JUDGMENT
V.S. Sirpurkar, C.J.
Heard the appeal finally with the consent of both the sides.
1. Being aggrieved by the order passed by learned Single Judge of this Court allowing the writ petition filed by the respondent herein, M/s. Vijay Shree Limited (hereinafter referred to as ‘Company’ for short) the appellants come up before us by way of this appeal. The two appellants are the officers of Union of India and have filed this appeal on behalf of Union of India. By the instant judgment and orders, the learned Single Judge directed the appellants to make payment of the amount to the Company for supply of second batch of 390 bales allegedly supplied by it. It was further directed that in default of a payment, the appellants would pay interest at the rate of 12% per annum. Shortly stated the facts are as under:
2. The Company, Vijay Shree Limited, referred to as ‘Company’ herein, is a limited company and owned a jute mill. It is also a sick Company under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and at the relevant time, was running the jute mill on the basis of a scheme approved by the Board of Industrial and Financial Reconstruction. It received at order bearing No. S.O. 565(E) dated 12.6.2000 to produce jute bags of the mentioned specifications and supply them by way of a sale as per the direction of Director of Supplies and Disposals, Kolkata. It appears that the Deputy Director of Supplies; and Disposals, Kolkata directed the writ petitioners to sell 780 bales of gunny bags vide the order dated 3rd June, 2003. This consignment was meant for a party, that is, Assistant Director (supplies) on behalf of the Governor of Punjab. The consignee was the Managing Director, Punjab State Cooperative Supply and Marketing Federation at Sangrur. It seems that the writ petitioners sent first consignment of 390 bales to Sangrur on 23rd June, 2003.
3. Petitioner’s case is that he sent the railway receipts bill raised against the discharge of goods along with the quality assurance certificate to the consignee, Punjab State Cooperative Supply and Marketing Federation (‘Marketing Federation’ for short). The writ petitioner pleaded that the petitioner was informed by subsequent letters that the 390 bales which were received by the consignee were badly affected by rains and that those 390 were lifted by the consignee to avoid further damages and stacked separately. It was revealed that the consignee had requested the Director of Supplies and Disposals to stop payment of 390 bales and had also requested to direct the writ petitioner to despute their representative for a joint inspection as per the terms of contract. It seems that thereafter there was correspondence in between the writ petitioner and the present appellants about this consignment of 390 bales and ultimately, the writ petitioner received a letter dated 12.9.2003 wherein the writ petitioner was informed that the sum of Rs. 35,85,447/- had been withheld from Bill No. L/78 pending finalisation of the case of recovery due from the writ petitioner. It is the case of recovery due from the writ petitioner. It is the case of the writ petitioner that Bill No. L/78 had nothing to do and that was pertaining to an entirely different and independent contract which had no relation with the earlier contract of the supply of 780 bales. The further case of the writ petitioner was that the petitioner, in fact, was already paid the bill amount in respect of the 780 bales and it is only out of the consideration of the subsequent supplies made by the writ petitioner, deduction was made by withholding the payment. According to the writ petitioner, this could not have been done and, therefore, the petitioner filed the writ petition praying for quashing of the order withholding the payments and, consequently, for releasing the payment of aforementioned sum.
4. The writ petition seems to have come before the learned Single Judge on 8.1.2004 and on that date, the learned Single Judge passed the following order:
“Affidavit-in-opposition to this writ application is to be filed by two weeks from date. Reply, if any, is to be filed by one week thereafter. Put up this matter in the monthly list of February 2004 as ‘Motion Adjourned’.
Question of maintainability of this writ application is kept open on the prayer of Mr. Bhattacharya, learned Advocate for the respondent.”
