S. S. K. T. COMPANY v. FOOD CORPORATION OF INDIA — 1988 DIGILAW 345 (KAR)

K. A. SWAMI, J. ( 1 ) THE petitioner is a registered Company engaged in the business of transporting goods. In this petition under Articles 226 and 227 of the Constitution, the petitioner has sought for quashing the communication dated 20-6-1986 bearing No. S and C/13 (14)/85 Cont. issued by the Regional manager, Food Corporation of India, Bangalore Annexure-K terminating the contract dated 1-3-1986 at the risk and costs of the petitioner. The petitioner has also sought for a Writ in the nature of Mandamus directing the 1st respondent to entrust the work to the petitioner as per the acceptance of tender Annexure-A and a further direction to the respondent not to engage any other contractor/s for the period between 1-3-1986 and 28-2-1988 till which day, the contract awarded to the petitioner will be effective for handling and transporting its foodgrains. ( 2 ) SUBSEQUENTLY the petitioner filed an application seeking amendment to the Writ Petition. That application was allowed on 16-5-1988. The petitioner was permitted to amend the Writ Petition. The amended prayer is as follows : "in the alternative, this Hon'ble Court be pleased to issue a Writ in the nature of mandamus or any other suitable orders or directions to the first respondent directing him to immediately pay to the petitioner the sum of Rs. 5,67,262-83 admittedly with-held by it with interest thereon at 18% per annum which is the prevailing interest as per trade usage from 20-6-86 on which day the contract was unlawfully terminated, till the date of payment. " After the amendment was allowed, the 1st respondent has also filed additional statement of objections. ( 3 ) HAVING regard to the contentions urged on both sides, the following points arise for consideration : 1) Whether the 1st respondent is justified in law in terminating the contract dated 1-3-1986? 2) Whether it is a fit case in which a direction in the nature of mandamus can be issued to the 1st respondent to pay a sum of Rs. 5,67,262-83 admittedly with-held by the 1st respondent with interest thereon as prayed for. Before we take up both the points for determination, it is necessary to point out that due to passage of time, the period of contract has expired, during the pendency of the petition. Therefore, the other reliefs originally sought for have become infructuous point NOS. 5,67,262-83 admittedly with-held by the 1st respondent with interest thereon as prayed for. Before we take up both the points for determination, it is necessary to point out that due to passage of time, the period of contract has expired, during the pendency of the petition. Therefore, the other reliefs originally sought for have become infructuous point NOS. 1 and 2 : ( 4 ) BOTH the points can be considered together as they are inter-linked. ( 5 ) IN addition to several other contentions Sri U. L. Narayana Rao, learned Counsel appearing for the 1st respondent, contends, that this is not a case in which exercise of jurisdiction under articles 226 and 227 of the Constitution is called for as the question as to the validity of termination of the contract cannot be gone into in a Writ Petition. It is submitted that the breach of contract and the remedies arising out of that and the cancellation or the termination of the contract and the amount payable thereon pursuant thereto, are matters which can be legitimately and properly decided in an appropriate suit in as much as those matters shall have to be decided on the basis of several facts which are disputed and as such they are to be proved; and hence it is contended that the reliefs sought for by the petitioner cannot at all be granted in a petition under article 226 or 227 of the Constitution. ( 6 ) ON the contrary, it is contended on behalf of the petitioner that on the undisputed facts, the termination of the contract by the 1st respondent, which answers the description of the State as defined under Article 12 of the Constitution, is highly illegal and arbitrary and as such it is opposed to Article 14 of the Constitution. Hence this is a matter in which exercise of jurisdiction under Article 226 of the Constitution is called for. As far as the sum of Rs. Hence this is a matter in which exercise of jurisdiction under Article 226 of the Constitution is called for. As far as the sum of Rs. 5,67,262-83 payable by the 1st respondent to the petitioner is concerned, the 1st respondent does not dispute that in respect of the work done by the petitioner, the aforesaid sum is due to be paid to it but it has claimed that it is entitled to with-hold the said sum because it has been put to great loss, as a result of unsatisfactory performance of the contract by the petitioner which led to termination of the contract. ( 7 ) THE facts which led to termination of the contract which are proved in the case are as follows: the 1st respondent called for tenders for awarding contract starting from 1-3-1986 upto 28-2-1988 for loading and unloading and handling and transport of foodgrains at F. C.. godown and rail-heads at Krishnarajapuram/whitefield, Bangalore by the Notification dated 16-11-1985. Pursuant to the said tender notification, the petitioner and others submitted their tenders. Ultimately, the tender submitted by the petitioner was accepted and it was intimated of the acceptance by the communication dated 22-2-1986 bearing No. S and C 13 (14)/85 Cont. Annexure-A. The relevant portion of it reads thus : "your revised offer of 82% (eighty-two percent) above Schedule of Rates for services given in the reference cited second for appointment as our contractor for loading/unloading/handling and transport of foodgrains/fertilisers etc. , at the Food Corporation of India godowns and rail heads at K. R. Puram/whitefield/bangalore is hereby accepted. Accordingly, you are appointed as our loading/ Unloading/handling and Transport Contractor at Food Corporation of India godowns and railheads at Krishnarajapuram/whitefield/bangalore at 82% (eighty two per cent) above the schedule of rates for