Case Note & Summary
The petitioner, M/s S.K. Translines Pvt. Ltd., was awarded a work order by Respondent No. 5 (General Manager (Traffic), MSRTC) for carrying out the business of transportation of parcels. The petitioner was required to provide vehicles as per the contract. However, the petitioner failed to provide the required number of vehicles, leading to the termination of the contract by the respondents. The petitioner challenged the termination by filing a writ petition under Article 226 of the Constitution of India before the Bombay High Court, Aurangabad Bench. The respondents raised a preliminary objection regarding the maintainability of the petition, arguing that the contract contained an arbitration clause and that the dispute was purely contractual. The court considered two issues: (i) the jurisdiction of the High Court under Article 226 in contractual matters, and (ii) whether by an agreement the jurisdiction under Article 226 can be restricted. The court held that the jurisdiction under Article 226 cannot be ousted by any agreement, but the court may not ordinarily entertain a petition involving disputed questions of fact arising out of a contract unless the action is arbitrary or unreasonable. On merits, the court found that the petitioner had failed to provide the required number of vehicles as per the contract, and the termination was based on the terms of the agreement. The court concluded that there was no arbitrariness or unreasonableness in the respondents' action and dismissed the writ petition.
Headnote
A) Constitutional Law - Jurisdiction of High Court under Article 226 - Contractual Matters - Whether by an agreement the jurisdiction of the Court under Article 226 can be restricted - Held that the jurisdiction of the High Court under Article 226 cannot be ousted by any agreement between the parties, but the Court may not ordinarily entertain a petition involving disputed questions of fact arising out of a contract unless the action is arbitrary or unreasonable (Paras 1-3). B) Contract Law - Termination of Contract - Breach of Contractual Obligations - Whether termination of a contract for transportation of parcels by MSRTC was arbitrary - Held that the petitioner failed to perform its obligations under the contract, and the termination was based on the terms of the agreement; the Court found no arbitrariness or unreasonableness in the action of the respondents (Paras 4-6).
Issue of Consideration
Whether the High Court under Article 226 of the Constitution of India can entertain a petition arising out of a contractual matter and whether by an agreement the jurisdiction of the Court under Article 226 can be restricted.
Final Decision
The writ petition is dismissed. The court held that the jurisdiction under Article 226 cannot be ousted by agreement, but on merits, the petitioner failed to show any arbitrariness or unreasonableness in the termination of the contract. The termination was based on the petitioner's failure to provide the required number of vehicles as per the contract.
Law Points
- Jurisdiction under Article 226 cannot be ousted by agreement
- Contractual disputes not ordinarily entertainable under Article 226
- Termination for breach of contract not arbitrary if based on terms
- Writ court examines only arbitrariness or unreasonableness
- Not a forum for contractual disputes
