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1975 DIGILAW 246 (KER)

T. D. JOSEPH v. STATE OF KERALA

1975-09-25

P.GOVINDA NAIR, T.KOCHU THOMMEN

body1975
Judgment :- 1. The question which arises for our consideration in this case is whether the jurisdiction of this Court under Art.226 of the Constitution can be invoked to challenge orders of Government in respect of contractual rights and obligations. The petitioner prays for a writ of certiorari or other appropriate writ, order or direction to quash Exts. P7 and P8 orders of the Assistant Conservator of Forests, Teak Plantation Division, Parambikulam, the 2nd respondent herein, whereby he has ordered the forfeiture of certain security amounts and sale proceeds, as well as the recovery of amounts due from the petitioner to the Government, in terms of Ext. P1 contract dated 24-8-1967. 2. In accordance with Ext. P1 agreement the petitioner was granted by the State of Kerala the right to cultivate tapioca in Block Nos. 133 to 148 in the Parambikulam Teak Plantation Range for a period of two years. According to the respondents, the petitioner had failed to carry out the weeding operations in terms of the agreement. Clause.17 to 20 of the Agreement give the State wide powers to cancel the petitioner's licence, forfeit his security amounts, confiscate his crops and take steps for recovery of all amounts due from him including fine, in the event of his failure to satisfactorily carry out his obligations in terms of the contract. In such a case the Government has the right to complete the work at the risk and cost of the petitioner. 3. The notices marked as Exts P2(a) to P2 (c) all dated 18-7-1969, were issued to the petitioner by the Forest Range Officers calling upon him to be present at the site for the purpose of preparing a mahazar to determine the loss caused to the Department by the petitioner's default. The petitioner states in Para.5 of his petition that a notice dated 24-7-1969 was issued to him by the 2nd respondent stating that he had not done the weeding work in an area over 413.79 hectares and that he was thus liable to remit a sum of Rs.14110.24 in the Treasury. The 2nd respondent, by Ext. P7 order dated 1-7-1972, pointed out that the lease period expired on 23-8-1969 and that the petitioner did not carry out the weeding work in accordance with the agreement dated 24-8-1967, despite various notices issued to him. He therefore ordered the confiscation of the security amount of Rs. The 2nd respondent, by Ext. P7 order dated 1-7-1972, pointed out that the lease period expired on 23-8-1969 and that the petitioner did not carry out the weeding work in accordance with the agreement dated 24-8-1967, despite various notices issued to him. He therefore ordered the confiscation of the security amount of Rs. 3400/- together with interest as well as a sum of Rs. 10,500/-, which was realised by the Department by the sale of the crop raised by the petitioner on the land. By Ext. P8 order dated 5-7-1972 the 2nd respondent informed the petitioner that action was being taken to debar him from future 'taungya' leases. He ordered the recovery of sum of Rs. 14,124.03 which was due and payable by the petitioner to the Government in terms of Ext. P1 agreement. 4. The petitioner says that Exts. P7 and P8 are arbitrary orders and they were passed without jurisdiction. He further complains that these orders were issued without giving him an opportunity to explain his position, and therefore the principles of natural justice were violated. In Para.11 of the petition he says. "No notice was given to me before ordering the forfeiture of the amounts due to me or imposing penalty upon me or calling upon me to remit the alleged balance amount." He further says that his license was cancelled without notice to him. According to the petitioner the dispute ought to have been referred to the Conservator of Forests (Development Circle), Trichur, for decision under Clause.19 of the Agreement. 5. The 2nd respondent in his counter affidavit dated 30-5-1973 refers to a number of notices issued to the petitioner, both by the Range Officers of the respective Ranges and by the 2nd respondent. All these notices were issued to the petitioner long before Ext. P2 series of notices were issued. It is therefore pointed out that the allegation that the principles of natural justice were violated is absolutely without basis. The 2nd respondent points out that there was no cancellation of the petitioner's licence as the full period of two years had run out. The amounts were confiscated and steps were initiated for recovery of the balance sum due from the petitioner on account of his failure to carry out his obligations under the contract The contract fully provided for such forfeiture and recovery steps. The amounts were confiscated and steps were initiated for recovery of the balance sum due from the petitioner on account of his failure to carry out his obligations under the contract The contract fully provided for such forfeiture and recovery steps. He says that if the petitioner wanted to refer the matter for the final decision of the Conservator under Clause.19 of the Agreement he should have said so. Most of the notices issued to the petitioner were unanswered by him. He refused to appear for the preparation of a mahazar despite notices calling upon him to do so. The petitioner had requested for an extension of the contract which was not granted to him as he had tailed to remit the estimated cost of weeding as directed by the Department in the notice. He says that the leased area was resumed only after the expiry of the period of the lease on 23 - 8-1969. The 2nd respondent therefore asserts that the sale of the crop as well as the resumption of the leased area were effected after notices were served on the petitioner. The 2nd respondent further submits in the counter affidavit that if any contractual rights of the petitioner were violated, such rights could be vindicated only by means of a civil action and not under Art, 226 of the Constitution. 