5. It seems that thereafter the matter came before the learned Single Judge on 20.4.2004 and it seems that on the same day, it was allowed. The learned Single Judge noted that in spite of a direction, no Affidavit-in-Opposition was filed by the respondent, the Union of India and their Counsel reported that she had no instructions. The learned Judge, therefore, went on to hold that since there was no Affidavit-in-Opposition, the facts stated by the petitioner were liable to be accepted and, therefore, the learned Judge passed the order allowing the petition by directing the respondent authority not to deduct any amount from the bills of the petitioners on the allegation that in the previous batch of goods supplied, there were defects. The learned Judge further observed that if any defect were, found, the-respondent and the petitioner must hold a joint inspection and the respondent should give an opportunity to the writ petitioner to replace the goods. A recall application thereafter came to be made by the Marketing Federation. It seems that there was subsequently an application made. However, by the order dated 16.7.2004, the learned Single Judge dismissed that application also. Therefore, by way of the present appeal, the original order dated 20.4.2004 is being challenged.
6. The learned Counsel for the appellant urged before us firstly, that the writ petition itself was not maintainable as the petitioner had actually sought for a money decree. It was then urged that there were number of factual questions involved which could be decided only on the parties leading evidence and, therefore, the learned Judge erred in entertaining the writ petition. Thirdly, it was urged that on the very first day of the hearing, the learned Judge erred in disposing of the writ petition even without the reply-affidavit on the part of the appellants. It was urged that though an opportunity was sought for, the learned Judge erred in not extending the time for filing the Affidavit-in-Opposition or to place the documents. Lastly, it is said that even on the facts stated in the petition and the documents filed along with the petition alone, it was clear that there were number of disputed questions of facts and, therefore, the learned Judge should not have entertained the writ petition nor should have allowed the same. The learned Counsel heavily relied on few decisions of the Supreme Court to suggest that where there was a disputed question of law involved, the High Court should desist from entertaining a writ petition under Article 226 of the Constitution of India. Number of documents have been filed before us along with the appeal and relying on them, the Counsel urged that the dispute between the parties could be solved only after leading evidence and that this was not a case where the petitioner was not required ,to prove all the facts and there are no admitted facts.
7. As against this, it was urged by the learned Senior Counsel, Mr. Pratap Chatterjee, that a writ petition was undoubtedly maintainable and that the learned Judge had committed no error in entertaining and allowing the same. The learned Counsel relied on a latest Supreme Court decision in ABL International Ltd. and Anr. v. Export Credit Guarantee Corporation of India Ltd. and Ors., , and urged that by this decision, the Supreme Court had widened the horizons of the jurisdiction of the High Court under Article 226 of the Constitution. According to the learned Counsel, there was nothing wrong even if the High Court entertained a money claim against the Government and entertained the factual dispute in a writ petition. On merits, the learned Counsel had to point out that the petitioner had an unassailable case as the impugned order, besides being illegal, was arb
ary also. The learned Counsel further argued that the authorities concerned could not have ordered the deduction from the consideration of a contract in respect of which there was no dispute merely because there was some dispute in respect of the supplies made in the earlier contract between the same parties.
8. On this rival contention, it would have to be seen as to whether the learned Single Judge of this Court was justified in entertaining the writ petition and allowing the same by quashing the aforementioned order dated 2.9.2003. The learned Single Judge has not only quashed the aforementioned order dated 12.9.2003 but has also directed the appellant respondents to make payment of the amount for supply of the second batch of 390 gunny bales supplied by the petitioners positively within one month from date. The learned Judge has also further directed to pay interest at the rate of 12% per annum from the date of presentation of bill till payment.
