The Pathakhadarabad Handloom ... vs Smt. K. Sunitha
2023 Latest Caselaw 1817 AP

 IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI

THE HON'BLE SRI JUSTICE G. RAMAKRISHNA PRASAD

   W.P.No. 11647 OF 2022 & C.C.No.3645 OF 2022


COMMON ORDER:

           Heard Sri K.G.Krishna Murthy, Ld. Senior

Counsel appearing on behalf of Sri K.Ramamohan, Ld.

Counsel for the Writ Petitioners, Sri Kasa Jaganmohan

Reddy, Ld. Counsel for the Respondent No.2 and Sri

Bankatlal Mandhani, Ld. Counsel for the Respondent No.6.

2. It is agreed by all the Counsel that for the sake

of convenience, the Writ Petition bearing No.11647 of 2022

and Contempt Case bearing No.3645 of 2022 be taken up

and heard together. In view of this consensus, the Writ

Petition and Contempt Case were heard together.

3. The prayer in the Writ Petition is as under:

"It is therefore prayed that this Hon‟ble Court may be pleased to issue a appropriate writ, order or direction, more particularly on in the nature of Writ of MANDAMUS declaring the action of the Respondent No.2 in releasing the amounts to the 6th Respondent from the funds released and available in proceedings vide

R.C.No.SS-16/16/2022-CMOSEC-SSA dated 14.03.2022 issued by the Respondent No.4 to the 2nd Respondent without clearing the pending dues payable to the Petitioners for the Livery cloth supplied during the years 2015- 2019 even after the lapse of more than 4 years, as illegal, improper, unjust, arbitrary and contrary to law and consequently direct the Respondent No.2 to pay the sum payable to the petitioners along with accrued interest @ 24% per annum till the date of payment for the cloth supplied during the year 2015-2019 before paying the bills to the 6th respondent and pass such other order or orders as the Hon‟ble court may deem fit and proper in the circumstances of the case"

4. Sri K.G.Krishna Murthy, Ld. Senior Counsel

has drawn the attention of this Court to the contents of the

Affidavit filed in support of the Writ Petition that the

Respondent No.2 namely the A.P. State Handloom Weavers'

Cooperative Society Limited (for short "APCO") is a

Cooperative Society registered under Andhra Pradesh

Cooperative Societies Act 6 of 1964 read with Section 3(2)

(b) of the Andhra Pradesh State Handloom Weavers'

Cooperative Society (Formation) Ordinance No.14 of 1976;

that the constituent members comprise of various

Handloom Weavers' Societies which are spread across the

State; the main objective of APCO is to serve and function

as a State Level Apex Society for Cotton, Silk and Wool

Handloom Weavers; that the Petitioners' Societies are the

Primary Societies which are the members of the APCO,

which is construed as the Apex Society; that the Apex

Society organises the Handloom Industry on commercial

lines in the State; that the object of the Apex Society is to

provide processing facilities including dyeing, mercerizing,

printing and finishing for all types of yarn and varieties of

cloth to the member societies (Primary Society); that one of

the prime object of the Apex Society is to purchase raw

materials, tools and machinery (including spares) and sell

the same for cash or credit to the member societies

(Primary Societies) and several other functions; that the

limitation of the Apex Society is that it shall not either

supply raw material or any assignment to any society

which process livery to the power looms; that since the

main objective of the Apex Society being to encourage the

handlooms, the only embargo on the Apex Society is to not

have any transaction with any registered society dealing

with the products derived from power looms.

5. The Ld. Senior Counsel further submitted that

regarding supply of livery cloth to Welfare Departments

including Sarva Shiksha Abhiyan, Tribal Welfare

Departments, Women and Child Welfare Departments etc.,

the then Director of Handloom and Textile finalised a

production plan for procurement of livery cloth from

member societies after making an assessment of the active

looms in each of the Primary Society; that this proposal

was got approved in the Managing Committee meeting of

the Apex Society (Respondent No.2); that basing on this

approval the Primary Societies that include the Petitioners

herein have supplied material to meet the Orders placed by

the Tribal Welfare Departments etc; that a standard

routine was established between the Apex Society and

Primary Societies in settling the procurement-dues of the

Members Society in a Chronological Order; that due to this

systematic settlement of dues in a Chronological Order, the

Primary Societies have not been put to any difficulty as

regards the receiving of the due amounts; that the

Petitioners have also supplied material between 2015 to

2019; that the Government has not cleared the dues for

several Primary Handloom Cooperative Societies; that each

of such society having been aggrieved of non-payment of its

long pending dues, have approached this Court by filing

W.P.Nos.26663, 26308, 18410, 8369, 18389, 18226 and

18181 of 2021 seeking a direction against the Respondent

No.2 herein (APCO) to release the pending dues payable to

the Writ Petitioners; that while the said Writ Petitions are

pending before this Court, the APCO has decided to

procure cloth from newly registered Power Loom Weavers'

