Delhi High Court
Lt. Col. D. Ghosh (Retd.) vs Union Of India (Uoi) And Ors. on 16 July, 2007
Author: Hima Kohli
Bench: Hima Kohli
JUDGMENT Hima Kohli, J.
1. This writ petition has been filed by the petitioner praying inter alia for directions in the nature of mandamus to the respondents to clear the dues of the petitioner towards house rent allowance and telephone facility at his residence.
2. In a nutshell, the facts of the case are that the petitioner retired from the Indian Army in the rank of Lt. Colonel and thereafter, registered himself with respondent No. 1, the Directorate General Resettlement, for seeking re-employment. In the year 1999, respondent No. 1 sponsored the name of the petitioner to respondent No. 3, U.P. Purva Sainik Kalyan Nigam Ltd. It is the common case of the parties that respondent No. 3 executed an Agreement with the petitioner on 9th July, 1999, valid for a period of one year, with effect from 1st June, 1999 to 31st May, 2000, whereunder the services of the petitioner were hired by respondent No. 3 as a Chief Security Officer to be posted at the premises of Respondent No. 2, Gas Authority of India Limited at Noida. In terms of the aforementioned Agreement, it was agreed between the parties that the petitioner shall be paid Rs. 10,000/- per month as consolidated emoluments subject to full attendance and that respondent No. 3 shall have no other liability of any nature whatsoever. It is also stipulated in the Agreement that the same shall be deemed to have been signed at Lucknow and the Labour/Civil Courts in Lucknow shall have jurisdiction in respect of any suit arising out of any dispute over and damage/compensation arising there from. Upon the expiry of the aforementioned Agreement, two more Agreements dated 7th June, 2000 and 22nd June, 2001 were executed between the petitioner and respondent No. 3 on the same terms and conditions as contained in the first Agreement. The petitioner continued working with respondent No. 3 from 1st June, 1999 till February, 2002 when he tendered his resignation on 5th February, 2002.
3. After passing of over two years, in May 2004, the petitioner preferred the present writ petition seeking payment of house rent allowance with a telephone facility by relying on Clause 21 of the Work Order dated 1st June, 1998 issued by respondent No. 2 in favor of respondent No. 3 regarding providing upkeep, maintenance and security cover to the installations of respondent No. 3 in Noida region. The said clause is reproduced hereinbelow:
21. Accommodation The CSO who is on the rolls of M/s Nigam will be provided residential accommodation with PandT telephone at Res./office at NOIDA at the cost of M/s Nigam. ASOs/Guards who shall be on the rolls of M/s Nigam shall be admissible to HRS @ Rs. 215/- PM for UP and Rs. 315/- PM for Delhi/Haryana regions. However this amount is to be claimed by M/s Nigam in their monthly bills and shall remain firm for the contract period. No service charge shall be admissible on this.
4. The petitioner claimed that as the terms and conditions contained in the Agreement dated 1.6.1999 executed between the petitioner and respondent No. 3 was contrary to the terms and conditions contained in the Work Order dated 1.6.1998, placed by respondent No. 2 on respondent No. 3, the petitioner had been illegally deprived of his entitlement to rent free accommodation and PandT telephone facility by respondent No. 3 who arbitrarily deleted the conditions contained in Clause 21 from the Agreement executed between the petitioner and respondent No. 3. Counsel for the petitioner also contended that in order to avoid the liability to provide the petitioner with rent free accommodation and telephone facility, respondent No. 3 illegally issued a letter to respondent No. 2 to alter the terms and conditions of the Work Order executed subsequently due to which the aforesaid Clause 21 was deleted there from. The attention of this Court was drawn to the subsequent Work Order dated 1.5.2000, executed between respondent No. 2 and respondent No. 3 wherein with reference to Clause 20 therein pertaining to accommodation, it was endorsed on the last page of the document that respondent No. 3 will not provide the cost of residential accommodation and PandT telephone to CSO.
