IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.4279 of 2003 MAJ.BALBIR SINGH BHASIN @ MAJ BALBIR SINGH, son of Late Sardar B.S.Pardesi, resident of MIG- 242, Lohiyanagar, Kankarbagh Colony, P.S. Kankarbagh, District Patna … Petitioner Versus 1. THE BIHAR STATE HOUSING BOARD, through its Managing Director, Bihar, Patna 2. The Estate Officer cum Joint Secretary, Bihar State Housing Board, Bihar, Patna 3. The Executive Engineer, Patna Sub-division I, Bihar State Housing Board, Bihar, Patna 4. The Revenue Officer, Bihar State Housing Board, Bihar, Patna … Respondents ----------- 14. 13.4.2009 Heard Mr. Akashdeep, learned counsel for the petitioner and Mr. Lalit Kishore, learned Addl. Advocate General No. III, appearing for Bihar State Housing Board (hereinafter referred to as „the Board‟). In this writ application the prayer of the petitioner as specifically stated in paragraph 1 thereof reads as follows: “ This is an application praying for issuance of an appropriate writ/order or direction, in the nature of a writ of certiorari or any other appropriate writ/order or direction for quashing the illegal and unjustified demand raised through letter no. 4004 dated 9.10.2002 read with letter no. 3590 dated 24.10.2002 and letter no. 4387 dated 15.11.2002, whereby and whereunder the petitioner has been asked to pay an amount of 2 Rs.2,56,648.00 without assigning any reason despite written demand made by the petitioner. The petitioner further prays for a writ/order or direction, in the nature of a writ of mandamus or any other appropriate writ/order or direction commanding the respondents to execute the final Deed of Transfer in favour of the petitioner as the petitioner has admittedly deposited entire price in all the 180 installments as fixed and demanded by the respondents for MIG 242, Lohiya Nagar, Patna and has also completed all the requisite formalities in terms of the Agreement dated 26.5.1980. The petitioner further prays that suitable costs be awarded in favour of the petitioner and against the respondents, as a measure of penalty, for having put the petitioner to unnecessary litigation, time in number, on account of failure of the Board to performance its statutory duty, in accordance with law, in respect of the house in question.” Mr. Lalit Kishore, learned counsel appearing on behalf of the Board, however, at the inception would raise a preliminary 3 objection with regard to maintainability of the writ application on the ground that the issue with regard to demand of sufficiency of the price of the flat already in possession of the petitioner in terms of the inter-parte Agreement dated 26.5.1980 (Annexure 2/1) has to be gone into by taking recourse to an arbitration proceeding and that in presence of an arbitration clause in the aforesaid Agreement this writ application is not maintainable. In this context he refers to an order of the Division Bench dated 19th April, 2007 passed in L.P.A.No. 1157/2001. Mr. Akashdeep, learned counsel for the petitioner, in response to the aforementioned preliminary objection, submits that the Board is precluded from raising such objection because the same has not been raised in the counter affidavit. He further submits that this Court in the case of Bihar State Housing Board and ors. vrs. Shiv Sahay Verma, reported in 2008(2) PLJR 384, has held that “the existence of arbitration clause by itself will not exclude the jurisdiction of this Court under 4 Article 226 of the Constitution of India”. In the light of the aforementioned stand of the rival parties this Court has to decide the maintainability of the writ petition. It is not in doubt that the inter- parte Agreement between the petitioner and the Board dated 26.5.1980 there is a specific Clause No.20 which reads as follows: “ 20. On matters not specifically stipulated in the agreement or provided for in the relevant Rules and Regulations of the Board or in case any dispute, doubt or question arises between the settlee and the Board then and in such event every such case shall be referred for the arbitration to the Chairman of the Board acting as such at that time and his decision in these regards shall be final on both the parties and shall not be liable to be questioned in any court of law.” Thus, there is no doubt that there is an arbitration clause in the Agreement and the dispute sought to be raised in this writ application is totally covered by the aforementioned Clause 20 of the Agreement. The exercise of power under Article 226 in 5 presence of such an arbitration clause has been virtually barred