services and on the terms and conditions stipulated in tender No. S and C. 13 (14)/85 Cont. dated 16-11-1985 for a period of two years from 1-3-1986 to 29-2-1988. You are requested to remit the security deposit of Rs. 50,000/- (Rupees fifty thousand only) within seven days from the date of issue of this letter. dated 16-11-1985 for a period of two years from 1-3-1986 to 29-2-1988. You are requested to remit the security deposit of Rs. 50,000/- (Rupees fifty thousand only) within seven days from the date of issue of this letter. You have the option to remit 50% of the security deposit in one lumpsum by cash or demand draft in favour of the District Manager, Food corporation of India, Bangalore, within seven days and the balance 50% by way of deduction at the rate of 5% from each admitted bill pertaining to this contract. You are also requested to furnish the following documents immediately for our verification and return : 1) Original Income-tax Clearance Certificate. 2) Original Partnership Deed. 3) Original Power of Attorney. "you are requested to contact the District Manager, Food Corporation of India, Bangalore for further instructions. Kindly acknowledge receipt. " pursuant to the above, an agreement was also executed. The conditions of the contract are those which are found in the tender notification dated 9-12-1985 bearing Receipt No. 4101 produced by the 1st respondent. The relevant portion of the same will be adverted to at the appropriate time. ( 8 ) AFTER the acceptance of the contract and before it could be commenced on 1-3-1986, the labour Union of the workers of the -1st respondent on 27-2-1986 filed W. P. No. 3460/86 in this court seeking the following reliefs: "wherefore, the petitioner respectfully pray that this Hon'ble Court may be pleased to : a) Declare the action of the 1st respondent - Food Corporation of India in retrenching 450 workers working continuously for several years in its various godowns and Railheads in bangalore District, as illegal, irregular, arbitrary, capricious, discriminatory and void ab-initio being opposed to the provisions of the Industrial Dispute Act and Article 14 of the Constitution of India. b) Issue a Writ of Mandamus or any other appropriate Writ, order or direction, directing the respondent No. 1 from retrenching any of the existing 450 loading and unloading workers working in its various godowns and railheads in Bangalore District, without any justification and without complying with the mandatory provisions of Section 25 (N) and 25 (F) of the Industrial dispute Act. c) Grant such other relief or reliefs as this Hon'ble Court deems it fit to grant in the facts and circumstances of this case including the costs of these proceedings. c) Grant such other relief or reliefs as this Hon'ble Court deems it fit to grant in the facts and circumstances of this case including the costs of these proceedings. PRAYER FOR INTERIM RELIEF for the reasons stated in the foregoing paragraphs the petitioner respectfully prays that this hon'ble Court may be pleased to forbear the first respondent or any one else claiming through or under it from retrenching or any terminating the services of 450 Loading and Unloading workers working in the various godowns and Railheads of Food Corporation of India in Bangalore district without complying with the mandatory provisions of Section 25 (N) and 25 (F) of the industrial Dispute Act, 1947 and further from engaging new Labour force in their place pending disposal of this Writ Petition. It would be in the interest of justice to do. " In that Writ Petition an interim order was passed on 28-2-1986 as prayed for. Thus as a result of the interim order passed in W. P. No. 3460/86 on 28-2-1986, the 1st respondent or any one else claiming through or under it was restrained from retrenching or terminating the service of 450 loading and unloading workers working in the various godowns and railheads of the Food corporation of India in Bangalore District without complying with the mandatory provisions of section 25 (N) and 25 (F) of the Industrial Disputes Act, 1947. They were also restrained from engaging new labour force in their place pending disposal of the said Writ Petition. ( 9 ) AS a result thereof, the petitioner could not commence the work with its workmen. The aforesaid interim order came to be modified on 13-3-1986 on the application filed by the 1st respondent. As per the modification, the petitioner (3rd respondent in that Writ Petition) was directed to provide work to the workmen represented by the petitioner (Union) on the same terms and conditions to which they were entitled to as on 28-2-1986. e. , when they were under the employment of F. C.. (contractor ). This interim order was directed to continue for a period of three weeks from 13-3-1986. It was also made clear that such engagement by the petitioner herein shall not in any way prejudice its right in the Writ Petition. ( 10 ) CONSEQUENTLY, the 1st respondent called upon the petitioner to commence the work under the contract. (contractor ). This interim order was directed to continue for a period of three weeks from 13-3-1986. It was also made clear that such engagement by the petitioner herein shall not in any way prejudice its right in the Writ Petition. ( 10 ) CONSEQUENTLY, the 1st respondent called upon the petitioner to commence the work under the contract. Accordingly, on the very next day. e. , on 14-3-1986, the petitioner commenced the work of loading and unloading and transporting of foodgrains from the railheads to the 1st respondent's godown. After 3-4-1986, the 1st respondent directed the petitioner as per Annexure-B dated 7-4-1986 to work on its new godown at Whitefield where the workmen of the 1st respondent had not worked earlier. Accordingly, the petitioner commenced the work at Whitefield godown on 8-4-1986 itself and worked upto 30-5-1986. Thereafter it could not continue the work because w. P. No. 8650/86 came to be filed by the petitioner seeking the following reliefs : "wherefore, the petitioner respectfully prays that this Hon'ble Court be pleased