K. Muthuswamy v. The Chairman, Neyveli Lignite Corporation Ltd. , Neyveli and another
1992-03-16
ABDUL HADI, VENKATASWAMI
body1992
DigiLaw.ai
Judgment :- Abdul Hadi, J. This writ appeal is against the order dated 22. 1992 of Bakthavatsalam, J. in W.P.No.2605 of 1992, filed by the appellant against the Authorities of Neyveli Lignite Corporation. The writ petition is for the issue of writ of mandamus forbearing the said Corporation from taking any action in the matter of the right of retrieval of carbonaceous material flowing out from B and C drain belonging to them in pursuance of the letter dated 12. 1992 issued by the Corporation. 2. The petitioner-appellant has been conferred with a right of retrieval of the above said material for a period of one year pursuant to his tender. Consequently, the petitioner has paid a sum of Rs.30,000 as earnest money deposit. No doubt, the petitioner-appellant is the highest bidder, his bid being for Rs.41 lakhs plus taxes. The Corporation accepted the said bid and called upon him by letter dated 112. 1991 to remit either the full sum or if he desires to pay in monthly instalments, to remit the first monthly instalment and to furnish bank guarantee for the balance. The appellant having opted to pay in instalments, was given the format of the bank guarantee to be furnished as per the tender notice, on 112. 1991. The appellant was given 15 days’ time to furnish bank guarantee. He wanted an extension of time by 30 days by his letter dated 30.12.1991. The Corporation gave another 15 days’ time. But, the appellant sought further time of 60 days. The Corporation, finally by its letter dated 12. 1992, gave only another extension upto 12. 1992. In that letter, it is specifically stated that if the appellant fails to do so, the contract would automatically lapse on 12. 1992 and the above said deposit of Rs.30,000 would also be forfeited. Aggrieved by the said letter, the appellant filed the above said writ petition. 3. The learned Judge disposed of the writ petition at the admission stage as follows: "Taking into account the facts and circumstances of this case and in particular the interest of revenue of the confuction (S.C. Corporation) and the petitioner being the highest bidder, I am of the view, as a last chance, the petitioner may be given time till 3. 1992 to furnish bank guarantee for a sum of Rs.Fortyone lakhs along with other requisite charges.
1992 to furnish bank guarantee for a sum of Rs.Fortyone lakhs along with other requisite charges. Accordingly, the respondent is directed to grant time till 3. 1992 to furnish bank guarantee for the amount specified in the tender conditions along with the requisite other charges. If the petitioner furnishes bank guarantee for the requisite amount on or before 3. 1992, the same shall be accepted by the respondents. The writ petition is disposed of accordingly." Aggrieved by the said order, the petitioner has preferred this appeal. 4. Since the next higher bid was very much below the bid of the appellant, we were initially inclined to order notice of motion to the Corporation and the Corporation has entered appearance. The Corporation has also filed its counter in the injunction petition from which alone some of the facts narrated above have been extracted. 5. The learned counsel for the appellant submits as follows: The appellant was the highest bidder and the next highest bid was only for Rs.27,50,200 plus taxes. Further, as per clause 14 of the tender, furnishing of bank guarantee would come in only after the first monthly instalment is paid. The appellant is ready to pay the first monthly instalment and requests that this Court should direct the Corporation to give further time of four weeks for furnishing bank guarantee in view of the huge amount involved. Further, the Corporation would only benefit very much if the appellant is allowed to have this remedy since his bid is very much higher than the next higher bid. 6. But, we do not see any merit in the argument of the learned Counsel for the appellant. First of all, we think that the writ petition itself is not maintainable. The relationship between the petitioner and the Corporation is admittedly one based on contract and no writ of mandamus could be issued to compel the Corporation to carry out the terms of the contract.