as was held by the Apex Court in the case of State of U.P. vs. Bridge & Roof Co. (India) Ltd., reported in (1996) 6 SCC 22, and in the case of ABL International Ltd. & anor. Vs. Export Credit Guarantee Corporation of India Ltd. & ors., reported in (2004) 3 SCC 553. The refusal of writ jurisdiction under Article 226 of the Constitution in a case where the parties are bound by an earlier agreement providing for arbitration by now is a well settled law. The Apex Court in the case of State of U.P. vs. Bridge & Roof Co. (India) Ltd. (supra) has held as follows: “ Further, the contract in question contains a clause providing inter alia for settlement of disputes by reference to arbitration. The arbitrators can decide both question 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 6 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.” The same law in fact has been reiterated by the Apex Court even in the case of ABL International Ltd. (supra) wherein it had been held as follows: “ 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.” Thus, in the light of the aforementioned binding precedent of the Apex Court which have not been even noticed by either of the two Division Bench judgments relied by the parties, this Court must hold that the petitioner is bound by Clause 20 of 7 his Agreement and has to invoke arbitration clause for the reliefs being claimed in this writ application. As a matter of fact the over emphasized reliance on paragraph 11 of the Division Bench judgment of this Court in the case of Shiv Sahay Verma (supra) by the counsel for the petitioner also seems to be misplaced. Paragraph 11 thereof reads as follows: “ As regards the submission that in fact of the arbitration clause, the writ Court ought not to have interfered in the matter, we are of the opinion that in the facts of the present case the learned Single Judge did not err in doing so. It is well settled that existence of the arbitration clause itself does not exclude the jurisdiction of this Court as it is well known that it is a matter of discretion not of jurisdiction. Herein the present case the learned Single Judge found that the Board had increased the price without any justification but no increase has been effected in the case of similarly situated house. It seems that writ petitioner is subjected to this treatment as he had paid all the 8 instalments before time. On these facts, it cannot be said that the learned Single Judge faulted in exercise of its jurisdiction.” From the above-mentioned passage it would be clear that as the learned Single Judge did not go into the question of arbitration and had decided the matter on merit, in the resultant appeal of the Board the Division Bench had held that in the facts of that case taking note recourse to arbitration would not have vitiated the judgment of the learned Single Judge under appeal. Thus, what was said therein was confined to the facts of that particular case wherein it had agreed that the findings of the learned Single Judge that the Board had increased the price without any justification and that no increase had been effected in the case of similarly situated houses and further also by taking into account that the writ petitioner of that case had paid all the instalments before time. Can it be said that the facts of the present case are similar to the case of Shiv Sahay Verma. Here it is the specific case of 9 the Board in the counter affidavit, supplementary counter affidavit and additional counter affidavit that the writ petitioner had never paid the amount of instalments in time and had always been over anxious to avoid the demand made by the Board by taking recourse to litigation. In that context in the supplementary counter affidavit it has been stated that when the petitioner was allotted the house in question under Higher Purchase Agreement dated 26.5.1980 its tentative or provisional price was fixed at Rs. 59,100/- which was redetermined/ re-evaluated in terms of Clause 3 and 4 of the Agreement dated 26.5.1980 respectively after taking into account the actual expenditure made over the scheme under which the allotted house was constructed as well as financial charges/ interest payable by it over the cost incurred in execution of the said Scheme. It is further case of the Board that on such re-evaluation/ redetermination the cost/ price of the allotted house of the petitioner was determined at Rs. 69,804/- as on 31.3.1980 and the cost of the land 10 measuring 2800 Sq.ft. utilized for construction of the house in question was redetermined at Rs. 12,139/- as