M/S. RAM BARAI SINGH & CO.versusSTATE OF BIHAR & ORS.

A
                       (2014] 11 S.C.R. 286


                 M/S. RAM BARAi SINGH & CO.
                                                                •
                                 v.
                     STATE OF BIHAR & ORS.
                 (Civil Appeal No. 11465 of 2014)
                      DECEMBE,R 17, 2014
B
          [M.Y. EQBAL AND SHIVA KRITI SINGH, JJ.]

        Constitution of India, 1951 - Art. 226 - Writ petition by
  appellant - No objection taken by respondent as to
C entertainment of writ petition on the ground of availability of
   alternative remedy - Writ petition rendered on merits by the
   Single Judge of High Court - Letters Patent Appeal by
  respondent - Division Bench allowed LPA, setting aside the
   order of Single Judge on the ground that an alternative
o remedy by way of arbitration clause could have been resorted
   to - On appeal, held: Constitutional remedy by way of writ
  petition is always available to an aggrieved party and an
   arbitration clause in an agreement between the part;es cannot
  ipso facto render a writ petition "not maintainable" - On facts,
E there was no existing agreement because the work had been
   completed and payment had already been made, and the final
  judgment in the writ petition was rendered on merits - Thus,
   order of the Division Bench is set aside and that of the Single
  Judge is restored.
F       Allowing the appeal, the Court

       HELD: 1.1. A constitutional remedy by way of writ
  petition is always available to an aggrieved party and an
  arbitration clause in an agreement between the parties
G cannot ipso facto render a writ petition "not maintainable"
  as wrongly held by the Division Bench. Availability of
  alternative remedy is definitely a permissible gmund for
  refusal by a writ court to exercise its jurisdiction in
  appropriate cases. But once the respondents had not
H                                286
    •      RAM BARAi SINGH & CO. v. STATE OF BIHAR


        objected to entertainment of the writ petition on ground of
                                                                   287


                                                                          A
        availability of alternative remedy, the final judgment
        rendered on merits, cannot be faulted and set aside only
        on noticing by the Division Bench that an alternative
        remedy by way of arbitration clause could have been
        resorted to. On facts, there was no existing agreement            B
        because the work had been completed and payment had
        already been made long back. Thus, the order under
        appeal is set aside and the judgment and order of the
        Single Judge is restored. [Para 12, 13, 14) [291-0-G; 292-C]

             State of U.P. & Ors. v. Bridge & Roof Company (India) C
        Ltd. 1996 (4) Suppl. SCR 762: (1996) 6 sec 22; ABL.:
        International Ltd. & Anr. v. Export Credit Guarantee
        Corporation of India Ltd. & Ors. (2004) 3 SCC 553 - referrect
        to.
                                                                      D
                              Case Law Reference:
            1996 (4) Suppl. SCR 762 referred to             Para 10
            (2004) a sec 553              referred to       Para 10
            CIVIL APPELLATE JURISDICTION : Civil Appeal No.               E
        11465 of 2014.

            From the Judgment & Order dated 12.01.2011 of the High
        Court of Judicature at Patna in LPA No. 762 of 2009.
                                                                          F
            Gaurav Agrawal for the Appellant.

            Manish Kumar (for Gopal Singh) for the Respondents.

            The Judgment of the Court was delivered by
                                                                          G
             SHIVA KIRT! SINGH, J. 1. Heard the parties. Leave
        granted.

            2. This appeal is directed against final judgment and order
•       dated 12.01.2011 passed by the Division Bench of Patna High       H
    288      SUPREME COURT REPORTS                [2014] 11 S.C.R.


A Court in L.P.A. No.762 of 2009 whereby the Letters Patent
  Appeal preferred by the respondents herein was allowed and
                                                                         •
  order of the learned Single Judge dated 18.02.2009 in Writ
  Petition bearing C.W.J.C. No.10173 of 2008 was set aside on
  the sole ground that there was an arbitration clause in an
B agreement between the ·parties and since such alternative
  remedy was not availed by the appellant, the writ petition itself
  was not maintainable.