First of all, we think that the writ petition itself is not maintainable. The relationship between the petitioner and the Corporation is admittedly one based on contract and no writ of mandamus could be issued to compel the Corporation to carry out the terms of the contract. In B.K.Sinha v. State, A.I.R. 1974 Pat 230, Untwalia, J. has observed as follows: "A writ of mandamus cannot issue to compel the authorities to remedy a breach of contract pure and simple." (emphasis supplied) Further, in Radhakrishna Agarwal v. State of Bihar, A.I.R. 1977 S.C. 1496, the Supreme Court divided the cases involving breaches of alleged obligation by the State arising out of contract or promise by the State, into three categories and held that in one of them a writ would not lie. That category is where the contract entered between the State and the person aggrieved is not statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, and the petitioner complains about breach of such contract by the State. In Har Shanker v. Dy. Excise and Taxation Commissioner, A.I.R. 1975 S.C. 1121 & 1126, also the Supreme Court observed thus: "The writ jurisdiction of High Courts under Art.226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred." (emphasis supplied) Again in Divisional Forest Officer v. Bishwanath Tea Company Ltd., A.I.R. 1981 S.C. 1368, the petitioner tried to enforce through writ petition the right to remove timber under the contract. Dismissing the action, the Supreme Court observed thus: "A right to relief flowing from a contract has to be claimed in a civil court, where a suit for specific performance of contract or for damages could be filed." These rulings squarely apply to the present case. .7. That apart, the interpretation which the learned counsel for the appellant wants to put on clause 14 of the contract cannot be accepted. Clause 14 runs as follows: "The bid amount along with sales tax should be paid in one lump sum by D.D. payable at , Neyveli in favour of Neyveli Lignite Corporation Limited or by instalments at the discretion of the Management.
Clause 14 runs as follows: "The bid amount along with sales tax should be paid in one lump sum by D.D. payable at , Neyveli in favour of Neyveli Lignite Corporation Limited or by instalments at the discretion of the Management. In the case of payment by instalments the bidder should produce Bank Guarantee to cover the balance amount of bid value after remitting the first instalment after N,L.C. exercise their discretion and agree for payment in instalments." (emphasis supplied) No doubt, the Corporation has in its discretion permitted the petitioner to pay in instalments. But, in such a case, the highest bidder should necessarily produce the bank guarantee for ll/12th of the bid amount on paying the first monthly instalment, that is l/12th of the total bid amount. The term "the balance amount of bid value after remitting the first instalment" would only mean the above said 1l/12th of the bid amount and not that the first instalment must be paid initially and thereafter bank guarantee should be given. .8. It is also settled law that no one can ask for mandamus without a clear legal right. But, in the present case, all that the appellant has pleading again and again is for further extension of time for furnishing bank guarantee stipulated under the contract. This is only seeking indulgence from the Corporation. In such circumstances, there is absolutely no scope for grant of any writ of mandamus. 9. Further, from the counter affidavit of the Corporation in the aforesaid injunction petition (C.M.P.No.3055 of 1992) we find the following averments: "The gap between the offer made by the appellant and the second bidder is rather big, yet the Corporation was driven to the next bid, in view of the default committed by the Appellant. The second offer was confirmed on 22. 1992, granting them 15 days time to furnish the bank guarantee. The said party has sent its monthly instalments amount by Demand Draft and these amounts are lying with the Corporation. Before processing this bid, the Respondent Corporation received a communication by an order from the High Court, Madras, dated 22. 1992, stating that the Appellant has been given time till 3. 1992 for giving bank guarantee." Further, it is also averred in the said counter affidavit as follows: "Further, the earlier contract ended on 12. 1991 and the materials were accumulating and could not be disposed effectively.
1992, stating that the Appellant has been given time till 3. 1992 for giving bank guarantee." Further, it is also averred in the said counter affidavit as follows: "Further, the earlier contract ended on 12. 1991 and the materials were accumulating and could not be disposed effectively. Further, it is being removed on an ad hoc basis, causing grave loss to the respondent Corporation. By reason of this delay, the Corporation is losing more than Rs.2,00,000 a month. In view of this revenue loss, any further extension would affect the respondent Corporation very gravely and, therefore, the appellant’s request for extension of time could not be acceded to." 10. For all these reasons, the writ appeal is dismissed with costs. Counsel fee Rs.1,000.