executing the work in question through third parties. The learned Single Judge, however, recorded the statement of the learned Standing Counsel for the Railways that there shall not he any recovery from the petitioner pursuant to clause 62 of the contract and ordered that no recovery be made from the petitioner's pending bill, if any, for the work already executed as per clause 62 of the General Conditions of contract. The aforesaid two orders dated 3.3.97 passed in Civil Rule Nos. 936 and 938 of 1997 are the subject matter of Writ Appeal Nos. 153 and 154 of 1997 respectively.

(2.) As both the appeals involve the same questions of law and fact, we have heard both the appeals together.Mr. A.K. Bhattacharyya, learned Senior Counsel assisted by Mr. J. Deb, Ms. N.T. Nath, Ms. E. Kakoty and Mr. N. Nath submitted that the impugned order of recession of the contract was arbitrary and capricious and therefore violative of Article 14 of the Constitution of India. Mr. Bhattacharyya has drawn our attention to the materials on record to bring home his point about the unlawful termination of the contract. The learned Senior Counsel further submitted that legitimacy of the action of the respondents was under examination of the Court and therefore in the fitness of things the learned Single Judge on the facts and circumstances ought to have passed an order of interim direction to safeguard and protect the interest of the appellant. The refusal of interim direction virtually amounted to dismissal of the writ petitions, Mr. Bhattacharyya submitted. Mr. B.K. Sharma, learned Standing Counsel for the Railways along with Mr. M.K. Choudhury, Advocate questioned the very maintainability of the writ petitions. The learned Standing Counsel submitted that the subject matter involved in the writ petitions relates to the realm of contract and the rights and duties are flown from the contract. The writ Court is not the proper forum for enforcement of the rights and obligations emanated from contract. No powers under Article 226 of the Constitution of India is intended for avoiding contractual obligations voluntarily incurred.

(3.) Mr. Sharma, the learned Standing Counsel further submitted that the very contract in question on which the appellant 'put its reliance contained a clause directing, inter-alia, for resolution of disputes by a reference to arbitration. According to the learned counsel the writ petitions themselves are misconceived and therefore the question of granting of interim direction did not arise. Mr. Sharma in support of his argument referred to the decisions in Bareilly Development Authority and another Vs. Ajay Pal Singh reported in A.I.R. 1989 S.C. 1076, Food Corporation of India and others -Vs- Jagannalh Dutta reported in A.I.R. 1993 S.C. 1494, Rajendra Singh -Vs- State of M.P. and others reported in (1996) 5 S.C.C 460 and State of U.P. and others - Vs- Bridge & Roof Company (India) Ltd. reported in (1996) 6 S.C.C, 22. Mr. Sharma, the learned Standing Counsel further submitted that public interest also did not warrant for any interim direction in the given case. The Railway had a lime schedule for completion of the work in question which relates to gauge conversion from Metre Gauge to Broad Gauge from Lumding to Dibrugarh. The Railway had also fixed its target to open the Broad Gauge track for traffic within 313,97. National interest and development of North Eastern Region demands the rejection of any interim order, submitted the learned counsel.