Cooperative Society which was registered only on

27.03.2021, and is arrayed as Respondent No.6 herein

namely Kendriya Bhandar; that this Respondent No.6

which is a Power Loom Weavers' Cooperative Society is not

a Primary Member of APCO; that the Respondent No.6 is

having less paid-up members share capital with no liquid

funds and source of working capital; that the present Writ

Petitioners which are the Primary Handloom Weavers'

Cooperative Societies (14 in number) have approached

APCO seeking clearance of dues; that the Primary Societies

(Writ Petitioners herein) have stitched and supply masks

during Covid-19 period to APCO; that the Public Health

and Family Welfare Department, vide G.O.Rt.No.4083

Finance (FMW-HM&FW) Department, dated 01.09.2021,

sanctioned amount to a tune of Rs.96,10,00,000/-; that

this amount was released with a view to settle the pending

bills of the Primary Member Society including the Writ

Petitioners herein which had supplied masks and other

material; that however, without clearing the dues with the

funds granted for this very same purpose, the APCO

management had utilized the said funds for clearing the

dues due to the Respondent No.6; that the Respondent

No.6 is an outside agency and also a bogus Power Loom

Weavers' Cooperative Society of Nagari; that the

Respondent No.2 is making payments in favour of the

Respondent No.6 to the detriment of the present Writ

Petitioners; that this illegal act of the Respondent No.2 in

clearing the dues to the Respondent No.6 without following

the Chronological Order, which was a custom earlier, is

not only irrational, unjust and discriminatory, but it is

contrary and in violation of the established procedure in

clearing dues in a chronological order.

6. Sri Kasa Jaganmohan Reddy, Ld. Counsel for

the Respondent No.2 has drawn the attention of this Court

to the contents of the Counter-Affidavit and submitted that

the bylaws which are governing the Respondent No.2 do

not impose any condition that the APCO shall only transact

with Member Societies and that it cannot transact with a

Power Loom Society; that the bylaws do not impose any

condition that APCO cannot transact with a Power Loom

Society which is a non-member; that the present Writ

Petition is misconceived inasmuch as the claim made by

the present Writ Petitioners is a part of the litigation in

W.P.Nos.26663, 26308, 18410, 8369, 18389, 18226 and

18181 of 2021 wherein the Respondent No.2 has disputed

claims of the Writ Petitioners and the matter is due for

determination as regards the entitlement of the dues; that

there is criminal investigation pending against the Writ

Petitioners; that since the prayer sought in the present

Writ Petition is a monitory claim, the Writ Petitioners

would have to approach a Civil Court; that the nature of

the prayer in the present Writ Petition is to the effect that

until the Writ Petitioners are paid, Respondent No.2 shall

not disburse any funds to the Respondent No.6 and this

prayer is in the nature of conditional injunction to the

effect that firstly the Writ Petitioner shall be paid before

making payment to the Respondent No.6; that the APCO

acted only as an intermediary, and therefore, the APCO did

not transact any business with the Respondent No.6 for

any benefit.

7. Sri Kasa Jaganmohan Reddy, Ld. Counsel for

the Respondent No.2 has further submitted that the issue

of considering the prayer in the present Writ Petition would

only arise when there is an amount which is admitted by

the Respondent No.2, but presently the claim of the Writ

Petitioners is yet to be determined and Writ Petitioners

have not submitted all the particulars before this Court in

the abovementioned Writ Petitions, and therefore, this

issue is sub judice; that, therefore, the present Writ Petition

should be dismissed since the claim of the Writ Petitioners

is yet to be determined in the proceedings pending before

this Court in W.P.Nos.26663, 26308, 18410, 8369, 18389,

18226 and 18181 of 2021.

