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2004 DIGILAW 586 (ALL)

Har Charan Sharma v. Nagar Panchayat

2004-03-16

DILIP GUPTA, TARUN CHATTERJEE

body2004
JUDGMENT : Tarun Chatterjee, C.J. By consent of the parties this writ application is treated as on days list and taken up for final hearing/disposal. 2. The writ Petitioner has come up before this Court by means of this writ application under Article 226 of the Constitution of India praying for quashing of a resolution of Nagar Panchayat, Goverdhan, district Mathura, dated 1st October, 2003 (Annexure-1 to the writ petition) and order dated 4th October, 2003, passed by the District Magistrate, Mathura-Respondent No. 4 granting contract to Sri. Om Prakash-Respondent No. 3 and for quashing all other subsequent orders or acts consequent to the resolution dated 1st October, 2003. 3. In the resolution No. 1 the Nagar Panchayat, Goverdhan resolved to cancel the contract granted in favour of the writ Petitioner whereas under resolution No. 2 the letter dated 1st October, 2003, submitted by the writ Petitioner expressing his inability to continue with the contract was considered and it was resolved that the contract may be cancelled w.e.f. 1st October, 2003. 4. We have heard Sri. A.P. Sahi, learned advocate appearing for the writ Petitioner, Sri. Jamwant Maurya, learned advocate appearing on behalf of Respondent No. 1, Sri. R.B. Singhal, learned advocate for Respondent Nos. 2 and 6, Sri. Manish Kumar Nigam, learned advocate for Respondent No. 3 and learned standing counsel for State-Respondent Nos. 4 and 5 and have also perused the entire materials available on record. 5. The dispute raised in this writ application relates to a contract for realisation of parking fees. It has been alleged in the writ application that pursuant to an advertisement published in the newspaper a public auction was held on 16th June, 2003, for awarding the contract for realisation of parking fees from 20th June, 2003 to 31st March, 2004. The Bid of the writ Petitioner being the highest was accepted and on the basis of the approval granted by the Collector/District Magistrate, Mathura-Respondent No. 4, a letter dated 20th June, 2003, was issued to the writ Petitioner awarding the contract in his favour. Although a copy of the letter dated 20th June, 2003, was annexed with the writ application but the writ Petitioner in the writ application has not annexed the terms and conditions of the contract. Although a copy of the letter dated 20th June, 2003, was annexed with the writ application but the writ Petitioner in the writ application has not annexed the terms and conditions of the contract. In the writ application it has been alleged that on the basis of the resolution dated 1st October, 2003, the contract of the writ Petitioner was cancelled and an amount of Rs. 80,000 was ordered to be paid to the writ Petitioner. According to the learned Counsel for the writ Petitioner in fact, no resolution was passed on 1st October, 2003 and the letter dated 1st October, 2003, was never written by him. The writ Petitioner further alleged that the contract was cancelled by the Nagar Panchayat without affording any opportunity of hearing to him. The writ Petitioner next alleged that subsequently, the contract for the remaining period was awarded to Sri. Om Prakash Respondent No. 3. 6. A counter-affidavit has been filed on behalf of Adhyaksh Nagar Panchayat, Govardhan. The terms of auction have been annexed as Annexure-C.A. 1 to the counter-affidavit. Apart from mentioning the manner in which the Bid amount was to be deposited, it has also been stated that under Clause 18 of the terms of auction, in the event any dispute arose in the contract, the District Magistrate would be the authority entitled to take a decision in the matter. In the counter-affidavit it was further alleged that the writ Petitioner defaulted in depositing the amount as per the schedule indicated in the agreement, as a result of which a notice dated 26th August, 2003, was sent to him by the Nagar Panchayat. Therefore, it cannot be safely concluded that no opportunity was afforded to the writ Petitioner. In fact the writ Petitioner himself had submitted the letter which was placed in the meeting of the Nagar Panchayat held on 1st October, 2003. In the said letter, the writ Petitioner stated that he was unable to continue with the contract since the Corporation buses and the tempos were not paying the parking fees, accordingly, it was requested that an appropriate decision may be taken in the matter. It was in these circumstances the meeting of Nagar Panchayat took place on 1st October, 2003. In the said letter, the writ Petitioner stated that he was unable to continue with the contract since the Corporation buses and the tempos were not paying the parking fees, accordingly, it was requested that an appropriate decision