Fabtech Projets And Engineers Ltd … vs Indian Oil Corporation Ltd And Anr on 23 July, 2026

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    Bombay High Court

    Fabtech Projets And Engineers Ltd … vs Indian Oil Corporation Ltd And Anr on 23 July, 2026

    Author: Manish Pitale

    Bench: Manish Pitale

                                                                                       CNR No : HCBM010504592024
    
    
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                                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                                CIVIL APPELLATE JURISDICTION
                                               WRIT PETITION NO.16219 OF 2024
    
                              Fabtech Projects & Engineers Limited                 ...      Petitioner
                              Vs.
                              Indian Oil Corporation Limited and another           ...      Respondents
    
                              Mr. Mayur Khandeparkar a/w. Mr. Chaitanya Nikte, Mr. Swapnil Sangle and
                              Mr.Shubankar Kulkarni i/b. Esha Malik for Petitioner.
                              Ms. Huzan Bhumgara a/w. Mr. Amit Meharia, Ms. Tannishtha Singh,
                              Ms.Paramita Banerjee, Mr. Preet Dabre and Mr. Himanshu Singh i/b. Meharia &
                              Co. for Respondent No.1.
                              Mrs. Shehnaz V. Bharucha for Respondent No.2.
    
    
                                                         CORAM : MANISH PITALE &
                                                                 SHREERAM V. SHIRSAT, JJ.
                                                         DATE      : JULY 23, 2026
    
                              ORAL ORDER : (Per Manish Pitale, J.)

    . The petitioner is a company now run by a successful resolution
    applicant after Corporate Insolvency Resolution Process (CIRP) had
    intervened in the light of the earlier management of the company
    causing the CIRP process to be undertaken under the provisions of the
    Insolvency and Bankruptcy Code, 2016 (IBC). This aspect is crucial, for
    the reason that the petitioner contends that the said aspect of the matter
    is a clear answer to the preliminary objection regarding maintainability
    of the present writ petition raised on behalf of the respondent No.1 –
    Indian Oil Corporation Limited (IOCL). The petitioner company has
    filed the present writ petition for a direction to the respondents to
    forthwith release a specific amount payable to it for works done against
    specific purchase orders for Guwahati and Panipat Refineries of the
    respondent No.1 – IOCL. The petitioner company also prays for
    MINAL by
    Digitally signed
    MINAL
    SANDIP SANDIP PARAB
    Date: 2026.07.23
    quashing of a communication dated 26.06.2024, whereby reliance was
    PARAB 14:57:51 +0530

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    SPONSORED

    placed on adjustment of payment towards Risk and Cost terms executed
    with the company before it underwent CIRP.

    2. In the year 2019, the respondent No.1 – IOC awarded a contract
    for fabrication, erection, testing and commissioning of storage tanks at
    its Solapur Depot to the petitioner company, which was under the
    erstwhile management. On 24.09.2019, CIRP was commenced in respect
    of the petitioner company when a petition under the provisions of the
    IBC was admitted by the National Company Law Tribunal, Mumbai
    (NCLT). The respondent No.1 – IOC was aware about the CIRP
    concerning the petitioner company as it had submitted its claims
    pertaining to its Bongaigaon Refinery with the resolution professional.
    But, admittedly, respondent No.1 – IOC did not submit any claim for
    Risk and Cost in respect of its claims concerning the petitioner company
    in the aforesaid pending CIRP before the resolution professional.

    3. On 16.11.2021, the NCLT approved the resolution plan submitted
    by the new management and hence, the successful resolution applicant
    as the new management took over the petitioner company. On
    10.03.2022, the NCLT modified its order dated 16.11.2021 in the light of
    the law laid down by the Supreme Court in its judgement in the case of
    Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset
    Reconstruction Company Limited and others
    , (2021) 9 SCC 657.
    Accordingly, it was specifically recorded that any claim, which did not
    form part of the resolution plan would stand permanently extinguished
    and waived and further that, no proceedings could be initiated for such a
    claim.

