Andhra HC (Pre-Telangana)
M/S. Baroda Cotton Company, Bombay vs The A.P. State Federation Of Co-Op. ... on 6 March, 1991
Equivalent citations: AIR1991AP320, AIR 1991 ANDHRA PRADESH 320, (1992) 73 COMCAS 497 (1991) 1 ANDHWR 492, (1991) 1 ANDHWR 492
ORDER Eswara Prasad, J.
1. The writ appeal is preferred against the judgment in W.P. No. 3570/87 of the learned single Judge, dismissing the writ petition holding that a writ of mandamus cannot be issued directing the payment of amounts said to be due to the petitioner, arising purely out of a monetary transaction and that the petitioner has to seek his relief by filing a regular suit.
2. The appellant is M/s. Baroda Cotton Company, Bombay, carrying on business as cotton merchant engaged in the supply of cotton of different varieties to several spinning mills in the country. It is the case of the appellant that cotton was sold to the 2nd respondent through the first respondent under final invoice No. I dated 24-8-82 for a total sum of Rs.1,12,430.53 and that the 2nd respondent accepted the goods without any objections. It was further stated that again on 13-9-82 another consignment of cotton was delivered to the 2nd respondent under invoice No.3 dated 1-8-82 for a total sum of Rs.1,20,118/- and that the same was received and accepted by the 2nd respondent without any objections. It is stated that the 2nd respondent made certain payments, leaving a balance of Rs.1,96,397.76 and neglected to pay the amount in spite of several requests. The appellant issued several notices to the 2nd respondent requesting him for payment of the monies due and that the 2nd respondent requestes for time for making payment on the ground that the 2nd respondent was in a bad financial position. It is further stated that the 2nd respondent informed the appellant that the amount will be paid after the process of modernisation of their mills. The appellant therefore, filed the writ petition seeking a writ of mandamus declaring the attitude of the respondents for their failure to clear off the dues and in withholding the same, as illegal and arbitrary.
3. The learned single Judge, who disposed of the writ petition observed that the relief sought for cannot be granted and that the appellant has to seek his remedy through a civil court.
4. The learned counsel for the appellant Sri Duba Mohanarao contended that the respondents are public authorities, corning within the jurisdiction of this Court under Article 226 of the Constitution of India, as they answer the description of the word 'State', within the meaning of Article 12 of the Constitution. He argued that the 2nd respondent having admitted the amounts due to the appellant, cannot arbitrarily withhold payment and that a writ of mandamus, directing the respondents to pay the amounts admittedly due to the appellant should be issued. The learned Counsel for the respondents contended that the amounts said to be due to the appellant arises purely out of a monetary transaction based on contracts which are not statutory and that the respondents are not discharging any public duties in entering into such contracts and therefore, a writ of mandamus cannot be issued to enforce contractual obligations which are neither statutory nor arise out of any discharge of public functions by the respondents. The respondents also raised the plea that the 2nd respondent-society is registered under the provisions of the A. P. Co-operative Societies Act, 1964, and it is neither a statutory body nor a 'State', within the meaning of Article 12 of the Constitution and therefore, the writ petition is not maintainable. Another objection to the maintainability of the claim is based on a declaration of the State Government in G.O. Ms. No. 449 Industries and Commerce (SP and S) Department dated 17-7-82, declaring that the 2nd respondent is a Relief Undertaking under the A.P. Relief Undertaking (Special Provisions) Act, 1971, by virtue of which, the proceedings for recovery of the amount stand stayed.
5. The question for consideration is whether a writ of mandamus can be issued against the 2nd respondent for recovery of the amounts said to be due by the 2nd respondent for the goods supplied by the appellant.
6. The learned Counsel for the appellant contended that the 2nd respondent is a Government-owned Corporation, headed by the top officials of the State of Andhra Pradesh, discharging public duties. To counter the contention that the 2nd respondent is only a Co-operative Society registered under the A.P. Co-operative Society Act, 1964 and is not amenable to writ jurisdiction of this Court, no material is placed by the appellant. In Sri Konaseema Co-op. Central Bank Ltd. v. N. Seetarama Raju, AIR 1990 AP 171 (FB) : (1990 Lab 1C NOC 63) (AP), a Full Bench of this Court, consisting of one of us (Jagan-nadha Rao J.) referred to six tests, namely, whether the entire share capital of the Corporation is held by the Government, whether the financial assistance of the State is so much as to meet almost the entire expenditure of the Corporation, whether the corporation enjoys monopolistic status protected by the State, deep and pervasive State control, performance of governmental functions of public importance; if a department of the Government is transferred to a Corporation, the latter becoming an instrumentality or agency of the Government, to arrive at a conclusion whether a co-operative society can also be an authority of the 'State', within the meaning of Article 12 of the Constitution (as culled out from the decision in Ramana Dayaram Shetty, and affirmed in Ajay Hasia v. Khalid Mujib, . The appellant in this case has not placed any material to show that the respondents conform to any of the tests referred to above. It is, therefore, not possible to agree with the contention of the learned Counsel for the appellant that the respondents are 'State', within the meaning of Article 12 of the Constitution of India or statutory authorities discharging public functions.
