HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY W.P.No.21404 of 2010 Date : 18-1-2011 Between : Water Health India Private Limited, represented by its Chief Financial Officer Mr.G.A.S. Sarma .. Petitioner And Vetlapalem Gram Panchayath, represented by its Sarpanch, Gram Panchayath office, Vetlapalem, East Godavari District. .. Respondent Counsel for petitioner : Sri M.R.S. Srinivas Counsel for respondent : Sri G.Elisha, Standing Counsel The Court made the following : ORDER: This Writ Petition is filed for a mandamus to declare the action of the respondent in forcibly taking possession of the property relating to water treatment plant as illegal and arbitrary. At the hearing, Sri M.R.S. Srinivas, learned counsel for the petitioner submitted that the respondent has entrusted the work relating to execution and maintenance of community water system to the petitioner under agreement dated 29-3-2007 and that though the petitioner is entitled to maintain the system for a period of 8 years from the date of entering into agreement, the respondent has forcibly and high-handedly taken over the system contrary to the provisions of the agreement. The learned counsel placed reliance on the Judgment of the Supreme Court in Haji Abdul Shakoor and others Vs. Union of India and others [1] in support of his submission that even in respect of a dispute arising under a contract, the remedy under Article 226 of the Constitution of India is appropriate if the action is in violation of principles of natural justice. I have carefully considered the submission of the learned counsel for the petitioner. Ordinarily, a dispute arising out of a non-statutory contract is not amenable for writ jurisdiction as held by the Supreme Court in a catena of Judgments, reference to a few of which can be usefully made: M/s. Radhakrishna Agarwal & others Vs. State of Bihar & others [2], State of U.P. Vs. Bridge & Roof Co. (India) Ltd.[3], Kerala State Electricity Board Vs. Kurien E.Kalathil [4], State of Jammu & Kashmir v. Ghulam Mohd. Dar [5]. However, the Apex Court has laid down certain exceptions to this general rule and one such exception is when the action of the State or its instrumentalities which are one of the parties to the contract, acts with patent arbitrariness or in flagrant violation of principles of natural justice. In ABL International Ltd., Vs. Export Credit Guarantee Corporation of India Ltd.[6]., the Apex Court has interfered with one such dispute arising under a non-statutory contract. However, it held that exercise of its plenary jurisdiction by the Constitutional courts under Article 226 of the Constitution of India is not normally exercised in cases where the parties have an effective alternative remedy such as arbitration. Clause 8 of the agreement entered between the petitioner and the respondent reads as under : “In the event a dispute or difference arises in connection with the interpretation or implementation of this Agreement, either Party may refer the dispute by arbitration according to the Arbitration and Conciliation Act, 1996 as amended from time to time or any other law for the time being in force. The arbitration proceedings shall consist of three arbitrators, one to be appointed by WHIN and the other to be appointed by the Panchayat. The two appointed arbitrators shall appoint the third arbitrator. The Arbitration shall be conducted in Hyderabad.” In the light of the dispute redressal mechanism provided for in the bilateral agreement between the petitioner and the respondent, it is not appropriate for this court to entertain the dispute arising under the contract in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India. The petitioner has not spelt out any reason for not availing the remedy as provided under the above reproduced clause of the agreement. The Judgment (1 supra) on which reliance has been placed by the petitioner is of no avail to him because it is not known from the facts contained in the said Judgment that the agreement between the parties therein contained an arbitration clause. For the above mentioned reasons, the Writ Petition is dismissed without going into the merits of the case with liberty to the petitioner to avail the remedy of reference of disputes to arbitration as envisaged in clause-8 of the agreement. As a sequel to dismissal of the Writ Petition, WPMP No.27228/2010 is disposed of as infructuous. ____________________ C.V.Nagarjuna Reddy.,J Date : 18-1-2011 AM [1] (2002) 9 SCC 760 [2] AIR 1977 SC 1496 [3] (1996) 6 SCC 22 [4] (2000) 6 SCC 293 [5] (2004) 12 SCC 327 [6] (2004) 3 SCC 553