may be taken in the matter. It was in these circumstances the meeting of Nagar Panchayat took place on 1st October, 2003. It was further stated that the writ application itself was not maintainable since there was no statutory contract between the writ Petitioner and the Nagar Panchayat and for any dispute regarding breach of contract, the proper course for the writ Petitioner was to file a civil suit or resort to the provisions of Clause 18 of the terms of auction. It was further stated that after the contract of the writ Petitioner was cancelled a fresh contract was entered into with Respondent No. 3, Om Prakash for the period from 5th October, 2003 to 31st March, 2004 at the rate of Rs. 11,000 per day on the basis of the auction held on 4th October, 2003, in which the Bid of Respondent No. 3 was the highest. 7. A counter-affidavit has also been filed by Respondent No. 3-Om Prakash more or less mentioning the same facts as have been mentioned in the counter-affidavit filed by the Respondent Nos. 2 and 6. 8. The Nagar Panchayat, Goverdhan, District Mathura-Respondent No. 1 has also filed a counter-affidavit which was sworn in by the Executive Officer of the Nagar Panchayat in which it has been stated that the deponent had no knowledge of the resolutions dated 1st October, 2003 and 4th October, 2003, which were passed in his absence. 9. The dispute, therefore, revolves around the letter dated 1st October, 2003, which is said to have been submitted by the writ Petitioner and the resolution Nos. 1 and 2 passed in the meeting held on 1st October, 2003. 10. The stand taken by Respondent Nos. 9. The dispute, therefore, revolves around the letter dated 1st October, 2003, which is said to have been submitted by the writ Petitioner and the resolution Nos. 1 and 2 passed in the meeting held on 1st October, 2003. 10. The stand taken by Respondent Nos. 2, 3 and 6 was that since the writ Petitioner was unable to carry out the contract he himself had submitted the letter dated 1st October, 2003, seeking to withdraw from the contract and, therefore, he was not entitled to challenge the decision taken by the Nagar Panchayat to cancel the contract and in any case these being disputed questions of facts and, more particularly, arising out of a contract, the writ jurisdiction of this Court cannot be invoked. 11. On the other hand, the writ Petitioner contended that the letter dated 1st October, 2003 is a forged document since he never wrote the said letter and nor any meeting was held on 1st October, 2003, in which the aforesaid resolution have been stated to have been passed. 12. On consideration of the above facts, therefore, it is evident that a serious disputed question of fact has arisen as to whether the letter dated 1st October, 2003, was at all submitted by the writ Petitioner and as to whether the meeting, in fact, was held on 1st October, 2003. Such a disputed question of fact having been arisen in this writ application, we are of the view that the same cannot be decided by this Court in writ jurisdiction under Article 226 of the Constitution. If it is found that the letter dated 1st October, 2003, was actually written by the writ Petitioner, in that event the writ Petitioner would be debarred from saying that the contract was illegally cancelled by the Nagar Panchayat and if such situation is accepted in that case, he is also debarred from challenging the subsequent decision of the Nagar Panchayat to award the contract for the remaining period in favour of Om Prakash Respondent No. 3. 13. Even assuming that the writ Petitioner had not written letter dated 1st October, 2003, in which he expressed his desire to withdraw from the contract even then this writ application cannot be entertained as the dispute relating to an ordinary contract cannot be agitated under Article 226 of the Constitution. 14. 13. Even assuming that the writ Petitioner had not written letter dated 1st October, 2003, in which he expressed his desire to withdraw from the contract even then this writ application cannot be entertained as the dispute relating to an ordinary contract cannot be agitated under Article 226 of the Constitution. 