THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN W.P.Nos.9396 of 2009 and 30431 of 2011 COMMON ORDER: W.P.Nos.9396 of 2009: The proceedings of the 1st respondent dated 20.2.2009 in Rc.No.254/Tourism/2007 is under challenge in W.P.No.9396 of 2009 as being arbitrary, illegal and in violation of Article 14 of the Constitution of India. A consequential direction is sought to the respondents to forthwith allow the petitioner to run the children’s park as per the usual terms and conditions till the lease period is completed. The petitioner is a private limited company incorporated under the Companies Act, 1956. They entered into an agreement with the 1st respondent on 22.8.2003 for providing recreation to the general public in the subject children’s park. On the petitioner being found to be the successful bidder, registered lease agreement No.9000/2003 was entered into. It is the petitioners’ case that, on account of recession in the ﬁnancial market, they could not pay the lease amount in terms of the conditions stipulated in the said agreement; on 02.04.2009 they were served a notice by the 1st respondent to pay Rs.12,82,063/- upto March, 2009; on 7.4.2009 the 2nd respondent, along with its oﬃcials, came over to the Children Park, and asked the son of the Director of the petitioner company to sign certain papers acknowledging that they were taking possession of the property; no notice was served prior to the notice dated 20.2.2009 which the petitioner received on 7.4.2009; even in case there is a default in payment, the respondent is entitled to receive penal interest at 2% for every such default; the 1st respondent had acted at the dictates of the local MLA; he had issued the impugned proceedings, and had taken possession, without putting the petitioner on notice; thereby principles of natural justice, and the conditions stipulated in the agreement, were violated; he had met the District Collector personally, and had requested that some time be granted to enable him to pay the amount, as he could not pay the same in time on account of recession; he had spent huge sums of money to develop the Children’s Park, and he had borrowed from persons who are to be paid high interest; this fact is known to the lessor; he had ﬁled O.S. No.42 of 2009 on the ﬁle of I Addl. District Judge, Nellore seeking permanent injunction invoking Clause 21 of the Agreement; and the said Suit is still pending. In his counter aﬃdavit the 1st respondent would state that the Government, in G.O.Ms. No.125 dated 30.5.2001, had permitted him to take over possession of the children’s park which was hitherto under the control of the Municipal Corporation, Nellore; the District Tourism Promotion Council, Nellore had passed a resolution to develop the children park at Nellore, and the Beach Tourist Complex at Ramatheertham, with private participation; pursuant thereto bids were invited from private individuals; as the Director of the petitioner company was the successful bidder, a lease agreement was executed with him for development of both the children park, and the Ramatheertham beach; the agreement executed on 22.8.2003, between the 1st respondent and the petitioner, stipulated that half yearly lease rent should be paid which ranged between Rs.3.00 lakhs to Rs.5,93,980/-; the said lease deed was registered; a development and management agreement was entered into between the parties; one of the conditions in the said development agreement required the petitioner- lessee to pay additional development premium which ranged between Rs.6.60 lakhs in the third year to Rs.12.50 lakhs in the ﬁfteenth year; in compliance with the conditions stipulated in the agreement, possession of the park was handed over to the petitioner on 27.9.2003; the petitioner failed to pay lease rent, as well as additional development premium for three quarters from the year 2007-08 onwards; a notice was issued, vide letter dated 11.6.2008, requesting him to pay the lease amount for these half years, as well as additional development premium for three quarters in the year 2007-08; as he failed to pay the lease rent, and the additional development premium, as stipulated in both the agreements for two and half years, and four quarters respectively, a notice was again issued to the petitioner vide letter dated 15.10.2008; in response thereto the petitioner submitted his reply on 15.10.2008 stating that he was unwell, and was required to undergo a major surgery; he requested one more month’s time to pay the amount; he again failed to pay the amount due and was therefore issued another notice, vide letter dated 4.1.2009, to pay the lease rent and additional development premium for ﬁve quarters, for Rs.12,82,650/-; in response thereto the Director’s son submitted his reply stating that, due to ﬁnancial troubles