on 31.3.1980. The total cost of the said house including the land, therefore, came to Rs. 81,943/- as on 31.3.1980. It has been further explained in the counter affidavit that with the interest @ 8.5% per annum on the aforementioned amount of Rs. 81,943/- the same came to be Rs. 83,108/- as on 31.5.1980 in the month the allotment of the said house was made in favour of the petitioner under the Higher Purchase Agreement dated 26.5.1980. The Board has in fact given full accounts of the payment made by the petitioner and for the sake of clarity and brevity the same are reproduced hereinbelow: “ 7. That in accordance with the said decision of the Board the calculation of the remaining amount along with interest up to 28.2.2009 towards the cost/ price of the house in question was made by the Board whereby Rs. 1,79,529.00 has been found payable by the petitioner towards the same by 28.2.2009, details of which are being stated hereinafter. 11 8. That the tentative cost/price of the said allotted house, as indicated in the allotment letter dated 16.5.1980 and the Higher Purchase Agreement dated 26.5.1980 as contained in Annexure 1 and 2/1, respectively to the writ application under reply was Rs. 59,100/-. 9. That the tentative cost/ price of the house in question i.e. Rs. 59,100/- was re-determined/ re- evaluated by the Board in terms of clause 3 and clause 4 of the said Allotment letter dated 16.5.1980 (Annexure 1) and the said Higher Purchase Agreement dated 26.5.1980 (Annexure 2/1) respectively after taking into account the actual expenditure made over the Scheme under which the allotted house was constructed as well as the financial charges/ interest payable by it (the Board) over the cost incurred in execution of the said Scheme. 10. That, accordingly, the cost/ price of the said allotted house was re-determined/ re-evaluated at Rs. 69,804/- as on 31.3.1980 and the cost of the land measuring 2800 sq.ft. utilized for construction of the house in question was re- determined at Rs. 12,139/- as on 31.3.1980. Thus, the total cost of 12 the said house including the land comes at Rs. 81,943/- as on 31.3.1980. 11. That the said cost of Rs. 81,943/- as on 31.3.1980 along with interest @ 8.5% per annum comes at Rs. 83,108/- as on 31.5.1980 i.e. in the month the allotment of the said house was made in favour of the petitioner and the said Higher Purchase Agreement dated 26.5.1980 (Annexure 2/1) was executed by the petitioner with the Board with respect to the allotted house in acceptance of the terms of the allotment. 12. That Rs. 14,775/- was paid by the petitioner to the Board by way of initial deposit towards the tentative cost/ price of the allotted house indicated in the said allotment letter dated 16.5.1980 (Annexure 1) and the said agreement dated 26.5.1980 (Annexure 2/1) before the execution of the said Agreement, thus, after deducting the said Rs. 14,775/- from the said revised cost of Rs. 83,108/- as on 31.5.1980,- Rs.44,325/- was required to be paid by the petitioner in 180 monthly equated instalments determined along with interest and payable with effect from June, 1980. 13. That the said instalment was/ 13 is fixed along with interest @ 8% per annum, in case of payment thereof by 7th of that month and if the instalment of a month is paid after 7th of that particular month then the additional interest @ 2.5% per annum was/is charged in addition to the said interest @ 8% per annum. 14. That in case of delay in making payment of the instalments fixed for a particular month by months and months together then in that case interest @ 1% per month is chargeable over the amount of defaulted monthly instalments for the delayed period in terms of the provisions made under clause 7 of the Higher Purchase Agreement dated 26.5.1980 (Annexure 2/1). 15. That the physical possession of the house in question could not be delivered to the petitioner immediately after the execution of the said Higher Purchase Agreement dated 26.5.1980, as the same was unauthorisedly occupied by one Sri Mahesh Prasad, IAS. 16. That, in the circumstances, the Board filed an eviction case in January, 1981 before the competent authority, constituted under the Bihar State Housing Board Act, but unfortunately the same was dismissed on account of non- 14 appearance of the learned counsel for the Board. 17. That faced with the said situation the petitioner moved before the Hon‟ble Court and thereafter in compliance to the Hon‟ble Court‟s order passed in M.J.C.No. 735/1987, the vacant physical possession of the house in question was delivered by the Board to the petitioner on 4.1.1988, who, however, made his signature over the possession letter on 28.3.1988. 