14. It is now a well-settled law that Article 226 of the Constitution is not the appropriate forum for enforcing any remedy for breach of a contract. Way back in the year 1959, the Supreme Court in C.K. Achuthan Vs. The State of Kerala and Others, AIR 1959 SC 490 clearly held that a contract which is even entered into by the Government, stands on no different footing than a contract held with a private party. The breach of contract, if any, may entitle the person aggrieved to sue for damages or in appropriate cases, even for specific performance, but he cannot complain that there has been a deprivation of the right to practice any profession or carry on any occupation, trade or business as contemplated by Article 19(1)(g) of the Constitution. The Supreme Court has consistently upheld and followed this view and our attention has not been drawn to any subsequent pronouncement by the Apex Court of our country. In Radhakrishna Agarwal and Others Vs. State of Bihar and Others, (1977) 3 SCC 457 , the Supreme Court further clarified the position and reaffirmed the same principle and held that when the State or its agents have entered into the field of ordinary contract the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties, inter se. No question where the State or its agents purporting to act within this field performs any act. In that case, the Supreme Court further held that no order can be issued under Article 226 of the Constitution to compel the authorities to remedy a breach of contract. Similar view was also expressed by the Supreme Court in Har Shankar and Others Vs. The Dy. Excise and Taxation Commr. and Others, (1975) 1 SCC 737 and Divisional Forest Officer v. Bishwanath Tea Co. Ltd. AIR 1981 SC 1378. In State of Bihar and Others Vs. Similar view was also expressed by the Supreme Court in Har Shankar and Others Vs. The Dy. Excise and Taxation Commr. and Others, (1975) 1 SCC 737 and Divisional Forest Officer v. Bishwanath Tea Co. Ltd. AIR 1981 SC 1378. In State of Bihar and Others Vs. Jain Plastics and Chemicals Ltd., (2002) 1 SCC 216 , it was held that the writ petition under Article 226 of the Constitution was not the appropriate proceeding for adjudicating contractual disputes and the party should approach the court of competent jurisdiction for appropriate relief for breach of contract. In paragraph 6 of this judgment, the Supreme Court has made clear thus: In our view, it is apparent that the order passed by the High Court on the face of it is illegal and erroneous. It is true that many matters could be decided after referring to the contentions raised in the affidavits and counter-affidavits, but that would hardly be a ground for excessive of extraordinary jurisdiction under Article 226 of the Constitution in case of alleged breach of contract. Whether the alleged non-supply of road permits by the Appellants would justify breach of contract by the Respondent would depend upon facts and evidence and is not required to be decided or dealt with in a writ petition. Such seriously disputed questions or rival claims of the parties with regard to beach of contract are to be investigated and determined on the basis of evidence which may be led by the parties in a properly instituted civil suit rather than by a Court exercising prerogative of issuing writs. 15. In a very recent decision of the Supreme Court in G. Basi Reddy Vs. International Crops Research Instt. and Another, (2003) 4 SCC 225 , again it has been held that a writ application under Article 226 of the Constitution cannot be held to be maintainable in view of the fact that the contract was not a statutory one nor statutorily controlled nor such contract performs a public or statutory duty or a public function. 16. That being the position, therefore, we are of the view that the writ jurisdiction is not the appropriate forum in the facts and circumstances of the instant case, as noted hereinabove. 17. 16. That being the position, therefore, we are of the view that the writ jurisdiction is not the appropriate forum in the facts and circumstances of the instant case, as noted hereinabove. 17. Before we part with this judgment we may deal with the contention of the learned Counsel for the writ Petitioner that since the terms under which the auction was held referring the Government order dated 26th November, 2001 and Sections 128, 298 and 299 of the Uttar Pradesh Municipalities Act, 1916, it must be held that the contract was statutory, in nature, and therefore, the writ petition is maintainable. Considering the facts and circumstances of the present case, we are unable to accept this contention of the learned Counsel for the writ Petitioner. It is well-settled that a contract would not become statutory merely because a statute expressly or impliedly confers power on a statutory body to enter into contract in order to enable it to discharge its function. The dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not, by itself, affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to enter into contracts or deal with properties. This principle has been enunciated by the Supreme Court in Kerala State Electricity Board and Another Vs. Kurien E. Kalathil and Others, (2000) 6 SCC 293 . Therefore, the contention of the learned Counsel for the writ Petitioner deserves to be rejected. 18. No other point was raised by the learned Counsel for the parties before us. 19. Accordingly, we do not find any merit in this writ application. The writ petition is, therefore, dismissed. There will be no order as to costs. Interim order, if there be any, shall stand vacated.