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Arbitration Clause Not Absolute Bar For High Court To Entertain Writ Petition In Contractual Matter: Supreme Court

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The Supreme Court on Wednesday observed that the mere existence of the Arbitration Clause does not debar the Court from entertaining Writ Petition.

In the instant appeal, the Allahabad High Court had allowed the Writ Petition filed by CG Power an Industrial Solutions Ltd. against the order of Executive Engineer, Unnao, UPPCL regarding Labour Cess under the Building and Other Construction Workers’ Welfare Cess Act, 1996 read with Rules 3 and Rule 4 (1), (2) (3) and (4) of the Building and Other Construction Workers Welfare Cess Rules, 1998, and also Section 2 (1)(d), (g) and (i) of the Building and Other Construction Workers (Regulation of Employment and Condition of Service) Act, 1996.

The bench of Justice Uday Umesh Lalit and Justice Indira Banerjee has dismissed an Appeal preferred against the Judgment of Allahabad High Court.

The bench observed that, “It is well settled that availability of an alternative remedy does not prohibit the High Court from entertaining a writ petition in an appropriate case. The High Court may entertain a writ petition, notwithstanding the availability of an alternative remedy, particularly (1) where the writ petition seeks enforcement of a fundamental right; (ii) where there is failure of principles of natural justice or (iii) where the impugned orders or proceedings are wholly without jurisdiction or (iv) the vires of an Act is under challenge.”

The Court further said that the Cess Act and/or statutory rules framed thereunder prescribe the mode and manner of recovery of outstanding cess under the Cess Act. It is well settled that when statute requires a thing to be done in a particular manner, it is to be done in that manner alone. UPPTCL could not have taken recourse to the methods adopted by it. The impugned communications have rightly been set aside.

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