Writ jurisdiction cannot be invoked to resolve private civil disputes over machinery Ownership claims

The Petitioner provided machineries for a project awarded by NTPC (Respondent No. 1) to M/S SPML Infra Limited (Respondent No. 2).

After the contract was terminated in 2013, Respondent No. 2 initiated arbitral proceedings.

In 2016, NTPC released certain machineries to the Petitioner upon the Petitioner furnishing a Bank Guarantee of ₹1,56,76,445/-.

Meanwhile, an arbitral award was passed in 2020 in favor of Respondent No. 2, which included the value of the same machineries the Petitioner claimed as its own.

NTPC satisfied this award via a Settlement Agreement in 2024.

Consequently, NTPC demanded the Petitioner pay ₹1,56,76,445/- or face invocation of the Bank Guarantee. The Petitioner paid the amount under protest and filed this writ petition seeking a refund.

1. Whether the Court can exercise the power of judicial review to direct Respondent No. 1 to refund the amount paid by the Petitioner in satisfaction of the Bank Guarantee.

2. Whether a dispute involving competing claims over machinery value between a subcontractor and a main contractor constitutes a public law remedy or a private civil dispute.

The Court applied the principles governing judicial review under Article 226 of the Constitution of India, emphasizing that writ jurisdiction cannot be used to modify arbitral awards.

It distinguished between public law remedies and private civil disputes, holding that purely commercial or private contractual conflicts are not maintainable under writ jurisdiction.

The court also implicitly relied on the principle against "double jeopardy" in civil liability, noting that a party cannot be penalized twice for the same underlying value.

The Court reasoned that granting a refund would effectively modify the 2020 arbitral award, exceeding the scope of judicial review.

Furthermore, since NTPC had already paid Respondent No. 2 for the value of the machineries pursuant to the Settlement Agreement, directing a refund to the Petitioner would result in NTPC being penalized twice for the same assets.

The Court observed that while the Petitioner claims ownership of the machineries, Respondent No. 2 had already successfully claimed their value in arbitration. Therefore, the core conflict is a private ownership and monetary dispute between the Petitioner and Respondent No. 2, rather than a public law grievance against the State entity (NTPC).

The Court ruled that it cannot direct a refund as it would interfere with an established arbitral award and settlement. However, the Court clarified that its dismissal does not prejudice the Petitioner’s right to pursue a civil claim against Respondent No. 2 in an appropriate forum.