of the company, they were negotiating with two other companies for ﬁnancial help, and after ﬁnalization of negotiations they would pay the pending dues; since the petitioner failed to fulﬁll the conditions in the lease deed, and the development and management agreement, and had failed to pay the lease rent and additional development premium, the Lease deed and the Development and Management agreement of the children’s park was revoked by the 1st respondent by his proceedings dated 20.02.2009, and the Commissioner, Municipal Corporation, Nellore was directed to take over the children’s park immediately and maintain the same; possession was taken by the Municipal Commissioner as directed by the 1st respondent; the son of the Director of the petitioner handed over possession on 7.4.2009; thereafter the lessee had ﬁled O.S. No.42 of 2009 on the ﬁle of the Additional District Judge, Nellore; the matter was referred to arbitration in accordance with the clauses of the lease agreement, and the development agreement; the petitioner was asked to request the 1st respondent to appoint an arbitrator; and the lessee, instead of approaching the 1st respondent for appointment of an arbitrator, had filed the present writ petition. In the counter aﬃdavit ﬁled by the 2nd respondent it is stated that there is no agreement between the petitioner and the 2nd respondent for supply of water to the children park; the 2nd respondent had provided a dedicated water supply pipe line with 1 ½ inches size pipe from the elevated service reservoir to the children park management for drinking water purpose; it is for the petitioner management to look after the requirement of its water needs; and the 2nd respondent is in no way concerned with reconstruction of the damaged compound wall of the children’s park etc. The petitioner ﬁled reply aﬃdavits both to the counter aﬃdavits ﬁled by the 1st and the 2nd respondent alleging several acts of negligence on their part, and putting the blame on them for the present impasse. This Court, by order dated 30.4.2009, granted interim stay on the condition that the petitioner deposits Rs.11.00 lakhs within four weeks, and in default the stay would stand vacated. The petitioner claims to have complied with the said interim order. Learned G.P. for Revenue (Andhra and Rayalaseema areas) would submit that the arrears due as on date exceeds Rs.37.00 lakhs; and the lease deed and the Development agreement between the petitioner and the 1st respondent are non-statutory contracts. While the several contentions urged in the writ aﬃdavit are denied by the 1st and 2nd respondents in their counter aﬃdavits, it is wholly unnecessary for this Court to refer to any of them in as much as the questions which would necessitate examination are whether (1) this Court should exercise its discretion to entertain a Writ Petition seeking speciﬁc performance of a non-statutory contract?; and (2) whether the petitioner, having ﬁled a Civil Suit wherein they were directed to invoke the arbitration clause for resolution of the disputes, can parallelly invoke the jurisdiction of this Court under Article 226 of the Constitution of India? Under the lease agreement dated 22.08.2003, in consideration of the lease rent and the lessee agreeing to observe and perform the covenants and the terms and conditions stipulated thereunder, lease of the site was granted for 15 years; the lease agreement contains a renewal clause to be mutually decided by the parties to the agreement; the lease rent which is Rs.3.00 lakhs in the ﬁrst year, increases upto Rs.5,93,980/- in the ﬁfteenth year; the lease rent is required to be paid half yearly i.e., on 22nd February and the 22nd of August each year through DD/Government challan payable to the District Collector, Nellore; clause 10(t) of the lease deed stipulates that, either on expiry of the lease or on its termination, the lessee should hand over the site free from all encumbrances and lien, and together with all additions made as per clause 9 of the agreement; Clause 17 empowers the lessor to terminate the lease for reasons mentioned therein after giving 180 days notice; clause 22 provides for informal dispute resolution and, thereunder, parties to the dispute are required to resolve the dispute through mutual discussions and, in case no solution is found, then the dispute is required to be referred to arbitration. Like wise, the development and management agreement between the 1st respondent and the petitioner dated 22.8.2003 stipulates various conditions for development and management of the recreation park at Nellore. The said agreement, among others, requires payment of additional development premium each quarter to the 1st respondent from the third year till the ﬁfteenth year. While the additional development premium in the third year