PIONEER CARBIDE PVT. LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The appeal is directed against a judgment and order of April 5, 2022 passed on the appellants' petition under Article 226 of the Constitution.

(2.) In view of the fair stands taken by the parties at this stage, it may not be necessary to record the grievance with which the appellants approached this Court. It may only be noticed that the appellants had made an offer pursuant to a notice inviting tender and claim that the selection was required to be on reverse auction basis; but that such procedure may not have been followed. The immediate grievance that prompted the appellants to approach this Court was the invocation of a risk purchase clause and the attempt by the Bhilai Steel Plant of Steel Authority of India Limited (SAIL) to take measures for recovering the perceived loss from the bills and payments due to the appellants in respect of other unrelated contracts.

(3.) The writ petition was dismissed on the ground that there was an alternative remedy available. The principal ground raised in the appeal is whether an authority answering to the description of "the State" under Article 12 of the Constitution may act arbitrarily even in a contractual matter without the affected party having a right of recourse to Article 226 of the Constitution. In the context of the stands taken by the parties, it may not be necessary to dwell on such aspect of the matter. However, the issue is left open for future consideration in an appropriate case. Suffice it to say that the mere existence of an arbitration agreement between the two parties may not, by itself, be a ground to not receive a petition under Article 226 of the Constitution. This is because arbitration is only procedural and it implies only that instead of regular mechanism of a suit the disputes between the parties to an arbitration agreement are decided by a consensual forum. The existence of an arbitration agreement is no more defence than a State or other authority asserting that the disputes made the subject-matter of the petition under Article 226 of the Constitution may be more conveniently dealt with in an appropriately constituted civil suit.