Holding

Disputes involving pure contractual matters and disputed questions of fact, where the contract provides for arbitration, are not maintainable before a writ court and must be decided by the agreed forum.

Summary

The Union of India and others entered into a road‑construction contract with M/s Puna Hinda, which contained an arbitration clause for dispute resolution. After completing the work, the contractor submitted a final bill of Rs 23.68 crore, claiming payment for certain bills that the government alleged were already settled or exceeded the approved amount. The Gauhati High Court, both Single and Division Benches, entertained a writ petition under Article 226 and ordered payment, holding that contemporary evidence could be used in lieu of fresh measurements. On appeal, the Supreme Court held that the dispute involved pure contractual issues and disputed questions of fact, which, given the arbitration clause, could not be decided by a writ court. Consequently, the High Court’s order was set aside and the matter was directed to the agreed arbitration forum.

Issues considered

Whether a writ petition under Article 226 is maintainable for a dispute arising out of a private contract that contains an arbitration clause.
Whether the High Court can adjudicate disputed questions of fact concerning payment and measurement under a construction contract.
Whether the parties must resolve the payment dispute through arbitration rather than the writ jurisdiction.

Legislation cited

Code of Civil Procedure, 1908s. Section 80
Constitution of Indias. Article 226
Indian Contract Act

Subjects

ArbitrationWrit jurisdictionContractual disputeMeasurement of workPublic procurementArticle 226Private lawDisputed facts

Judgment

[2021] 9 S.C.R. 117 117

UNION OF INDIA & ORS. A
v.
M/S PUNA HINDA
(Civil Appeal No. 4981 of 2021)
SEPTEMBER 06, 2021 B
[HEMANT GUPTA AND A. S. BOPANNA, JJ.]
Writ – High Court – Jurisdiction of – Disputed question of
facts relating to recovery of money – A Notice inviting tender was
issued for construction and improvement of road – The bid of the
C
writ petitioner was accepted and work order was issued – There
was an arbitration clause in the contract for resolving disputes
arising between the parties – The writ petitioner submitted a final
bill and claimed a sum of Rs.23,68,11,589.02 – It was asserted that
payment for amount claimed in the 18 running bills was already
made, but in respect of 19th and 20th running bill, entries were made D
in the measurement book, however, the payment was not cleared –
The final bill was returned unactioned and writ petitioner was
informed that the payment up to 18 running bills had already
exceeded the permissible approved amount including escalation
payment – The claim was refused by the appellants – Writ petition
E
filed by the petitioner was allowed by the Single Judge of the High
Court and affirmed by the Division Bench of the High Court – On
appeal, held: The dispute could not be raised by way of a writ
petition on the disputed questions of fact – Though, the jurisdiction
of the High Court is wide but in respect of pure contractual matters
in the field of private law, having no statutory flavour, are better F
adjudicated upon by the forum agreed to by the parties – The dispute
as to whether the amount is payable or not and/or how much amount
is payable are disputed questions of facts – Such process could be
undertaken only by the agreed forum i.e., arbitration and not by
the Writ Court as it does not have the expertise in respect of
G
measurements or construction of roads.
Allowing the appeal, the Court
HELD: 1. The High Court has based its order on the ground
that after five monsoons, the final measurements could not be
ascertained. If the final measurements could not be done at the H
117
118 SUPREME COURT REPORTS [2021] 9 S.C.R.

A spot, the contemporary evidence and the measurement books
prepared from time to time could be the basis for determining
the liability of the appellants. The Joint Survey Report is not an
admitted measurement, though some officers might have signed
it. The Report prepared after the completion of work wherein no
such work done is reflected in the measurement book prepared
B
during execution of work is an attempt to inflate the claim raised
by the writ petitioner. The entire amount claimed by the writ
petitioner is disputed. [Para 23][135-B-D]
2. Therefore, the dispute could not be raised by way of a
writ petition on the disputed questions of fact. Though, the
C jurisdiction of the High Court is wide but in respect of pure
contractual matters in the field of private law, having no statutory
flavour, are better adjudicated upon by the forum agreed to by
the parties. The dispute as to whether the amount is payable or
not and/or how much amount is payable are disputed questions
D of facts. There is no admission on the part of the appellants to
infer that the amount stands crystallized. Therefore, in the absence
of any acceptance of Joint Survey Report by the competent
authority, no right would accrue to the writ petitioner only because
measurements cannot be undertaken after passage of time.
Maybe, the resurvey cannot take place but the measurement
E books of the work executed from time to time would form a
reasonable basis for assessing the amount due and payable to
the writ petitioner, but such process could be undertaken only
by the agreed forum i.e., arbitration and not by the Writ Court as
it does not have the expertise in respect of measurements or
F construction of roads. [Para 24][136-A-D]
Kerala State Electricity Board & Anr. v. Kurien E.
Kalathil & Ors. (2000) 6 SCC 293 : [2000] 1 Suppl.
SCR 581; Joshi Technologies International Inc v. Union
of India & Ors. (2015) 7 SCC 728 : [2015] 6 SCR
G 1042 – referred to.
Case Law Reference
[2000] 1 Suppl. SCR 581 referred to Para 17
[2015] 6 SCR 1042 referred to Para 18
H
UNION OF INDIA & ORS. v. M/S PUNA HINDA 119