    4. On 09.05.2023, the new management took over the petitioner
    company as it was revived through CIRP and accordingly, all claims
    except those provided in the resolution plan stood extinguished by
    operation of law. Thereafter, respondent No.1 – IOCL awarded the two

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    separate contracts to the petitioner company for its Guwahati and
    Panipat Refineries. The present dispute pertains to the amounts payable
    to the petitioner company in respect of the said projects. The petitioner
    company followed up the matter with the respondent No.1 – IOCL by
    submitting representations in June 2024. But on 26.06.2024, the
    impugned e-mail was received from the respondent No.1 – IOCL stating
    that there was a debit recovery of Rs.3.91 crores under the Risk and Cost
    pertaining to Solapur Project of respondent No.1 – IOCL and that the
    payments due for the ongoing projects at Guwahati and Panipat
    Refineries would be adjusted towards the same.

    5. Aggrieved by the aforesaid approach adopted by the respondent
    No.1 – IOC, the petitioner company has filed the present writ petition.

    6. Mr. Khandeparkar, learned counsel appearing for the petitioner
    submitted that the preliminary objection with regard to maintainability
    of the present writ petition raised on behalf of the respondent No.1 –
    IOC, is without any substance. It was submitted that the only basis for
    disputing the payments due to the petitioner company, is the claim of
    respondent No.1 – IOCL that it can rely upon alleged amounts due under
    the Risk and Cost executed with the petitioner company prior to CIRP
    concerning the Solapur Project. It was submitted that the said basis for
    disputing payments due to the petitioner company is wholly
    unsustainable as it is in the teeth of Section 31 of the IBC and the law
    clarified by the Supreme Court in the case of Ghanashyam Mishra and
    Sons Private Limited Vs. Edelweiss Asset Reconstruction Company
    Limited and others
    (supra). It is submitted that since the repudiation of
    the claim of the petitioner company gives rise to a pure question of law,
    which as per the settled position of law is answered in favour of the
    petitioner company, the action of the respondent No.1 – IOCL, which is
    an agency and instrumentality of the State is rendered wholly arbitrary

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    and hence, the writ petition is maintainable. On the question of
    maintainability of writ petition, reliance was placed on judgements of
    the Supreme Court in the cases of ABL International Limited Vs. Export
    Credit Guarantee Corporation of India and others
    , (2004) 3 SCC 553;
    M/s. Surya Constructions Vs. State of Uttar Pradesh and others, 2019
    SCC OnLine SC 2442; DFO South Kheri and others Vs. Ram Sanehi
    Singh
    , (1971) 3 SCC 864; as also judgement of this Court in the case of
    A2Z Infraservices Limited Vs. Union of India and others, 2018 SCC
    OnLine Bom.1042.

    7. It was submitted that once it is demonstrated that the writ petition
    is maintainable, there is no defence available to the respondent No.1 –
    IOCL, and therefore, the prayers made in the present writ petition
    deserve to be granted. On the question of the petitioner having filed
    applications before the NCLT, it was explained that the reliefs sought
    therein pertained to the resolution plan, which was accepted, while the
    relief sought in the present petition has a public law element, which the
    NCLT would not be able to consider. On this basis, it was submitted that
    the writ petition may be allowed.

    8. On the other hand, Ms. Bhumgara, learned counsel appearing for
    respondent No.1 – IOCL submitted that the only contention being raised
    on behalf of the said respondent pertained to the very maintainability of
    the present writ petition. It was submitted that a perusal of the prayer
    clauses would show that it is nothing but an action for recovery of
    alleged dues to the petitioner company. Since the respondent No.1 –
    IOCL is disputing the liability to pay the said amount, such a
    controversy ought to be agitated before the competent civil court and not
    before this Court exercising writ jurisdiction. It was submitted that in the
    facts and circumstances of the present case, a writ of mandamus can
    certainly not be issued. Reliance was placed on judgement of the

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    Supreme Court in the case of State of UP Vs. Bridge & Roof Company
    (India) Limited
    , (1996) 6 SCC 22.

