The Supreme Court has ruled that contracts could not be enforced by way of issuing directions under writ jurisdiction and the aggrieved party should claim damages for breach of contract.
"Ordinarily, a specific performance contract would not be enforced by issuing a writ or in the nature of mandamus, particularly when keeping in view the provisions of the Specific Relief Act, 1963 damages may be an adequate remedy for breach of contract," the court held.
The ruling came on a Special Leave Petition filed by Noble Resources Ltd challenging an Orissa High Court verdict dismissing its writ petition in connection with a contract for supply of 1,20,000 MT Grade A, B and C iron ore in 2003.
The High Court had dismissed the petition on the ground that it involved enforcement of a contract, which could not be done in a writ petition.
Senior counsel Ashok Desai had argued on behalf of the appellant company that when a state-owned monopoly acted unfairly, the action being violative of the right to equality as contained in Article 14 of the Constitution, a writ petition would be maintainable.
However, a Bench of Justice SB Sinha and Justice Dalveer Bhandari dismissed the petition, saying the reasons for non-supply may constitute a breach of contract but having regard to the contract of the parties, it cannot be said that it was so arbitrary so as attract Article 14.