7. The learned Counsel for the appellant further submitted that the respondents discharge public functions and therefore cannot be permitted to act arbitrarily, and that they are bound to make payment for the goods they have admittedly received, even though their claim is based on breach of contract between the parties. He relied on the decision in DFO South Kheri v. Ram Sanehi, . That was a case in which one of the contracting parties was DFO, who is admittedly a public authority. In exercise of statutory functions, the public authority modified an order or proceeding of the subordinate forest authority, thus depriving the petitioner therein of a valuable right. In such circumstances, the Supreme Court held that merely because the source of right was initially based on a contract, the petitioner therein would not have to resort to a Civil Court when the action was directed against an arbitrary and unlawful act on the part of a public authority. In the present case, the respondents are not shown to be public authorities. The contract between the parties was not entered into, in discharge of any public duties. The decision relied on by the learned Counsel is therefore not applicable to the case on hand.
8. The learned Counsel for the appellant next relied on Express Newspapers Private Ltd. V. Union of India, , and contended that a writ could be issued when the authorities misused their powers in breach of law, and when the exercise of power amounts to a fraud on power and is not bona fide. As pointed out earlier, the respondents are not statutory authorities and have not exercised any statutory power, and therefore, the question of misuse of power or fraud on power, does not arise in the present case. The said decision has no application to the facts of this case. The learned Counsel for the appellant further argued that no complicated questions of fact arise, as there is no denial by the respondents of the claim made by the appellant, and hence the appellant need not be driven to a Civil Court. He relied on Century Spinning and Manufacturing Company Ltd. v. Ullas Nagar Municipality, . That was a case where a claim was made against the Municipality, which is a public body. The Supreme Court held that merely because a question of fact was raised, the High Court will not be justified in requiring the party to seek relief in a civil Court. It was observed therein that the questions of fact raised by the petitioner in that case are elementary. The claim of the petitioner in that case was based on estoppel, resulting in a contract or obligation with a public body.
The appellant in this case before us relied on certain acknowledgments said to have been made by the 2nd respondent in order to save the claim being barred by limitation. It is not possible for this court to go into the questions of fact raised in the writ petition, including the question of limitation as to whether the claim is barred by time. The contention of the learned Counsel for the appellant that the provisions of the Limitation Act, do not as such apply to granting of relief under Art. 226 of the Constitution, based on State of Madhya Pradesh v. Bhailal Bhai, , has no relevance here, as the said decision arises out of Sales Tax Act, where the levy of sales tax was held to be invalid and the High Court was held to be competent to give a consequential relief by ordering repayment of money realised by the Government without the authority of law.
9. This Court in Sri Konaseema Central Bank case (supra) referred to above, held that one of the well-accepted limitations upon the exercise of power under Art. 226 of the Constitution is that it is not available to enforce the terms of the contract, that is, a contract which is not statutory in nature, and that it makes no difference even if one of the contracting parties is the State Government, or other local authority. The Full Bench referred to the decision of the Supreme Court in Anadi Mukta Sadguru v. V. R. Rudani, wherein it was observed (at page 1611):
"If the rights are purely of a private character no mandamus can issue. If the management of the college is purely a private body with no public duty, mandamus will not lie."
In sum, the Full Bench of this court laid down that a writ of mandamus, certiorari and prohibition are public law remedies; and not available to enforce private law rights. Every act of a society which may be a 'State' within the meaning of Article 12, does not necessarily belong to public law field. A society, which is a 'State' may have its private law rights just like a Government. A contractual obligation, which is not statutory, cannot be enforced by way of a writ petition under Art. 226 of the Constitution.
10. The contentions relating to the bar of the claim of the appellant in view of the order of the State Government issued under the A.P. Relief Undertaking (Special Provisions) Act, 1971, need not be gone into in the view we have taken that no Writ lies for issuing a writ of mandamus for enforcing non-statutory contractual obligations of a non-statutory body, which is not discharging any public functions.
11. The learned single judge rightly dismissed the writ petition holding that the proper remedy of the petitioner-appellant lies only in a civil Court and that no Writ of Mandamus could be issued. We are in agreement with the view expressed by the learned single Judge and we see no reason to interfere with the same in this appeal. The appeal is accordingly dismissed. No order as to costs.
12. Appeal dismissed.