JUDGMENT
S.K. Keshote, J.
1. M/s. Nand Construction Company (hereinafter shall be referred to as ‘the petitioner’) filed S.B. Civil Writ Petition No.1041/1999 against the Regional Manager, Oriental Insurance Company limited and its Branch Manager (hereinafter shall be referred to as ‘the respondents’), which was decided by the learned Single Judge under its judgment dated 4.3.2002 (RLW 2002(2) Raj. 1233) Distinguished. The petitioner filed S.B. Civil Review Petition No.54/2002, which was dismissed by the learned Single Judge under its order dated 4.9.2002. The petitioner and the respondents, felt aggrieved of the judgment of the learned Single Judge filed these special appeals under Section 18 of the Rajasthan High Court Ordinances, 1949. Both the special appeals were taken up for hearing together; arguments were heard and concluded and the order was reserved on 29.8.2005.
2. Briefly stated the facts of the case are that the petitioner entered into insurance contract with respondent Oriental Insurance Company Limited vide Contractors All Risk (CAR) Policy No.44/96/00008 for a total contract price of Rs. 1.42 crores four road on different sites in Nadbai Tehsil, District Bharatpur. The petitioner paid premium of Rs.39,661/- through Cheque No.378071, dated 27.10.1995, and the respondent Insurance Company issued a miscellaneous provisional Cover Note No.069264/93, dated 27.10.1995, in favour of the petitionerand the period of contract was specified as from 27.10.1995 to 26.11.1996 (including one year maintenance period). A loss alleged to have been occurred in respect of CAR Policy aforesaid and accordingly the petitioner lodged a claim vide Claim No.44/97/00006 with the respondent Insurance Company. It is alleged that the respondent Insurance Company entrusted the job of surveying he actual loss sustained by the petitioner, to different surveyors on different times, first to Mr. N.K. Jairi (Surveyor of Jaipur) and secondly, to M/s. R.K. Singhal & Company (Surveyor of New Delhi). After completing his survey work Mr. N.K. Jain alleged to have quantified the loss sustained by the petitioner to the tune of Rs.29.50 lacs. The second surveyor M/s. R.K. Singhal & Company private Limited, New Delhi assessed the loss sustained by the petitioner and quantified it to the tune of Rs. 24.50 lacs. The grievance of the petitioner was despite repeated requests made. A notice of demand of justice was served and the writ petition, out of which these special appeal arise, was filed on 12.2.1999.
3. In the writ petition aforesaid the petitioner prayed for grant of following relief,
(i) to issue a writ in the nature of mandamus, wherewith, the respondents be directed to settle the claim of the petitioner as per the survey report, received by them.
(ii) to direct the respondents to pay the amount of interest @ 24% per annum accrued, thereon, i.e., on the principal sum payable from the date of loss dated 22.6.1996 till the actual payment is made.
(iii) to direct the respondents to pay damages to the tune of Rs.5.00 lacs for their failure to discharge their statutory and public duty in accordance with the law, and
(iv) the cost of the petition may kindly be awarded to the petitioner.
4. The respondent Insurance, Company contested the writ petition. The reply thereto was filed by it on 28.6.1999. The rejoinder thereto was filed by the petitioner on 20.7.1999. The learned Single Judge, under the impugned order, allowed the writ petition of the petitioner and set aside the letter dated 31.5.1999 (Annex.R/1), issued by the respondent Insurance Company during the pendency of the writ petition. The learned Single Judge directed to the respondent Insurance Company to settle the claim of the petitioner as per survey reports received by them, within two months from the date of the order. The respondent Insurance Company has also been saddled with the costs of the writ petition.
5. The petitioner, as stated above, filed S.B. Civil Review Petition No.54/2002 for review of the impugned judgment of the learned Single Judge on the ground that the Court has not passed any order on prayer Nos. (ii) and (iii) made by the petitioner in the writ petition. In prayer No.(ii) the petitioner prayed for grant for interest at the rate of 25% per annum on the principal sum with effect from 22.6.1996 till the actual payment is made thereof. In prayer no.(iii) the petitioner prayed for direction to the respondent Insurance Company to pay damages to the tune of Rs. 5.00 lacs for their failure to discharge their statutory and public duty in accordance with the law. The learned Single Judge dismissed the review petition on4.9.2002 and in D.B. Special Appeal (Writ) No.946/2002 this order of the learned Single Judge is under challenge.
