The Jammu & Kashmir High Court has reaffirmed that a private party cannot seek compensation from the government in writ proceedings based on an agreement not executed with or sanctioned by the government; privity of contract and prior adjudication bar such claims. This judgment upholds existing precedent and serves as binding authority for subordinate courts within Jammu & Kashmir on the issue of contractual claims against the State in writ jurisdiction.
Summary
| Category | Data |
|---|---|
| Case Name | LPA/228/2025 of SABIYA TARIQ Vs UNION TERRITORY OF J AND K AND ORS. (HEALTH AND MEDICAL EDUCATION / SKIMS) |
| CNR | JKHC010048732025 |
| Date of Registration | 16-09-2025 |
| Decision Date | 30-10-2025 |
| Disposal Nature | Dismised |
| Judgment Author | HON’BLE MR. JUSTICE RAJNESH OSWAL |
| Concurring or Dissenting Judges | HON’BLE THE CHIEF JUSTICE (ARUN PALLI) concurred |
| Court | High Court of Jammu & Kashmir and Ladakh at Srinagar |
| Bench | CJ Court |
| Precedent Value | Binding within the territorial jurisdiction of the High Court |
| Overrules / Affirms | Affirms prior Division Bench judgment dated 07.06.2005 |
| Type of Law | Civil – Public Law/Constitutional – Writ jurisdiction under Article 226 |
| Questions of Law | Whether the appellant, having no privity of contract with the State, can claim compensation for investments allegedly made in government property under a private agreement with a Trust? |
| Ratio Decidendi |
The High Court held that in absence of privity of contract between the appellant and the government, no enforceable right to compensation arises. The petitioner’s claim was already settled in prior litigation between the Trust and the government. Any agreement not sanctioned by the government is void ab initio for the purposes of public property. Disputed facts and matters of private contract cannot be adjudicated in writ proceedings. The appellant’s recourse, if any, lies against the Trust, not the State. Additionally, the issue being settled in earlier rounds of litigation cannot be revived in subsequent writ petitions. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court |
The appellant, after entering into a private agreement with a Trust (not the government), invested funds in a Nursing Home. Subsequently, the Government took over the Nursing Home. The appellant sought compensation in writ proceedings, which was denied by the Writ Court for lack of privity and res judicata. This intra-court appeal was dismissed for the same reasons. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Jammu & Kashmir and Ladakh jurisdiction |
| Persuasive For | Other High Courts considering similar issues of contractual privity and writs |
| Overrules | None—judgment affirms prior precedent |
| Distinguishes | Divides claims purely under private contract from those where government is a party |
| Follows | Prior Division Bench judgment dated 07.06.2005 and Hon’ble Mr. Justice V.K. Jhanji’s reasoning |
What’s New / What Lawyers Should Note
- Reiterates that writ jurisdiction under Article 226 cannot be invoked to enforce private contracts against the State where there is no privity.
- Confirms that compensation cannot be claimed from the government for investments in public property under an agreement not authorized by the State.
- Stresses that disputed questions of fact and private/familial contracts are not adjudicable via writ proceedings.
- Highlights that earlier final adjudications (res judicata) bar re-litigation of the same issues, even when relief sought is reworded or limited (e.g., compensation only).
- Lawyers should counsel clients that claims for compensation in similar factual circumstances must be brought against the contracting party (here, the Trust), not the government, and by appropriate civil action, not writ.
Summary of Legal Reasoning
The Court examined the nature of the agreement between the appellant and the respondent Trust, reiterating that the government was not a party to the contract and had not sanctioned such arrangements. The factual genesis and legal substratum of the agreement were found questionable and tainted by apparent collusion and absence of authority. The previous Division Bench judgment (endorsing Hon’ble Mr. Justice V.K. Jhanji’s view) was upheld, clarifying that the government’s takeover was to preempt illegitimate transfer to a private party, and the Trust itself had no right to lease or encumber public property.
The High Court emphasized the absence of privity of contract between appellant and government, making the compensation claim unsustainable in public law (writ) proceedings. Additionally, the controversy had already been settled by prior litigation, attracting the bar of res judicata. The scope of writ jurisdiction does not extend to enforcing disputed contractual claims or resolving complex factual disputes between private parties.
Arguments by the Parties
Petitioner:
- Claimed entitlement to compensation for investments made in the Nursing Home on the basis of an agreement with the Trust.
- Submitted that the relief was only for compensation, not restoration of possession.
- Asserted that the government was legally obligated to compensate for losses suffered.
Respondents:
- Agreement with the appellant was void ab initio as it was not sanctioned by the government and intended to defraud the exchequer.
- Asserted no privity of contract existed between appellant and government, barring any compensation claim.
- Highlighted disputed facts and urged such issues were beyond writ jurisdiction.
- Pointed to prior Division Bench judgment as settling the dispute.
Factual Background
The appellant, a relative of the Vice Chairman of the relevant Trust, entered into an agreement (12.05.2003) with the Trust to manage a government-owned Nursing Home and claimed to have invested substantial amounts in its operation. On 22 July 2003, the government took over management and possession of the Nursing Home, rescinding earlier permissions. Previous litigation between the Trust and government resulted in a Division Bench judgment upholding the takeover. The present case represents a second round of litigation, with the appellant limiting her claim to compensation for the alleged investments. The Writ Court denied relief on grounds of lack of privity and prior settlement; this decision was challenged in the intra-court appeal.
Statutory Analysis
- The Court applied principles governing writ jurisdiction under Article 226 of the Constitution of India.
- Privity of contract doctrine was emphasized—no compensation can be ordered where the State is not a party to the contract.
- The legal bar on State liability in respect of private contracts for State-owned property not entered into by authorized government representatives was underscored.
- No mention of specific statutory “reading down” or “reading in”.
Dissenting / Concurring Opinion Summary
- Both judges (HON’BLE THE CHIEF JUSTICE and HON’BLE MR. JUSTICE RAJNESH OSWAL) concurred.
- No dissenting view was recorded.
- The Chief Justice expressly recorded agreement with the reasoning dismissing the appeal.
Procedural Innovations
- No procedural innovations or new approaches to locus standi, burden of proof, or guidelines were articulated.
- Standard procedure for disposal of intra-court appeals was followed.
Alert Indicators
- ✔ Precedent Followed – Upholds previous Division Bench judgment and well-settled principles regarding privity of contract in writ proceedings.