to : a) declare that employment of the 2nd respondent-Contractor and through it new labourers as contract labour by the 1st respondent-Corporation in its various godowns and Railheads at bangalore/krishnarajapuram/ Whitefield and other places in Bangalore District in sheer violation of the mandatory provisions of the Contract Labour Act and the Industrial Disputes act, while refusing to employ its own 450 loading and unloading workers in these places and in these operations, even after the order dated 25-4-1986 passed by this Hon'ble Court in W. P. No. 3460/1986 are highly illegal, irregular, arbitrary, high-handed, mala fide, capricious and not sustainable in law by issue of an appropriate Writ/order/direction. b) Grant a Writ of Mandamus or any other appropriate Writ/order/direction, as the case may be, directing the 1st respondent to employ only its own 450 loading and unloading workers in its various godowns and in its various operations in Bangalore/krishnarajapuram/white-field in bangalore District and not to carry on its operations through the 2nd respondent-contractor or any other contractor employing their own labour; c) award costs; and d) grant such other relief or reliefs as this Hon'ble Court deems it fit to grant in the facts and circumstances of this case. PRAYER FOR INTERIM ORDER for all the above reasons and in view of the urgency of the matter, the petitioner respectfully prays that this Hon'ble Court be pleased to grant an interim order restraining the 1st respondent from employing the 2nd respondent Contractor or any other contractor and through him/them any contract labour so long as 450 of its own labour who have been working in its various godowns and rail-heads at Krishnarajapuram, Whitefield and other places in Bangalore District have not been fully employed as per the orders of this Hon'ble Court in W. P. No. 3460/86 on 25-4-1986 pending disposal of this Writ Petition. It would be in the interest of justice to do so. " In the above Writ Petition also an interim order was passed on 30-5-1986 as prayed for. As a result thereof, the same position which obtained on 27-2-1986 when the interim order was passed in W. P. No. 3460/86 had come to prevail. In the meanwhile W. P. No. 3460/86 was allowed on 25-6-1986. It was held by this Court as follows: "in the result, the petition is allowed and there shall be a direction to the Corporation i) to treat the workmen employed by respondent-2 as on 28-2-1986 as its workmen on the same terms and conditions of service as mentioned in Annexure-A and B to the Writ Petition; ii) If for any reason the Corporation intends to retrench these workmen, the statutory requirement under Section 25 (N) and (F) of the. D. Act shall be complied with; iii) It is made clear that the workmen would not be entitled to claim backwages for the period 1-3-1986 upto the date of this order. But in case, the Corporation does not implement this order within two weeks from this day, the workmen would be entitled to backwages from the date of this order upto the date of their reinstatement. " ( 11 ) THE Food Corporation of India, being aggrieved by the order dated 25-4-1986 passed in w. P. No. 3460/86 preferred W. A. No. 939/86 before a Division Bench on 26-5-1986. The Writ appeal came up for admission on 9-6-1986. It was admitted and an interim of stay was passed subject to the condition that the workmen concerned were given the work at the rate prescribed in the agreement dated 6-6-1986. The Writ appeal came up for admission on 9-6-1986. It was admitted and an interim of stay was passed subject to the condition that the workmen concerned were given the work at the rate prescribed in the agreement dated 6-6-1986. It may be relevant to mention at this stage itself that in view of the fact that a fetter came to be put by reason of the interim order dated 30-5-1986 passed in w. P. No. 8460/86 with a view to see that the F. C.. does not suffer and the petitioner can go on doing the work under the contract, an agreement was arrived at by the petitioner with the Labour union. The petitioner claimed that it was done at the instance of F. C.. (1st respondent herein ). ( 12 ) THIS agreement dated 6-6-1986 was produced before the Division Bench in W. A. No. 939/86 by the F. C.. Consequently, the aforesaid interim order was passed on 9-6-1986. The petitioner herein sought for clarification of that order by filing an application. Accordingly, the matter again came up before the Court on 19-6-1986 and the following order was passed : "this. A. is for modification of interim order made by us on June 9, 1986: So many grievances have been set out in the application by the 3rd respondent. We are not inclined to examine all those grievances. The one contention urged by the Counsel in our opinion, deserves consideration. He urged that he has no objection to give work to the members of the 1st respondent-union as per the terms of the agreement dated June 6, 1986, but the additional burden thereunder regarding the higher rate will have to be borne by the Food Corporation of India. We do not think that there is any scope for misapprehension that the Food Corporation of India is not going to bear the additional burden, because the interim order was made in the appeal preferred by the Food Corporation of India it was then urged before us that the loading and unloading work should go on uninterruptedly as per the terms and agreement dated June 6, 1986. The Food Corporation of India wanted a stay of the order of the learned Single Judge in which it has been held that these workmen would be the workmen of the Food Corporation of India and not the contractor. The Food Corporation of India wanted a stay of the order of the learned Single Judge in which it has been held that these workmen would be the workmen of the Food Corporation of India and not the contractor. The order under appeal has been stayed subject to the condition imposed in the interim order. It is therefore obligatory on the part of the Food Corporation of India, if not under the agreement dated June 6, 1986 but by reason