6. Both the special appeals came up for hearing before the Bench on 6.5.2003 and same were heard and orally the result was pronounced, the reasons in support of the order were to be recorded later on. It is unfortunate that the files were not placed for recording reasons in the Chamber before one of us. It transpired later on, that files of both the appeals have been lost. On the prayer made by the parties files of these special appeals have been reconstituted and the same are placed for hearing and decision before us.
7. Learned counsel for the respondent Insurance Company contended that the learned Single Judge has committed an error in granting relief to the petitioner in a petition filed under Article 226 of the Constitution of India as therein attempt was made for enforcement of alleged right under the contract of insurance. In his submission the writ petition under Article 226 of the Constitution of India for enforcement of contractual rights is not maintainable. In support of his contention learned counsel for the respondent Insurance Company placed reliance on the decision of Hon’ble the Apex Court in Belde Venkatesham v. Chokkarapu Lakshmi Narasiah .
8. It has next been contended that the learned single judge granted the relief in favour of the petitioner though the same was not prayed for in the writ petition. In his submission the petitioner has not prayed for quashing of the letter dated 31.5.1999 (Annex.R/1) repudiating thereunder the contract of insurance by the respondent Insurance Company and still the same was quashed. Not only this, the learned Single Judge has given direction to the respondent insurance Company to settle the claim of the petitioner. It is urged that where the learned Single Judge considered it necessary to grant relief to the petitioner and to quash the letter Annexure-R/1 it was expected to record filing as regard to correctness of the claim raised. It is submitted that in fact the petition filed by the petitioner for the claim made has become infructuous after the decision aforesaid of the respondent Insurance Company. The learned Single Judge ought to have decided whether the claim made by the petitioner against the respondent Insurance Company is sustainable. Only after the Court having been recorded its satisfaction that the ground given for repudiation of contract by the respondent Insurance Company is not legally sustainable the relief could not have been granted. The learned Single Judge has not undertaken this exercise and without there being any prayer for quashing Annex.R/1 and adjudication upon the validity of the decision taken by the respondent Insurance Company the relief has been granted in favour of the petitioner, which on the face of it is erroneous.
9. Lastly, it is contended that the learned Single Judge has committed an error to draw an inference of mala fide on the part of the respondent Insurance Company to repudiate the contract on the ground that it has been done after notice of the writ petition.
10. Shri Suresh Sahani with Shri R.M. Sharma, learned counsel for the petitioner, contended that the learned Single Judge has committed a serious error in not granting the relief as prayed for in a prayer Nos. (ii) and (iii) of the writ petition. In their submissions the learned Single judge has accepted it to be a case of illegal repudiation of contract by the respondent Insurance Company and the petitioner should have been awarded interest on the amount of claim as well as damages. There is an error apparent on the face of the judgment of the learned Single Judge not to make the reference of the prayers (ii) and (iii) what to say to record reasons for non-grant of relief and thus the order deserves to be reviewed on this point.
11. Opposing the appeal of the, respondent Insurance Company learned Counsel for the petitioner supported the order of the learned Single Judge.
12. Per contra learned Counsel for the respondent Insurance Company submitted that it is a discretion of the learned Single Judge to grant the relief as prayed for in prayer Nos. (ii) and (iii). The learned Single Judge has considered this aspect, which is clearly borne out from the fact that the review petition has been dismissed. The learned Single Judge has considered this aspect in the review petition and was not inclined to grant relief Nos. (ii) and (iii), which is evident from the fact of dismissal of the review petition.
13. We have given our anxious thoughtful consideration to the rival contentions raised by learned Counsel for the parties and perused the entire record of the writ petition and the special appeal.