CIVIL APPELLATE JURISDICTION: Civil Appeal No.4981 of A
2021.
From the Judgment and Order dated 17.11.2017 of the High Court
of Gauhati, Itanagar Bench in W.A. No.23 (AP) of 2017.
K. M. Nataraj, ASG, B. K. Satija, Ms. Suhasini Sen, Udai Khanna,
Arvind Kumar Sharma, Advs. for the Appellants. B

Ms. Meenakshi Arora, Sr. Adv., Yoginder Handoo, Advs. for the
Respondent.
The Judgment of the Court was delivered by
HEMANT GUPTA, J. C
1. The challenge in the present appeal is to an order dated
17.11.2017 passed by the Division Bench of the Gauhati High Court
dismissing an intra-court appeal and affirming the order passed by the
learned Single Bench on 4.8.2016.
D
2. The learned Single Bench of the High Court allowed the writ
petition filed by the respondent – M/s. Puna Hinda1 who had sought
quashing of letters dated 27.8.2015 and 21.10.2015 and also a direction
to pay Rs. 31,57,16,134/- with interest at the rate of 18% p.a.
3. The learned Single Judge held that payment in terms of Final
Joint Survey/Measurement Report dated 24.10.2013 be taken into E
consideration for making revised Detailed Project Report (DPR) and
thus passed necessary orders for payment of the amount due to the writ
petitioner within four months of the receipt of copy of the order. In an
appeal filed by the appellants, the Division Bench of the High Court held
that resurvey for measurement and DPR would not be just and fair at F
this stage since five monsoons had passed. Therefore, the only option
left to the appellants was to approve the DPR and pay the pending bills
on the basis of Final Joint Survey/Measurement Report dated 24.10.2013.
4. Brief facts leading to the present appeal is that a Notice Inviting
Tender (NIT) was issued on 22.10.2008 for construction and improvement G
of road from 26.800 km to 47.850 km between Lumla and Tashigong
under Special Accelerated Rural Development Programme (SARDP).
The bid of the writ petitioner was accepted at Rs.31,87,58,950/-. The
work order was issued on 15.7.2009. The said work order was amended
1
Hereinafter referred to as the ‘writ petitioner’ H
120 SUPREME COURT REPORTS [2021] 9 S.C.R.

A by the parties on 15.3.2012 leading to enhanced work cost at
Rs. 35,03,15,695.23. The work order had provided details of the work to
be carried out and the estimated amount payable for each work with
rate of each work. The work was divided into three parts, such as,
Formation work, which included jungle clearance etc.; Permanent work
which included excavation in trenches, cement concrete; and Surface
B
work which included preparation of subgrade in soil mix boulder, laying,
spreading and compacting graded stone aggregate. The measurement
process for payment was specified in the General Conditions of Contract,
which read as under:
“2 .8 .1 Excavation for roadway shall be measured by taking cross
C Section at suitable intervals in the original position before the work
starts and after its completion and computing the volumes in cum
by the method of average and areas for each class of material
encountered. Where it is not feasible to computes volumes by this
method because of erratic location of isolated deposits, the volumes
D shall be computed by other accepted methods.
2.8.2 At the option of the Engineer-In-Charge/QC Contract, the
Contractor shall leave depth indicators during excavations of such
shape and size and in such positions as directed so as to indicates
the originals ground level as accurately as possible. The Contractor
E shall see that there remain intact till the final measurements are
taken.”
5. The contractor completed the formation work by 20.9.2012,
the communication of which was sent by the writ petitioner on 17.10.2012.
The joint survey of the works was carried out by the Board of Officers
F on 23.1.2013. The Board of officers made the following
recommendations: -
“RECOMMENDATION OF THE BOARD
FORMATION WORKS
20. The details of items of formation works provisioned (as per
G
DPR), executed departmentally and balance between Km 26.800
and Km 31.00 are as under:
xx xx xx

H
UNION OF INDIA & ORS. v. M/S PUNA HINDA 121
[HEMANT GUPTA, J.]