    9. On this basis, it was submitted that the writ petition deserved to
    be dismissed and the petitioner company ought to be relegated to the
    alternative remedy of approaching the competent civil court.

    10. Having considered the rival submissions, we find that the
    controversy in the present petition is in a very narrow conspectus. There
    is no dispute about the fact that the petitioner company underwent CIRP
    and that today, it is being run by the successful resolution applicant. The
    amounts claimed by the respondent No.1 – IOCL under Risk and Cost
    terms admittedly pertain to the amounts claimed by the respondent No.1

    – IOCL from the petitioner company in its earlier avatar, prior to
    undergoing CIRP. It is also an admitted position that in respect of the
    said dues, the respondent No.1 – IOCL did not raise any claim during the
    CIRP before the resolution professional. As a consequence, the said dues
    were not part of the resolution plan as approved by the NCLT.

    11. It is also an admitted position that the respondent No.1 – IOCL
    was aware about the fact that the petitioner company was undergoing
    CIRP, as it had raised claim in the said process before the Resolution
    Professional in respect of its other project concerning the Bongaigaon
    Refinery. These admitted facts are crucial for considering the question as
    to whether the only basis for the respondent No.1 – IOCL to dispute the
    amount now due and payable to the petitioner company can be
    sustained.

    12. This also has a direct bearing on the preliminary objection
    regarding maintainability raised on behalf of the respondent No.1 –
    IOCL. We are of the opinion that the only basis on which the respondent
    No.1 – IOCL is disputing payment of dues to the petitioner company

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    being run by the successful resolution applicant, gives rise to a question
    of law concerning provisions of the IBC and the interpretation of the
    same rendered by the Supreme Court. In such a situation where no other
    dispute is raised, including on the quantum of the dues claimed by the
    petitioner company for its works in Guwahati and Panipat Refineries of
    respondent No.1 – IOCL, there is no disputed question of fact at all,
    necessitating leading of evidence in any manner. If the question that
    arises for consideration, in the light of the only ground raised by the
    respondent No.1 – IOCL for disputing the amounts due and payable to
    the petitioner company, is answered against the respondent No.1 – IOCL,
    its action can be demonstrated to be arbitrary, justifying filing of the
    present writ petition by the petitioner company.

    13. In this context, the position of law clarified by the Supreme Court
    in the case of Ghanashyam Mishra and Sons Private Limited Vs.
    Edelweiss Asset Reconstruction Company Limited and others

    (supra) assumes significance. After referring to the provisions of the
    IBC in great detail, the Supreme Court in the said judgement observed as
    follows:-

    “66. Vide Section 7 of Act 26 of 2019 [vide S.O. 2953(E),
    dated 16-8-2019 with effect from 16-8-2019], the following
    words have been inserted in Section 31 of the I&B Code:

    ‘including the Central Government, any State
    Government or any local authority to whom a
    debt in respect of the payment of dues arising
    under any law for the time being in force, such as
    authorities to whom statutory dues are owed.’

    67. As such, with respect to the proceedings, which arise
    after 16-8-2019, there will be no difficulty. After the
    amendment, any debt in respect of the payment of dues
    arising under any law for the time being in force including the
    ones owed to the Central Government, any State Government
    or any local authority, which does not form a part of the
    approved resolution plan, shall stand extinguished.

