THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION NO.21854 of 2007 DATED 18.1.2008 Between: M/s. Avuthu Kulanda Reddy, (registered firm), Tenali, Guntur District, represented by its Managing Director A.Neelakanteswara Reddy. .. PETITIONER versus Rashtriya Ispat Nigam Limited, Visakhapatnam Steel Plant, Visakhapatnam, represented by Its Chairman-cum-Managing Director and four others. .. RESPONDENTS THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION NO.21854 of 2007 ORDER: The matter is coming up for admission. 2. The Writ Petition is filed for a Writ of Mandamus declaring the communication of the 4th respondent vide his letter MHTG/BP/2007- 08/10/41, dated 30.4.2007 termination of the petitioner’s contract for entering into LTC for a period of two years and its consequential debit note No.16, dated 7.5.2007 of the 4th respondent debiting an amount of Rs.16,200/- towards the forfeiture of security deposit and stoppage of further supply of fertilizers as illegal and arbitrary and direct the respondents to release the fertilizers required to be released in favour of the petitioner in the current ending quarter of the year 2006-07 without deducting the alleged claim for refund mentioned in the impugned order dated 7.5.2007 and pass such other suitable orders. 3. Several facts had been narrated in paragraphs 2 to 10 of the affidavit filed in support of the Writ Petition and these facts need not detain this Court any longer for the reason that it is brought to the notice of this Court that a similar matter Writ Petition No.10745 of 2007 had been disposed of by this Court by order dated 10.10.2007. The relevant portion of the said order reads as hereunder: “There is no serious controversy between the parties that the agreement governing the parties contains clauses relating to jurisdiction under 2.12.0 and also relating to arbitration under 2.14.0 and the said clause relating to arbitration reads as under: ‘Arbitration: In the event of any dispute or difference between the parties hereto on the construction of any clause herein contained or rights, duties and liabilities of the price referred to in clause above, the same shall be referred to the Chairman-cum-Managing Director, Rashtriya Ispat Nigam Limited, or his nominee as the sole Arbitrator. The decision of the sole Arbitrator shall be final and binding on both the parties to this Agreement. The arbitration proceedings shall be governed y the Indian Arbitration Act, 1940 and the rules framed thereunder. The venue of Arbitration shall be at Visakhapatnam’. In contractual obligations, in normal circumstances, principles of judicial review cannot be invoked to enforce such obligations. But, when the contractual power is being used for public purpose, it is amenable to judicial review as observed in Binny Limited vs. V.Sadasivan (2005 (6) SCJ 156). Article 226 of the Constitution of India applies to contractual powers of Government and its instrumentalities to prevent arbitrariness on favouritism within limitations and Article 14 of the Constitution of India to be kept in mind as held in Thota Venkateshwara Prasad vs. Government of Andhra Pradesh (2005(3) ALT 115 (DB) = 2005(3) ALD 435). In Deepika Constructions vs. Government of Andhra Pradesh (2006(2) ALT 272 = 2006(2) ALD 187), the enforcement of contractual obligations arising out of terms and conditions of agreements had been dealt with. The decision in Government of A.P. vs. Sri Rama Engineering Constructions (2005(4) ALT 26 (DB) was distinguished and the decision in ABL International Ltd., vs. Export Credit Guarantee Corporation of India Ltd., (2004) 3 SCC 553) had been followed. It is no doubt true that it cannot be laid down as broad proposition that in the contractual field, when the parties are governed by contractual obligations, the writ jurisdiction under Article 226 of the Constitution of India cannot be invoked, at all, under any circumstances. It may be that on the touch stone of Article 14 of the Constitution of India or otherwise, and within the permissible limits, may be, the writ Court may exercise the power of judicial review. But, the same to be within the clear specified limitations and not beyond thereto. Normally, the writ Court would be very slow in interfering with such matters, where the parties are governed by the contractual obligations, especially in a non-statutory contract. In the light of the facts and circumstances, and in view of the fact that several factual controversies are involved in the matter and also in the light of the availability of arbitration clause, the petitioner is given liberty to invoke the arbitration clause, if the petitioner is so advised and no relief, as prayed for, in the Writ Petition, can be granted. Accordingly, with the above observations, the Writ Petition is disposed of. It is needless to say that the interim order granted earlier by this Court stands vacated. There shall be no order as to costs”. 4. In the light of the above, the present Writ Petition is also disposed of giving liberty to the petitioner to invoke the Arbitration clause, if he is so advised. There shall be no order as to costs. ---------------------------- 18.01.2008 SSR