9. It would be first seen that this was purely a non-statutory contract. The appellant had placed an order for supply of jute bags to original respondent No. 6, Marketing Federation. A direction was given by the Deputy Jute Commissioner, vide letter dated 2.6.2003, under the powers conferred by Clause (4) of Jute and Jute Textiles Control Order, 2000, read with Notification of Government of India in the Ministry of Textiles, bearing No. S.O. 565(E) dated 12.6.2000, that the petitioner Company would produce a particular category of jute bags as specified and sell the same to the persons specified by the Director (Supplies and Disposals), Kolkata. It seems that in pursuance of that, the Deputy Director of Supplies and Disposals, Kolkata wrote a letter dated 3.6.2003 to” M/s. Vijay Shree Limited (the ‘Company’ herein) to sell 780 bales (each bale of 500 pieces). The goods were to be sold to Assistant Director (Supplies) for and on behalf of the Governor of Punjab. The ex-factory price was also indicated in this letter. It seems that thereafter the Company was informed of the terms of delivery and the address of the consignee where the said bales were to be supplied, that being the Managing Director, Punjab State Cooperative Supply and Marketing Federation, the original respondent No. 6, vide letter No. C III/2980/VSL(PW)/204 dated 3.6.2003 sent by the Assistant Director or Supplies for Directorate of Supplies and Disposals. The Company then seems to have dispatched 390 bales to Sangrur in pursuance to this contract No. C-II/2980/VSL(FW)/204. Along with this, there was a warranty which is in following terms:
“We agree to replace, free of cost, to the Buyer, F.O.R. Railway Station/Destination: Sangrur 390 bales or any bale, which are found not to be upto the ISI Specification and which are certified as such by the competent Authority under the Indian Standards Certification Schemes. The freight of the bales rejected will he to our account, both ways.”
10. The railway receipt number of this consignment was (79405-07 dated 22.6.2003 Ex. Howrah to Sangrur. It appears that this consignment reached Sangrur on 2.7.2003, but the bales were found badly affected by rains. It was reported by the respondent No. 6, Marketing Federation through its Chief Manager (Food grains) to the Director (Supplies and Disposals) by letter dated 9.7.2003 that the bales were badly affected by rains and the railway authorities did not accept any remarks on the delivery book and, therefore, the bales were lifted to avoid further damages and they were stacked separately. It was further requested by this letter that the Director (Supplies and Disposals) should stop the payment of 390 gunny bales of M/s. Vijay Shree Limited and any other charges connected therewith. The Director was also further requested that the supplier Jute Mills, meaning the petitioner-Company, should depute their representative for joint investigation of the rain affected gunny bales mentioned above. The copy of this letter seems to have been sent to the Director, Food, Civil Supplies and Consumer Affairs, Punjab, D.M. Markfed, Sangrur as also Deputy Director, (QA), Department of Supplies, 234/4, Nizam Palace, AJC Bose Road, Kolkata-20. A reply seems to have been sent to this letter vide letter dated 18/28.7.2003 wherein it was suggested by the Acting Director (QA), that the bales had got wet during transit and this was not a quality complaint and, therefore, the Chief Manager was requested to advise the D.M., Sangrur to file a claim on the carrier. It was further stated that the office of Acting Director was advising the firm to depute the representative to settle the issue with the consignee. There appears to be a further letter dated 20.8.2003 by the Assistant Director of Supplies to the Controller of Accounts, Ministry of Commerce suggesting therein that the consignee had received 390 bales in damaged condition and, therefore, the Controller of Accounts was requested to withhold the value of 390 bales from the firm till intimation from the Office of Assistant Director. Even the Company seems to have joined the issue vide its letter dated 5.9.2003, wherein it was claimed that the gunny hag got wet during transit and that there was no confirmation from Railways and, therefore, the claim was untenable. A further suggestion was made to make a claim against the carrier. It was informed, however, by the letter dated 12.9.2003 that a sum of Rs. 35,85,447/- was withheld from Bill No. L 76 dated 4.9.2003. It was also informed that the withheld amount had been kept under Deposit in the name of the Company pending finalistion of the case of recovery due from the Company in respect of supplies made by the Company against AT (R.C. No. S.O. 204 dated 3.8.03). It is very significant to note that in this communication itself, it is suggested:
“You may, however, note that since final decision in the case can be taken only by the purchase officers, at whose instance the amount has been withheld. So you would correspond on the issue with that officer only. In case the matter has been settled with the purchase office concerned, the amount so withheld will be released from this end and with the instructions of that office.”