                        *      *      *     *      *      *
    
    
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    95. In the result, we answer the questions framed by us as
    under:

    (i) That once a resolution plan is duly approved by the
    adjudicating authority under sub-section (1) of Section 31, the
    claims as provided in the resolution plan shall stand frozen
    and will be binding on the corporate debtor and its
    employees, members, creditors, including the Central
    Government, any State Government or any local authority,
    guarantors and other stakeholders. On the date of approval of
    resolution plan by the adjudicating authority, all such claims,
    which are not a part of resolution plan, shall stand
    extinguished and no person will be entitled to initiate or
    continue any proceedings in respect to a claim, which is not
    part of the resolution plan;

    (ii) 2019 Amendment to Section 31 of the I&B Code is
    clarificatory and declaratory in nature and therefore will be
    effective from the date on which the I&B Code has come into
    effect;

    (iii) Consequently all the dues including the statutory dues
    owed to the Central Government, any State Government or
    any local authority, if not part of the resolution plan, shall
    stand extinguished and no proceedings in respect of such dues
    for the period prior to the date on which the adjudicating
    authority grants its approval under Section 31 could be
    continued.”

    14. The aspect of availability of alternative remedy was also argued
    before the Supreme Court in the said case and in that context, the
    Supreme Court in the said judgement held as follows:-

    “128. The main ground raised on behalf of the respondent is
    with regard to availability of alternate remedy. The second
    ground raised is, since the transfer date is prior to the 2019
    Amendment to Section 31 of the I&B Code, the said
    amendment would not be applicable to the debts owed to the
    State Government or the Central Government.

    129. As held by this Court in a catena of cases including in
    Baburam Prakash Chandra Maheshwari v. Antarim Zila
    Parishad
    , Muzaffarnagar [Baburam Prakash Chandra
    Maheshwari v. Antarim Zila Parishad, Muzaffarnagar
    ,
    (1969) 1 SCR 518 : AIR 1969 SC 556], Whirlpool Corpn. v.

    Registrar of Trade Marks [Whirlpool Corpn. v. Registrar of
    Trade Marks
    , (1998) 8 SCC 1], Nivedita Sharma v. COAI
    [Nivedita Sharma v. COAI, (2011) 14 SCC 337 : (2012) 4

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    SCC (Civ) 947], Embassy Property Developments (P) Ltd. v.
    State of Karnataka [Embassy Property Developments (P) Ltd.
    v. State of Karnataka, (2020) 13 SCC 308] and recently in
    Kalpraj Dharamshi [Kalpraj Dharamshi v. Kotak Investment
    Advisors Ltd.
    , (2021) 10 SCC 401 : 2021 SCC OnLine SC
    204] , that non-exercise of jurisdiction under Article 226 is a
    rule of self-restraint. It has been consistently held that the
    alternate remedy would not operate as a bar in at least three
    contingencies, namely,
    (1) where the writ petition has been filed for the
    enforcement of any of the fundamental rights;

    (2) where there has been a violation of the principle of
    natural justice; and
    (3) where the order or proceedings are wholly without
    jurisdiction or the vires of an Act is challenged.

    130. In the foregoing paragraphs, we have held that the
    2019 Amendment to Section 31 of the I&B Code is
    clarificatory and declaratory in nature and therefore will have
    a retrospective operation. As such, when the resolution plan is
    approved by NCLT, the claims, which are not part of the
    resolution plan, shall stand extinguished and the proceedings
    related thereto shall stand terminated. Since the subject-matter
    of the petition are the proceedings, which relate to the claims
    of the respondents prior to the approval of the plan, in the
    light of the view taken by us, the same cannot be continued.
    Equally the claims, which are not part of the resolution plan,
    shall stand extinguished.

    131. In this view of the matter, we find that relegating the
    appellant to the alternative remedy would serve no purpose. A
    party cannot be made to run from one forum to another forum
    in respect of the proceedings and the claims which are not
    permissible in law.”

