Writ jurisdiction is not exercised in contractual disputes where efficacious alternative dispute resolution mechanisms are available.

The petitioner, M/S. Prabha Exim Pvt. Ltd., filed a writ petition under Article 226 of the Constitution of India challenging an order dated 17.03.2026, whereby its contract was rescinded by the respondent

The petitioner contended that the order was arbitrary and violated principles of natural justice because the grounds raised in their reply to the show-cause notice were not considered

Conversely, the respondent State raised a preliminary objection regarding the maintainability of the petition, citing the existence of an alternative and efficacious remedy under Clause 12 of the contract, which provides for a structured dispute resolution system

1. Whether the writ petition is maintainable under Article 226 of the Constitution of India given the alternative remedy provided in the dispute resolution clause of the contract

2. Whether the circumstances of the case warrant the exercise of extraordinary jurisdiction despite the availability of a specialized arbitration tribunal under the M.P. Madhyastham Adhikaran Adhiniyam, 1983

The court primarily considered the discretionary nature of jurisdiction under Article 226 of the Constitution of India

It applied Clause 12 of the contract, which mandates a "Dispute Resolution System" consisting of a written dispute before a Competent Authority, a subsequent appeal to an Appellate Authority, and a final reference to the Madhya Pradesh Arbitration Tribunal constituted under the M.P. Madhyastham Adhikaran Adhiniyam, 1983

The court also addressed the precedent in Unitech Limited and others v. Telangana State Industrial Infrastructure (2021(16) SCC 35), which establishes that while an arbitration clause is not an absolute bar to writ jurisdiction, its exercise depends on the nature of the dispute and the adequacy of the alternative remedy

The court reasoned that the impugned order was passed by a competent authority after adhering to procedural requirements, including the issuance of a show-cause notice and consideration of a reply

The court noted that the petitioner's specific grievances—such as the alleged failure to provide site access or documents—involved disputed questions of fact that are better suited for adjudication within the contractually agreed-upon dispute resolution framework rather than under Article 226

While the court acknowledged the legal principle that an alternative remedy does not create an "absolute bar" to its jurisdiction, it emphasized that in contractual matters where a specific, efficacious remedy (including a statutory tribunal) exists, the High Court should be disinclined to interfere

The court distinguished the Unitech case, finding that its principles did not apply to the specific facts of this case where a comprehensive resolution system was already in place

The court held that it would not entertain a contractual dispute when the contract itself provides a multi-tier dispute resolution system and a reference to a specialized Arbitration Tribunal

The court further directed that any observations made in this order should not prejudice the petitioner’s case should they choose to pursue the alternative remedy