5. Counsel for the petitioner pointed out that despite a letter dated 25th November, 2002 issued by respondent No. 1 to respondent No. 3 calling upon it to ensure that the pending dues of the petitioner are cleared, respondent No. 3 failed to take any effective steps to pay the dues of the petitioner. It was contended that the petitioner had been discriminated against and the respondents have violated Articles 14 and 16 of the Constitution of India as HRA has been paid to all other retired army personnel employed by respondent No. 3 except for the petitioner. It is the case of the petitioner that as respondent No. 3 failed to consider his request, he was compelled to serve a legal notice upon respondents No. 2 and 3. Vide reply dated 16th April, 2003, respondent No. 3 denied its liability to pay the petitioner anything beyond the terms and conditions contained in the contract executed with the petitioner. Vide reply dated 19th June, 2003, respondent No. 2 also denied its liability to pay any amount directly to the petitioner.
6. In opposition to the writ petition, counsel for respondent No. 3 took a preliminary objection with regard to the maintainability of the writ petition. He also drew the attention of this Court to the order dated 4th September, 2006 whereunder the petitioner was directed to satisfy the court as to why the writ jurisdiction had been invoked by him to claim his dues towards house rent allowance based on a contract of employment. It was categorically denied that the petitioner had any constitutional right whatsoever against the respondents or that the respondents had infringed any fundamental rights of the petitioner so as to entitle him to invoke the powers of judicial review of this Court under Article 226 of the Constitution of India. Counsel for the respondent No. 3 also claimed that the writ petition involved disputed questions of facts which could not be decided in the present proceedings and apart from that, it was contended that the petitioner had not exhausted the alternate remedies which were available to him under the industrial laws and the civil laws. It was submitted that for the said reason, the present writ petition is liable to be rejected.
7. On merits it was submitted that there was no contractual stipulation or obligation upon respondent No. 3 to provide the petitioner rent free residential accommodation with a P and T telephone at his residence at Noida. Counsel for the respondent referred to the terms and conditions of the service Agreement dated 9th July, 1999 and subsequent two Agreements dated 7th June, 2000 and 22nd June, 2001 to state that none of them contained such a contractual stipulation as sought to be pressed by the petitioner to his advantage. It was further submitted that reliance placed by the petitioner on the Work Orders executed between respondent No. 2 and respondent No. 3 for deployment of security personnel at the installations of respondent No. 2 in Noida was misconceived as the same were bipartite agreements and the petitioner, not being a party thereto, had no privity of contract with the aforesaid Agreements. It was also stated that the petitioner was erroneously equating himself with other employees who belonged to different categories and in respect of whom the terms and conditions were also governed by separate service agreements. In support of his contention that the writ petition is not maintainable and the petitioner could not enforce any contractual rights by invoking the writ jurisdiction of this Court, counsel for respondent No. 3 relied on the following judgments, amongst others:
(i) Har Shankar and Ors. v. The Deputy Excise and Taxation Commissioner and Ors. reported as
(ii) Radhakrishna Agarwal and Ors. v. State of Bihar and Ors. reported as
(iii) Life Insurance Corporation of India v. Escorts Ltd. and Ors. reported as
(iv) Bareilly Development Authority and Anr. v. Ajay Pal Singh and Ors. reported as
8. Counsel for the petitioner sought to repel the aforesaid arguments raised on behalf of respondent No. 3 and asserted that the writ petition was maintainable in view of the fact that the petitioner had been discriminated against, thus offending Articles 14 and 16 of the Constitution of India and the respondent No. 1 being an instrumentality of the State, was functioning under the aegis of respondent No. 1 and was under an obligation to perform its duties in accordance with the constitutional mandate. It was canvassed that even in contractual matters, the court can interfere and strike down the illegal action of the State authority on the ground of the same being arbitrary and on the ground of unequal bargaining power between the State and a citizen. Reliance was placed on the judgment of the Supreme Court in the case of LIC of India and Anr. v. Consumer Education and Research Centre and Ors. reported as .
9. I have heard the learned Counsels for the parties. In view of a preliminary objection raised by respondent No. 3 with regard to the maintainability of the writ petition, the said issue may be addressed in the first instance.