    15. We are of the opinion that in the face of such an authoritative
    pronouncement of the Supreme Court regarding the position of law, the
    respondent No.1 – IOCL as an agency and instrumentality of the State
    has arbitrarily refused to pay the amounts due to the petitioner company
    by referring to its alleged dues under Risk and Cost terms pertaining to
    the Solapur Project for which the said respondent had engaged the
    petitioner company in its earlier avatar before CIRP kicked in. As noted

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    hereinabove, the respondent No.1 – IOCL could have raised its claim
    before the Resolution Professional in the CIRP, but it failed to do so,
    despite being aware about the fact that the petitioner company was
    undergoing CIRP. As a matter of fact, it raised claim before the
    Resolution Professional for another project. By operation of law, the
    aforementioned earlier claims upon which the respondent No.1 – IOCL
    is trying to rely at this point in time, stood extinguished. This renders the
    impugned action and the impugned communication dated 26.06.2024
    issued by the respondent No.1 – IOCL as arbitrary and wholly
    unsustainable. There is no question of the respondent No.1 – IOCL,
    withholding amounts due to the petitioner company for its works
    pertaining to Guwahati and Panipat Refineries.

    16. We also do not find any substance in the contention raised on
    behalf of the respondent No.1 – IOCL by relying upon the judgement of
    the Supreme Court in the case of State of UP and others Vs. Bridge &
    Roof Company (India) Limited
    (supra). In the said case, the
    concerned company had raised a simplicitor claim of amounts due and
    payable under a contract in the realm of private law. In that context, the
    Supreme Court found that interpretation of terms and conditions of
    contract was involved and the amount due itself was being disputed by
    the State. In that context, it was held that writ petition under Article 226
    of the Constitution of India was not maintainable.

    17. We find that in the case of ABL International Limited and
    another Vs. Export Credit Guarantee Corporation of India Limited
    and others
    (supra), the Supreme Court discussed in detail as to in what
    conditions a writ petition would be maintainable even in the context of a
    contract wherein a State or an agency or an instrumentality of the State
    was one of the parties.
    In the said judgement, the Supreme Court also
    considered its earlier aforesaid judgement in the case of State of UP and

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    others Vs. Bridge & Roof Company (India) Limited (supra) and yet,
    held that the writ petition under Article 226 of the Constitution of India
    would be maintainable. The relevant portion of the said judgement reads
    as follows:-

    “10. It is clear from the above observations of this Court in
    the said case, though a writ was not issued on the facts of that
    case, this Court has held that on a given set of facts if a State
    acts in an arbitrary manner even in a matter of contract, an
    aggrieved party can approach the court by way of writ under
    Article 226 of the Constitution and the court depending on
    facts of the said case is empowered to grant the relief. This
    judgment in K.N. Guruswamy v. State of Mysore [AIR 1954
    SC 592 : (1955) 1 SCR 305] was followed subsequently by
    this Court in the case of D.F.O. v. Ram Sanehi Singh [(1971)
    3 SCC 864] wherein this Court held: (SCC p. 865, para 4)
    ‘By that order he has deprived the respondent of a
    valuable right. We are unable to hold that merely because
    the source of the right which the respondent claims was
    initially in a contract, for obtaining relief against any
    arbitrary and unlawful action on the part of a public
    authority he must resort to a suit and not to a petition by
    way of a writ.
    In view of the judgment of this Court in
    K.N. Guruswamy case [AIR 1954 SC 592 : (1955) 1 SCR
    305] there can be no doubt that the petition was
    maintainable, even if the right to relief arose out of an
    alleged breach of contract, where the action challenged
    was of a public authority invested with statutory power.’
    (emphasis supplied)

    11. In the case of Gujarat State Financial Corpn. v. Lotus
    Hotels (P) Ltd.
    [(1983) 3 SCC 379] this Court following an
    earlier judgment in Ramana Dayaram Shetty v. International
    Airport Authority of India
    [(1979) 3 SCC 489] held: (SCC pp.
    385-86, paras 9 & 11)
    The instrumentality of the State which would be
    ‘other authority’ under Article 12 cannot commit
    breach of a solemn undertaking to the prejudice of
    the other party which acted on that undertaking or
    promise and put itself in a disadvantageous
    position. The appellant Corporation, created under
    the State Financial Corporations Act, falls within
    the expression of ‘other authority’ in Article 12 and
    if it backs out from such a promise, it cannot be
    said that the only remedy for the aggrieved party
    would be suing for damages for breach and that it

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    could not compel the Corporation for specific
    performance of the contract under Article 226.