8. Sri Bankatlal Mandhani, Ld. Counsel for the

Respondent No.6 has also made similar submissions

contending that the present Writ Petition is in the nature of

the recovery of money. He relied on a decision of the

Hon'ble Supreme Court in Union of India and others vs.

Puna Hinda ((2021) 10 SCC 690, paragraph Nos.17 and

24 of which are extracted hereunder:

"17. Mr Nataraj, learned Additional Solicitor General appearing for the appellants, pointed out that there are serious disputes about the facts in respect of authenticity of the Joint Final Report and the work done. Therefore, such disputed question of facts could not have been adjudicated by the writ court as disputed question of facts relating to recovery of money could not have been entertained thereunder.

Reliance has been placed upon the judgment of this Court reported as Kerala SEB v. Kurien E. Kalathil [Kerala SEB v. Kurien E. Kalathil, (2000) 6 SCC 293] wherein it was held as under : (SCC pp. 298-99, paras 10-11)

"10. We find that there is a merit in the first contention of Mr Raval. The learned counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject-

matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226.

We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract.

A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature.

11. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary

principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law.

It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a civil court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have relegated to other remedies."

24. Therefore, the dispute could not be raised by way of a writ petition on the disputed questions of fact. Though, the jurisdiction of the High Court is wide but in respect of pure contractual matters in the field of private law, having no statutory flavour, are better adjudicated upon by the forum agreed to by the parties. The dispute as to whether the amount is payable or not and/or how much amount is payable are disputed questions of facts. There is

no admission on the part of the appellants to infer that the amount stands crystallised. Therefore, in the absence of any acceptance of joint survey report by the competent authority, no right would accrue to the writ petitioner only because measurements cannot be undertaken after passage of time. Maybe, the resurvey cannot take place but the measurement books of the work executed from time to time would form a reasonable basis for assessing the amount due and payable to the writ petitioner, but such process could be undertaken only by the agreed forum i.e. arbitration and not by the writ court as it does not have the expertise in respect of measurements or construction of roads.

9. It is submitted that a direction cannot be given

in the present Writ Petition to the detriment of the

Respondent No.6 so as to not to disburse the amount to

the Respondent No.6 till the dues of the Writ Petitioners

are settled because of the fact that, for the present, there is

no determination of dues in favour of the Writ Petitioners.

He has also referred to the decision of the Hon'ble Supreme

Court in Godavari Sugar Mills Limited vs. State of

Maharashtra and others ((2011) 2 SCC 439, paragraph

No.8(1) of which is extracted hereunder:

8. The observations in Suganmal [AIR 1965 SC 1740] related to a claim for refund of tax and have to be understood with reference to the

nature of the claim made therein. The decision in Suganmal [AIR 1965 SC 1740] has been explained and distinguished in several subsequent cases, including in U.P. Pollution Control Board v. Kanoria Industrial Ltd. [(2001) 2 SCC 549] and ABL International Ltd. v. Export Credit GuaranteeCorpn. of India Ltd. [(2004) 3 SCC 553] The legal position becomes clear when the decision in Suganmal [AIR 1965 SC 1740] is read with the other decisions of this Court on the issue, referred to below:

(i) Normally, a petition under Article 226 of the Constitution of India will not be entertained to enforce a civil liability arising out of a breach of a contract or a tort to pay an amount of money due to the claimants. The aggrieved party will have to agitate the question in a civil suit. But an order for payment of money may be made in a writ proceeding, in enforcement of statutory functions of the State or its officers. (Vide Burmah Construction Co. v. State of Orissa [AIR 1962 SC 1320 : 1962 Supp (1) SCR 242] .)

(ii) ......

(iii) ......

(iv)......

(v) ......

(vi) ......

10. At this stage, Sri K.G.Krishna Murthy, Ld.

Senior Counsel has submitted, on instructions, that the

Writ Petitioners would limit their prayer in seeking a

direction to the Respondent No.2 restraining the

Respondent No.2 in releasing the amounts to the

Respondent No.6 from the funds released and available in

proceedings vide R.C.No.SS-16/16/2022-CMOSEC-SSA

dated 14.03.2022. He has limited his prayer to the first

portion and has submitted that the later portion of the

prayer is not being pressed. For the sake of convenience,

the whole prayer originally made is reproduced as

hereunder and the portion of it which is given up is

highlighted in bold and italics.