of the interim order to bear the additional burden regarding the higher rates agreed upon. With this modification, the interim order is continued. " ( 13 ) PURSUANT to the above order, the petitioner demanded for payment of the enhanced sum in terms of the agreement dated 6-6-1986. However, the 1st respondent-Corporation decided to terminate the contract from the next day by the communication dated 20-6-1986 Annexure-K. It is this communication that is sought to be quashed in this Writ Petition. The said communication reads thus : "it has come to our notice that you are not cooperating with the Union in getting the work of loading and unloading as per the terms of the contract. The rates which you have been agreed to between you and the Union on 6-6-86 do not exceed the rates stipulated in the contract with us dated 1-3-1986. Hence the question of the Food Corporation of India paying additional amount as per the High Court order dated 19-6-1986 and W. A. 939/ 86 dated 17-6-1986 does not arise. In spite of the same, you have now claimed amounts more than the agreed rates. The entire public distribution system of foodgrains etc in Bangalore District is paralysed because of your attitude and not starting the work through your workmen viz. , the Union. This has caused huge loss to the Food Corporation of India and to the State Government incurring a liability of several lakhs. However, you have committed the breach of the contract. In view of the circumstances, we are constrained to terminate the contract dated 1-3-1986 at your risk and costs and also as per tender terms and conditions Clause No. X (b ). Receipt of this letter may please be acknowledged. " ( 14 ) IN view of the termination of the contract, the petitioner apprehended that the work would be entrusted to another contractor. Receipt of this letter may please be acknowledged. " ( 14 ) IN view of the termination of the contract, the petitioner apprehended that the work would be entrusted to another contractor. Therefore it sought for an injunction by filing. A. III in W. A. No. 939/86 against the 1st respondent-Corporation. That application came up for consideration on 25-6-1986 and the following order was passed : "there were two interim orders made by this Court in the Writ Appeal, one dated June 9, 1986 and another dated June 19, 1986. Purport of both the orders is that the workers shall get the rates as per the terms of the agreement dated June 6, 1986, till the disposal of the appeal and the work of loading, unloading and distribution shall continue. "after the second interim order was made there appears to be some correspondence between the appellant-Corporation and respondent-3. Respondent-3 is a contractor whose tender has been accepted by the Corporation for the year commencing from 1-3-1986 for a period of two years. Normally it should have executed the contract work as per the terms of the agreement. But in the meantime. Corporation has cancelled that agreement and entrusted the loading, unloading and distribution of foodgrains to respondent-2 after calling for fresh tenders. In this application, respondent-3 seeks a direction to the Corporation not to terminate its contract and not to entrust the same to any other person and further to give effect to the order dated June 19, 1986. We have perused the previous orders made by this Court and also heard Counsel on both sides. The validity of cancellation of the contract by the Corporation is not a matter which could be adjudicated in this proceedings. This Court is only concerned with the terms of the agreement by which the workers are required to be paid. It is brought to our notice that the workers have been provided with work and are being paid at the new rates as directed by this Court. Prima facie, therefore, there is no violation of the interim order made by this Court. However, since all the parties are before us. it may not be proper to drive them to another round of litigation to work out their rights under the contract. Prima facie, therefore, there is no violation of the interim order made by this Court. However, since all the parties are before us. it may not be proper to drive them to another round of litigation to work out their rights under the contract. It is more appropriate that the Corporation and respondent-3 amicably settle their differences and if there is any dispute the matter be brought before this court. Bring up after two weeks.. A. No. III stands accordingly disposed of. " 14. 1. Subsequently certain observations made in the aforesaid order dated 25-6-1986 have been deleted by the order dated 23rd July 1986 which reads thus: "in this appeal, on June 25, 1986, while rejecting. A. No. III, we made the following observation: "however, since all the parties are before us, it may not be proper to drive them to another round of litigation to work-out their rights under the contract. It is more appropriate that the corporation and respondent No. 3 amicably settle their differences and if there is any dispute the matter be brought before this Court. " after the order was made, the above referred respondent No. 3 filed Writ PetitionNo. 12711/1986 challenging the validity of the cancellation of contract by the Corporation. We have said in the aforesaid order that validity of the cancellation of contract cannot be the subject matter of dispute in the Writ Appeal. Probably, that is the reason why respondent No. 3 has now come forward with an independent Writ Petition challenging the validity of cancellation of contract. But it cannot at the same time take advantage of the observation made by this Court in this appeal. Mr. Narayana Rao for the Corporation also submitted that it would be extremely embarassing for the Corporation to settle outstanding dues, if any, with respondent No. 3 so long as the Writ petition is kept pending. We can understand the embarassing position of the Corporation. To avoid all this, Counsel on both sides submitted that the above observation made by this Court in this appeal may be deleted. Accordingly, accepting the submission, we delete