         3. Learned counsel for the appellant has assailed the
    aforesaid order of the Division Bench on facts as well as on
C   law. On law, it was contended that the writ petition could not
    have been held not maintainable, more so when no such
    objection was taken by the other side. On facts, it was submitted
    that the agreement noticed by the Division Bench no doubt
D   contained an arbitration clause entitling either of the parties to
    invoke arbitration by the concerned Superintending Engineer
    in case of any dispute arising out of the agreement but the
    Division Bench failed to notice that the agreement itself was
    no longer in existence because the work was completed long
    back and payments including payment on account of labour
E   escalation costs amounting to Rs.9.53 lacs was paid in
    February 1992. Thus, according to the appellant, the agreement
    dated 06.02.1989 had worked itself out and it was much later
    that a dispute arose when the respondent authorities withheld
    the security amount of the appellant of Rs.30 lacs for a long
F   period. On persistent demand, Rs.20 lacs out of the security
    amount, was returned after 10 years in December 2002 and
    that too without any interest. At that stage appellant came to
    know that Engineer-in-Chief vide an order dated 09.06.2001
    had ordered for making a recovery of Rs.9.53 lacs from the
G   appellant which had been paid long back on account of labour
    escalation cost.

       4. The appellant preferred a writ petition bearing
  C.W.J.C.No.3686 of 2005 to claim the interest on undue delay
H in refunding the security deposit and against the direction for
•       RAM BARAi SINGH & CO. v. STATE OF BIHAR                  289
                 [SHIVA KIRTI SINGH, J.]
    recovery of labour escalation cost. The respondents did not         A
    raise plea of arbitration clause and that writ petition was
    disposed of on 20.09.2006 allowing 12% interest on account
    of delay in payment of security amount. The issue of labour
    escalation cost was remanded back to the concerned
    Engineer-in-Chief who was directed to pass a reasoned order         B
    after hearing the appellant or his representative, within a fixed
    period. The appellant was granted liberty to seek his remedy
    if he was aggrieved by the order that may be passed by the
    Engineer-in-Chief.

         5. The respondents preferred a Letters Patent Appeal
                                                                        c
    bearing No.877 of 2006 in which also they did not raise the
    issue of alternative remedy by way of arbitration clause. The
    LPA was disposed of on 11.12.2007 with the following
    direction :
                                                                        D
        " ........ Since the matter is going on remand, the State has
        to apply its mind afresh to the facts and circumstances of
        the case and, therefore, the direction, as quoted above
        would be juxtaposition to the order of remand. The question
        of payment of interest by either side, however, will abide      E
        by the ultimate determination of the question by the State
        of Bihar.

              It goes without saying that the matter would be
         examined and re-determined by the State expeditiously."        F

         6. The Engineer-in-Chief passed a fresh order on
    21.05.2008 against the appellant over-ruling the various
    grounds and objections raised by the appellant in his
    representation relating to merits of the matter as well as
    jurisdiction of the Engineer-in-Chief who, according to             G
    appellant, had no role in the issue which was to be finalized at
    the stage of Executive Engineer and the Superintending
    Engineer. The appellant challenged the order of Engineer-in-
    Chief through writ petition bearing C.W.J.C. No.10173 of 2008
                                                                        H
    290      SUPREME COURT REPORTS                 [2014] 11 S.C.R.

