Case Note & Summary
The petitioners, Jog Engineering Limited and Mr. Madhav Vishnu Jog, entered into a contract with the State of Maharashtra (respondent) for the construction of a flyover at Andheri. A Public Interest Litigation (PIL) was filed challenging the construction, and by an interim order dated 28th July 2000, the petitioners were directed to proceed with the work and the respondents were directed to make payment for the work done. Disputes arose between the parties regarding the amounts claimed by the petitioners. The respondent paid Rs.68.22 crores plus an additional Rs.9.08 crores to the petitioners. In respect of the claim referred to the Committee of Secretaries under clause 3.4.16 of the contract, the committee rejected the petitioners' claim except to the extent of Rs.37 lakhs. The petitioners filed a writ petition under Article 226 of the Constitution of India seeking to quash the orders dated 3rd July 2004 and 30th June 2004 passed by the Committee of Secretaries, and also sought a direction to refer all disputes to arbitration. The court held that the Committee of Secretaries acted within its jurisdiction under the contract, and its decision is final and binding. The court found no violation of principles of natural justice, no mala fides, and no error of law apparent on the face of the record. Consequently, the writ petition was dismissed, and the rule was discharged. No order as to costs.
Headnote
A) Constitutional Law - Writ Jurisdiction - Contractual Disputes - Article 226 of the Constitution of India - The court held that a writ petition is not maintainable against a decision of a committee constituted under a contract to decide disputes, unless there is a violation of principles of natural justice, mala fides, or an error of law apparent on the face of the record. The Committee of Secretaries acted within its jurisdiction and its decision is final and binding under the contract. (Paras 1-3) B) Contract Law - Interpretation of Contract - Clause 3.4.16 - Finality of Committee's Decision - The contract provided that the decision of the Committee of Secretaries on claims under clause 3.4.16 shall be final and binding. The court upheld the committee's decision rejecting the petitioner's claim except for Rs.37 lakhs, as no grounds for interference were made out. (Paras 1-2)
Issue of Consideration
Whether the decision of the Committee of Secretaries rejecting the petitioner's claim under clause 3.4.16 of the contract is liable to be quashed in writ jurisdiction under Article 226 of the Constitution of India.
Final Decision
The writ petition is dismissed. Rule discharged. No order as to costs.
Law Points
- Writ jurisdiction under Article 226 not available against decisions of contractual committees
- Committee of Secretaries' decision final and binding under contract clause 3.4.16
- No error of law apparent on face of record
- No violation of principles of natural justice
- No mala fides established
