The Bombay High Court, Aurangabad Bench, has declined to entertain a writ petition filed by M/s. MVV Satyanarayan challenging the termination of its railway construction contract, holding that the dispute arose purely out of contractual obligations and must be resolved through arbitration in accordance with the provisions of the General Conditions of Contract. The petitioner had argued that the termination was arbitrary, violated principles of natural justice, and was issued despite substantial time remaining for completion of the project. It also sought permission to complete the remaining work and release the pending dues.
The Bench of Justice Hiten S. Venegavkar and Justice Vibha Kankanwadi, however, found that the dispute involved highly contested factual issues relating to project execution, delay, and payments, which cannot be adjudicated in writ jurisdiction. It noted that the railway authorities had repeatedly issued notices, conducted meetings, and provided opportunities to the contractor before terminating the agreement, thereby rejecting the allegation of violation of natural justice.
Emphasising the limited scope of judicial review in contractual matters, the Court held that “the disputes sought to be agitated are essentially and overwhelmingly disputes involving contested questions of fact” and therefore unsuitable for adjudication under Article 226. Reference was made to U.P. & Ors. v. Bridge & Roof Co. (India) Ltd. (1996) 6 SCC 22 & Kerala State Electricity Board & Anr. v. Kurien E. Kalathil & Ors. (2000) 6 SCC 293.
The Bench further underscored the binding nature of the arbitration clause, observing that “it would be wholly inappropriate for this Court to permit a party to bypass the agreed dispute resolution mechanism”.
Concluding that no public law element or fundamental rights violation was involved, the Court dismissed the petition while granting limited interim protection to the petitioner, allowing time to initiate arbitration proceedings.
Appearances
Mr. Prasadrao Vemulapalli, Advocate h/f Mr. A.A. Fulfagar,Advocate for Petitioner Mr. N.S. Salunke, Advocate for Respondents No.1 to 3
