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Judgment
[1] Heard Mr. Lenin Hijam, Ld. Addl. AG for the applicants/petitioners and Mr. Irom Denning, Ld. counsel for the respondent.
[2] The State has filed these two miscellaneous cases under Section 8 of the Arbitration and Conciliation Act, 1996 seeking to dismiss the writ
petitions being W.P.(C) Nos.6 and 7 of 2021 pending on the file of this Court filed by the respondent-writ petitioner stating that there is a binding
contract between the respondent-writ petitioner and the Arbitrator and any dispute arising out of the contract shall be settled through arbitration by an
Arbitrator appointed by the State Government.
[3] The learned Additional Advocate General for the State submitted that the respondent-writ petitioner filed the writ petitions without exhausting their
remedies before the arbitration and therefore, this Court has no jurisdiction to entertain the writ petitions. Drawing attention to the arbitration clause
contained in the agreement dated 19.03.2020 entered between the respondent-writ petitioner and the State, the learned Additional Advocate General
contended that when Clause 6 of the agreement specifically states that in the event any dispute arising out of the agreement, the matter shall be
settled through arbitration by an Arbitrator to be appointed by the State Government. Thus, the learned Additional Advocate General submitted that in
the instant case, the respondent-writ petitioners have filed the writ petitions without invoking the arbitration and hence, the writ petitions of the
respondent-writ petitioner are not maintainable before this Court.
[4] Per contra, the learned counsel for the respondent-writ petitioners submits that these miscellaneous cases have been filed by the State in
conspiracy with the fourth petitioner herein. He would submit that the State authorities have exercised their power illegally and unlawfully and such
power was exercised in coalition with the said fourth petitioner. The learned counsel further submitted that since the State authorities has passed the
order impugned in the writ petitions just to man their choice of transporter and in violation of principles of natural justice, the respondent-writ
petitioners have filed the writ petitions challenging the orders dated 16.12.2020 impugned. He would submits that in fact before completion of the
agreeable period of one year between the parties, the State authorities have unilaterally awarded the contract to the fourth petitioner and while doing
so, no opportunity was provided to the respondent-writ petitioners. As such, the action of the State authorities is unlawful, arbitrary and illegal in the
eyes of law. Thus, the learned counsel submits that there are no merits in the present miscellaneous cases and the same are liable to be dismissed.
[5] This Court considered the submissions raised by the learned counsel for the parties and also perused the materials available on record.
[6] The respondent-writ petitioners filed the writ petitions to quash the order dated 16.12.2020 issued by the Under Secretary (CAF&PD),
Government of Manipur stating that in supersession of all previous Government Orders issued in this regard, the Governor of Manipur by an order
dated 02.03.2020 was pleased to appoint the respondent-writ petitioners as transport contractors for transportation of PDS rice for doorstep delivery
of the TPDS items with immediate effect for a period of one year or till regular transport contractors are appointed, whichever is earlier and until
further orders.
[7] It appears that pursuant to the order dated 02.03.2020, an agreement was entered between the State and the respondent-writ petitioners on
19.3.2020.
[8] According to the respondent-writ petitioners, the respondent- writ petitioners were transporting PDS rice from Food Storage Depots of Consumer
Affairs to the districts indicated therein. While so, without any notice to the respondent-writ petitioners and in supersession of all previous orders
issued in that regard, the State authorities appointed the fourth petitioner herein as transport contractor for transportation of PDS rice and the said act
of the State authorities is in violation of principles of natural justice.
[9] At this juncture, highlighting the arbitration clause contained in the agreement dated 19.03.2020, the learned Additional Advocate General for the
State submitted that if the respondent-writ petitioners are aggrieved by the award of contract to the fourth petitioner herein, their remedy lies before
the Arbitrator to settle the dispute and the respondent-writ petitioners have no right to approach this Court under Article 226 of the Constitution of
India.
[10] On the other hand, the learned counsel for the respondent-writ petitioners submits that this Court is empowered with extraordinary power and
discretionary power to interfere with any act or action of the State which are illegal and in the instant case, the State authorities have failed to comply
with the terms of the contract and therefore, this Court has ample power to interfere with the impugned order and prayed for dismissal of the
miscellaneous cases. In support, the learned counsel relied upon the following decisions:
(1) ABL International Limited and another v. Export Credit Guarantee Corporation of India Ltd. and others, (2004) 3 SCC 553:
(2) Maharashtra Chess Association v. Union of India and others, Civil Appeal No.5654 of 2019, decided on 29.7.2019.
[11] In ABL International Limited (supra), the Hon‘ble Supreme Court held that a writ petition involving serious disputed questions of facts which
requires consideration of evidence which is not on record will not normally be entertained by a Court in the exercise of its jurisdiction under Article
226 of the Constitution, but there is no absolute rule that in all cases involving disputed questions of fact the parties should be relegated to a civil suit.
The Hon’ble Supreme Court further observed that 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
questions of fact.
[12] In Maharashtra Chess Association (supra), the Hon’ble Supreme Court observed that the existence of an alternate remedy, whether
adequate or not, does not alter the fundamentally discretionary nature of the High Court’s writ jurisdiction and therefore does not create an
absolute legal bar on the exercise of the writ jurisdiction by a High Court. The decision whether or not to entertain an action under its writ jurisdiction
remains a decision to be taken by the High Court on an examination of the facts and circumstances of a particular case.
