Andhra HC (Pre-Telangana)
P. Prabhakar Reddy vs Government Of Andhra Pradesh And Ors. on 29 April, 1997
Equivalent citations: 1998(1)ALD124
JUDGMENT
1. The fate of this writ petition hangs on the question whether the termination of contract and forfeiture of Earnest Money Deposit by the respondents could be looked into and decided by the High Court in exercise of its Writ jurisdiction under Article 226 of the Constitution of India.
2. The learned Counsel for the petitioner attempted to bring home to the Court that the petitioner was precluded from performing the work at the site of the contract mainly on account of the fact that the site for executing the contract work was not made available to him and not even till today. The work was to be completed within 18 months from the date when the site was actually required to be handed over to the petitioner-Contractor by the Roads and Buildings Division, Tirupathi, Chittoor District.
3. By a letter dated 25-5-1996 (Lr. No. W.F.C.104/93-94/A2), the 4th respsondent terminated the Agreement No. 104/93-94 dated 21-7-1993 relating to the work of construction of a High Level Bridge across river Araniar in KM 4/2 of Puttur Satyavedu Road and the Earnest Money Deposit of Rs.91,400/- was also forfeited.
4. According to the petitioner, the proposed bridge was to form part of bye-pass road at Narayanavaram village and Mandal, Chittoor district that the site was not handed over to the petitioner because the respondents failed to obtain possession by acquiring the same from its owners under the Land Acquisition Act on account of the fact that the land acquisition proceedings were stayed by an order passed by the High Court in W.P.No.7455/92. The stay was granted on 19-6-1992 in W.P.M.P.No.9288/92.
5. Further, according to the petitioner, for approaching the bridge site, the petitioner had to pass through the patta lands apart from the fact that major portion of work, i.e., abutments and approaches formed part of the patta lands. The petitioner, even after the receipt of notice from the 3rd and 4th respondents, could not proceed with the work because the said respondents did not mark out the site. There was no place for him even to store the necessary material. The final notice dated 24-4-1996 was served upon the petitioner-Contractor asking hint to commence the work within 10 days, failing which the agreement would be terminated and eventually the agreement was terminated by the letter dated 25-5-1996. The Earnest Money Deposit amounting to Rs.91,400/- was also forfeited. This act of termination was resorted to under clause 60(a) of P.S. to A.P.D.S.S. However, no clarification was made about the stay order obtained by the owner of the land during the pendency of the writ petition. According to the learned Counsel for the petitioner, since the contract work could not be commenced for non-availability of the site, no fault could be found with the petitioner-Contractor and that this situation called for judicial review by this High Court of the respondents' decision to terminate the contract and forfeit the Earnest Money Deposit. No mala fides, however, were alleged by the petitioner against the respondents.
6. The learned Counsel for the petitioner further submitted that the aforesaid clause 60(a) of P.S. to A.P.D.S.S. was not applicable to the facts of the case because the delay, if any, was not occasioned on account of any default on the part of the Contractor. The Executive Engineer would have been justified in terminating the contract and forfeiting the Earnest Money Deposit if the petitioner-Contractor committed delay and failed to show progress in work in accordance with the terms of the contract.
7. From cursory look at these short facts gives this Court a reason to believe that it would not be in fitness of things to interfere with the termination and forfeiture, primarily, because the allegations made by the Contractor were of the nature of wrongful breach of contract allegedly committed by the respondents, which allegations involve adjudication of many disputed questions of facts including the pre-dominant question whether the site in fact was not made available in time and whether the interim order in Writ Petition No.7455/92 at all came in the way of the contract.
8. This High Court in M/s. Padmavathi Constructions v. A.P.Indl Infrastructure Corporation Ltd., , held that where the dispute between the Contractor and a Corporation arose on the basis of the General Law of Contract and the fundamental right of the Contractor was not alleged to have been violated nor constitutionality of any statute or statutory provision is involved for determination, the Writ Court would not be a proper Forum for adjudication of the dispute, precisely because the real dispute between the parties related to the performance of the contract in terms of the contract, the adjudication thereof would depend upon several facts to be established before any relief could be granted to either of the contracting parties and in that view of the matter, the writ petition would not be maintainable. This decision was arrived at by relying upon the principles laid down in several decisions of the Supreme Court, viz., Tata Cellular v. Union of India, ; LIC of India v. Consumer Education & Research Centre, ; Larsen & Tubro v. M.S.E.B, 1995 AIR SCW 4134; Asst. Excise Commissioner v. Issac Peter, 1994 AIR SCW 2616 ; Modi Industries Ltd. v. State of Uttar Pradesh and others, ; Mahabir Auto Stores v. Indian Oil Corp., ; and M/s. Mallikarjuna Chemicals v. Singareni Collieries Ltd., (1989)2 APLJ 384.
