The question in this appeal was as to whether a writ
petition under Article 226 of the Constitution of India could be entertained
against an assessment order on the sole ground that the statutory remedy of
appeal against the order stood barred by law.
An assessment order passed by the appellant against
the respondent under the Andhra Pradesh Value Added Tax Act, 2005 was not
challenged by the respondent within the stipulated time period under the
applicable rules. The delay was sought to be explained by placing the blame on
negligence of an employee of the respondent, against whom disciplinary
proceedings had also been initiated. The appellate authority disbelieved the
factual version set up by the respondent, and also rejected the appeal on the
ground that the delay in the case was beyond its power of condonation under the
statute. This order of the appellate authority was not challenged further.
Instead, the original assessment order was challenged by way of a writ petition
before the High Court, which writ petition of the respondent came to be allowed
by the order under challenge before the Supreme Court.
The Supreme Court held:
(i)
Although power under Article 226 is wide, it ought
usually not to be exercised where alternative remedy is available to a party;
the Court relied on Titaghur Paper Mills Co. Ltd. &Anr. v. State of
Orissa &Ors. for the proposition that where a right or liability is
created by statute which gives a special remedy in enforcing it, that statutory
remedy must only be availed of;
(ii)
The power of the High Court under Article 226 cannot
be exercised to issue a writ which would be inconsistent with the legislative
mandate. The decisions of the Andhra High Court in Electronics Corporation
of India Ltd. v. Union of India &Ors., of the Gujarat High Court in Panoli
Intermediate (India) Pvt. Ltd. v. Union of India &Ors., and of the
Karnataka High Court in Phoenix Plasts Company v. Commissioner of Central
Excise (Appeal-I), Bangalore were held to proceed on a fallacious premise.
(iii)
Once the statute provides a remedy, and the
statutory remedy of appeal has been allowed to become time barred, the question
of violation of fundamental rights so as to entertain a writ petition could not
arise.
The appeal was thus allowed.
South East Asia
Marine Engineering and Constructions Ltd. (Seamec Ltd.) v. Oil India Limited
[Civil Appeal
No. 673 of 2012 decided on 11.5.2020]
This case arose out of a challenge to a judgment of
the Gauhati High Court whereby the High Court, in exercise of power under
Section 37 of the Arbitration & Conciliation Act, 1996 (“Act”), set aside
an arbitral award while holding that the interpretation of the contract by the
arbitral tribunal was against the public policy of India. The award having been
upheld under Section 34, the High Court opined that the award could be set
aside under Section 37 as it had been passed overlooking the terms and
conditions of the contract.
The bone of contention between the parties was the
applicability of Clause 23 of the contract between the parties (for drilling of
oil wells in Assam by the appellant for the respondent) which was the ‘Change
in Law’ clause. During the subsistence of the contract, the Government by an
executive order brought about an increase in the price of High Speed Diesel
(HSD) which was one of the essential materials for carrying out drilling
operations. The appellant claimed that this triggered Clause 23, and the
respondent was liable to reimburse the increase to the appellant. The arbitral
tribunal accepted the claim of the appellant while holding that the executive
action though not strictly ‘law’ within the meaning of Clause 23, did have the
force of law. This view was reversed by the High Court while holding that
Clause 23 of the contract was akin to a force majeure clause relatable to
Section 56 of the Contract Act, 1872.
The Supreme Court held:
(i)
Clause 23 of the contract was found to be one which
envisaged and dealt with the harsh consequences of a possibility of frustration
of the contract, and provided for measures for mitigation of the same;
(ii)
It was found that Clause 23 did not support as wide
an interpretation as canvassed by the appellant, and sustained by the arbitral
tribunal; It was observed that the thumb rule of interpretation of a written contract
was to read it as a whole and so far as possible, mutually explanatory;
(iii)
It was found that the contract was one for a fixed
price, and the risk of price fluctuation was limited by the terms of the
contract, and can also have been assumed to have been taken into account by the
bidder while bidding for the tender;
(iv)
The wide interpretation of Clause 23 to include
price variation in HSD was also not supported by the other terms of the
contract. The Court also noticed that fuel was to be provided by the contractor
at his expense. This was found to be another indicator of the fact that the
view of the arbitral tribunal was not a possible interpretation of the terms of
the contract.
The impugned order was sustained and the appeal was
dismissed based on the above conclusions.
Patel
Engineering Ltd. v. North Eastern Electric Power Corporation Ltd. (NEEPCO)
[S.L.P (C)
3584-85/2020 and connected matters decided on 22.5.2020]
The SLPs before the Supreme Court were filed against
a set of impugned orders dated 10.10.2019 of the High Court of Meghalaya at
Shillong whereby the High Court refused to entertain review petitions filed by
the petitioner in respect of a judgment and order dated 26.2.2019. The review
petitions were dismissed on the ground of delay as well as the finding that no
ground for review was made out.
The orders dated 26.2.2019 had been passed by the
High Court to allow the appeals under Section 37 of the Arbitration &
Conciliation Act, 1996 (“Act”) filed by the respondent against the order of the
Additional Deputy Commissioner (Judicial) who had rejected the respondent’s
application under Section 34 challenging the arbitral awards passed in favour
of the appellant. The arbitral awards had thus been set aside by the High
Court.
The aforesaid orders dated 26.2.2019 were challenged
by the appellant before the Supreme Court, and the special leave petitions came
to be dismissed by a non-speaking order on 19.7.2019. No leave to file review
before the High Court was sought at the stage of dismissal of the SLPs on
19.7.2019.
Nevertheless, review petitions came to be preferred
by the appellant before the High Court on the ground that while passing the
Orders dated 26.2.2019 the High Court had committed an error apparent on the
face of the record in failing to consider the amendments made to the Act by the
Amendment Act of 2015. The said review petitions were dismissed vide the Orders
dated 10.10.2019, subject matter of the present challenge.
The Supreme Court referred to and relied upon its
decision in Bussa Overseas and Properties Private Limited and Another v.
Union of India and Another to hold that the present SLPs were not
maintainable against the Orders whereby applications for review had been
rejected, especially also since the appellants had not sought liberty to
approach the High Court for review at the stage of dismissal of the first round
of SLPs.
On the merits of the challenge, the Supreme Court
held that the High Court had correctly applied the law in Associate Builders
v. Delhi Development Authority (which was followed inSsyangyong
Engineering and Construction Company Limited v. National Highways Authority of
India) to hold that a domestic award could be set aside on the ground of
patent illegality or if the view of the arbitrator was found to be perverse.
The mere reference to judgments which preceded the Amendment Act of 2015 could
not lead to the conclusion that the High Court had applied the principles of
law incorrectly.
The impugned orders were upheld and the appeals were
dismissed.