21. The details of items of formation works provisioned in DPR A
and as arrived at after detailed Joint Survey from Km 31.000 to
Km 47.850 are as under:

Location In SMB In SR In HR Embankment Jungle
(cum) (cum) (cum) fil ing (cum) Clearance
(10 Sq m) B
Km 31.000-Km 47.850
(a) Qty of 633835.33 15298.87 81438.22 0.00 25275.00
Fmn works
provisioned
as per dpr
(b) Qty of 356166.00 182073.00 337447.00 0.00 23123.00
Fmn works as
per joint C
survey

The quantities as arrived at after joint survey are theoretical
only and after completion of formation works Total station survey
shall be carried out as per Clause 18 of Special Conditions of
D
Contract to ascertain the actual quantity executed. Hence these
quantities be treated as accurate, based on theoretical calculations.
The classification of soils as shown in joint survey are based
on visual appearance of soil strata. The actual classification of
excavation shall be decided during execution by Engg in Charge
and OC Contract as per clause 2.2.2 of Particular specification E
of CA at page no. 87 duly supported with photographs.
The quantities of formation works as arrived at after joint
survey between Km 26.800 and Km 47.850 as per details given
at Appendix ‘A’ are recommended for execution of ground and
will form the basis of RAR payments to be made as per Contract F
Provision/Stipulation during execution of works under CA No.
CE/VTK/03/2009-10. The final quantity shall be arrived only after
completions of formation works by carrying out Total station
survey. Hence, amendment in quantities of formation works is
recommended only after final joint survey on completion of work. G
22. Unlined drain of any shape cut to the required gradient with
average sectional area 0.50 Sqm in soft rock – 2299.80 Mtrs and
in Hard rock-5146.00 Mtrs as arrived at after Joint Survey are
recommended for construction on ground between Km 26.800 to
Km 47.850 under CA No. CE/VTK/03/2009-10. H
122 SUPREME COURT REPORTS [2021] 9 S.C.R.

A PERMANENT WORKS
23. Abstract of quantity of item of works for construction of
permanent structures which are executed and balance between
Km 26.800 and Km 31.000 and structures provisioned between
Km 31.000 and Km 47.850 has been worked out and shown at
B Appendix ‘B’.
24. Permanent works to be executed under CA No. CE/VTK/
03/2009-10 are as under:
(a) R/Wall: R/Walls balance between Km 26.800 and Km
31.000 and provisioned between Km 31.000 and Km 40.000
C at locations mentioned in Annexure-I to Appendix ‘B’ are
recommended for execution on ground under CA No. CE/
VTK/03/2009-10.
(b) RCC Culverts: RCC Culverts balance between Km 26.800
and Km 31.000 including two incomplete RCC culverts at
D locations Km 28.300 and Km 29.000 and those provisioned
between Km 31.000 and Km 47.850 at locations mentioned
in Annexure-II to Appendix “B” are recommended for
execution on ground under CA No. CE/VTK/03/2009-10.
(c) T/Walls Below RCC Culverts: T/Walls below RCC Culverts
E balance between Km 26.800 and Km 31.000 and those
provisioned between Km 31.000 and Km 47.850 at locations
mentioned in Annexure-III to Appendix ‘B’ are
recommended for execution on ground under CA No. CE/
VTK/03/2009-10.
F (d) T/Walls below R/Walls: T/Walls below R/Walls provisioned
between Km 26.800 to Km 31.000 and Km 31.000 to Km
47.850 at locations mentioned in Annexure IV to Appendix
‘B’ are recommended for execution on ground under CA
No. CE/VTK/03/2009-10.
G (e) Breast Walls: Breast Walls provisioned between Km 26.800
to Km 31.000 and between Km 31.000 to Km 47.850 at
locations mentioned in Annexure V to Appendix ‘B’ are
recommended for execution on ground under CA No. CE/
VTK/03/2009-10.
H
UNION OF INDIA & ORS. v. M/S PUNA HINDA 123
[HEMANT GUPTA, J.]

(f) Lined drain: Lined drain for 13271.00 Mtr length of A
trapezoidal shape in plum concrete between Km 26.800
and Km 47.850 at locations as arrived at after Joint Survey
and mentioned at Annexure-VI to Appendix ‘B’ are
recommended for execution on ground under CA No. CE/
VTK/03/2009-10.
B
(g) Road Furniture: Road furniture provisioned between Km
26.800 and Km 47.850 as per Annexure-VII to Appendix
‘B’ are recommended for providing/fixing on ground under
CA No. CE/VTK/03/2009-10.
25. Working drawings of all permanent structures (different sizes/ C
types) are enclosed with this Board of Officers.
26. Construction of permanent structures at designated locations
or otherwise will only be executed after obtaining prior approval
of Engineer-in-Charge/OC Contract as per ground requirement.
27. The quantity of items of Permanent works as arrived at after D
Joint Survey between Km 26.800 and Km 47.850 as per details
given at Table-2 of Appendix ‘B’ are recommended for execution
on ground and will form the basis of RAR payments to be made
as per Contract Provision/Stipulation during execution of works
under CA No. CE/VTK/03/2009-10. Amendment in quantities of E
permanent works is recommended only during final stage of
completion of permanent works.
SURFACING WORKS
28. No surfacing works has been executed departmentally between
Km 26.800 and Km 47.850. Quantities of various items of surfacing F
works as arrived at after Joint Survey as per details given at
Appendix ‘D’ are recommended for execution on ground under
CA No. CE/VTK/03/2009-10.
SUMMARY OF PAVEMENT WORKS AS PER JOINT SVY
Sl. Items of Surfacing A/ U Total Surfacing Eqvt G
No. Quantity DGBR CL-9
1 Preparation of Sqm 82943.75 0.00
subgrade in SMB
2 Preparation of Sqm 14373.75 0.00
subgrade in SR
H
124 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 3 Preparation of Sqm 21227.21 0.00
subgrade in HR
4 Sand Blanketting Sqm 21227.21 0.00
25mm
5 GSB 150mm thick Sqm 97317.50 5.90
6 GSB 100mm thick Sqm 64229.50 2.60
B 7 WMM 75mm thick Sqm 256370.31 15.54
8 Prime coat over Sqm 85456.71 0.00
WMM surface
9 BM 50mm thick Sqm 85456.71 10.36
10 SDBC 25mm thick Sqm 85456.71 5.18
Total Surfacing Km Eqvt Cl-9 39.58
C
29. However, if the soil classification varies from the enclosed
strata as shown in (Annexure-I to Appx “C”), layer combination
shall be revised accordingly and be executed after prior approval
of OC Contract duly supported with photographs of Soil strata.
30. Amendment in quantities of surfacing works are recommended
D
only during final stage of completion of surfacing works.
xx xx xx
CE/VTK/03/2009-10 ON ROAD LUMLA-TASHIGONG
BETWEEN KM 26.800 TO KM 47.850
E
Sl. Location Earth Work involved in CUM Earth Jungle Unlined Unlined
No. work in Clearance Drain in Drain
From To Cutting Emban- SR (M) in
kment HR(M)
SMB SR HR
1 26.800 31.000 18727.01 1735.04 7631. 42 0.00 0 125.00 217.80
2 31.000 47.850 356166.00 182073.00 337447.00 0.00 23123.0 2174.80 4928