    12. The learned counsel appearing for the first respondent,
    however, submitted that this Court has taken a different view
    in the case of LIC of India v. Escorts Ltd. [(1986) 1 SCC 264]
    wherein this Court held: (SCC p. 344, para 102)
    ” If the action of the State is related to
    contractual obligations or obligations arising out of
    the tort, the court may not ordinarily examine it
    unless the action has some public law character
    attached to it. Broadly speaking, the court will
    examine actions of State if they pertain to the public
    law domain and refrain from examining them if they
    pertain to the private law field. The difficulty will lie
    in demarcating the frontier between the public law
    domain and the private law field. It is impossible to
    draw the line with precision and we do not want to
    attempt it. The question must be decided in each
    case with reference to the particular action, the
    activity in which the State or the instrumentality of
    the State is engaged when performing the action, the
    public law or private law character of the action and
    a host of other relevant circumstances. When the
    State or an instrumentality of the State ventures into
    the corporate world and purchases the shares of a
    company, it assumes to itself the ordinary role of a
    shareholder, and dons the robes of a shareholder,
    with all the rights available to such a shareholder.
    There is no reason why the State as a shareholder
    should be expected to state its reasons when it seeks
    to change the management, by a resolution of the
    company, like any other shareholder.”

    (emphasis supplied)

    13. We do not think this Court in the above case has, in
    any manner, departed from the view expressed in the earlier
    judgments in the case cited hereinabove. This Court in the
    case of LIC of India [(1986) 1 SCC 264] proceeded on the
    facts of that case and held that a relief by way of a writ
    petition may not ordinarily be an appropriate remedy. This
    judgment does not lay down that as a rule in matters of
    contract the court’s jurisdiction under Article 226 of the
    Constitution is ousted. On the contrary, the use of the words
    “court may not ordinarily examine it unless the action has
    some public law character attached to it” itself indicates that
    in a given case, on the existence of the required factual matrix

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    a remedy under Article 226 of the Constitution will be
    available. The learned counsel then relied on another
    judgment of this Court in the case of State of U.P. v. Bridge &
    Roof Co. (India) Ltd.
    [(1996) 6 SCC 22] wherein this Court
    held: (SCC p. 31, para 21)
    Further, the contract in question contains a
    clause providing inter alia for settlement of disputes
    by reference to arbitration. The arbitrators can decide
    both questions of fact as well as questions of law.
    When the contract itself provides for a mode of
    settlement of disputes arising from the contract, there
    is no reason why the parties should not follow and
    adopt that remedy and invoke the extraordinary
    jurisdiction of the High Court under Article 226. The
    existence of an effective alternative remedy — in this
    case, provided in the contract itself — is a good
    ground for the court to decline to exercise its
    extraordinary jurisdiction under Article 226.

    14. This judgment again, in our opinion, does not help the
    first respondent in the argument advanced on its behalf that in
    contractual matters remedy under Article 226 of the
    Constitution does not lie. It is seen from the above extract that
    in that case because of an arbitration clause in the contract,
    the Court refused to invoke the remedy under Article 226 of
    the Constitution. We have specifically inquired from the
    parties to the present appeal before us and we have been told
    that there is no such arbitration clause in the contract in
    question. It is well known that if the parties to a dispute had
    agreed to settle their dispute by arbitration and if there is an
    agreement in that regard, the courts will not permit recourse
    to any other remedy without invoking the remedy by way of
    arbitration, unless of course both the parties to the dispute
    agree on another mode of dispute resolution. Since that is not
    the case in the instant appeal, the observations of this Court in
    the said case of Bridge & Roof Co. [(1996) 6 SCC 22] are of
    no assistance to the first respondent in its contention that in
    contractual matters, writ petition is not maintainable.