14. Article 226 of the Constitution of India, it is not gainsay, confers extraordinary jurisdiction on the High Court to issue high prerogative writs for enforcements of fundamental rights or for any other purpose. The Constitution, it is equally not gainsay, does not place any fetters on exercise of extraordinary jurisdiction. It is left to the discretion of the High Court. Looking to the nature of extraordinary jurisdiction confers upon he High Court under Article 226 of the Constitution it cannot be laid down as a general proposition of law that in no case the High Court can entertain a writ petition under Article 226 of the Constitution to enforce a claim under a insurance contract. Their Lordships of the Hon’ble Supreme Court in Life Insurance Corporation of India and Ors. v. Asha Goel and Anr. (2001) 2 SCC 160, observed that it is neither possible nor appropriate to enumerate exhaustively the circumstances in which such a claim can or cannot be enforced by filing a writ petition. In the opinion of their Lordship of the Hon’ble Supreme Court in the case of Life Insurance Corporation of India and Ors. v. Asha Goel and Anr. (supra), determination of question depends on consideration of several factors like, whether a writ petitioner is merely attempting to enforce his/her contractual rights or the case raises important questions of law and constitutional issues, the nature of dispute raised, the nature of inquiry necessary for determination of dispute etc. Their Lordships concluded that the matter is to be considered in the facts and circumstances of each case. The High Court must bear in mind the self-imposed restrictions in not entertaining the writ petition under Article 226 of the Constitution filed for enforcement of purely contractual rights and obligations, which involve disputed questions of fact. In the case of Life Insurance Corporation of India and Ors. v. Asha Goel and Anr. (supra), their Lordships of the Hon’ble Supreme Court held that ordinarily, the High Court should not entertain a writ petition filed under Article 226 of the Constitution mere enforcement of a claim under a contract of insurance. Where insurer has repudiated the claim, in case such a writ petition is filed, the High Court has to consider the facts and circumstances of the case, the nature of dispute raised and the nature of enquiry necessary to be made for determination of questions raised, it is further observed that the pros and cons of the matter in the context of the fact-situation of the case should be carefully weighed and appropriate decision should be taken. In a case where claim by insured or a nominee is repudiated raising a serious dispute and the Court finds the dispute to be a bona fide one which requires oral and documentary evidence for its determination then the appropriate remedy is a civil suit and not a writ petition under Article 226 of the Constitution. Similarly, where a plea of fraud is pleaded by the insurer and on examination is found prima facie to have merit and oral and documentary evidence may become necessary for determination of the issued raised, then a writ petition is not an appropriate remedy. Learned Counsel for the respondent Insurance Company is correct in his contention that the Hon’ble Supreme Court in the case of Life Insurance Corporation of India and Ors. v. Asha Goel and Anr. (supra), has not concluded the issue and held that as a rule a petition under Article 226 of the Constitution in the matter or insurance contract is maintainable.
15. It is being an extraordinary equitable jurisdiction under Article 226 of the Constitution of the High Courts is not subject to any restriction but there are self-imposed restrictions and one of them is that for enforcement of contractual rights the appropriate remedy may be a civil suit and not a writ petition, but in exceptional cases where the dispute raised is not bona fide, the defence taken is legally not sustainable and there is no disputed question of fact determination thereof any oral and documentary evidence is necessary a petition under Article 226 of the Constitution may be entertained but not as a rule.
16. In Lekhraj Sathramdas v. M.M. Shah , their Lordships of the Hon’ble Supreme Court held as under,
In our opinion, any duty or obligation falling upon a public servant out of a contract entered into by him as such public servant cannot be enforced by the machinery of a writ under Article 226 of the Constitution.
17. In Bachhanidhi Rath v. State of Orissa , their Lordships of the Hon’ble Supreme Court declared, “If a right is claimed in terms of a contract such a right cannot be enforced in a writ petition.
