Himachal Pradesh High Court
Powai Labs Technology Private vs State Of Himachal Pradesh And Others on 16 December, 2022
Bench: Tarlok Singh Chauhan, Virender Singh
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No. 2081 of 2013.
.
Reserved on : 08.12.2022.
Date of decision: 16.12.2022.
Powai Labs Technology Private
Limited .....Petitioner.
Versus
State of Himachal Pradesh and others r .....Respondents.
Coram The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.
The Hon'ble Mr. Justice Virender Singh, Judge.
Whether approved for reporting?1 Yes For the Petitioner : Ms. Shalini Thakur, Advocate.
For the Respondents : Mr. Rajinder Dogra, Senior Additional Advocate General with Mr. Vinod Thakur, Additional Advocate General and Mr. Bhupinder Thakur, Deputy Advocate General.
Tarlok Singh Chauhan, Judge The instant petition has been filed for grant of the following substantive reliefs:-
1Whether the reporters of the local papers may be allowed to see the Judgment?Yes ::: Downloaded on - 17/12/2022 20:34:44 :::CIS 2 "1) For issuing a writ of Mandamus or any other appropriate writ, order or direction to the .
respondents for releasing 100% payment i.e. Rs.
99,93,984/- to the petitioner as agreed in terms of MoA annexure P-3 dated 16.3.2010 within a time bound schedule along with 15% interest w.e.f. April 2010 till the date of payment.
2) For directing the respondents to pay to the petitioner damages on account of non performance of contractual obligations by them under the Memorandum of Agreement annexure P-3 dated 16.3.2010. Respondents may also be directed to pay to the petitioner, the expenses incurred by it on account of boarding/lodging and travel. Respondents may also be directed to pay the petitioner the cost of the writ petition and other legal expenses to the petitioner.
3) For the sustainability of the project the respondent may kindly be directed to pay for the reinstallation, extended warranty from the date of expire of Bank Guarantee, pay for any component that is damaged in transit from old campus to new campus, any component that is stolen etc., to enable the project be restarted for the benefit of the students and faculty of the State."
2. Brief facts of the case are that a letter was received by respondent No.3 from Indian Institute of ::: Downloaded on - 17/12/2022 20:34:44 :::CIS 3 Technology, Mumbai, signed by one Professor Madhav P. Desai wherein it was informed that the Micro Processor .
and VLSI are the emerging areas of technology and benefits under the distance education programme of IIT Mumbai could be achieved by setting up of VLSI Lab for which the representatives of the petitioner-company would liaison with IIT Mumbai Professors, who shall, in turn conduct courses for the students of remote locations. The total cost was stated to be Rs.96,09,600/- and it was desired to contact the petitioner an IIT Mumbai incubated entity at their phone number and e-mail.
3. Further communication was received from the petitioner on the pads depicting IIT Mumbai and Powai Labs i.e. petitioner, wherein it was indicated that IIT Professors are conducting the Microelectronic Course and the petitioner lab shall support the education delivery. Another communication, a certificate from IIT Mumbai signed by M.Shajai Baghini, Assistant Professor of Electrical Engineering, IIT, Mumbai, was received, wherein it was indicated that the representative from petitioner lab would be visiting under his guidance and his support visit to remote location will reduce the gap between the students ::: Downloaded on - 17/12/2022 20:34:44 :::CIS 4 and faculty. Yet, another certificate purportedly signed by Professor Madhav P. Desai was issued wherein the .
petitioner had been shown to be the coordinator of the IIT Mumbai distance education programme. Not only this, the petitioner wrote a letter dated 22.12.2009 on the pad depicting the IIT logo contending to deliver IIT Course to the Technical Education Institutes of the State. The petitioner made an oral presentation on 10.02.2010 wherein the scope and benefits of the lab were discussed and feedback forms from the faculty were taken.