    15. The learned counsel then contending that this Court
    will not entertain a writ petition involving disputed questions
    of fact relied on a judgment of this Court in the case of State
    of Bihar v. Jain Plastics and Chemicals Ltd.
    [(2002) 1 SCC
    216] wherein this Court held: (SCC p. 218, para 7)
    ‘7. In our view, it is apparent that the order passed
    by the High Court is, on the face of it, illegal and
    erroneous. It is true that many matters could be

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    decided after referring to the contentions raised in the
    affidavits and counter-affidavits, but that would
    hardly be a ground for exercise of extraordinary
    jurisdiction under Article 226 of the Constitution in
    case of alleged breach of contract. Whether the
    alleged non-supply of road permits by the appellants
    would justify breach of contract by the respondent
    would depend upon facts and evidence and is not
    required to be decided or dealt with in a writ petition.
    Such seriously disputed questions or rival claims of
    the parties with regard to breach of contract are to be
    investigated and determined on the basis of evidence
    which may be led by the parties in a properly
    instituted civil suit rather than by a court exercising
    prerogative of issuing writs.’

    16. A perusal of this judgment though shows 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 of India.
    This decision again, in our opinion, does not lay down an
    absolute rule that in all cases involving disputed questions of
    fact the parties should be relegated to a civil suit. In this view
    of ours, we are supported by a judgment of this Court in the
    case of Gunwant Kaur v. Municipal Committee, Bhatinda
    [(1969) 3 SCC 769] where dealing with such a situation of
    disputed questions of fact in a writ petition this Court held:

    (SCC p. 774, paras 14-16)
    ’14. The High Court observed that they will not
    determine disputed question of fact in a writ
    petition. But what facts were in dispute and what
    were admitted could only be determined after an
    affidavit-in-reply was filed by the State. The High
    Court, however, proceeded to dismiss the petition in
    limine. The High Court is not deprived of its
    jurisdiction to entertain a petition under Article 226
    merely because in considering the petitioner’s right
    to relief questions of fact may fall to be determined.
    In a petition under Article 226 the High Court has
    jurisdiction to try issues both of fact and law.
    Exercise of the jurisdiction is, it is true,
    discretionary, but the discretion must be exercised
    on sound judicial principles. When the petition
    raises questions of fact of a complex nature, which
    may for their determination require oral evidence to
    be taken, and on that account the High Court is of

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    the view that the dispute may not appropriately be
    tried in a writ petition, the High Court may decline
    to try a petition. Rejection of a petition in limine will
    normally be justified, where the High Court is of the
    view that the petition is frivolous or because of the
    nature of the claim made dispute sought to be
    agitated, or that the petition against the party against
    whom relief is claimed is not maintainable or that
    the dispute raised thereby is such that it would be
    inappropriate to try it in the writ jurisdiction, or for
    analogous reasons.

    15. From the averments made in the petition filed
    by the appellants it is clear that in proof of a large
    number of allegations the appellants relied upon
    documentary evidence and the only matter in respect
    of which conflict of facts may possibly arise related
    to the due publication of the notification under
    Section 4 by the Collector.

    16. In the present case, in our judgment, the High
    Court was not justified in dismissing the petition on
    the ground that it will not determine disputed
    question of fact. The High Court has jurisdiction to
    determine questions of fact, even if they are in
    dispute and the present, in our judgment, is a case in
    which in the interests of both the parties the High
    Court should have entertained the petition and called
    for an affidavit-in-reply from the respondents, and
    should have proceeded to try the petition instead of
    relegating the appellants to a separate suit.’

    17. The above judgment of Gunwant Kaur [(1969) 3 SCC
    769] finds support from another judgment of this Court in the
    case of Century Spg. and Mfg. Co. Ltd. v. Ulhasnagar
    Municipal Council [(1970) 1 SCC 582] wherein this Court
    held: (SCC p. 587, para 13)
    ‘Merely because a question of fact is raised, the
    High Court will not be justified in requiring the
    party to seek relief by the somewhat lengthy,
    dilatory and expensive process by a civil suit against
    a public body. The questions of fact raised by the
    petition in this case are elementary.’