6. In Lekhraj Sathramdas Lalvani v. N. M. Shah, Deputy Custodian-cum-Managing Officer, Bombay (AIR. 1966 S C. 334), the Supreme Court held that duties or obligations arising out of a contract could not be enforced by the machinery of a writ under Art.226 of the Constitution. Referring to this decision the Supreme Court says in Har Shankar v. Deputy Excise and Taxation Commissioner (AIR. 1975 S.C.1121) at page 1126 as follows: "Analysing the situation here, a concluded contract must be held to have come into existence between the parties. The appellants have displayed ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching contractual obligations. x x x x x x x x The writ jurisdiction of High Courts under Art.226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred." 7. The appellants have displayed ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching contractual obligations. x x x x x x x x The writ jurisdiction of High Courts under Art.226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred." 7. Counsel for the petitioner drew our attention to certain decisions of the Supreme Court in support of his contention that the remedy under Art.226 would be available to a person whose civil rights were violated by officers of Government although such rights arose under a contract. He relies upon certain observations of Bose J. in Guruswamy v. State of Mysore (AIR. 1954 S. C. 592) In Para.20 of the judgment, Bose J. says "The next question is whether the appellant can complain of this by way of a writ. In our opinion, he could have done so in an ordinary case. The appellant is interested in these contracts and has a right under the laws of the State to receive the same treatment and be given the same chance as anybody else." A writ was, however, not issued in that case on account of the long delay. The Court said: "But, owing to the time which this matter has taken to reach us (a consequence for which the appellant is in no way to blame, for he has done all he could do to have an early hearing), there is barely a fortnight of the contract left to go. xx xx xx xx A writ would therefore be ineffective and as it is not our practice to issue meaning less writs we must dismiss this appeal and leave the appellant content with the enunciation of the law." Counsel submits that the above observation of Bose J. supports his contention that in appropriate casts a writ would lie even to enforce contractual obligations. The facts of that case show that this is too wide a proposition to be accepted. In that case the Government, in granting a liquor licence, had acted in violation of certain statutory rules made under the Mysore Excise Act. The facts of that case show that this is too wide a proposition to be accepted. In that case the Government, in granting a liquor licence, had acted in violation of certain statutory rules made under the Mysore Excise Act. The Court said "The Act and the Rules make it plain that liquor licensing in the State of Mysore can only be done in certain specified ways and such discretion as is left to the authorities is strictly controlled by Statute and Rule." It was therefore observed that the Government had. in ignoring the statutory requirements, acted arbitrarily and illegally, although for reasons of delay a writ was not issued. 8. In Ram Chandra Rai v. State of Madhya Pradesh (AIR 1971 SC 128), the appellant, who was a licensee of a liquor shop, moved the High Court of Madhya Pradesh for a writ of Mandamus to direct the Excise Department of the State not to recover licence fee for the days on which liquor was not supplied to him. The High Court summarily rejected the petition stating, "If the Government had committed a breach of the contract the remedy is elsewhere." On this the Supreme Court observed "It cannot, without further investigation, be said that the rights and obligations arising under a licence issued under a statutory authority are purely contractual. In our judgment the High Court was in error in summarily rejecting the petition." Here again, as in the case of Guruswamy v. State of Mysore (supra), the question was whether the Department had acted contrary to the provisions of a licence which was issued under the Statute The High Court was therefore directed by the Supreme Court to decide the case on merits instead of disposing it of summarily. 9. In D. F. O. South Kheri v. Ram Sanehi (AIR. 1973 S. C. 205 at 206), the Supreme Court stated "We are unable to hold that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must report to a suit and not to a petition by way of a writ. tp view of the judgment of this Court in K. N. Guruswamy's case there can be no doubt that the petition was maintainable, even if the right to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power." In this case the Divisional Forest Officer passed an order cancelling an earlier order (issued by a subordinate Forest authority) under which the respondent had actually acted. The respondent contended that the Divisional Forest Officer ought to have heard him before passing his order. By the order of the Divisional Forest Officer, the timber which was removed by the respondent with the sanction of the forest authorities under the tally dated October 29, 1966, was to be treated as if it was removed in November, 1966 which was outside the period of his contract Such an order of the Divisional Forest Officer seriously affected the respondent's civil rights and, as the Supreme Court said, he ought to have been heard before passing the order. The Court stated that the order was passed by a public authority modifying the order or proceeding of a subordinate forest authority. By that order the contractor was deprived of a valuable right. The Court then pointed out "Granting that the order was administrative and not