F
Presi ding Officer Lt Col Dhiraj Min otra, OC, 117 RCC (GREF)
OC Cont ract
Member 1 Sd/- (Comments KS, AE(Civil) Eng-in-Charge
117 RCC (GR EF)

2 Shri __________A Holder Authorized rep of M/s Puna
Hinda

6. The writ petitioner was directed not to cut extra road formation
G
width without obtaining proper written permission from the Competent
Authority on 28.1.2013, and in case any formation work was carried
out, no payment shall be made after the report of the Board of Officers.
7. The Second in Command of the Unit sought approval of the
Headquarters on 24.10.2013 after the joint survey of formation cutting
H
UNION OF INDIA & ORS. v. M/S PUNA HINDA 125
[HEMANT GUPTA, J.]

was done by the Joint Survey Team. It is the said Joint Survey Report A
which was rejected by the Competent Authority at the Headquarter,
when the following communication was addressed to the field office
with a copy to the writ petitioner. The said communication of the
Commissioner on 29.10.2013 reads as under:
“Headquarters B
763 Boarder Roads Task Force
Pin-930763
C/O 99 APO
8001/715/EB C
29 Oct 2013
117 RCC (GREF)
PIN 9300117
C/O 99 APO D

CONSTRUCTION AND IMPROVEMENT OF ROAD
LUMLA TASHIGONG FROM KM 26.800 TO 47.800 SINGLE
LANE STANDARD UNDER PHASE ‘A’ OF SARDP INE IN
TWANG DISTT OF ARUNACHAL PRADESH:CA NO. CE(P)
VTK/03/2009-10 E

Refer your letter No. 804/vtk/03/2009-10/79 dated 24 Oct 2013.
2. The documents namely base plan, details of curves and quantity
calculations and cross sections have been scrutinized and found
that they are not in order. F
3. Table 6.10 of hill road manual IRC:SP:46-1998 at Page No. 40
is not correctly interpreted and marked on cross section. Minimum
sight distance ‘m’ (P1 ref to sketch 6.1) at Page No. 40 of hill
road manual IRC SP.46-1996 is to be measured from centre line
of carriage way and not from the edge of the road way.
G
4.Hence, the above documents have not been approved by
competent authority and cancelled herewith.
Sd/-
(MANV Prasad)
SE (Civ) H
Commissioner
126 SUPREME COURT REPORTS [2021] 9 S.C.R.

A Copy to

M/S Puna Hinda,
C/O Time Video Library
Akash Deep Market Ganga
B Pot Itanagar Distt. Papum Pare
Arunachal Pradesh Pin-791111.”
8. The writ petitioner was informed vide letter dated 24.3.2014 to
provide a breakup of the contract agreement amount of Rs.31.87 crores
and also point out that initial joint survey was carried out by a team
C comprising of then OC Contract, Engineer-In-charge, JE In-charge of
contract and Contractor to assess the actual quantities of earth work
before commencement of the work on ground. A comparison of the
contract amounts as well as amended contract amount was delineated
in Table 3 which reads as thus:
D S. No. Description Original CA Amended CA Variation
Amount (Crs) Amount (Crs) /o/ \(/o)
1 Format ion works Rs.11,98 Rs.16.27 + 35,81
2 Permanent works Rs.06.63 Rs.6.25 -05,73
3 Surfacing works Rs.13.26 Rs.12.51 -05,6.6
Total Rs.31.87 Rs.35.03 +09.91