the aforesaid observation made in our order dated June 25, 1986. " thereafter the present Writ Petition is filed for the aforesaid reliefs. To avoid all this, Counsel on both sides submitted that the above observation made by this Court in this appeal may be deleted. Accordingly, accepting the submission, we delete the aforesaid observation made in our order dated June 25, 1986. " thereafter the present Writ Petition is filed for the aforesaid reliefs. ( 15 ) IF the matter has to be decided on the aforesaid facts which cannot be disputed, we have no doubt in our mind that the Corporation (1st respondent) was not justified in terminating the contract. The 1st respondent quite contrary to and in flagrant violation of the order dated 19-6-1986 passed in W. A. No. 959/86 has stated in the impugned order Annexure-K thus: "hence the question of the Food Corporation of India paying additional amount as per the High court order dated 19-6-1986 and W. A. 939/86 dated 17-6-1986 does not arises. In spite of the same you have now claimed amounts more than the agreed rates. " the order dated 19-6-1986 was not modified. As such the 1st respondent - Food Corporation of india - was bound by it. In spite of this quite strangely the demand made by the petitioner in terms of the order dated 19-6-1986 passed in W. A. No. 939/86 is made a ground for terminating the contract. This, in our view, is sufficient to quash Annexure-K as being violative of the order of this Court. 15. 1. However, the question raised on behalf of the 1st respondent is that in a petition under article 226 of the Constitution, the validity of termination of the contract cannot be gone into whether or not the facts of the case are disputed as it relates to the terms of the contract between the parties. Therefore, it is not a matter for determination in a petition under Article 226 of the constitution. Therefore, it is not a matter for determination in a petition under Article 226 of the constitution. ( 16 ) PER contra, the petitioner contends that the 1st respondent-Corporation is also The State and it is more a commercial undertaking than it is understood in the common parlance; that even in the matter of commercial transactions, the State is required to adhere to the norms of Article 14 of the Constitution; therefore, whenever the action is taken whether in exercise of the right under a contract or under a statute, if the action is arbitrary, irrespective of the fact that it relates to a contract, it violalates Article 14 of the Constitution and as such the exercise of jurisdiction in a petition under Article 226 of the Constitution is called for. Reliance is also placed on a decision in R. D. SHETTY v.. A. AUTHORITY OF INDIA, AIR1979 SC 1628 , (1979 )II LLJ217 SC , (1979 )3 SCC489 , [1979 ]3 SCR1014. ( 17 ) IF the point was res integra, in a matter like this, where the relevant facts are indisputable, we were inclined to accept the argument advanced on behalf of the petitioner, but we are of the view that the point is covered by the decisions of the Supreme Court. 17. 1. In KULCHHINDER SINGH v. HARDAYAL SINGH, AIR1976 sc 2216 , [1977 (34 )FLR53 ], (1976 )II LLJ204 SC , (1976 )3 SCC828 , [1976 ]3 SCR680 , 1976 (8 )UJ350 (SC ) it is held that the remedy under Article 226 of the Constitution is not available to enforce a contract. To quote the actual observation : "11. . . . . . . . The Writ Petition, stripped of embroidery and legalistics, stands naked as a simple contract between the staff and the society, agreeing upon a certain percentage of promotions to various posts or an omnibus, all embracing promise to give a quota to the existing employees. At its best, the Writ Petition seeks enforcement of a binding contract but the neat and necessary repellent is that the remedy of Article 226 is unavailable to enforce a contract qua contract. At its best, the Writ Petition seeks enforcement of a binding contract but the neat and necessary repellent is that the remedy of Article 226 is unavailable to enforce a contract qua contract. We fail to see how a supplier of chalk to a Government School or cheese to a Government hospital can ask for a constitutional remedy under Article 226 in the event of a breach of a contract by-passing the normal channels of civil litigation. We are not convinced that a mere contract agreeing to a quota of promotions can be exalted into a service Rule or statutory duty. What is immediately relevant is not Whether the respondent is State or public authority but whether what is enforced is a statutory duty or sovereign obligation or public function of a public authority. Private law may involve a State, a statutory body or a public body in contractual or tortious actions. But they cannot be siphoned off into the Writ jurisdiction. 12. The controversy before us in substance will turn on the construction and scope of the agreement when the. claim to a quota as founded cannot be decided in Writ jurisdiction without going back on well-settled guidelines and even subverting the normal processual law except perhaps in extreme cases which shock the conscience of the Court or other extraordinary situation, an aspect we are not called upon to explore here. We are aware of the wide amplitude of Article 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course, without even statutory complexion, can be enforced by this short, though, wrong cut. " 17. 2. Again in DIVISIONAL FOREST OFFICER v. BISHWANATH TEA CO. LTD, AIR1981 SC 1368 , 1981 (1 )SCALE771 , (1981 )3 SCC238 , [1981 ]3 scr662 , 1981 (13 )UJ470 (SC ) it is held that the contractual right flowing from a contract of lease cannot be enforced in a petition under Article 226 of the Constitution. ( 18 ) HOWEVER, it is contended on behalf of the petitioner that it is not a petition merely to enforce the contract but it is a petition for issuing a direction to pay the amount which is admittedly due to the petitioner. Therefore, for the purpose of considering that relief, the question as to whether the contract has been validly terminated is required to be gone into. Therefore, for the purpose of considering that relief, the question as to whether the contract has been validly terminated is required to be gone into. 18. 