11. It appears that the Company had also written on 24.9.2003 that their representative would visit the consignee godown at Sangrur to settle the above matter very soon. By the said letter, it was further requested to release the withheld amount as the Company had to pay the bonus to the staff for Durga Puja.
12. We have deliberately referred to all these facts only to show that there was no final action taken by the authorities and the parties concerned were still at the stage of negotiations. It was only by way of interim measure that the amount came to be withheld. The petitioner Company also knew it fully well that the order of withholding was not a final order at all but was by way of interim measure. Acting on that, the Company had shown its readiness to send the representative for joint inspection. We have carefully seen the writ petition and we find nothing in the writ petition regarding the further happenings as to whether such joint inspection did take place or not. It appears, however, that the Company straightaway proceeded to file a writ petition. All these documents were the part of the writ petition itself and, therefore, it was quite clear that the action of withholding the amount was not final and was further subject to the joint inspection which was also admitted by the Company. It is also to be noted here that the petitioner Company did not, in any way, assail this action of withholding and instead, showed its readiness to send representative for joint inspection of the damaged bales. All these would suggest that everything was in the fluid state. In our opinion, therefore, there was no justification for the petitioner to approach the High Court straightaway by way of a writ petition. Such writ petition was, therefore, clearly premature.
13. It is argued before us by the appellant herein that even if there was no counter-affidavit to the petition, the facts were clear from the documents in the petition itself. In fact, the learned Counsel for the appellant complained before us that though the opportunity was asked for, the said opportunity was not provided to file the Affidavit-in-Opposition to the petition. The learned Counsel was at pains to argue that this was undoubtedly a case where from the correspondence of the parties, it was clear that on number of issues, the parties to the contract were at variance and the said questions could not have been resolved unless the parties were given opportunities to lead evidence since there were questions of fact. According to the learned Counsel for the appellant, the first question of fact was as to whether the goods supplied by respondent writ petitioner were in reality damaged. The further questions were as to who was responsible for the damaged goods, what was the rate of contract in respect of the damaged goods and Whose liability it was and lastly, whether all the transactions were part of the same contract. The learned Counsel pointed out that all these questions would require the pleadings and the evidence on the part of the parties to the contract. He further argued that the learned Single Judge had completely misunderstood the action on the part of the appellants inasmuch as the amount was merely withheld and not deducted. We have deliberately quoted the part of the impugned letter, a plain reading whereof would be enough to suggest that the amount was “withheld” and not deducted finally and that the further action was to be taken on the basis of the joint inspection. The learned Single Judge has recorded a finding that the appellate authority acted arbitrarily in withholding the amount payable to the petitioner when there was no dispute as regards the supply of 390 gunny bales. This finding is presumably given on the basis that each supply amounted to a contract. Now whether this was a single contract or whether each supply an independent contract, was also a question which was to be decided on the basis of the evidence and, therefore, the learned Judge could not have written a finding that there was no dispute as regards the supply of second instalment. In fact, the learned Judge has not addressed himself on the question as to whether each supply amounted to an independent contract.
14. The learned Judge has found fault with the appellant presuming that the appellant had already made full payment against the first batch without raising any dispute. We have already pointed out that the dispute was undoubtedly raised in respect of the supply of the first batch as soon as the supply of first batch was materialised. Indeed till such time, no dispute could have ever been raised. We are, therefore, unable to agree with the finding recorded by the learned Judge that there was no dispute raised in respect of the supply of the first batch. The appellant along with his Memo of Appeal has brought a number of documents on record. This includes a letter sent by the respondent Company dated 17.10.2003 wherein the Company has requested the Marketing Federation to consume these bales sent after the segregation. Perhaps it meant to suggest that the same bales of bags were non-usable. They could be rejected which would be replaced by the Company. The Company also showed its readiness to pay all the expenses, such as, labour charges, transport charges regarding the bales or bags. It was, therefore, obvious that the petitioner was fully aware regarding the defective supply as also the dispute raised by the Marketing Federation and the appellants. Under the circumstances, we fail to understand as to how the Company could have approached this Court by way of writ petition in the month of November 2003. The Counsel also pointed out that a representative of the Company had signed a joint inspection report dated 18.10.2003 wherein it was accepted that 65% of “bardana” (gunny bags) to be in damaged condition. The report seems to have been signed by one R.S. Pandey on behalf of the writ petitioner Company.