9. It was also pointed out that the formation work was completed
E on 20.9.2012 i.e., not four years back but two years back, as stated by
the writ petitioner. The writ petitioner was communicated that the unpaid
amount on account of original formation work was Rs.74,33,631/- and
Rs.4 crores (approx.) for extra widening of road beyond 7.45 m. It was
communicated as under:
F “….
(h) It is worth mentioning that vide your letter No. NCUBRO/ L-
T/ADM/2013 dated 12 Jul 2013 (copy enclosed as Appx ‘D’)
you claimed unpaid amount just Rs.74,33,631.00 on account of
original formation work and Rs. 4.00 Crores (approximately) on
G account of extra widening of road beyond 7.45m which is beyond
the scope of the contract and the same has already been intimated
to you vide this HQ letter No. 80914/L-T/26-47/114/E8 dated 19
Aug 2013, in case you have any approval of the dept for doing-
extra work or if there is any amendment to work order, the same
H may please be forwarded for our perusal.
UNION OF INDIA & ORS. v. M/S PUNA HINDA 127
[HEMANT GUPTA, J.]

3. In view of the above, it is submitted that each payment has A
been released to you as per claim based on joint measurement
and duly accepted by you till finalization of the formations work
as per clause No 18(vi) of special conditions of contract at serially
page 72 of contract agreement. Hence any extra claim after fifteen
months of completion of formation work is baseless not correct.”
B
10. The writ petitioner communicated on 12.7.2013 that it would
be bound to stop/abandon the project work and the responsibility shall be
that of the department itself for projecting an indifferent attitude, if the
department cannot pay the work done by it as has been claimed. It was
also asserted that the department may take over the remaining work
and complete it themselves. The amount claimed in the said letter was C
as under:

Unseen expenditure done on works

I Land slide clearance during rainy Rs.10000000/- D
season Rs.2500000 x 4 years
II Earth filling on shoulders of the Rs.3000000/-
road without items
on Boo
III Local villagers donation for Rs.50000000/-
smooth progress of the work E
IV Bank Interest due to delay in Rs.1200000/-
payment (Ref RAR Bill)
V Total Rs30000000/-

11. The writ petitioner submitted a final bill on 17.6.2014 and
claimed a sum of Rs.23,68,11,589.02. It was asserted therein that payment F
for amount claimed in the 18 running bills has been made, but in respect
of 19th and 20th running bill, entries have been made in the measurement
book however the payment has not been cleared yet. The final bill
submitted by the writ petitioner was returned unactioned on 10.8.2014.
The writ petitioner was informed that the payment up to 18 running bills
had already exceeded the permissible approved amount including G
escalation payment and was also informed of the following deficiencies:
“3. Also, the following queries/disputes have to be resolved for
finalization of the payment to be made through final bill:-

H
128 SUPREME COURT REPORTS [2021] 9 S.C.R.

A (a) Supporting documents to the final bill submitted by you on
17 Jun 2014 are not found enclosed.

(b) Documents as asked vide our letter No. 604/CE/VTK/
03.2009-10 189/E8 dated 02 Aug 2014 have not been
submitted by you.
B
(c) Claims for extra work done in respect of earth work
quantities beyond scope of contract claimed through your
various letters have been refuted by accepting officer in
this connection please refer HQ CE(P) Vartak letter No.
C 80914/L-T/26.800 to 47.850/326/E8 dated 18 Jul 2014 (copy
enclosed).

(d) Joint survey earned out in respect of formation works
completed against subject CA is under scrutiny and not yet
approved by competent Financial authority.
D
(e) Query in respect of escalation payment made against
formation works has been raised by HQ CE(P) Vartak to
HQ DGBR vide their letter No. 80914/L-T/26.800 to 47
85/286/E8 dated 28 Jun 2014 whose reply is awaited.
E (f) As per directions received vide Par 8 of HQ DGBR/ADG
Sectt letter No 71004/DGBR/25/ADG Sectt dated 25 Jul
2014 and HQ CE(P) Vartak letter No B0914/L-T/26.800
to 47.85/341/E8 dated 30 Jul 2014 (copy of both letters
enclosed) recovery of amount on account of non hancing
F over the quantity of hard rock from the formation works
executed has to be incorporated in your final bill on receipt
of reply from HQ CE(P) Vartak.

(g) Already matter in respect of disputes relating to subject
CA is with HQ DGBR.”
G
12. An inter-departmental communication was sent to Head
Quarters of Seema Sadak Bhawan (Border Road Office) on 17.4.2015
that Board of Officers were not required to be appointed and Accepting
Officer may take the requisite decision. In the status report under
Appendix ‘A’ to the Head Quarter vide letter dated 26.5.2015, it was
H noted as under:
UNION OF INDIA & ORS. v. M/S PUNA HINDA 129
[HEMANT GUPTA, J.]