1. Of course in BURMA CONSTRUCTION CO. v. STATE OF ORISSA, AIR1962 SC 1320 , [1962 ]supp (1 )SCR242 , [1961 ]12 STC816 (SC ) it has been held that the relief as to refund of tax improperly or illegally collected can be maintained in a petition under Article 226 of the Constitution, against the State or against an officer of the State to enforce a statutory obligation. 18. 2. However, in SUGANMAL v. STATE OF MADHYA PRADESH AND ORS. , AIR1965 SC 1740 , [1965 ]56 ITR84 (SC ), [1965 ]16 STC398 (SC ) it has been held that no petition for the issue of a Writ of Mandamus will be normally entertained for the purpose of merely ordering a refund of money to the return of which the petitioner claims a right; that such a petition solely praying for issue of a Writ of Mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected as a tax. The same view is reiterated in D. R. MILLS v. COMMISSIONER, CIVIL SUPPLIES AND anr. , AIR1976 SC 2243 , (1976 )4 SCC723 , [1976 ]3 SCR387 , 1976 (8 )UJ266 (SC ) and SHIV SHANKAR DAL MILLS v. STATE OF HARYANA, AIR1980 SC 1037 , (1980 )2 SCC437 , [1980 ]1 SCR1170 , 1980 (12 )UJ55 (SC ). 18. 3. In this connection, a contention was advanced based on a decision of the Supreme Court in state OF KARNATAKA v. SHREE RAMESHWARA RICE MILLS, THIRTHAHALLI, AIR 1987 SC 1359 . No doubt in that decision, it has been held that the power of the State government under the agreement entered into with a private person, providing for assessment of damages for breach of conditions of the agreement and recovery of damages is confined only to those cases where the breach of conditions is either admitted or it is not disputed. No doubt in that decision, it has been held that the power of the State government under the agreement entered into with a private person, providing for assessment of damages for breach of conditions of the agreement and recovery of damages is confined only to those cases where the breach of conditions is either admitted or it is not disputed. On the basis of this proposition, it is further contended that as the State cannot be the Judge in the matter of assessment of damages, merely on the allegation that the 1st respondent has incurred heavy loss because of the alleged non-satisfactory performance of the contract by the petitioner the 1st respondent cannot retain the amount due to the petitioner towards the work done by it under the contract. In this regard, reliance is also placed on a decision of the Supreme Court in H. M. KAMALUDDIN ANSARI and CO. v. UNION OF INDIA AND ORS. , AIR1984 SC 29 , 1983 (2 )SCALE107 , (1983 )4 SCC417 , [1983 ]3 SCR607 In this decision, the Supreme Court has considered its earlier decision in SUGANMAL v. STATE OF M. P. , AIR1965 SC 1740 , [1965 ]56 ITR84 (SC ), [1965 ]16 STC398 (SC ) no doubt in this decision, the Supreme Court has held in para 14 that: "the Court in arbitration proceedings was not competent to issue an in/unction restraining the union of India from withholding the amount due to the appellant-contractor under other pending bills. The only remedy of the appellant is to proceed outside the arbitration proceedings for the payment due under the pending bills, from the respondent. This Court can, however, restrain the union of India from recovering or appropriating the amount due to the appellant-contractor under pending bills towards the damages claimed by the Union, unless it has been adjudicated upon or admitted by the other side. " therefore, it is contended that the 1st respondent can be directed not to withhold the amount due to the petitioner on the ground that as a result of alleged breach of the contract, the petitioner is liable to pay vast amount by way of damages. " therefore, it is contended that the 1st respondent can be directed not to withhold the amount due to the petitioner on the ground that as a result of alleged breach of the contract, the petitioner is liable to pay vast amount by way of damages. ( 19 ) ON behalf of the 1st respondent it is further contended that as per the terms of the contract, as found in paras XII and XII (A) of the Tender Notification, the 1st respondent is entitled to withhold the amount. Para XII and Para XII (A) of the Tender Notification are as follows: "x. LIABILITY OF CONTRACTORS FOR LOSSES ETC. SUFFERED BY THE corporation : a) The contractors shall be liable for all costs, damages, demurrages, wharfages, forfeature of wagon registration fees, charges and expenses suffered or incurred by the Corporation due to the contractor's negligence and unworkmen-like performance of any service under this contract or breach of any terms thereof or their failure to carry out the work with a view to avoid incurrence of demurrages etc. and for all damages or losses occasioned to the Corporation or in particular to any property or plant belonging to the Corporation due to any act whether negligent or otherwise of the contractors themselves or their employees. The decision of the Regional Manager regarding such failure of the contractors and their liability for the losses etc. suffered by the corporation shall be final and binding on the Contractors. b) The Corporation shall be at liberty to reimburse themselves of any damages, losses, charges, costs or expenses suffered or incurred by them due to contractors negligence and unworkmanlike performance of services under the contract or breach of any terms thereof. The total sum claimed shall be deducted from any sum then due or which at any time hereafter may become due to the contract under this or any other contract with the Corporation. In the event of the sum which may be due from the Corporation as aforesaid being insufficient the balance of the total sum claimed and recoverable from the contractors as aforesaid shall be deducted from the security deposit furnished by the contractors as specified in Para. Should this sum also be not sufficient to cover the full amount claimed by the Corporation, the contractors