15. Mr. Pratap Chatterjee, the learned Senior Counsel took a very strong objection for these documents being led. It was the contention of the learned Counsel that where the documents were not before the learned Single Judge, those could not be seen by us in our appellate jurisdiction. We can understand the opposition in these documents being seen because if it is that there was a joint inspection on 18.10.2003, such fact should have been in the writ petition which has been filed in the month of November 2003 and unfortunately, it is not there. On the other hand, the learned Single Judge was persuaded to pass the order on the factual basis that there was no joint inspection of the damaged goods. We have already pointed out that the learned Judge proceeded on the basis that since the allegations were not countered by way of an affidavit-in-opposition, all the allegations contained in the writ petition were deemed to be admitted. In the third para of his order, the learned Judge has recorded an allegation that there was no joint inspection. The learned Judge says, “In the instant case no such joint inspection was held, but subsequently….” Now when the document which we have pointed out is read it is obvious that the factual basis itself is knocked out. We cannot understand the argument on the part of the learned Senior Counsel that we could not allow the documents to be filed at the appellate stage. There was nothing wrong if the documents which were not available with the party, are read by the appellate Court on the principles of Order 41 Rule 27. In this case, the learned Counsel for the appellant was all the while clamouring that the documents could have never been filed at the lime when the matter was heard because those documents were not in possession of the appellant but in possession of the consignee at Sangrur. It is obvious that the joint inspection report would be ordinarily in possession of the Marketing Federation at Sangrur where the joint inspection took place. The appellant points out that in its affidavit in support of the stay application, it was specifically pleaded that there was a joint inspection held on 18.10.2003. We cannot see much force in the arguments that we should not see the documents merely because they were not produced before the learned Single Judge. We accept the explanation offered by the learned Counsel for the appellant that the documents were not available for being filed. With that view, we have decided to look into the documents filed by the appellant. In our opinion, even the documents were not required because the very documents filed by the petitioner were enough to come to the conclusion that a dispute was raised. In that view, we are of the opinion that the questions involved in the petition could not have been decided unless the parties were given an opportunity to lead the evidence. If it was the position, in our opinion, the writ petition could not have been entertained.