is Rs.6.60 lakhs, it increases each year and by the ﬁfteenth year the additional development premium payable by the petitioner to the 1st respondent is Rs.12.50 lakhs. The manner of payment is through demand draft drawn in favour of the District Collector, Nellore. Clause 15 of the said agreement provides for dispute resolution. As in the lease agreement, referred to hereinabove, even under this agreement also parties are required to make eﬀorts to resolve their disputes by mutual discussions and, in case no solution is found within 60 days, the dispute is required to be referred to arbitration. In O.S. No.42 of 2009 ﬁled by the petitioner herein, the 1st respondent and others ﬁled I.A. No.382 of 2009 under Section 8 of the Arbitration and Conciliation Act, 1996 praying that the dispute be referred to an arbitrator as contemplated under Clause 22(a) & (b) of the lease agreement dated 22.8.2003, and Clause 15(2) and (3) of the Development Agreement dated 22.8.2003 entered into between the 1st respondent and the petitioner. The learned I Additional District Judge, Nellore passed an order on 20.4.2009 as follows: “i) that the petition be and the same is hereby allowed and the dispute has to be referred to the Arbitrator; ii) That the parties shall inform this Court the arbitrator nominated within 15 days, and on such intimation the dispute is to be referred to the arbitrator; and iii) that each party shall bear their own costs” On the ﬁrst question aforementioned, it is not in dispute that both the lease agreement and the development and management agreements entered into between the petitioner and the 1st respondent is not referable to any statute. Both these agreements are non-statutory contracts, and are in the private law realm. The distinction between public law and private law assumes signiﬁcance as this Court would not, ordinarily, exercise its extraordinary jurisdiction under Article 226 of the Constitution of India to adjudicate disputes in the private law realm. Public law is a system which enforces the proper performance by public bodies of the duties which they owe to the public. Every body which is created by a statute, and whose powers and duties are defined by the statute, is a 'public authority'. Private law is a system which protects the private rights of private individuals or the private rights of public bodies. Distinction therein is that the public as a whole is the beneﬁciary of what is protected by public law, and it is the individuals or bodies entitled to the right which are the beneﬁciaries of the protection provided by private law. The petitioner, in having entered into a lease agreement and an agreement for development of a children park, does not discharge any public law functions or duties. Not all decisions taken by bodies in the course of their public functions are subject-matter of judicial review. In the following two situations judicial review will not normally be appropriate even though the body may be performing a public function: (a) Where some other branch of the law more appropriately governs the dispute between the parties. In such a case, that branch of the law and its remedies should and normally will be applied; and (b) Where there is a contract between the litigants. In such a case the express or implied terms of the agreement should normally govern the matter. The terms of a contract will normally govern the transaction, or other relationship between the parties, rather than the general law. Thus, where a special method of resolving disputes (such as arbitration or resolution by private or domestic tribunals) has been agreed upon by the parties (expressly or by necessary implication), that regime, and not judicial review, will normally govern the dispute. (Desmith, Woolf and Jowell's Judicial Review of Administrative Action, 5th Edition; Hindustan Petroleum Corporation v. Ali Jafar[1]). Public duty can never be equated to that of an obligation to any person or identiﬁable group of persons. Public duty is owed to the public in general, and not speciﬁcally to any person or group of individuals. That is the precise character of public law duty in contra distinction to private law, which is normally founded upon a contract or tort etc., as the case may be. (Ali Jafar1) . For a public law remedy enforceable under Article 226 of the Constitution, the actions of the authority need to fall in the realm of public law - be it a legislative act of the State, an executive act of the State or an instrumentality or a person or authority imbibed with a public law element. The question is required to be determined in each case having the aforementioned principles in mind. It may not, however, be possible to generalize the nature of the action which would come either under the public law remedy or the private law