shall pay to the Corporation on demand the remaining balance of the aforesaid sum claimed. Should this sum also be not sufficient to cover the full amount claimed by the Corporation, the contractors shall pay to the Corporation on demand the remaining balance of the aforesaid sum claimed. c) In the event of default on the part of the contractors in providing labour, weighing scales, weights etc. , and/or their failure to perform any of the services mentioned in this agreement efficiently and to the entire satisfaction of the Regional Manager or any officer acting on his behalf, the Regional Manager shall without prejudice to other rights and remedies under this agreement have the right to recover by way of compensation from the contractors a sum of rupees one hundred or such lesser sum per day or part of a day of the default as the Regional manager in his absolute discretion may determine and the decision of the Regional Manager on the question whether the contractors have committed such default or have failed to perform any of such services efficiently and are liable to pay compensation and as to the quantum of such compensation shall be final and binding on the contractors. d) The contractors shall be responsible for the safety of the goods from the time they are loaded on their trucks from railway station or siding/godowns/until they have been unloaded from their trucks at godowns or at other destinations. They shall provide tarpaulins on decks of the trucks so as to avoid loss of grain etc. through the holds/ crevices in the decks of the trucks. They shall deliver the number of bags and the weight of foodgrains, fertilisers etc. received by them and loaded on their trucks and shall be liable to make good the value of any loss, shortage or damage during transit. The Regional Manager will be sole Judge for determining, after taking into consideration all the relevant circumstances. The quantum and value of loss and also as regards the liability of the contractors for such loss and the amount to be recovered for such loss and the amount to be recovered from them. The decisions of the Regional Manager in this regard shall be final and binding on the contractors. XII (A ). The quantum and value of loss and also as regards the liability of the contractors for such loss and the amount to be recovered for such loss and the amount to be recovered from them. The decisions of the Regional Manager in this regard shall be final and binding on the contractors. XII (A ). SET OFF : any sum of money due and payable to the contractors (including security deposit returnable to them) under this contract may be appropriated by the Corporation and set off against any claims of the Corporation for the payment of any sum of money arising out of or under any other, contract made by the contractors with the Corporation. " 19. 1. From the aforesaid terms of the contract, it is clear that several types of damages mentioned therein depend upon the determination of the facts as to negligence and unworkman like performance of the contract which the 1st respondent cannot determine. As far as Para xii (A) is concerned, it relates to the amount due under other contract and not the amount due under the contract in question. Therefore Para XII (A) is of no relevance in the instant case. As far as the amount due to the petitioner from the 1st respondent is concerned, there is no dispute about and in this regard, during the pendency of this Writ Petition, two orders are passed. On 24-9-1987, after hearing both sides, the following order came to be passed : "this matter pertains to the cancellation of the contract for transhipment and transportation of food-grains between the Food Corporation of India on the one had and the petitioner on the other. The petitioner assails the legality and the bona fides of the termination of the contract. Sri S. V. Srinath, learned Counsel for the petitioner submitted that apart altogether from the arbitrariness of the termination of the contract and driving him to litigation, the Corporation had also withheld lakhs of rupees owing to the petitioner by way of deposits and transportation charges for work actually carried out. He submitted that his client is exposed to theruinous recurring liability for the huge interest on the locked-up funds. Sri Srinath submitted that if the amounts which are admittedly payable to the petitioner, are paid it would save the petitioner from the recurring liability towards interest and would also obviate multiplicity of proceedings. He submitted that his client is exposed to theruinous recurring liability for the huge interest on the locked-up funds. Sri Srinath submitted that if the amounts which are admittedly payable to the petitioner, are paid it would save the petitioner from the recurring liability towards interest and would also obviate multiplicity of proceedings. The grievance of the petitioner prima facie appears worth serious examination by the corporation. We request Sri U. L. Narayana Rao, learned Counsel for the respondent to take up this question with his client and make appropriate submissions two weeks hence. Call after two weeks. Let a copy of this order be furnished to the learned Counsel for the respondent. " again the matter came up before us on 7-12-1987, the following order was passed on that day: "during the course of hearing, Sri Narayana Rao, learned Counsel appearing for the Corporation, has brought to the notice of the Court the letter dated 2-11-1987 written by the Corporation to him in which it is stated that the Corporation is due to the petitioner a sum of Rs. 5,67,262-83 and it is further submitted that this amount is with-held because the Corporation has suffered a loss to the tune of Rs. 15,93,244-00 due to the breach of the alleged contract committed by the petitioner. In the light of the contentions urged by the petitioner, Sri Narayana Rao learned Counsel for the corporation submits that the Corporation may be granted two weeks time to consider whether the amount of Rs. 5,67,262-83 may be paid to the petitioner without prejudice to their right to claim damages to the tune of Rs. 15,93,244/- in accordance with law. Accordingly, bring up this petition on 5-1-1988. " ( 20 ) AS the 1st respondent took the stand that it was entitled to retain the amount, the petition was heard. Learned Counsel appearing for the petitioner made it clear to the Court as well as to the 1st respondent that if the 1st respondent were to pay the sum of Rs. 5,67,262-83 due to it reserving its right to claim damages from the petitioner the petitioner would have no objection to passing the order in those terms keeping open all the contentions of the parties. However, the 1st respondent was not prepared to pay the amount. 