16. The objection as to the tenability of the writ petition was raised by the learned Counsel for the appellant on the ground that this application merely amounted to a decree of money and, as such, it amounted to a mere Money Suit and, therefore, the writ petition was not tenable or, at any rate, should not have been entertained. We will go to the aspect of tenability and the propriety of entertaining the writ petition a little later. But before that, we must take note of another argument of the learned Counsel that the learned Single Judge had passed the order even without hearing the original respondent No. 6. We have already shown that the argument is undoubtedly full of substance. It is to be seen that this Company was a sick company and was a Jute Mill and the directions were given to the Company to supply goods to the Marketing Federation which was the respondent No. 6. The question as to whether the goods supplied to the Marketing Federation were damaged or not, could certainly have not been decided or cannot be decided in the absence of the Marketing Federation, the original respondent No. 6. The learned Judge had proceeded to finalise the hearing even without there being any service on the respondent No. 6. It is apparent from the record that after the order was passed even without hearing the respondent No. 6, the respondent No. 6 filed an application for recall/review of the order that seems to have been rejected on the ground that respondent No. 6 was not a necessary party at all and that, at any rate, it was at the most an agent of the present appellant. Our attention was drawn at the review application and he ordered passed thereupon, wherein the learned Single Judge has held that the respondent No. 6 was not a necessary party. In the first place, it must be seen that the petitioner had joined with the respondent No. 6 as a party because it was for respondent No. 6 that the goods were ordered. The supply was merely arranged by the appellant through the Jute Commissioner, Government of India and the Deputy Jute Commissioner, Government of India as the writ petitioner Company was a Jute Mill. However, it was obvious that the goods were to be used by the respondent No. 6. In our opinion, therefore, respondent No. 6 was a necessary party particularly because there was a dispute raised by the respondent No. 6 that the goods were damaged. Whether the goods were damaged would have been one of the issues at a civil suit being filed. Such issue could not have been decided unless original respondent No. 6 was made a party. The whole controversy regarding the withholding of the amount had centered round the issue as to whether the goods were damaged and whether withholding the amount was justified at the instance of the appellant herein. Therefore, it is futile to state that the sixth respondent was not a necessary party. In our opinion, therefore, unless the sixth respondent was served and heard, the writ petition could not have been decided. We, therefore, accept the contention of the learned Counsel for the appellant that the writ petition could not have been finally disposed of unless the sixth respondent, Marketing Federation was served. In our opinion, that by itself is enough to set aside the judgment of the learned Single Judge.
17. This brings us on the wider issue as to whether the writ petition was maintainable and whether it could have been entertained in the circumstances of the case. The Apex Court from time-to-time has held that the High Court should not ordinarily entertain the writ petition under Article 226 of the Constitution where disputed questions of facts are involved while considering the questions arising out of the contracts where one of the parties is the State. The Apex Court has discouraged the High Courts from entertaining a writ petition under Article 226, particularly when such contracts are not the statutory contracts. In LIC of India v. Escorts Ltd., , the Apex Court declared that if the action of the State related to contractual obligations was not to be ordinarily examined by the Court unless such action had some public law character attached to it. The Court further expressed the difficulty involved in demarcating the public law domain and the private law field and further ordered that the question must be decided in each case with reference to the particular action. The Supreme Court in the same case observed that where the State assumes to itself the ordinary role its right and liability should be tested as an ordinary contracting part. There can, however, be no doubt that in this decision it was not held that the High Court’s jurisdiction under Article 226 in the matters of contract was totally barred. The Supreme Court in the earlier cases like K.N. Guruswamy v. State of Mysore, and D.F.O. v. Ram Sanehi Singh, (1973) 3 Supreme Court Cases 864, had also held that the writ petitions would be maintainable in the sense that there would be no absolute bar to the exercise of the jurisdiction. It was observed by the Supreme Court in State of Bihar v. Jain Plastics and Chemicals Ltd., , that seriously disputed questions or rival claims of the parties with regard to the breach of contract are to be investigated and determined on the basis of evidence which may be led by parties in a properly instituted civil suit rather than by a Court issuing prerogative writs.
18. The learned Senior Counsel for the petitioner, Mr. Pratap Chatterjee, invited our attention to ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd., (supra). He pointed out that in this decision the Supreme Court had taken into consideration practically all the cases on the question of the tenability of a writ petition under Article 226 in the matters of contractual obligations of the State. The learned Counsel contends that the Supreme Court has held in this decision in the clearest possible terms that the writ petition is not absolutely barred in such matters. Our attention was invited to paragraph 19 which is as under:
“19. Therefore, it is clear from the above enunciation of law that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the Court entertaining such petition under Article 226 of the Constitution is not always hound to relegate the parties to a suit. In the above case of Gun want Kaur this Court even went to the extent of holding that in a writ petition, if the facts require, even oral evidence can be taken. This clearly shows that in an appropriate se, the writ Court has the jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation and/or involves some disputed question of fact.”