10. The plea of the petitioner is that respondent No. 3 comes within the purview of Article 12 of the Constitution of India and as there is a public law element involved in the matter, it cannot be permitted to wriggle out of its contractual obligations, in which context the petitioner has placed reliance on the Work Order dated 1st June, 1998 executed between respondent No. 2 and respondent No. 3. On the other hand, respondent No. 3 has disputed the said position and argued that the transaction is purely a contractual matter, which cannot be made a subject matter of judicial review and that reliance placed by the petitioner on the aforesaid Work Order is misconceived because in fact, no such contract existed between the petitioner and respondent No. 3, enforcement of which could be sought in the present writ petition, particularly when the petitioner of his own free will and volition executed a Service Agreement dated 1st June, 1999 followed by two Agreements dated 7th June, 2000 and 22nd June, 2001 none of which cast any obligation on the respondent No. 3 to provide the petitioner rent free residential accommodation along with a telephone facility.
11. It is not disputed that respondent No. 3 has the trappings of a "State" or that it would fall within the definition of 'other authority' for the purposes of Article 12 of the Constitution of India while carrying out its public duties but at the same time, there is no straightjacket formula which can be unformly adopted and the Courts must examine the factual matrix of each case to arrive at a conclusion as to whether the dispute falls within the domain of public law or private law rights. In a number of judicial pronouncements, it has been reiterated that after the State or its agents enter into the field of ordinary contract, the relations between the State and the citizen 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 and a writ petition is not an appropriate remedy for seeking compliance of a contractual obligation.
12. Reference in this regard may be made to the judgment of the Supreme Court in the case of Har Shankar (supra) wherein it was held as under:
Para 21: On the preliminary objection it was finally urged by the appellants that the objection was misconceived because there was in fact, no contract between the parties and therefore they were not attempting to enforce any contractual rights or to wriggle out of contractual obligations. The short answer to this contention is that the bids given by the appellants constitute offers and upon their acceptance by the Government a binding agreement came into existence between the parties....
13. Reference may be made to the judgment of the Supreme Court in the case of Bareilly Development Authority (supra), wherein it was held as below:
Para 21 : There is a line of decisions where the contract entered into between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple : Radhakrishna Agarwal v. State of Bihar , Premji Bhai Parmar v. Delhi Development Authority and D.F.C. v. Biswanath Tea Co. Ltd. .
Para 22 : In view of the authoritative judicial pronouncements of this Court in the series of cases dealing with the scope of interference of a High Court while exercising its writ jurisdiction under Article 226 of the Constitution of India in cases of non-statutory concluded contracts like the one in hand, we are constrained to hold that the high Court in the present case has gone wrong in its finding that there is arbitrariness and unreasonableness on the part of the appellants therein in increasing the cost of the houses/flats and the rate of monthly Installments and giving directions in the writ petitions as prayed for.
14. In the case of Radhakrishna Agarwal (supra), the Supreme Court held as under:
Para 9 : Dr. Singhvi's argument that the State Government had some special obligations attached to it would have appeared more plausible if it could be shown that the State or its officers or agents had practiced some discrimination against the petitioners-appellants at the very threshold or at the time of entry into the field of contract so as to exclude them from consideration when compared with others on any unreasonable or unsustainable ground struck by Article 14 of the Constitution. It is true that Article 14 of the Constitution imports a limitation or imposes an obligation upon the State's executive power under Article 298 of the Constitution. All constitutional powers carry corresponding obligations with them. This is the rule of law which regulates the operation of organs of Government functioning under a Constitution. And, this is exactly what was meant to be laid down by this Court in Erusian Equipment and Chemicals Ltd. v. State of West Bengal on which learned Counsel for the appellants sought to rely strongly. It was held that at page 677 of SCR at p. 268 of AIR.
15. In the case of Life Insurance Corporation of India (supra) the Supreme Court held as under:
Para 101 : The learned Attorney General on the other hand, contended that actions of the State or an instrumentality of the State which do not properly belong to the field of public law but belong to the field of private law are not liable to be subjected to judicial review. He relied on O'Reilly v. Mackman (1982) 3 All ER 1124, Davy v. Spelthorne (1983) 3 All ER 278, Congress del Partido (1981) 2 All ER 1064, R. v. East Berkshire Health Authority (1984) 3 All ER 425 and Radha Krishna Aggarwal v. State of Bihar . While we do find considerable force in the contention of the learned Attorney General it may not be necessary for us to enter into any lengthy discussion of the topic, as we shall presently see.... While we do not for a moment doubt that every action of the State or an instrumentality of the State must be informed by reason and that, in appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution, we do not construe Article 14 as a charter for judicial review to account for its actions in its manifold activities by stating reasons for such actions.