[13] On a perusal of the agreement dated 19.03.2020 entered between the respondent-writ petitioners and the State Government, it is seen that the
writ petitioner in W.P.(C) No.6 of 2021 was appointed as transport contractor to carry out the work of transportation of rice from (1) FSD of
CAF&PD to Konthoujam, Langthabal, Sekmai (including part of Saitu), Mayang Imphal, Naoriya Pakhanglakpa, Patsol, Thangmeiband, Lamshang
and part of Yaiskul ACs in Imphal West District; (2) FSD of CAF & PD to Shaikot AC in Churachandpur District; (3) FSD of CAF & PD to
Tipaimukh and Thanion ACs in Pheerzawl District and (4) FSD of CAF&PD to Tamei AC in Tamengiong District. Similarly, the writ petitioner in
W.P.(C) No.7 of 2021 was appointed as transport contractor to carry out the work of transportation of rice from (1) FSD of CAF&PD to Wangoi,
Uripok, Keishamthong, Singjamei and Sagolband ACs in Imphal West District; (2) FSD of CAF&PD to Ukhrul and Chingal ACs in Ukhrul District;
(3) FSD of CAF & PD to Phungyar AC in Kamjong District and (4) FSD of CAF & PD to Mao and Tadubi ACs in Senapati District.
[14] Clause 6 of the agreement dated 19.03.2020 reads thus:
“6. In the event of any dispute arising out of this agreement the matter shall be settled in Manipur through arbitration by an Arbitrator to be
appointed by the Government and the provisions of the Indian Arbitration and Reconciliation Act, 1996 shall be applicable to such arbitration. The
decision of the arbitrator shall be final and binding on the parties.â€
[15] The contention of the respondent-writ petitioners is that while the contract/agreement between the State and the writ petitioners are in force, the
State authorities, without any notice to the writ petitioners, cannot award contract to fourth petitioner herein.
[16] The perusal of the order impugned in the writ petitions shows that the State authorities in supersession of all previous orders issued in this regard
appointed the fourth petitioner as transport contractor for transportation of PDS rice to the Assembly Constituencies for doorstep delivery of the
TPDS items with immediate effect for a period of one year or till regular transport contractors are appointed.
[17] If really, the respondent-writ petitioners are prejudiced and/or aggrieved by the awarding the contract to the fourth petitioner herein, their remedy
is to invoke the arbitration clause and such facts cannot be decided in the writ petition.
[18] A perusal of Clause (6) clearly shows that the parties to the agreement had agreed to refer their dispute arising out of the agreement, of
whatever nature it may be, to an Arbitrator as contemplated in that agreement. Section 8 of the Arbitration and Conciliation Act, 1996 in clear terms
mandates that a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement to refer such parties to
arbitration.
[19] Section 8 of the Arbitration and Conciliation Act, 1996 provides:
“8. Power to refer parties to arbitration where there is an arbitration agreement:-
(1) A judicial authority before which an action is brought in a matter which is the subject to an arbitration agreement shall, if a party so applies not
later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly
certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section
(1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.â€
[20] In P.Anand Gajapathy Raju v. P.G.V. Raju, (2000) 4 SCC 539, the Hon’ble Supreme Court held that the language of Section 8 is peremptory
in nature. Therefore, in cases where there is an arbitration clause in the agreement, it is obligatory for the Court to refer the parties to arbitration in
terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made except to refer the
dispute to an arbitrator.
[21] In the present case, the existence of an arbitral clause in the agreement dated 19.03.2020 is not disputed by the respondent-writ petitioners. When
that being the position, this Court is of the view that the respondent-writ petitioners cannot maintain writ petitions. The respondent writ petitioners have
failed to establish that the State authorities have exercised their power wrongfully and have acted arbitrarily, thereby infringed upon the civil and
constitutional right of the respondent-writ petitioners. Since the issue raised by the respondent-writ petitioners is the dispute as mentioned in the
agreement dated 19.03.2020 and in the given facts and circumstances of the case, the writ petitions are not maintainable.
[22] Considering the facts and circumstances of the case, the respondent-writ petitioners are barred from exercising any legal remedy under Article
226 of the Constitution of India without exhausting the arbitration as contemplated under the Arbitration and Conciliation Act, 1996 and therefore, the
miscellaneous cases filed by the State are liable to be allowed. In the result,
(i) M.C.[W.P.(C)] Nos.24 and 25 of 2021 are allowed. As a consequence, W.P. (C) Nos.6 and 7 of 2021 are dismissed.
(ii) The parties are relegated their remedy before the Arbitrator and the State Government may appoint an Arbitrator to resolve the dispute in terms of
the arbitration clause contained in the agreement dated 19.03.2020.
(iii) The parties are at liberty to put forth their respective case before the State appointed Arbitrator and the Arbitrator will resolve the dispute in
accordance with law within a reasonable time after affording sufficient opportunity to the parties.
[23] Registry is directed to issue copy of this order to both the parties through their whatsapp/e-mail.