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CASE NO.: Appeal (civil)  7337 of 2004

PETITIONER: Mrs. Sanjana M. Wig                                              

RESPONDENT: Hindustan Petro Corporation Ltd.                                 

DATE OF JUDGMENT: 15/09/2005

BENCH: S.B. Sinha & C.K. Thakker

JUDGMENT: J U D G M E N T

S.B. SINHA, J :

       The 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.

       The 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 thus :

"55.    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 :-

(A)     If 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;

(B)     Upon                  (i)     The death or adjudication as insolvent of the  Dealer, if he be an individual;

(ii)    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.

(iii)   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 society."

       According 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

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becoming unrecoverable, ’if the supplies were suddenly stopped’.  The  Respondent  agreed to continue supplies to the Appellant on purely ad hoc  basis.     

       The Respondent alleging  violation of various conditions of the said  agreement, namely, (1) low sales volume of the dealership; (2) sales  performance; (3) dry outs at the outlet; and (4) no 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 dated 09.02.2000.   

       A 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.

       The 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.       

       The writ petition filed by the Appellant herein, as noticed  hereinbefore,  was dismissed in limine by the impugned order.   

       Mr.Uday 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  :

"In terms of statement of settlement dated December 15,  2004, I pass the award as follows :

5.1     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.

5.2     In 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 05.

5.3     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 Claimant.

5.4     All the claims of both the Claimant and the  respondent which are contrary to or other than the  aforesaid terms of settlement are rejected.

5.5     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

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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 Respondent.

       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].  

The 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.   Ordinarily, 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.      

A 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 :

        "28. 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

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not limited by any other provisions of the Constitution.  The High Court having regard to the facts of the case, has  a discretion to entertain or not to entertain a writ petition.  The 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 : (i) where the writ petition seeks enforcement of  any of the fundamental rights; (ii) where there is failure of principles of  natural justice; or (iii) where the orders or proceedings are wholly without  jurisdiction or the vires of an Act is challenged.   

       We 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.

       A three-Judge Bench of this Court in Gujarat Ambuja Cement Ltd.  (supra), referring to Harbanslal  Sahnia, (supra) held : "\005There 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. 25. 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

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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.  

But in 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.  They 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.

We are 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.

It may 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 afresh.

For 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.