9. In the case before this Court, if the relief prayed was confined only to the proposition that the site was not made available, this Court would not have hesitated to exercise the jurisdiction under Article 226 of the Constitution of India because it was an explicit term of the contract, undoubtedly, that the work should be completed within 18 months from the date of site being handed over to the petitioner-Contractor. The situation would then be ripe for juridicial review of the act of termination of contract, but the facts are not that simple.
10. According to the 4th respondent as stated in his counter affidavit, since the agreement was signed by the petitioner, the site was handed over to the petitioner-Contractor on 21-7-1993 and the particulars of progress were entered into at page 8 of the agreement but the petitioner failed to commence the work till 23-8-1993. It is further pointed out in the counter affidavit by Respondent No.4 that the notices were served upon the petitioner on 23-8-1993 and 1-10-1993 imposing a penalty of Rs.500/- for failure on the part of the petitioner to maintain the rate of progress. Instead, the petitioner sent a reply stating that :
"...the petitioner has attempted to start the work but some of the private land owners have objected the entry of the petitioner into their land.
It is further submitted by the 4th respondent in this counter affidavit that the petitioner could have commenced the work at the first instance where the river poramboke was relating to the Government land and that there was no objection from any person to commence the bridge work and C.D. work. In paragraph 5 of the counter, the 4th respondent states that the Mandal Revenue Officer, Narayanavaram, had handedover the private land to the possession of R & B Department on 13-7-1994. The land under acquisition was intended to be used for approach road to the bridge but there were no obstacles for commencing the bridge work and the petitioner was in no way concerned with the disputed private land which was under acquisition. Only a small piece of land was covered by the proceedings in Writ Petition No.7455 of 1992 and the same, according to the deponent, could not be treated as a ground to cover the Contractor's lack of interest and inability to start the work. Had the petitioner sincerely started the work, the Departmental Officers would have endeavoured to solve the problems, if any, faced by the petitioner-Contractor during the progress of the work. It is further alleged by the respondents that necessary markings were done at the site for the Contractor to commence the work but he did not make any efforts to commence the work. A copy of the fetter bearing the signature of the petitioner-Contractor admitting that the site for the work was handedover to him on 21-7-1993 has been annexed to the counter affidavit filed by the 4th respondent.
11. Copies of the correspondence between the parties have been produced by the petitioner along with the writ petition which also amply go to support the proposition that there are large number of disputed questions of facts which are required to be adjudicated for deciding the present writ petition, apart from the disputes which fly on the face of this Court from the reading of the counter affidavit of the 4th respondent. It is pertinent to note that by a letter dated 10-12-1993, the petitioner himself stated in paragraph 3 of his letter that he could not venture to start the work to some extent and then wait for the remaining land to be acquired and thus lend himself into litigation that may arise on account of non-payment of compensation for the remaining extent of land. This allegation amply makes it clear that the site good enough for executing the main work was made available to the Contractor but he did not commence the work under an apprehension or under a misapprehension that litigation may arise owing to non-payment of compensation. The Executive Engineer, R &B, Tirupati, vide his letter dated 8-11-1993 informed the petitioner that he should have no objection to start UK work because the proposed bridge alignment starts at KM 3/0 + 155 on Puttur side by taking a right hand curve and passing through a small tank for a length of 280 metres, that this portion of land was belonging to Government poramboke for which the land acquisition proposals were already submitted to the District Collector, Chittoor long back and that there is also Government poramboke land where earth work for formation of the approach road and construction of CD works such as balancing culverts etc. could be taken up without any obstruction or objection.
12. From a perusal of the contentions raised by the respondents in the counter affidavit which have not been traversed by the petitioner by way of a reply affidavit, it emerges demonstratively that the objection with regard to the non-avaibility of site precluding the petitioner-Contractor from executing the work entrusted to him involves consideration of many disputed questions of facts which could be adjudicated only in a civil proceeding and not in exercise of the Writ jurisdiction of High Court under Article 226 of the Constitution of India. It need hardly be stated that the writ petition cannot be entertained on account of the said disputed questions of facts.
13. The learned Counsel for the petitioner relied upon the following decisions in support of his contentions :
In a case where a Company carrying on the business of maintenance and running of river services entered into a scheme of arrangement with the Central Inland Water Transport Corporation Limited, a Government Company owned by Central Government and two State Governments which were treated as 'State' within the meaning of Article 12 of the Constitution of India, the Supreme Court in Central Inland Water Transport Corporation Limited v. Brojo Nath, held that the Scheme was approved by the High Court and the Company was dissolved by the order of the High Court. The Officers of the Company had no real choice when they accepted the job with the Corporation as, in the alternative, they would have received a meagre sum by way of compensation and could have required to search for alternative jobs. A sub-clause in a rule provided for termination of services of the officers in giving three months' notice. The clause in the rule was struck down by the High Court and the Supreme Court also approved the decision of the High Court by observing that considering the inequality in the bargaining power of the parties the clause in the contract of employment was void under Section 23 of the Contract Act as opposed to public policy, besides being ultra vires Article 14 of the Constitution of India.
