M/S S K Translines PVT LTD Thru Authorised Representative R D Baviskar Jalgaon vs. The State Of Maharashtra And Others

Held

The Court held that the writ jurisdiction of the High Court under Article 226 of the Constitution of India is sacrosanct and cannot be circumvented or circumscribed by an agreement between parties. It was clarified that Section 28 of the Contract Act, which allows for restricting jurisdiction to one court in case of concurrent jurisdiction, applies to ordinary tribunals exercising statutory jurisdiction and does not extend to constitutional remedies. The Court found that the termination of the contract entailed civil consequences, including forfeiture of security deposit and bank guarantee, and imposition of penalty, which could lead to the petitioner being blacklisted. This necessitated adherence to the principles of natural justice and prior notice. The Court noted that the termination was executed without adhering to Clause 41 of the License deed, which required a 30-day notice for premature termination, and also transgressed principles of natural justice. The decision-making process was found to be flawed, with the respondents immediately floating a fresh tender after termination. Consequently, the order dated December 16, 2017, was set aside. The contents of this communication were to be treated as a notice to the petitioner, who was given ten days to file a reply regarding remedying the respondents' dissatisfaction. The respondents were directed to take a decision on the reply on its merits, and until then, the further tender process was to be kept in abeyance. The judgment was kept in abeyance for four weeks to allow the respondents to avail further remedies.

Facts

The petitioner, M/s S.K. Translines Pvt. Ltd., was awarded a work order by the Maharashtra State Road Transport Corporation (MSRTC) for transporting parcels, allied services, and couriers via State Transport Buses from November 1, 2015, to October 31, 2018. This was based on a tender process and a license deed. However, on December 16, 2017, MSRTC, through Respondent No. 4, terminated the petitioner's license effective December 18, 2017. The termination order also entailed forfeiture of the security deposit and bank guarantee, and imposition of a penalty. The petitioner challenged this termination order by filing a writ petition before the Bombay High Court, Aurangabad Bench.

Key Issues

1. Whether the High Court has jurisdiction under Article 226 of the Constitution of India to entertain a writ petition concerning a contractual matter, especially when the contract involves an instrumentality of the State? The petitioner argued that judicial review powers of the High Court subsist in contractual matters involving the State and its instrumentalities, citing "Noble Resources Ltd. Vs. State of Orissa and another." They contended that civil consequences arising from contract termination necessitate adherence to principles of natural justice and opportunity of hearing, referencing "Kulja Industries Limited Vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and others." The petitioner also asserted that the availability of alternate remedies, or even an arbitration clause, does not bar the invocation of writ jurisdiction, and that contractual clauses cannot restrict the High Court's constitutional powers, citing "P.R.Transport Agency Vs. Union of India (UOI) and others" and "Sun TV Network Ltd. and others Vs. Union of India and others." The petitioner further alleged the termination was arbitrary and malafide, with non-existent reasons and trivial breaches, including issues related to GST registration. 2. Whether a contractual clause restricting jurisdiction to a specific court can oust the High Court's writ jurisdiction under Article 226 of the Constitution of India? The respondents argued that parties can agree to restrict jurisdiction to one court if multiple courts have concurrent jurisdiction, citing "Shriram City Union Finance Corporation Limited Vs. Rama Mishra" and "Swastik Gases P. Ltd. Vs. Indian Oil Corp.Ltd." They also contended that the High Court should not exercise its judicial review powers in contractual matters, referencing "Pimpri Chinchwad Municipal Corporation Vs. Gayatri Construction Company," "Empire Jute Co. Ltd Vs. Jute Corporation of India Ltd.," and "State of Uttar Pradesh Vs. Bridge and Roof Company India Limited." The respondents also claimed that the petitioner was made aware of lapses and that notices were issued.