“6. From the above it is evident that “work claimed to have been A
executed” is much beyond “work ordered to the contractor”.
Moreover the “excess work claimed to have been executed” by
the contractor has not been ordered by Accepting Officer or
Commander of work or Officer Commanding or Engineer-in-
Charge.
B
7. The “Joint Survey Report” on the basis of which contractor is
asking additional payment has not been authenticated/admitted
by the Chief Engineer(P) Vartak nor ordered by any authority.
Therefore contractually contractor’s claim cannot be admitted.
C
8. All payments correctly due to contractor have been already
made.”

13. The terms of reference of the Board of Officers were
determined on 22.7.2015, with copy of the letter to the writ petitioner, as
under: D

“3. Terms of References of the Board of Officers will be as under:

(a) To carry out Joint Survey with Tetal Station from KM 26.800
to 47.852 on Lumla-Tashigong road.
E
(b) To plot the Cross Section at suitable interval and Longitudinal
Section with Corresponding RL.

(c) To ascertain whether any extra work or account of Berm
filing/shoulder or curves has been done.
F
(d) To measure the exact length and width of road after formation
cutting.”

14. The writ petitioner objected to the constitution of the Board of
Officers on 12.8.2015 and claimed a sum of Rs.23,68,11,589/-, breakup G
of which has been reproduced hereunder. The said claim was refuted
by the appellants vide communication dated 27.8.2015. The constitution
of the Board of Officers was cancelled on 8.6.2015.

H
130 SUPREME COURT REPORTS [2021] 9 S.C.R.

A I Formation Work Rs.28,55,94,528.95

Total paid amounts [RAR Bills for formation Rs. 16,24,41,060.00
cutting]
Balance amounts Rs. 12,27,52,095.34

II For curve improvement [as per Hill Road Rs.4,51,04,271.98
Manual]
III For earth fi lling on shoulder of road [Berm Rs. 12,20,083.56
B Filling
IV Price Escalation[Approx] Rs.2, 78,41,323.42

V Unpaid 19 & 20 RAR Bills [for Sign Board, Rs.2,88,10,659.00 +
Milleage
Stone, drainage, retai ning wall etc.] Rs.1,20,83,155.00

Rs. 4,08,93,814.00
C VI Total Pending Bill amounts Rs. 23,68,11,589.00

15. Thereafter, the writ petitioner filed a writ petition before the
High Court on or about 23.11.2015 for quashing of the letter dated
27.8.2015. The writ petitioner was informed vide the said letter to process
D the bills through laid down channels before DC Contract and Commander
Contract. The letter dated 21.10.2015 was also challenged which is a
reply to the notice under Section 80 of the Code of Civil Procedure,
1908. A writ of mandamus was prayed for to pay a sum of
Rs.31,57,16,134/- with 18% interest. In reply to the said writ petition, the
assertions made by the writ petitioner were controverted but also an
E objection was raised that there was a clause for arbitration for resolving
disputes arising between the parties, therefore, the writ petitioner should
have approached the designated authority by appointment of an arbitrator.
16. The appellants in their affidavit had pointed out that after
completion of the formation work, the writ petitioner had communicated
F expenses of Rs.16,93,51,980/- as against provision of Rs.16,26,71,039.40.
It was asserted that the writ petitioner has been paid a sum of Rs.42.27
crores as against original cost of Rs.31.01 crores whereas the contractor
has claimed a total sum of Rs.71.86 crores. The letter dated 29.10.2013
has been issued by the Headquarters, Border Road Task Force stating
G that the minimum distance was to be measured from center line of
carriage way and not from the edge of the roadway. Thus, the entire
claim was based upon imaginary and arbitrary grounds which was
enhanced from time to time.
17. Mr. Nataraj, learned ASG appearing for the appellants, pointed
out that there are serious disputes about the facts in respect of authenticity
H
UNION OF INDIA & ORS. v. M/S PUNA HINDA 131
[HEMANT GUPTA, J.]

of the Joint Final Report and the work done. Therefore, such disputed A
question of facts could not have been adjudicated by the Writ Court as
disputed question of facts relating to recovery of money could not have
been entertained thereunder. Reliance has been placed upon the judgment
of this Court reported as Kerala State Electricity Board & Anr. v.
Kurien E. Kalathil & Ors.2 wherein it was held as under:
B
“10. We find that there is a merit in the first contention of Mr
Raval. Learned counsel has rightly questioned the maintainability
of the writ petition. The interpretation and implementation of a
clause in a contract cannot be the subject-matter of a writ petition.
Whether the contract envisages actual payment or not is a question
of construction of contract. If a term of a contract is violated, C
ordinarily the remedy is not the writ petition under Article 226.
We are also unable to agree with the observations of the High
Court that the contractor was seeking enforcement of a statutory
contract. A contract would not become statutory simply because
it is for construction of a public utility and it has been awarded by D
a statutory body. We are also unable to agree with the observation
of the High Court that since the obligations imposed by the contract
on the contracting parties come within the purview of the Contract
Act, that would not make the contract statutory. Clearly, the High
Court fell into an error in coming to the conclusion that the contract
in question was statutory in nature. E