A which was allowed by the learned Single Judge on 18.02.2009
                                                                    •
    by a reasoned order. There is no dispute that respondents filed
    a counter affidavit but did not raise any objection of alternative
    remedy by way of an arbitration clause in the agreement dated
    06.02.1989.
B
       7. The learned Single Judge allowed the writ petition
  preferred by the appellant by setting aside the order of the
  Engineer-in-Chief dated 21.05.2008. The Court found that the
  Engineer-in-Chief had raised demand of interest in the yea_r
C 2008 along with refund of labour escalatior. cost only to offset
  the State's liability to pay interest on refund of secllrity deposit
  after a delay of about 10 years. Thus the action of the
  respondents was held to be for ulterior reasons and objection
  to labour escalation cost after a long gap from its actual
  payment was held to be arbitrary and unreasonable.
0
        8. The aforesaid order of the learned Single Judge dated
    18.02.2009 was set aside by the Division Bench by the order
    under appeal on the ground already noticed earlier.

E        9. We find ourselves in agreement with case of the
    appellant that the Division Bench failed to notice the relevant
    facts including the history of earlier litigation. It also failed to
    notice that the agreement itself had worked out long back and
    in the earlier round of litigation as well as in the present round -
F   the respondents never raised any objection on the basis of
    arbitration clause.

       10. The Division Bench noticed the judgment of this Court
  in the case of State of U.P. & Ors. v. Bridge & Roof
G Company (India) Ltd. (1996) 6 sec 22 as well as in the case
  of ABL International Ltd. & Anr. v. Export Credit Guarantee
  Corporation of India Ltd. & Ors. (2004) 3 SCC 553 for
  coming to the conclusion that where the contract itself provides
  an effective alternative remedy by way of reference to
H arbitration, it is good ground for declining to exercise
•      RAM BARAi SINGH & CO. v. STATE OF BIHAR
                [SHIVA KIRTI SINGH, J.]
                                                                  291


    extraordinary jurisdiction under Article 226 of the Constitution      A
    of India and that the Court will not permit recourse to other
    remedy without invoking the remedy by way of arbitration,
    "unless, of course, both the parties to the dispute agree on
    another mode of dispute resolution."
                                                                          B
          11. In our considered view, the aforesaid two decisions
    did not warrant setting aside of the judgment of learned Single
    Judge without going into merits and dismissing the writ petition
    at appellate stage on ground of alternative remedy when no
    such objection was taken by the respondents either before the         C
    writ court or even in the Memorandum of Letters Patent Appeal.

          12. In our view, a constitutional remedy by way of writ
    petition is always available to an aggrieved party and an
    arbitration clause in an agreement between the parties cannot
    ipso facto render a writ petition "not maintainable" as wrongly       D
    held by the Division Bench. Availability of alternative remedy
    is definitely a permissible ground for refusal by a writ court to
    exercise its jurisdiction in appropriate cases. But once the
    respondents had not objected to entertainment of the writ
    petition on ground of availability of alternative remedy, the final   E
    judgment rendered on merits cannot be faulted and set aside
    only on noticing by the Division Bench that an alternative remedy
    by way of arbitration clause could have been resorted to.

          13. In our view, learned counsel for the appellant has made     F
    out a case for setting aside the order under appeal both on the
    facts noticed above which show that there was no existing
    agreement because the work had been completed and
    payment had already been made long back and also on the
    question of law raised in this appeal that a constitutional           G
    remedy through a writ petition cannot be held to be not available
    and not maintainable on account of an alternative remedy. It is
    for the writ court to consider whether in an appropriate case,
    writ petitioner should be relegated to avail alternative remedy
    or not. But once writ petition is heard at length and decided         H

                                                                          I
A
    292          SUPREME COURT REPORTS           (2014] 11 S.C.R.


    against one or the other party on merits, such a decision/order
    cannot be held to be bad in law only on the ground that writ
                                                                        •
    petition was not maintainable due to availability of alternative
    remedy.

8       14. Having considered the matter on merits as reflected
  by the order of the learned Single Judge, we find sufficient merit
  in this appeal and hence it is allowed. The order under appeal
  is set aside and the judgment and order of the learned Single
  Judge is restored along with a cost of Rs.25,000/- (Rupees
C twenty five thousand) to be paid by the respondents to the
  appellant within two months.

    Nidhi Jain                                        Appeal allowed.