quasi-judicial, the order had still to be made in a manner consonant with the rules of natural justice when it affected the respondent's rights to property. x x x x x x x x It is one of the fundamental rules of our constitutional set-up that every citizen is protected against exercise of arbitrary authority by the State or its officers. x x x x x x x x Without considering whether the order of the Divisional Forest Officer was vitiated because of irrelevant considerations, the order must be set aside on the simple ground that it was passed contrary to the basic rules of natural justice." A person who had acquired a right in terms of an earlier order could not be deprived of such right by a subsequent order without giving him an opportunity to be heard. It was because of this glaring violation of natural justice that the Court said that, merely because the source of the right which the contractor claimed was initially in a contract, the Court could not be prevented from exercising its discretionary power under Art.226. 10. In Lalvan's case (AIR 1966 S. C. 334) the Supreme Court had occasion to consider the question whether a writ of mandamus would lie to enforce a contractual obligation. The Court said "In our opinion, any duty or obligation falling upon a public servant put of a contract entered into by him as such public servant cannot be enforced by the machinery of a writ under Art.226 of the Constitution." This observation which was made in the context of a writ of mandamus is, in our opinion, equally applicable to a writ of certiorari which is the remedy sought in the present petition. 11. In Erusian Equipment and Chemicals v. State of West Bengal ( [1975] 1 S.C.C. 70) the Supreme Court observed that under Art.298 of the Constitution the executive power of the Union and the State would extend to the carrying on of any trade and the making of contracts. The Court said "The State need not enter into any contract with any one but if it does so, it must do so fairly without discrimination and without unfair procedure. Reputation is a part of a person's character and personality. Blacklisting tarnishes one's reputation. xx xx xx xx Where the State is dealing with individuals in transactions of sales and purchase of goods, the two important factors are that an individual is entitled to trade with the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice." This was a case of blacklisting which certainly affected the civil rights. The Court said "The blacklisting order does not pertain to any particular contract. The blacklisting order involves civil consequences. It casts a slur. It creates a barrier between the persons blacklisted and the Government in the matter of transactions. The Court said "The blacklisting order does not pertain to any particular contract. The blacklisting order involves civil consequences. It casts a slur. It creates a barrier between the persons blacklisted and the Government in the matter of transactions. The black lists are 'instruments of coercion'." The Court therefore observed that in matters of blacklisting or similar actions where civil consequences follow governmental actions, the executive authority should act fairly and justly and in accordance with the rules of natural justice. Allowing the Writ Petitions the Court observed: "The Government is a Government of laws and not of men. It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. This privilege arises because it is the Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions." 12. In the present ease, the counter affidavit filed by the respondent clearly shows that a number of notices had been issued to the petitioner pointing out to him that the work had not been satisfactorily done in accordance with the contract and calling upon him to complete the work without delay. It was clearly brought to his notice that the Government would in terms of the contract complete the work at the petitioner's risk and cost and that he would be liable to reimburse the Government for all expenses incurred therefor. These allegations have not been controverted by the petitioner. The points urged in the petition involve complicated questions of facts which can be effectively resolved only in a civil court. This Court will not exercise its discretionary powers under Art.226 of the Constitution in matters of contractual obligations, unless the impugned orders of the Government are, on the face of them, perverse, arbitrary or illegal, as a result of which the petitioner's civil rights are adversely affected The pleadings do not show that Exts. P7 and P8 are vitiated by any such vice which is apparent on the face of the record. There is no allegation that any statutory provision has been violated. P7 and P8 are vitiated by any such vice which is apparent on the face of the record. There is no allegation that any statutory provision has been violated. The petitioner's contention that he was not effectively heard before the orders were passed and consequently the principles of natural justice were violated is unsustainable in the light of the facts revealed in the pleadings. Nor is there any substance in the allegation that such orders were made without jurisdiction. 13. Ours is a Government of laws and within the laws the Government can, like any other person, make contracts. If disputes arise between parties as to their contractual rights and obligations, the remedy is ordinarily to be sought through a civil action or through such other method as the parties may provide by contract. We are not satisfied that this is a fit case for interference under Art.226 of the Constitution. We would, however, like to make it clear that none of the observations made above is intended to touch the merits of the case and the petitioner is free to seek any such remedy as may be available to him under the law. In the result, the writ petition is dismissed, but we make no order as to costs. Dismissed.