5,67,262-83 due to it reserving its right to claim damages from the petitioner the petitioner would have no objection to passing the order in those terms keeping open all the contentions of the parties. However, the 1st respondent was not prepared to pay the amount. That the aforesaid amount was due from the 1st respondent to the petitioner is admitted by the Corporation in its memo dated 6-1-1988. On considering this aspect of the matter, while considering the application filed by the petitioner seeking amendment, we have observed thus on 16-5-1988. "7. At this stage, whether the relief of the nature sought for by way of amendment is to be granted or not cannot be gone into. In other words, the merits of the amendment cannot be decided while considering the question as to whether the amendment has to be allowed or not. The only relevant consideration at this stage, as to whether the amendment is necessary for adjudicating the real controversy between the parties. Admittedly, the contract has been terminated by the Corporation and thereafter it has been given to the 2nd respondent. On the date when the application for amendment was filed the contract period was coming to a close. The question as to payment of the amount admittedly due to the petitioner was raised and orders were passed on 24-9-1987 and 7-12-1987, In the event the petitioner is not entitled to the relief sought for in the original petition he will be entitled to seek a direction with regard to payment of the amount. This one of the controversies involved between the parties. The Corporation admits that a sum of Rs. 5,67,262-83 paise is due to the petitioner towards the work done by it under the contract. Even before the application for amendment was filed, the Corporation had filed the memo dated 6-1-1988. In that the Corporation has not disputed the claim of the petitioner that the Corporation is liable to pay a sum of Rs. 5,67,262-83. 5,67,262-83 paise is due to the petitioner towards the work done by it under the contract. Even before the application for amendment was filed, the Corporation had filed the memo dated 6-1-1988. In that the Corporation has not disputed the claim of the petitioner that the Corporation is liable to pay a sum of Rs. 5,67,262-83. However, the defence set up in the memo is that that amount even though payable to the petitioner the Corporation is entitled to withhold the payment of the same having regard to the loss caused to it by the unsatisfactory performance of the contract by the petitioner and also under the terms of the contract certain expenses incurred, the Corporation is entitled to recover the same for adjust the same out of the amount payable to the petitioner. Thus there is a controversy between the parties with regard to the amount payable. Hence, we are of the view that the amendment sought for is just and necessary for the purpose of adjudicating the real controversy between the parties. " 20. 1. After taking time to consider as to paying the amount due to the petitioner, the Corporation on 18-1-88 filed a memo dated 6-1-1988 stating that as per the terms of the contract, the corporation was entitled to withhold the payment of the amount due to the petitioner. It is in this background that the amendment was allowed on 16-5-1988. While allowing, the amendment, we have observed as extracted in the preceding para. ( 21 ) THUS in the light of the aforesaid discussion, it emerges that there is no doubt that the Food corporation of India (1st respondent) is due to pay to the petitioner a sum of Rs. 5,67,262-83 towards the work done by the petitioner in terms of the contract but in the light of the several decisions of the Supreme Court, we are inclined to take a view that it is not just and appropriate to go into the question of termination of contract in a petition under Article 226 of the constitution. Without deciding the validity of the order terminating the contract, a mere direction to pay the amount due cannot also be issued in the light of the several decisions of the Supreme court to which we have already adverted to. Without deciding the validity of the order terminating the contract, a mere direction to pay the amount due cannot also be issued in the light of the several decisions of the Supreme court to which we have already adverted to. Of course, a direction to refund the amount can be issued as a consequential relief but not as a sole relief as held by the Supreme Court in suganmal's case5 to which we have already made a reference. Under these circumstances, even though we are of the view that the Food Corporation of India cannot be the Judge in its own cause and cannot assess the damages which are payable by the petitioner, as they depend upon the determination of the facts as to negligence and unworkman-like performance of contract, and commission of breach of the contract; which cannot be determined by the 1st respondent and as such the 1st respondent is not entitled to with-hold payment of the sum of Rs. 5,67,262-83 to the petitioner for the work carried out by it under the contract, still judicial discipline requires and we accordingly hold that it is not just and proper and not permissible to issue a direction to the 1st respondent to pay the amount in the light of the aforesaid decisions of the Supreme Court. Accordingly, we are of the view that the petition has to fail and it is accordingly dismissed.