    18. This observation of the Court was made while negating
    a contention advanced on behalf of the respondent
    Municipality which contended that the petition filed by the
    appellant Company therein apparently raised questions of fact

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    WP16219_24.doc

    which argument of the Municipality was accepted by the
    High Court holding that such disputed questions of fact
    cannot be tried in the exercise of the extraordinary
    jurisdiction under Article 226 of the Constitution. But this
    Court held otherwise.

    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 bound to relegate the parties to a
    suit. In the above case of Gunwant Kaur [(1969) 3 SCC 769]
    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 case, 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.”

    18. Therefore, the only objection raised on behalf of the respondent
    No.1 – IOCL in this petition is rejected.

    19. As regards reference to certain applications filed by the petitioner
    company before the NCLT, we find substance in the stand taken on
    behalf of the petitioner company that the said applications have been
    filed for seeking refund of certain bank guarantee and security deposit,
    concerning termination of tender by the respondent No.1 on account of
    CIRP and other such reliefs, which have a direct bearing on the
    resolution plan approved by the NCLT. Therefore, it cannot be said that
    because the petitioner company has filed the said applications before the
    NCLT, the present writ petition cannot be entertained. It is also a matter
    of record that the order passed by the NCLT approving the resolution
    plan, was confirmed by the National Company Law Appellate Tribunal
    in an appeal. Therefore, the extinguishment of the claim of the
    respondent No.1 – IOCL as regards its earlier claims stood confirmed.
    This further demonstrates the arbitrary nature of objections raised by the

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    WP16219_24.doc

    respondent No.1, despite being an agency and instrumentality of the
    State.

    20. In view of the above, the writ petition is allowed in terms of
    prayer clauses (a) and (b), which read as follows:-

    “(a) That this Hon’ble Court be pleased to examine the
    contents of the present Petition and upon examining the same
    be pleased to issue a writ of mandamus or any other writ
    thereby directing the Respondents to forthwith release an
    amount of Rs.3,88,98,537/- (Rupees Three Crores Eighty Eight
    Lakhs Ninety Eight Thousand Five Hundred Thirty Seven
    only) undisputedly and legally payable to the Petitioner in
    respect of the works done by the Petitioner against Purchase
    Order bearing No.213102-001/29356551 issued by IOCL
    Guwahati Refinery and Purchase Orders bearing
    No.6746/156/28462936 and B269/283/28663406 issued by
    IOCL Panipat Refinery; (which is more particularly described
    in Particulars of Claim annexed at Exhibit F);

    (b) That this Hon’ble Court be pleased to examine the
    contents of the Present Petition and after examining the same
    be pleased to quash and set aside (i) the Impugned
    Communication dated 26/06/2024 (annexed at Exhibit D to the
    Writ Petition) by Respondent No.1 and (ii) the Impugned
    Illegal action and decision of the Respondents of adjusting the
    disputed alleged claim ‘Risk and Cost’ of the Respondents in
    respect of Tender bearing No.WRCC/2019-20/PT/23 dated
    24/04/2019 floated by IOCL Solapur against the undisputed
    dues receivable by the Petitioner in respect of Purchase Order
    bearing No.213102-001/29356551 issued by IOCL Guwahati
    Refinery and Purchase Orders bearing No.6746/156/28462936
    and B269/283/28663406 issued by IOCL Panipat Refinery
    (which is more particularly described in Particulars of Claim
    annexed at Exhibit E) and declare to be non-est, illegal, bad in
    law and contrary to the fundamental rights guaranteed under
    the Constitution of India.”

    21. Consequently, the respondent No.1 – IOCL shall release the said
    amount in favour of the petitioner company within a period of four
    weeks from the date of this order.

    (SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)

    Minal Parab 16/16
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