14. The principle deducible from various precedents, the Supreme Court held, was that the Courts would not enforce and would, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between the parties who were not equal in bargaining power.
15. The facts before this Court as seen earlier, are totally different. The contract in question is not alleged to be unfair or unreasonable. What is urged before this Court by the petitioner is the non-applicability of Clause 60(a) of P.S. to A.P.D.S.S. and the wrongful breach allegedly committed by the respondents, on the ground that the site was not handed over to the petitioner-Contractor within the stipulated time. These facts and circumstances, in my opinion, do not attract the principle laid down by the Supreme Court in the above case.
16. A submission was also made on behalf of the petitioner that the action in terminating the contract and forfeiting the Earnest Money Deposit warranted a judicial review having regard to the fact dial the departmental action was arbitrary and oppressive in nature. The Supreme Court in Shrilekha Vidyarthi v. State of U.P., held that the non-assignment of reasons or non-communication thereof may be based on public policy, but termination of an appointment without the existence of any cogent reason in furtherance of the object for which the power was given would be arbitrary, and therefore, against public policy. The Supreme Court took into consideration that the function of the Public Prosecutor related to a public purpose and entrusting him with the responsibility of so acting only in the interest of administration of justice and this additional public element flowing from statutory provisions in the Code of Criminal Procedure, undoubtedly, invest the Public Prosecutors with the attribute of holder of a public office which cannot be whittled down by the assertion that their engagement was purely professional between a client and his lawyer with no public element attaching to it.
17. The Principle under-lying the aforesaid observation, as held by the Supreme Court, was that there was nothing like unreviewabe administrative discretion which should be just as much a contradiction in terms as unfettered discretion. The question to be asked was what was the scope of judicial review ? and in a few special cases the scope for the review of discretionary decisions may be minimal. It was axiomatic that all discretion is capable of abuse, and that legal limits to every power were to be found somewhere. This was in consonance with the current thought in this field and that the scope of judicial review might vary with reference to the type of matter involved, but the fact that the action was reviewable irrespective of the sphere in which it was exercised, could not be doubted.
18. In the instant case, the controversy is whether the petitioner committed breach of contract or whether the respondents did it by not making available the site within the stipulated time to the petitioner-Contractor. The controversy pre-dominantly involves adjudication of a disputed question of fact, and therefore, in my opinion, judicial review of the act or omission resulting into alleged wrongful breach of contract is unwarranted and consequently the invocation of the principle laid down by the Supreme Court in the above case could also not be pressed into service for the purpose of judicial review of the alleged wrongful termination of contract and forfeiture of the Earnest Money Deposit. If unworthiness of the approach road was a hindrance, the petitioner should have caused the concerned condition of the Contract accordingly. By not doing so, evidently the question of non-availability of site assumed a controvertial character.
19. On the other hand, the learned Government Pleader for Transport drew my attention to the decision of the Supreme Court in the case of Divisional Forest Officer v. Biswanath Tea Co. Ltd., in which it was held that where a Company tried to enforce through writ petition the right to remove timber without the liability to pay royalty, the Company was not enforcing its right under Rule 37 of the Assam Land and Revenue and Local Rates Regulation, but was seeking to enforce a contractual right under the specific terms of contract of lease agreed to between the Company and the Government. The Supreme Court also held that such contractual right, therefore, could not be enforced in Writ Petition.
20. A Division Bench of this Court in the case of Commissioner of Provident Fund v. Dr. V.S. V. Ramesh, also held that a contractual obligation was ipso facto not enforceable through the writ jurisdiction only because one of the parties to the Contract was 'State' under Article 12 of the Constitution of India. Even in suitable cases where the action of the State Bodies, though arising out of contractual obligations, falls short of adherence to the Principles of natural justice or compliance with fair play, equity and good conscience or lack of arbitrariness or discriminatory treatment the High Court would consider it a duty to interfere in order to maintain the balance of the citizens' right of equality before the law and equal protection of the laws. The Division Bench further held that the question of intereference or noninterference by the higher Court is more a matter of propriety than a case of lack of jurisdiction, a principle of self imposed limitation with the unanimity of the judicial opinion of not interfering where the questions to be resolved involve determination of disputed questions of facts.
21. The applicability of the principle laid down in both the above cases cited by the learned Government Pleader for Transport, need no further elucidation for its application to the facts of the case before this Court.
22. In the result, therefore, the writ petition fails and it is accordingly dismissed. No costs.