Orissa High Court
Syed Khursed Ali vs State Of Orissa And Anr. on 3 August, 2006
Equivalent citations: AIR2007ORI56, 2006(II)OLR557, AIR 2007 ORISSA 56, 2007 (3) ALJ (NOC) 407 (ORI.) = AIR 2007 ORISSA 56, 2007 A I H C 1592, (2006) 2 CLR 400 (ORI), 2006 (2) CLR 400, (2006) 2 ORISSA LR 557, (2007) 3 CIVLJ 73
Author: M.M. Das
Bench: B.P. Das, M.M. Das
JUDGMENT M.M. Das, J.
1. Though the writ petition was listed for admission, as pleadings are complete, with consent of the learned Counsel for the parties, the same is taken up for disposal.
2. The petitioner in this writ petition prays for quashing the order dated 26.8.2002 under Annexure-12, by which the agreement executed between the petitioner and the Government of Orissa has been terminated. It has been further prayed by the petitioner for issuance of a direction to the opp. party No. 2 to refund the security deposit made by the petitioner.
3. In order to resolve the dispute between the parties, it would be necessary to state the facts in brief.
A tender notice for supply of animal feed for the year 2002-03 was published by the Director, Nandankanan Zoological Park, Mayur Bhawan, Sahid Nagar, Bhubaneswar-opp. party No. 2. The petitioner who was one of the bidders having quoted the lowest price, his offer was accepted under the letter dated 19.3.2002 (Annexure-1) and he was asked to make a security deposit of Rs. 2,12,931/- and to execute the agreement. The petitioner deposited a sum of Rs. 1,20,000/- in shape of a cheque towards part of the security deposit and was issued with a provisional work order for supply of beef with effect from 8.4.2002 under Annexure-2. The petitioner, accordingly commenced supply of animal feed and the balance security amount was adjusted from the bill of the petitioner for the first two months. During the course of supply of animal feed, the National Cattle Commissioner made a visit to the State of Orissa on 5.6.2002 and issued a direction to the police authorities of Khandagiri Police Station and made certain raids on slaughter houses at Jadupur and seized some cattle on the allegation of unauthorized slaughtering of cattle. The petitioner was arrested and letter on, he was released on bail. He was directed to give an undertaking not to slaughter cows and bulls. Under these circumstances, the petitioner claims that he was unable to supply beef as per the agreement to the opp. party No. 2. He, accordingly, made a representation on 12.6.2002 stating therein that he may be allowed to supply Bullocks meat. He also made an application to the Collector seeking permission for slaughtering of cattle at Jadupur. By the letter under Annexure-4, the Director opp. party No. 2 intimated the petitioner that he has not supplied beef from 5.6.2002 onwards as per the tender conditions. It was further stated in the said letter that the petitioner was required to abide by the Act and the Rules applicable, i.e. The Orissa Prevention of Cow Slaughter Act, 1960 (hereinafter referred to as 'the Act') and the rules framed thereunder. The petitioner was, therefore, asked to explore the possibility of supply of Bullock's and Buffalo's meat as per the provisions of the Act and the Rules and resume supply as per the tender conditions.
4. In reply to the above letter, the petitioner by his letter under Annexure-7 intimated the opp. party No. 2 that he has applied to the Collector, Khurda for opening of a slaughter house in village Jadupur on which, the Collector has asked the Executive Officer, Bhubaneswar Municipal Corporation for opening of a slaughter house in the said village as soon as possible to remove the difficulties for supply of animal feed to the animals of Nandankanan Zoo. The petitioner also expressed his consent to supply Bullock's and Buffalo's meat for the animals and requested for permission to that effect.
5. It is alleged by the petitioner that instead of acceding to the request of the petitioner, the opp. party No. 2 by his letter dated 17.6.2002 under Annexure-8 called upon the petitioner to show cause as to why the security deposit made by the petitioner shall not be forfeited to the Government and the excess amount spent due to the departmental purchase shall not be recovered from the bills of the petitioner. The petitioner in response to the said notice filed his show cause as per Annexure-9 to the writ petition. Under letter dated i 8.7.2002 in Annexure-10, the Director did not accept the show cause/explanation given by the petitioner and observed that since supply of animal feed has not been resumed by the petitioner, the security deposit will be forfeited and consequently, action as per terms and conditions of the agreement shall be taken against him. Ultimately, by letter dated 26.8.2002 under Annexure-12, the agreement of the petitioner was terminated.