19. The learned Counsel also took us through the paragraph where the Supreme Court has referred to its judgment in Kumari Shrilekha Vidyarthi v. State of U.P., . Ultimately, the learned Senior Counsel pointed out from the observations in paragraph 23 that once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement Of Article 14 of the Constitution of India and where the State acts in contravention of the abovesaid requirement, a writ Court can issue suitable directions to set right the arbitrary actions. Developing his argument and applying it to the present case, the learned Counsel argued that in the writ petition itself the basic prayer was for quashing the “Order” dated 2nd June, 2003 passed by the Jute Commissioner. The learned Counsel further pointed out that once that order was quashed and declared to be illegal and invalid, the necessary relief of payment would automatically follow which was prayed for in prayer Clause (G) of the writ petition. The learned Counsel pointed out that the said order was per se arbitrary inasmuch as the respondents had no power to withhold a payment against a different lot on the ground that the earlier lot supplied was defective. This, according to the learned Counsel, clearly amounted to not only the breach Of contract, but an action which is totally arbitrary and without any justification in law.
20. We have already shown that in the first place this was not an “order” passed. It was merely a communication. Again there was no total and final refusal to pay the amount. The Amount was only “withheld” temporarily which would be clear from the contents of paragraph 3 of the said letter dated 12.9.2003. In that letter itself, there is a clear reference to the matter being settled with purchase officer. Not only this, but thereafter also even before the writ petition was filed, the writ petitioner had shown its readiness to settle the matter regarding the payment. We have already pointed out earlier that the matter could have been settled only after the joint inspection of the damaged goods. Therefore, it was clear that there was no finalised action on the part of the original respondent appellants herein to refuse the payment. Could such action then be, viewed as an arbitrary action where there was clearly an invitation on the part of the state instrumentality to settle the dispute. In our opinion, this could not be said to a finalised action and, therefore, this could not be viewed to be an appropriate case where a remedy could be sought for by the writ petitioner by way of a writ petition.
21. In the same judgment itself in paragraph 27 and paragraph 28, the Supreme Court has held as under:
“27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition:
(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.
(b) Merely because some disputed questions of facts arise for consideration same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule.
(c) A writ petition involving a consequential relief of monetary claim is also maintainable.
28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the Court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution of India is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corporation v. Registrar of Trade Marks). And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction.”
22. Considering this, it would have to be held that though the writ petition is not absolutely barred in the matters of non-statutory contract with the State, the factual situation has to be tested to see whether it should be entertained. There would be a lot of differences between the two concepts of enability of the petition and the propriety to entertain the same. As has been held by the Supreme Court above, the High Court has a discretion to entertain or not to entertain a petition and it is again reiterated that the High Court will not normally exercise its plenary right to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14. We have already pointed out that in this case, it could not be said that there is any unreasonableness on the part of the present appellants. On the other hand, we are of the clear opinion that the writ petitioner, without any justification, straightaway rushed to file a writ petition even when there was an invitation to settle the dispute and when no final action was taken by the appellants. There was, in fact, no refusal on the part of the appellants to pay the amount in question. What was done, was “withholding” the amount till there was a joint inspection and till the matters were resolved in between the parties in connection with the damaged goods supplied by the writ petitioners. Thus, in our opinion, the writ petition should not have been entertained firstly because it was a premature writ petition and secondly it pertained to the disputed questions of facts which questions we have already shown in the earlier part of the judgment. Undoubtedly, those questions could not have been solved merely on the basis of the affidavit and counter-affidavit. Another reason for not entertaining the writ petition was the availability of the (alternative) remedy of filing the civil suit where all the dispute question could have been solved by allowing parties to lead the evidence. We are, therefore, not in a position to agree with the learned Single Judge and would choose to dismiss the writ petition.
23. The appeal stands allowed. The impugned judgment of the learned Single Judge is set aside and the writ petition filed is dismissed.