18. That after taking physical possession of the house in question the petitioner moved before the Hon‟ble State Commission, Bihar, Patna by way of filing a complaint for grant of compensation for the inordinate delay in delivery of the physical possession of the allotted house. 19. That in the said complaint the petitioner prayed for payment of the expenses incurred by him in litigation, and the cost incurred by the petitioner in getting the said allotted house repaired as well as for payment of the rent @ 800/- per month for the period he (the petitioner) remained out of the allotted house on account of unauthorized possession there over of said Sri Mahesh Prasad. 15 20. That the Hon‟ble State Commission, Bihar, Patna, after hearing the parties, though turned down the petitioner‟s prayer for grant of litigation cost but directed the Board to compensate the petitioner by making payment of the rent @ 580/- per month for 91 months and further to pay Rs. 10,000/- towards deficiency in the allotted house and also directed for payment of interest @ 12% per annum over the aforesaid amount from the date of its order till the date of payment thereof by order dated 16.8.1991. 21. That the Board preferred an appeal against the said order dated 16.8.1991 passed by the Hon‟ble State Commission, Bihar, Patna before the Hon‟ble National Commission but the said appeal was dismissed and thereafter, the Board filed a Special Leave petition to appeal in the matter before the Hon‟ble Apex Court which was also 16 dismissed. 22. That in the circumstances, as aforesaid, the Board in all paid Rs. 1,24,618.30 paise to the petitioner in compliance to the Hon‟ble State Commission, Bihar, Patna‟s said order dated 16.8.1991. 23. That since the Board paid rent for 91 months i.e. the period the petitioner was not delivered the physical possession of the house in question and he had not paid the monthly instalments in terms of the said Higher Purchase Agreement dated 26.5.1980 (Annexure 2/1) the Board has not charged the additional interest and penal interest for its non-payment in the stipulated time as provided under the said Agreement and as such, only the amount of unpaid instalments without any additional interest/ penal interest has been charged by the Board from the petitioner for the period the petitioner could not be delivered 17 the physical possession of the said house i.e. for the period of 92 months. 24. That accordingly a total sum of Rs.38,975.80 paise has been found to be payable by the petitioner towards the unpaid monthly equated instalments @ Rs.423.65 paise for 92 months in terms of clause 3(a) of the said Higher Purchase Agreement dated 26.5.1980 (Annexure 2/1). 25. That in terms of Clause 4 of the said Higher Purchase Agreement dated 26.5.1980 (Annexure 2/1) the petitioner is required to pay the difference amount payable towards the said revised cost of Rs. 83,108/- as on 31/5/1980 i.e. Rs.83,108 the tentative cost of Rs. 52,100/- as on 31.5.1980 indicated as in the allotment letter dated 16.5.1980 (Annexure 1) and the Higher Purchase Agreement dated 26.5.1980 (Annexure 2/1)= Rs.24,008/- as on 31.5.1980. 18 26. That after adjustment of the amount paid by the petitioner in May 1995 and thereafter Rs.1,40,149.66 paise has been found payable along with interest @ 8% per annum up to 28.2.2009 in terms of clause 4 of the said Higher Purchase Agreement dated 26.5.1980 (Annexure 2/1). 27. That Rs. 116.50 paise has been found to be payable by the petitioner towards part of the monthly instalment for the month of November, 1992, which alongwith penal interest @ 1% per month comes at Rs.343.68 paise as on 28.2.2009 in terms of clause 7 of the said Agreement. 28. That, in the backdrop, as elucidated above, the petitioner is liable to pay Rs. 1,79,528.94 paise say Rs.1,79,529/- up to 28.2.2009 headwise break-up of which is being given here under: (i)Total unpaid monthly = Rs.38,975.80 instalments. (ii)Difference amount towards the revised cost with 19 interest over upto 28.2.2009 = Rs.1,40,149.46 (iii)Part of the monthly instalament for the month of November 1992 alongwith interest over upto 28.2.2009 = Rs. 343.68 (iv) Legal and documentation Charge = Rs. 50.00 (v) Administrative and financial charge in terms of clause 4 of the said Higher Purchase Agreement dated 26.5.1980 for one default in payment of monthly instalment @ Rs.10/- per default = Rs. 10.00 Grand total = Rs.1,79,528.94 Say Rs. 