6. A counter affidavit has been filed by the Director-opp. party No. 2, inter alia, stating that the petitioner having not acted in accordance with the terms of the agreement which has been annexed to the counter affidavit as Annexure-D/2, the action taken by him is legal and valid and the writ petition should be dismissed being devoid of any merit.
7. In course of hearing, Mr. Das, learned Counsel for the petitioner submits that non-supply of beef, in terms of the agreement executed between the parties, is neither intentional nor on account of volition of the petitioner. Mr. Das further submits that in view of the restrictions imposed under the Act and the Rules framed thereunder, this is a clear case of force majeure and not a case of vis-majeure. He also submits that the petitioner had the intention to perform his part of the contract as per the terms of the agreement, but the performance of the same having subsequently become an impossibility, no fault can be attributed to the petitioner for non-supply of beef in accordance with the terms of the agreement. He, therefore, submits that in such situation, forfeiture of the security money or any action proposed to be taken subsequently by the Director-opp. party No. 2 is wholly uncalled for and the petitioner is entitled to a direction to the opp. parties to refund the security in its entirety and not to take any further steps in that regard against the petitioner.
8. Learned Addl. Government Advocate, on the contrary, submits that the petitioner having agreed to supply beef under the agreement in question, non-fulfilment of his part of the contract amounts to breach of the same. Hence, under Clauses 8 and 9 of the agreement, the opp. party No. 2 has the right to forfeit the security money as well as claim such amount towards the extra expenditure incurred in that behalf. For better appreciation of the issues involved, Clauses 8 and 9 of the agreement are quoted hereunder:
8. That it shall be binding on the contractor to supply the fortnightly/daily ration as per Schedule in due time as agreed herein, and he shall not refrain from doing so at any time, during the period from the 08.04.2002 to the 31st March, 2003. In the event of the contractor failing to supply any time of ration at any time, it shall be open for the said Assistant Conservator of Forests, in-charge of Nandankanan or any person authorized by him in that behalf to purchase the requirements from elsewhere and the extra expenditure, if any, incurred in such purchase shall be recovered from the contractor. It is hereby expressly agreed that all amount recoverable from the contractor in accordance with this agreement shall be deemed to be a public demand recoverable in the manner provided in the Orissa Public Demands Recovery Act,1962.
9. That in the event of the non-performance or breach by the contractor of all or any of the terms of this agreement the security deposit shall be forfeited to the Government.
9. It is not disputed that due to operation of the Act, cow slaughter was prohibited except in accordance with Section 3 thereof, i.e., except when a certificate has been issued under Clause (b) of Sub-section (1) of Section 3 by the competent authority permitting such slaughter of particular cow, bull or bullock. It is also not disputed that the petitioner applied for such a certificate to the Collector, Khurda but the same was not granted.
10. In such view of the matter, the doctrine of "frustration of venture" will be applicable to the facts of the case, which doctrine is based not upon existence of any actual impossibility in fact but upon existence in the circumstances of the case, of any implied condition, which must be absolutely necessary to give effect to the transaction which parties must have intended.
11. Section 56 of the Contract Act, 1872 is relevant for the purpose and the relevant portion thereof is quoted hereunder:
56. Agreement to do impossible act - An agreement to do an act impossible in itself is void.
Contract to do act afterwards becoming impossible or unlawful.
A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
xxx xxx xxx
12. It is clear from the facts of the case that the agreement entered into between the parties became impossible to perform as well as unlawful and, thus, amounted to frustration of the same. No doubt provisions of Section 56 of the Contract Act, 1872, as quoted above, does not cover every case of frustration but it applies to a subsequent unforeseen event or contingency for which, neither of the parties is responsible. Giving regard to the nature and circumstances of the transaction and implied terms, no doubt is cast in the present case that the performance of the contract on the part of the petitioner became an impossibility and such impossibility can be brought within the fold of "force majeure".
13. In the aforesaid circumstances, we find no reason as to why the order of termination of the agreement directing forfeiture of the security deposit as well as proposing to take further action under Annexure-12 to the writ petition passed by the opp. party No. 2 should be sustained. We, therefore, quash the said order dated 26.8.2002 under Annexure-12 to the writ petition and direct the opp. parties to refund the entire security deposit of Rs. 2,12,931/- to the petitioner and to make payment of any outstanding amount, if due, to the petitioner for supply of animal feed already made by him pursuant tp the agreement executed between the parties. This should be done within a period of three months from the date of communication of this order.
14. The writ petition is accordingly allowed.
Requisites for communication of the order shall be filed within a week.
B.P. Das, J.
15. I agree.