Writ jurisdiction cannot be invoked for additional compensation where contract terms explicitly bar rate increases for route diversions.

The Petitioner, a transport contractor, was awarded a road transport contract by the Food Corporation of India (FCI) on September 29, 2021, to transport goods from Changsari to Shillong at a rate of Rs. 1095/- per metric ton.

The contract was based on an E-Tender dated June 11, 2021, which included a specific condition (NB:1) stating that no requests for rate increases would be considered due to route diversions or changes "on any account".

The Petitioner originally utilized the Umiam Bridge route (118.2 Kms). However, following a May 4, 2022, order by the High Court of Meghalaya restricting vehicles over 10 metric tons on said bridge, the Petitioner was forced to take a longer route via Mawryngkneng (190 Kms).

The Petitioner sought additional compensation for the increased distance, which was rejected by the Grievance Redressal Committee on September 1, 2022, and subsequently by the Executive Director (NE) on September 20, 2022.

The Petitioner challenged these rejections via the present writ petition.

1. Whether the Respondent’s rejection of the claim for additional compensation was arbitrary, unfair, or contrary to contractual terms, necessitating interference under Article 226 of the Constitution.

2. Whether the Petitioner is entitled to additional compensation based on the principle of quantum meruit under Section 70 of the Indian Contract Act, 1872.

The court applied the principles of judicial review under Article 226 of the Constitution of India, emphasizing that the court does not act as an appellate authority in contractual matters unless the state's action is arbitrary or unfair.

It also considered Section 70 of the Indian Contract Act, 1872, which governs the obligation of a person enjoying the benefit of a non-gratuitous act (quantum meruit).

The court adhered to the strict interpretation of contractual "negative covenants," specifically Note NB:(1) of the Notice Inviting E-Tender, which prohibited rate escalations due to route diversions.

The Court observed that the Petitioner voluntarily entered into a contract where the rates were quoted per metric ton for the "entire distance," with an express stipulation that no increase would be granted for route changes "on any account".

While the Petitioner argued that the closure of the Umiam Bridge was an unforeseen circumstance occurring after the bid acceptance, the Court found that the Respondents' adherence to the explicit terms of the tender did not constitute arbitrariness or illegality.

The Court noted that exercising jurisdiction under Article 226 is limited to checking the fairness of the decision-making process, not re-evaluating the merits of a contractual dispute like an appellate body.

Regarding the claim of quantum meruit under Section 70 of the Contract Act, the Court reasoned that such a claim requires factual evidence—such as proof of prior permissions for the diversion and the necessity of the alternate route—which cannot be adjudicated in summary writ proceedings and must instead be proven in a civil suit.

The Court clarified that this dismissal does not preclude the Petitioner from filing a civil suit to claim compensation based on quantum meruit.

To protect the Petitioner’s right to seek this alternative remedy, the Court granted the benefit of Section 14 of the Limitation Act, 1963, for the period the writ petition was pending (November 22, 2022, to April 20, 2026).