Para 102 : Broadly speaking the Court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field. The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances.
16. Having considered the facts and circumstances of the present case and the nature of dispute, coupled with the documents placed on the record, this Court is of the opinion that the action of respondent No. 3 is not one which can be questioned in writ jurisdiction, on the grounds available in the public law domain. The petitioner cannot be permitted to give the colour of public law element to a pure and simple private law dispute. Both the parties are bound by the terms and conditions contained in the Service Contract alone. The petitioner has not been able to demonstrate any statutory power or obligation on respondent No. 3 in the contractual field which is apart from the contract itself. There is no statutory flavour to the contract between the petitioner and respondent No. 3 and the same operates purely in the realm of a private contract. Thus the relief of mandamus sought by the petitioner cannot be granted for seeking enforcement of a private contractual right emanating from an agreement entered into between the petitioner and the respondent No. 3.
17. Reliance placed by the petitioner on the judgment of the Supreme Court in the case of LIC of India (supra) is misconceived and does not apply to the facts of the present case as even in the said case, it has been held that pure contracts between the parties cannot be a subject matter of scrutiny under judicial review unless it is shown that the exercise of power is arbitrary, unjust and unfair. While holding that there is a thin line between the public domain and private law, the Supreme Court observed that the question must be decided in each case with reference to a particular action and the activity in which the State or the instrumentality is engaged when performing its action, the public law or private law character of the action and a host of other relevant circumstances.
18. Since the counsels for both the parties did not restrict their arguments to the preliminary objection but went on to argue on merits, it is pertinent to examine the present case on merits, and even on merits, the case of the petitioner cannot stand. A bare perusal of the Service Agreements executed between the petitioner and respondent No. 3 from time to time also make it manifest that it contained no stipulation therein to the effect that the terms and conditions of the Work Order executed between respondent No. 2 and respondent No. 3 shall be read into them.
19. Once the petitioner entered into a contract with open eyes, then both he and the respondent No. 3 were equally bound by all the rights and obligations arising there from. Having continued to work with respondent No. 3 from 1st June, 1999 till February, 2002 in terms of the Service Agreements and having drawn consolidated emoluments for the entire period at the rate agreed upon, it is not permissible for the petitioner to turn around and dispute the same Service Agreements by seeking to incorporate therein, the terms of Clause 21 of the Work Order dated 1st June, 1998, which was a bilateral agreement executed between respondent No. 2 and respondent No. 3. It can also not be accepted that the petitioner was made to sign on the dotted lines of the Service Agreements under protest or coercion as sought to be pleaded. The petitioner was serving as a Lt. Colonel in the Indian Army and after his retirement, entered into the Service Agreements with respondent No. 3, after weighing all the pros and cons that a prudent man of his stature is expected to assess. After a lapse of over two years from the date of tendering his resignation, he cannot be heard to say that such terms and conditions which did not even find mention in the Service Agreement can be sought to be enforced by the petitioner against the respondents No. 2 and 3. Even the occurrence of hardship, if any, to the petitioner cannot be a ground for not binding either of the signatories who were parties to the terms and conditions of the contract. Being a purely contractual matter, the rights and obligations of both the parties flow from and are governed only by the terms and conditions of the Service Agreement.
20. The contention of the petitioner that there is violation of Article 14 of the Constitution of India as he has been discriminated against is also not borne out from the record. Except for making a bald averment in the writ petition to the said effect, the petitioner has failed to substantiate the same with any material facts whatsoever. The plea raised on behalf of the petitioner that the Service Agreement is liable to be struck down as being unequal, illegal or arbitrary and contrary to the Work Order executed between respondent No. 2 and respondent No. 3, can also not be entertained in the present proceedings for the reason that the petitioner has not chosen to assail the Service Agreement executed between him and respondent No. 3. Instead, he has confined his relief to the release of dues payable to him towards house rent allowance and telephone facility.
21. For the reasons stated above, the writ petition is dismissed on both counts, i.e. on the grounds of maintainability as also on merits. Parties are left to bear their own costs.