Friday 28 October 2022

Whether public authorities are bound to follow principles of natural justice while terminating a contract as per the terms of the agreement?

 In M/s Radhakrishna Agarwal Vs. State of Bihar, (1977) 3 SCC

457, it is held that in case of enforcement of contractual rights and liabilities the normal remedy of filing a civil suit is available to the aggrieved party and, therefore, the High Court will not exercise its prerogative writ jurisdiction to enforce such contractual obligation. In M/s Radhakrishna Agarwal (supra) it

is further held that a question of the distinction between an administrative and quasi-judicial decision can only arise in the exercise of powers under statutory provisions. Rules of natural justice are attached to the performance of certain functions regulated by statutes or rules made thereunder involving decisions affecting rights of parties. When a contract is sought to be terminated by the Officers of the State, purporting to act under the terms of an agreement between parties, such action is not taken in purported exercise of a statutory power at all. The limitations imposed by rules of natural justice cannot operate upon powers which are governed by the terms of an agreement exclusively. Thus in view of settled legal position, I am of the view that the petitioner is not even entitled to admission of this petition as issuance of notice being not a binding precedent applicable to invoke doctrine of 'stare decisis', and the order passed by the Hon'ble Division Bench being in different arena, no indulgence is required as petitioner has an alternative remedy of approaching the civil court if there is no arbitration clause in the agreement and if there is an arbitration clause then he has a duty to approach the arbitrator in terms of the arbitration clause in the agreement.

IN THE HIGH COURT OF MADHYA PRADESH

AT JABALPUR

WRIT PETITION No. 21169 of 2022

M/S KESHAV KANSHKAR  Vs THE PRINCIPAL SECRETARY DEPARTMENT OF ENERGY MANTRALAYA VALLABH BHAWAN

BEFORE

HON'BLE SHRI JUSTICE VIVEK AGARWAL

Dated:  20th OF SEPTEMBER, 2022.

Read full Judgment here: Click here

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