11. A statute may expressly or impliedly confer power on a statutory
body to enter into contracts in order to enable it to discharge its
functions. Dispute arising out of the terms of such contracts or
alleged breaches have to be settled by the ordinary principles of
law of contract. The fact that one of the parties to the agreement F
is a statutory or public body will not by itself affect the principles
to be applied. The disputes about the meaning of a covenant in a
contract or its enforceability have to be determined according to
the usual principles of the Contract Act. Every act of a statutory
body need not necessarily involve an exercise of statutory power. G
Statutory bodies, like private parties, have power to contract or
deal with property. Such activities may not raise any issue of public
law. In the present case, it has not been shown how the contract
is statutory. The contract between the parties is in the realm of
2
(2000) 6 SCC 293 H
132 SUPREME COURT REPORTS [2021] 9 S.C.R.

A private law. It is not a statutory contract. The disputes relating to
interpretation of the terms and conditions of such a contract could
not have been agitated in a petition under Article 226 of the
Constitution of India. That is a matter for adjudication by a civil
court or in arbitration if provided for in the contract. Whether any
amount is due and if so, how much and refusal of the appellant to
B
pay it is justified or not, are not the matters which could have
been agitated and decided in a writ petition. The contractor should
have relegated to other remedies.”
18. Mr. Nataraj also placed reliance on the judgment of this Court
reported as Joshi Technologies International Inc v. Union of India
C & Ors.3 wherein the following was held:
“55. Law in this aspect has developed through catena of judgments
of this Court and from the reading of these judgments it would
follow that in pure contractual matters the extraordinary remedy
of writ under Article 226 or Article 32 of the Constitution cannot
D be invoked. However, in a limited sphere such remedies are
available only when the non-Government contracting party is able
to demonstrate that it is a public law remedy which such party
seeks to invoke, in contradistinction to the private law remedy
simpliciter under the contract. Some of the case law to bring home
E this cardinal principle is taken note of hereinafter.
xx xx xx
59. On the basis of these facts, this Court observed that the
aforesaid observations of the High Court relying upon Ramana
Dayaram Shetty case [(1979) 3 SCC 489 : (1979) 2 LLJ 217]
F were not correct. Thus observed the Court, speaking through
Ratnavel Pandian, J.: (Ajai Pal Singh case [(1989) 2 SCC 116 :
(1989) 1 SCR 743], SCC pp. 125-26, paras 21-22)
“21. This finding in our view, is not correct in the light of the
facts and circumstances of this case because in Ramana
G Dayaram Shetty case [(1979) 3 SCC 489 : (1979) 2 LLJ 217]
there was no concluded contract as in this case. Even
conceding that the BDA has the trappings of a State or would
be comprehended in ‘other authority’ for the purpose of Article
12 of the Constitution, while determining price of the houses/
H 3
(2015) 7 SCC 728
UNION OF INDIA & ORS. v. M/S PUNA HINDA 133
[HEMANT GUPTA, J.]

flats constructed by it and the rate of monthly instalments to A
be paid, the ‘authority’ or its agent after entering into the field
of ordinary contract acts purely in its executive capacity.
Thereafter the relations are no longer governed by the
constitutional provisions but by the legally valid contract which
determines the rights and obligations of the parties inter se. In
B
this sphere, they can only claim rights conferred upon them by
the contract in the absence of any statutory obligations on the
part of the authority (i.e. BDA in this case) in the said
contractual field.
22. There is a line of decisions where the contract entered
into between the State and the persons aggrieved is non- C
statutory and purely contractual and the rights are governed
only by the terms of the contract, no writ or order can be
issued under Article 226 of the Constitution of India so as to
compel the authorities to remedy a breach of contract pure
and simple — Radhakrishna Agarwal v. State of Bihar D
[(1977) 3 SCC 457], Premji Bhai Parmar v. DDA [(1980) 2
SCC 129] and Divl. Forest Officer v. Bishwanath Tea Co.
Ltd. [(1981) 3 SCC 238 : (1981) 3 SCR 662] “
xx xx xx
69. The position thus summarised in the aforesaid principles has E
to be understood in the context of discussion that preceded which
we have pointed out above. As per this, no doubt, there is no
absolute bar to the maintainability of the writ petition even in
contractual matters or where there are disputed questions of fact
or even when monetary claim is raised. At the same time, F
discretion lies with the High Court which under certain
circumstances, it can refuse to exercise. It also follows that under
the following circumstances, “normally”, the Court would not
exercise such a discretion:
69.1. The Court may not examine the issue unless the action has G
some public law character attached to it.
69.2. Whenever a particular mode of settlement of dispute is
provided in the contract, the High Court would refuse to exercise
its discretion under Article 226 of the Constitution and relegate
the party to the said mode of settlement, particularly when
H
134 SUPREME COURT REPORTS [2021] 9 S.C.R.