18. Having carefully gone through the aforesaid pronouncements of their Lordships of the Hon’ble Supreme Court no doubt whatsoever remains in our mind that there is no absolute bar to entertain a petition under Article 226 of the Constitution in contractual matters but such power is circumscribed as enumerated in the case of Life Insurance Corporation of India and Ors. v. Asha Goel and Anr. (supra).
19. Learned Counsel for the petitioner does not dispute that the petitioner after reply of the respondent Insurance Company to the writ petition enclosing thereto the decision to repudiate a contract of insurance, had not got the writ petition amended and no prayer was made for quashing and setting aside the decision repudiating the insurance contract by the respondent Insurance Company. The petitioner filed rejoinder to the reply to the writ petition but therein it is has filed to make out a case that the ground given by the respondent in support of repudiation of insurance contract is not legally sustainable. During the course of arguments also the learned Counsel for the petitioner failed to satisfy us that the ground given by the respondent for repudiation of insurance contract is wholly untenable or illegal.
20. The learned Single Judge has not made any adjudication on the point whether the ground given for repudiation of insurance contract by the respondent Insurance Company is legally tenable or not. The learned Single Judge has influenced by a fact that the decision of repudiation of insurance contract was taken after notice of the writ petition was served on the respondents and thus it is mala fide.
21. We cannot oblivious of the fact that the respondent Insurance Company is State within the meaning of Article 12 of the Constitution and if it is held and made responsible to satisfy the claim made by the petitioner, though for which it is not entitled, it may be a loss of the public money. Adjudication on the defence taken by the respondent Insurance Company in the reply to the writ petition, the insurance contract repudiated and the ground in support of repudiation has also been given, was must. Only after the Court having been satisfied on the basis of the material produced on he record that the ground given for repudiation of insurance contract is not tenable or it does not find support from the document of insurance, there may be a justification of a petition under Article 226 of the constitution in the contractual matter and not otherwise. The respondent Insurance Company on very specific and clear ground disputes the claim made by the petitioner and thus it was imperative before granting relief to make adjudication or determination thereupon. Without making any adjudication and having been satisfied as to whether the ground taken by the respondent Insurance Company to repudiate the insurance contract is correct or not, merely because the claim was repudiated by the respondent after service of the notices of the writ petition, no relief could have been granted. We are of the considered opinion that only on the ground given by the learned Single Judge the entertainment of the writ petition under Article 226 of the Constitution of India and further to grant the relief in favour of the petitioner Is erroneous. In the facts of the case the adjudication on the ground given by the respondent In support of repudiation of insurance contract was Imperative and that has to be made either by the learned Single Judge himself or to send that matter to the respondent Insurance Company to give decision thereon after affording an opportunity of hearing to the petitioner. The course adopted by the learned single Judge leaving that apart that the ground given In support of decision Is erroneous, the petitioner has not prayed for quashing of the document Annexure-R/1 the decision of the respondent Insurance Company repudiating the Insurance contract, Is erroneous on the face of It and it cannot be allowed to stand.
22. As a result of the aforesaid discussion in the D.B. Special Appeal (Writ) No.296/2002 is allowed and impugned order dated 4.3.2002, of the learned Single Judge is quashed and set aside S.B. Civil Writ Petition No.1041/1999 is dismissed with costs in favour of the respondent Insurance Company which is quantified at Rs.2,000/-(rupees two thousand only). The petitioner is free to challenge the decision of the respondent Insurance Company of repudiating the insurance contract by filing a representation against it before the Regional Manager of the respondent Insurance Company at Jaipur and if such a representation is made by the petitioner within a period of one month from the date of receipt of the copy of this order, the authority concerned has to make adjudication thereupon after giving an opportunity of hearing to the petitioner, if it so desires that gives its decision. In case of the petitioner is not satisfied with the decision so given by the Regional Manager on its representation, it is free to avail the remedy available to it before the appropriate forum.
23. Consequently upon acceptance of the D.B. Special Appeal (Writ) No.296/2002 and dismissal of S.B. Civil Writ Petition No.1041/1999, the D.B. Special Appeal (Writ) No.946/2002 has become infructuous and accordingly the same is dismissed.