4. Even though, the petitioner was a private limited company, but uptill signing of the MOU, it conducted itself and purported to act on behalf of the IIT Mumbai distance education programme. According to the respondents, on account of this misrepresentation, they were led to believe that Powai Lab is an entity of IIT Mumbai and an enterprise venture for distance education programme. The communication made by the petitioner showing IIT Mumbai logo and Powai Lab specifically indicated the address as R & D Centre Registered Office 4 th Floor, IIT, Bombay and its email address powailabs@it,iitb.ac.in wherein IIT Mumbai connotes Indian ::: Downloaded on - 17/12/2022 20:34:44 :::CIS 5 Institute of Engineering and Technology Bombay which again according to the respondents demonstrates an .
attempt on the part of the petitioner to believe that it was an enterprise of IIT Mumbai and its integral part. A MOU was drawn wherein the petitioner had been stated to be IIT Bombay incubated entity in bold words as is evident from Annexure P-3. A supply order was placed with the respondents for setting up VLSI lab and not for the supply of hardware and software. A communication was received by the respondents from IIT Mumbai wherein it was clearly stated that IIT Mumbai is under no obligation and has no legal relationship with the petitioner. It was then that the matter was appropriately referred to the Government and examined at various stages including Law Department and the following opinion was given by the Advisory Department of State of Himachal Pradesh:-
"Examined in the Law Department. The S/D (State Director) has sought the advice of this department as to whether the Government can give approval to the Memorandum of Agreement (MOA) signed between Principal of the College and Director-cum-CEO of VLSI Lab?"::: Downloaded on - 17/12/2022 20:34:44 :::CIS 6
5. Record reveals that the MOU was signed by the Principal of respondent No.3-College on behalf of the .
Government of Himachal Pradesh for establishment of VLSI Design Lab by the petitioner. However, this memorandum had been signed without obtaining any approval from the Government or an authorization from the government.
6. Now, in this background, the moot question is whether the petitioner can be held entitled to the reliefs as claimed.
7. Article 299 of the Constitution reads as under:-
"(1) All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.
(2) Neither the President nor the Governor shall be personally liable in respect of any contract or assurance made or executed for the purposes of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing any such contract or assurance on behalf of any of them be personally liable in respect thereof."::: Downloaded on - 17/12/2022 20:34:44 :::CIS 7
8. It is more than settled that a contract is void for .
non-compliance with Article 299(1) of the Constitution.
Therefore, the petitioner cannot seek enforcement of the contract.
9. Now, as regards the plea of damages, it is now settled that even though a contract in contravention of Article 299 is void and unenforceable by either party, it may give rise to relief under Section 70 of the Contract Act (for short 'Act'). Section 70 of the Act reads as under:-
"Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously; and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered".
10. It means that even though a contract may be void, if one party has performed his part under it and the other party has received the benefit of such performance, the first party is entitled to be compensated for such performance. This section, in short, provides for payment of compensation or restoration of a thing by a person who has enjoyed the benefit, irrespective of the validity or ::: Downloaded on - 17/12/2022 20:34:44 :::CIS 8 otherwise of the contract between the parties, if the following conditions are established-
.
(i) that the plaintiff has made a payment or delivered a thing to the defendant;
(ii) that the plaintiff was acting lawfully when he made the payment or delivered the thing to the defendant;
(iii) that the plaintiff did not intend to do that gratuitously;
If the above
r to
(iv) that the defendant did enjoy that benefit.
conditions are satisfied either the private party or the Government is entitled to sue under this section.
11. Adverting to the facts of the case, it would be noticed that the instant petition and the reply filed thereto is loaded with allegations and counter-allegations.
Therefore, in the given facts and circumstances, it would neither be prudent nor safe for this Court to grant damages which will have to be proved by the petitioner by leading clear, cogent and convincing evidence before the Civil Court.
12. It needs to be clarified that merely because the petitioner satisfies any of the aforesaid conditions or all the said conditions, it does not mean that the suit that may be ::: Downloaded on - 17/12/2022 20:34:44 :::CIS 9 filed by it, has to be decreed. This would, of course, be subject to the rights and contentions of the respondents.
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13. In view of the aforesaid discussion, the contract being in contravention of Article 299 cannot be enforced by the petitioner against the respondents. However, the petitioner, if so advised, can sue the respondents for damages, but the same shall be subject to all the defences as are open rto the respondents, both legal as also factual including and not restricted to limitation, estoppel etc. etc.
14. The writ petition is disposed of in the aforesaid terms. Pending application(s), if any, also stands disposed of.
(Tarlok Singh Chauhan) Judge (Virender Singh) Judge 16th December, 2022.
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