ﬁeld nor is it desirable to give an exhaustive list of such actions. (Union of India v. S.B. Vohra [2]). Access to justice by way of a public law remedy would not be denied when a lis involves public law character and when the forum chosen by the parties would not be in a position to grant appropriate relief. If a serious disputed question of fact is involved, arising out of a contract qua contract, ordinarily a writ petition would not be entertained. A writ petition would be entertained when it involves a public law character or involves a question arising out of public law functions on the part of the respondents. (Sanjana M. Wig v. Hindustan Petroleum Corporation[3]). In this context it is useful to refer to Sri Konaseema Co-operative Central Bank Ltd v. N. Seetharama Raju [4], wherein the Full Bench of this Court observed: ".......Distinction between 'public law' and 'private law' : Diﬃcult as this distinction is and incapable of precise demarcation, it is yet necessary to keep the broad distinction in mind. Lord Denning in his book "The Closing Chapter" has this to say on the subject: "The ﬁrst thing to notice is that public law is conﬁned to 'public authorities'. What are 'public authorities'? There is only one avenue of Approach. It is by asking, in the words of Section 31(2)(b) of the Supreme Court Act 1981 : What is the 'nature of the persons and bodies against whom relief may be granted by such orders', that is, by mandamus, prohibition or certiorari'? These are divided into two main categories: First, the persons or bodies who have legal authority to determine questions aﬀecting the common law or statutory rights or obligations of other persons as individuals. That is the formula stated by Lord Justice Atkin in R. London Electricity Joint Committee Co. (1920) Ltd, (1924) 1 KB 171/2005 as broadened by Lord Diplock in O'Reilly v. Mackman, (1982) 3, wlr 1096/1104). Second, the persons or bodies who are entrusted by Parliament with functions, powers and duties which involve the making of decision of a public nature...........To which I would add the words of Lord Goddard, C.J. in R. v. National Joint Council for Dental Technicians, ex parte Neate (1953) 1 QB 704/707: "T he bodies to which in modern times the remedies of these prerogative writs have been applied have all been statutory bodies on whom Parliament has conferred statutory powers and duties which, when exercised, may lead to the detriment of subjects who may have to submit to their jurisdiction". But those categories are not exhaustive. T he Courts can extend them to any other person or body of a public nature exercising public duties which it is desirable to control by the remedy of judicial review. T here are many cases which give guidance, but I will just give some illustrations. Every body which is created by statute and whose powers and duties are deﬁned by statute is a 'public authority'. So Government departments, local authorities, police authorities, and statutory undertakings and Corporations, are all 'public authorities'. So are members of a statutory tribunal or inquiry, and the board of visitors of a prison. T he Criminal Injuries Compensation Board is a public authority. So also, I suggest, is a university incorporated by Royal charter, and the managers of a State School. So is the Boundary Commission: and the Committee of Lloyd's. But a limited liability company incorporated under the Companies Acts is not a 'public authority', (see Tozer v. National Greyhound Racing Club Ltd., (1983) T imes, 16 May). Nor is an unincorporated association like the Jockey Club......". Sir Harry Woolf, a Lord Justice of Court of Appeal, points out the distinction in the following words: "I regard public law as being the system which enforces the proper performance by public bodies of the duties which they owe to the public. I regard private law as being the system which protects the private rights of private individuals or the private rights of public bodies. T he critical distinction arises out of the fact that it is the public as a whole, or in the case of local Government the public in the locality, who are the beneﬁciaries of what is protected by public law and it is the individuals or bodies entitled to the rights who are the beneﬁciaries of the protection provided by private law..." (see page 221 of this Article "Public Law Private Law: Why the Divide? A personal View (published in "Public Law" Summer: (1986)") The learned Law Lord stated further in the same Article, at page 223: "While public law deals only with public bodies, this does not mean that the activities of public bodies are never governed by private law. Like public ﬁgures, at least in theory, public bodies are entitled to have a private life. T here have been suggestions that in the commercial ﬁeld public bodies