A settlement of disputes is to be resorted to through the means of
arbitration.
69.3. If there are very serious disputed questions of fact which
are of complex nature and require oral evidence for their
determination.
B 69.4. Money claims per se particularly arising out of contractual
obligations are normally not to be entertained except in exceptional
circumstances.”
19. It was thus argued that in view of the arbitration clause
available to resolve the disputes, the order of the High Court was
C unwarranted and untenable. It was also argued that the High Court in
the impugned order has held that resurvey was not possible as five
monsoons have passed, therefore, the appellants were directed to approve
the DPR and pay the pending bills on the basis of Final Joint Report.
20. The letter dated 27.8.2015 was issued by the Chief Engineer,
D Project Vartak denying the allegations levelled by the writ petitioner and
informing the writ petitioner that the Board of Officers is being cancelled
at his request. It was also pointed out that the Board of Officers was
constituted at the request of the writ petitioner to resolve the matter.
The letter dated 21.10.2015 was in fact reply to the notice served by the
E petitioner under Section 80 of Code of Civil Procedure, 1908.
21. Ms. Meenakshi Arora, learned senior counsel for the writ
petitioner, contended that the officer who had written such
abovementioned letter was not the competent authority to write the same.
Such argument was based upon an averment in the memorandum of
F appeal. The memorandum of appeal was signed by the panel counsel
and was not supported by any affidavit of an officer of the appellant.
We do not find any merit in the said argument raised. The letter itself
stated that it has been approved by the Competent Authority. It appears
that the decision was taken by the competent authority but the
communication was issued by an officer on behalf of the competent
G authority. The basis of Joint Survey Report itself has been found to be
fallacious. This Report appears to be a friendly act of some of the officers
of the appellant, to grant benefit to the writ petitioner, though even not
claimed by the petitioner at an early stage. The claim of
Rs.23,68,11,589.02 in the letter dated 17.6.2014 has swelled into an amount
of Rs. 35,51,80,651 as per the notice under Section 80 of the Code.
H
UNION OF INDIA & ORS. v. M/S PUNA HINDA 135
[HEMANT GUPTA, J.]

Therefore, for the purposes of these proceedings, the communication A
dated 29.10.2013 cannot be permitted to be disputed by the writ petitioner.
22. The Board of Officers convened its meeting but the same
was cancelled vide communication dated 8.6.2015. Thus, an attempt by
the appellants to resolve the disputes regarding the measurements by
constituting Board of Officers was scuttled by the writ petitioner for the B
reasons best known to him.
23. The High Court has based its order on the ground that after
five monsoons, the final measurements could not be ascertained. If the
final measurements could not be done at the spot, the contemporary
evidence and the measurement books prepared from time to time could C
be the basis for determining the liability of the appellants. The Joint Survey
Report is not an admitted measurement, though some officers might
have signed it. The Report prepared after the completion of work wherein
no such work done is reflected in the measurement book prepared during
execution of work is an attempt to inflate the claim raised by the writ
petitioner. The entire amount claimed by the writ petitioner is disputed. D
It has been asserted that the entire payment due as against the claim of
work order had been made, as reflected from the following table:
I Awarded cost of the work under the Rs.31.87 Crores
Contract
II Cost of the work already executed by Rs.0.86 Cr. E
the department on the same stretch
before the award of work
III Cost of the work as reduced in view of Rs.31.01 Crores
prior departmental
work
IV Amended cost of work under the Rs.35.03 Crores
Contract F
V Contract cost in revised DPR Rs. 42.27 Crores
processed to Ministry of Road,
Transport and Highways
VI Payment made to the Rs.42.27 Crores
contractor/respondent herein inclusive
of Rs.3.86 Crores as
per the order dated G
18.05.2017 of the Hon'b le High Court

VII Contractor's claim as per final bill Rs. 71. 76 Crores
dat ed 23.11.2015

H
136 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 24. Therefore, the dispute could not be raised by way of a writ
petition on the disputed questions of fact. Though, the jurisdiction of the
High Court is wide but in respect of pure contractual matters in the field
of private law, having no statutory flavour, are better adjudicated upon
by the forum agreed to by the parties. The dispute as to whether the
amount is payable or not and/or how much amount is payable are disputed
B
questions of facts. There is no admission on the part of the appellants to
infer that the amount stands crystallized. Therefore, in the absence of
any acceptance of Joint Survey Report by the competent authority, no
right would accrue to the writ petitioner only because measurements
cannot be undertaken after passage of time. Maybe, the resurvey cannot
C take place but the measurement books of the work executed from time
to time would form a reasonable basis for assessing the amount due and
payable to the writ petitioner, but such process could be undertaken only
by the agreed forum i.e., arbitration and not by the Writ Court as it does
not have the expertise in respect of measurements or construction of
roads.
D
25. A perusal of the matter shows that collusion of some of the
officers of the appellants with the contractor cannot be ruled out. Such
collusion seems to be the basis of the writ petition filed before the High
Court.
E 26. In view of the above discussion, we deem it appropriate to
allow the present appeal while dismissing the writ petition filed by the
writ petitioner before the High Court.

Ankit Gyan Appeal allowed.
F

G

H