Jammu and Kashmir High Court: Sanjay Dhar J., while dismissing the present petition, discussed the scope of interference under Article 226 in Contractual matters and further called the present case a classic example of filing successive petitions for the same relief after failing to get the interim relief in the earlier writ petitions. Taking a lenient view of the matter, and considering that the petitioner is a student, Court did not impose any costs but only left with a severe warning against the same.
Through the medium of the instant writ petition, the petitioner has sought a direction against the respondents for release of all the instalments of fee in her favour and transfer of the same to a medical college in Bangladesh, so that she is able to pursue her MBBS course from the institution therein. Further, a writ of certiorari for quashing of communication dated 31-01-2020 has also been sought. Issue to be determined by the Court precisely was, whether the petitioner is entitled to seek a direction upon the respondent corporation to release the loan amount sanctioned in her favour to college different from the one mentioned in the sanctioned letter. It is to be noted that such borrowings/loan from a Financial Institution is purely contractual in nature governed by the terms and conditions of the loan agreement indicating a very restricted approach of the Court exercising writ jurisdiction.
Court referred to the following cases pursuant to its decision;
- Noble Resources Ltd. v. State of Orissa, (2006) 10 SCC 236; While answering whether a writ petition was maintainable in contractual matters and if so, what is the scope of jurisdiction of the Court in such matters, Supreme Court said, “It is trite that if an action on the part of the State is violative of the equality clause contained in Article 14 of the Constitution of India, a writ petition would be maintainable even in the contractual field. A distinction indisputably must be made between a matter which is at the threshold of a contract and a breach of contract; whereas in the former the court’s scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution.” [Law laid down in Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCC 457]
- Kisan Sehkari Chini Mills v. Vardan Linkers, (2008) 12 SCC 500; With respect to an administrative action involved in conclusion of the Contract, Court said, “…when there is a contractual dispute with a public law element, and a party chooses the public law remedy by way of a writ petition instead of a private law remedy of a suit, he will not get a full fledged adjudication of his contractual rights, but only a judicial review of the administrative action.”
- Rishi Kiran Logistics v. Board of Trustees of Kandla Port Trust, (2015) 13 SCC 233; Distinguishing between a remedy sought under the Contract Act, by means of damages, Specific Performance under the specified Act and invoking Writ Jurisdiction, Court observed in the words, “Ordinarily, the remedy available for a party complaining of breach of contract lies for seeking damages. He would be entitled to the relief of specific performance, if the contract was capable of being specifically enforced in law. The remedies for a breach of contract being purely in the realm of contract are dealt with by civil courts. The public law remedy, by way of a writ petition under Article 226 of the Constitution, is not available to seek damages for breach of contract or specific performance of contract. However, where the contractual dispute has a public law element, the power of judicial review under Article 226 may be invoked.”
Narrowing down to the facts and circumstances of the present case, Court said that the terms and conditions of the loan agreement suggest that the institution in whose favour the loan was being sanctioned was an essential ingredient to the contract and the college in which the petitioner now seeks to take admission in, was not at all in picture during the grant of the first installment.
Therefore, “…the action of the respondent-Corporation in not releasing the second installment of loan in favour of the petitioner appears to be justified and the same cannot be termed either arbitrary or malafide”. Court further said, “So far as the action of the respondent Corporation directing the petitioner to refund the first installment of loan amount is concerned, the same also appears to be justified because the petitioner admittedly had, on her own, transferred the first installment of loan from the Community Based Medical College, Bangladesh to Khwaja Younis Ali Medical College, Bangladesh without informing the respondent Corporation which is a breach of terms and conditions of the sanction letter.” [Mubashir Ashraf Bhat v. Union Territory of J&K, 2021 SCC OnLine J&K 8, decided on 19-01-2021]
Sakshi Shukla, Editorial Assistant has put this story together