should adopt diﬀerent and higher ethical standards than private individuals, but this is not yet required as a matter of law and in relation to purely commercial transactions the same law is applicable, whether or not a public duty is involved. Prima facie, the same is true in relation to employment. T he servant employed by a public body ordinarily has the same private rights as any other servant....." The position may, however, be diﬀerent pointed out the learned Law Lord if such relationship is circumscribed by a statutory provision……” Ordinarily a writ petition would not lie, under Article 226 of the Constitution of India, for resolution of contractual disputes, or for enforcement of obligations arising therefrom. In Lekhraj v. Deputy Custodian, Bombay[5], the Supreme Court held that a writ of mandamus may be granted only in a case where there is a statutory duty imposed; there is failure to discharge that statutory obligation; and any duty or obligation arising out of a contract cannot be enforced by the machinery of a Writ under Article 226 of the Constitution. In Banchhanidhi Rath v. State of Orissa[6], the Supreme Court held that a right claimed in terms of a contract cannot be enforced in a writ petition. In Har Shankar v. Dy. Excise and Taxation Commissioner[7] a Constitution bench of the Supreme Court held that a writ petition was not an appropriate remedy for impeaching contractual obligations. In Radhakrishna Agarwal v. State of Bihar[8], the Supreme Court, following Har Shankar7, held: "………. Even if the appellants could be said to have raised any aspect of Article 14 of the Constitution and this Article could at all be held to operate within the contractual ﬁeld whenever the State enters into such contracts, which we gravely doubt, such questions of fact do not appear to have been urged before the High Court. And in any event, they are of such a nature that they cannot be satisfactorily decided without a detailed adduction of evidence, which is only possible in ordinary civil suits, to establish that the State, acting in its executive capacity through its oﬃcers, has discriminated between parties identically situated. On the allegations and aﬃdavit evidence before us we cannot reach such a conclusion. Moreover, as we have already indicated earlier, the correct view is that it is the contract and not the executive power, regulated by the Constitution, which governs the relations of the parties …….." (emphasis supplied) I n Divisional Forest Oﬃcer v. Bishwanath Tea Co. Ltd [9] the Supreme Court held that, ordinarily, where a breach of contract is complained of, a party complaining of such breach may sue for speciﬁc performance of the contract, or for damages; such a suit would ordinarily be cognizable by the Civil Court; and the High Court, in its extraordinary jurisdiction, would not entertain such a petition. In Bareilly Development Authority v. Ajai Pal Singh [10], the Supreme Court held that where the contract, entered into between the State and the person aggrieved, was non-statutory and the rights were governed only by the terms of the contract, no writ or order could be issued under Article 226 of the Constitution so as to compel the authority to remedy the breach of contract; and the High Court in such cases would not examine the question of arbitrariness and unreasonableness on the part of the State or its instrumentalities. In State of Gujarat v. M. P. Shah Charitable Trust [11], the Supreme Court held that if the matter is governed by a contract, a writ petition is not maintainable since it is a public law remedy and is not available in the private law ﬁeld. In Asstt. Excise Commissioner v. Issac Peter[12], the Supreme court held that there was no room for invoking the doctrine of unjust enrichment in business transactions; the rule of promissory estoppel and estoppel by conduct could not be invoked to alter or amend speciﬁc terms of the contract; the rule of legitimate expectation could not be invoked to modify or vary the express terms of the contract; in case of contracts freely entered into with the State, there was no room for invoking the doctrine of fairness and reasonableness against one party to the contract (State), for the purpose of altering or adding to the terms and conditions of the contract; and, in such cases, the mutual rights and liabilities of the parties are governed by the terms of the contract, and the laws relating to contracts. I n State of U. P. v. Bridge and Roof Co. (India) Ltd.[13] the Supreme Court held that the contract between the parties was a contract in the realm of private law; any dispute relating to interpretation of the terms and conditions of such a contract could not have been agitated in a writ petition; and it was a matter either for arbitration as provided by the contract or for