1,79,529/- Upto 28.2.2009.” The aforesaid stand of the Board, however, has been seriously controverted by the petitioner by taking all sort of plea in the rejoinder affidavit but none-the-less it remains a fact that the case of the petitioner does not stand on the same footing as that of Shiv Sahay Verma (supra). In this case it cannot be said that increase of price was without justification or that the increase was made only in the case of the house of the petitioner or that he had actually paid all the instalments before time. Thus, for the reasons indicated above and in the facts of the present case this Court would not exercise its discretionary 20 jurisdiction to go into the accounting and the plea of the petitioner that the Board was not empowered to revise the price of the house allotted to the petitioner. As a matter of fact it was on these considerations that even a Division Bench in the case of Akhileshwar Kumar (supra) had held that the exercise of power by the learned Single Judge in deciding the matter of dispute relating to demand made by the Board in presence of arbitration clause was improper exercise of jurisdiction under Article 226 of the Constitution. The Division Bench of this Court in the aforesaid case had held as follows: “ … … … In a very recent judgment rendered by the Hon‟ble Supreme Court, the Supreme Court has upheld the right of the appellant Board to claim increase in price due to increase in the cost of land acquisition or due to increase in the cost of construction and accordingly, we are of the view that the writ court was not correct in holding that the clause authorizing tentative price to be revised due to increase in cost of land acquisition or due to increase in cost of construction is 21 unfair or unreasonable. In consequence thereof, since the conclusion is that the demands, as were challenged in the writ petition, were raised on the basis of the authority granted by the said clause, the same cannot be treated as stale claims lodged belatedly. Further more, the subject demands were bare claims and admittedly no steps had been taken subsequent to lodgment of such claims to enforce the same. The writ petitioner is contending that such claims are arbitrary claims. He is, therefore, contending that such claims sare unjustified claims. In other words, he is contending that such claims cannot be made in terms of the provisions of the subject contract. Admittedly, the contract contains an arbitration clause. In the counter affidavit, as was filed by the appellant Board, which was over looked by the writ Court, it was specifically stated that inasmuch as the contract contains an arbitration clause the writ Court cannot decide whether the claims lodged by the appellant Board are correct or incorrect. We think that parties having chosen to take recourse to arbitration to sort out their disputes and differences 22 pertaining to claims and counter claims arising out of the subject contract, they were not entitled to approach the writ Court to sort out the same, as was done in the instant case. In those circumstances, we would interfere with the judgment and order under appeal and would set aside the same and relegate the parties to arbitration. Accordingly, the judgment under appeal is set aside and the writ petition is dismissed with liberty to the parties to take recourse to arbitration in accordance with the arbitration clause contained in the said agreement.” This Court is also not in a position to accept the submission of the learned counsel for the petitioner that the respondents having not pleaded as with regard to non-maintainability of the writ application on account of arbitration clause are precluded to raise this question in course of submissions. In fact the counsel is not correct that such plea is a question of fact and must have been taken in counter affidavit. In the opinion of this Court, maintainability of a writ petition on the 23 ground of alternative remedy can be raised even orally if the materials with regard to the same are either available in the statute or in the pleadings of the writ petition. Here the petitioner himself has filed a copy of the Agreement which contains the arbitration clause and therefore, this Court must reject even that plea of the counsel for the petitioner that the Board by not raising such a plea in the counter affidavit has waived its right regarding the arbitration clause. As has been also noted above, in the present case also the Board had only fixed tentative price in the original letter of allotment and as per Clause 4A of