"It is therefore prayed that this Hon'ble Court may be pleased to issue a appropriate writ, order or direction, more particularly on in the nature of Writ of MANDAMUS declaring the action of the Respondent No.2 in releasing the amounts to the 6th Respondent from the funds released and available in proceedings vide R.C.No.SS- 16/16/2022-CMOSEC-SSA dated 14.03.2022 issued by the Respondent No.4 to the 2nd Respondent without clearing the pending dues payable to the Petitioners for the Livery cloth supplied during the years 2015-2019 even after the lapse of more than 4 years, as illegal, improper, unjust, arbitrary and contrary to law and consequently direct the Respondent No.2 to pay the sum payable to the petitioners along with accrued interest @ 24% per annum till the date of payment for the cloth supplied during the year 2015-2019 before paying the bills to the 6th respondent and pass such other order or orders as the Hon'ble court may deem fit and proper in the

circumstances of the case" (Emphasis supplied)

11. In the light of this submission made by the Ld.

Senior Counsel giving-up the later part of the prayer, this

Court is not mandated to deal with the entire cause

originally raised and projected by the Petitioners in the

present Writ Petition concerning a different perspective.

Now, the prayer is only limited to seeking a direction

declaring the action of the Respondent No.2 in releasing

the amounts to the Respondent No.6 from the funds

released and available in proceedings vide R.C.No.SS-

16/16/2022-CMOSEC-SSA dated 14.03.2022 issued by

the Respondent No.4 to the Respondent No.2 as illegal.

12. For consideration of this prayer, the prayer

made in the pending Writ Petitions bearing W.P.Nos.26663,

26308, 18410, 8369, 18389, 18226 and 18181 of 2021

assumes significance. The claim for Rs.98,75,343/-

pertains to only W.P.No.26663 of 2021, whereas, there are

such other claims in other Writ Petitions as well. In the

material papers filed by the Writ Petitioners along with the

Reply (Rejoinder), just the prayer in W.P.No.26663 of 2021

(one page), has been filed as Ex.P11. The prayer is usefully

reproduced herein.

"It is, therefore, prayed that this Hon'ble Court may be pleased to issue an appropriate Writ, Order or direction more particularly one in the nature of the Writ of Mandamus declaring the on the part of the respondent No.2 in not paying a sum of Rs.98,75,343/- (Rupees Ninety Eight Lakhs Seventy Five Hundred Three Hundred Forty Three Only) payable to the petitioner for the Livery cloth supplied by it through the Invoice Nos.5, 6, 7 and 8, dated 06.06.2016, 14.06.2016, 22.06.2016 and 29.06.2016 respectively, eventhough, more than five (5) years two (2) months are elapsed as arbitrary, illegal and abdication of the statutory duty cast on them and violative of the fundamental rights guaranteed to the petitioner under Article 14, 19 and 21 and consequently direct the respondent No.2 to pay the sum of Rs.98,75,343/- (Rupees Ninety Eight Lakhs Seventy Five Hundred Three Hundred Forty Three Only) payable to the petitioner alongwith the accrued interest @ 15% per annum forthwith and pass such other order or orders as are deemed fit and proper in the circumstances of the case."

13. In Paragraph No.6 of the Counter-Affidavit filed

by the Respondent No.2 dated 01.11.2022, it is stated that

the prayer for clearing the dues of the Writ Petitioners in

W.P.Nos.26663, 26308, 18410, 8369, 18389, 18226 and

18181 of 2021 have been answered by filing a Counter-

Affidavit in each of the Writ Petitions mentioned above

stating that the Writ Petitioners should submit the

necessary details. Paragraph No.6 of the Counter-Affidavit

filed by the Respondent is reproduced hereunder:

" 6. With respect to the pleadings in para 15 it is submitted that the government orders under G.O.Ms.Nos.24 dated 22.03.2013 and 142 dated 14.11.2013 are not violated except due to exigency caused by Covid 19 pandemic. The transactions effected during the pandemic were undertaken with the permission of the Government to meet the exigency. Admittedly the petitioners filed separate writ petitions for the payment towards the invoices raised by them. This respondent requested the petitioners to submit the details of purchase orders, details of supply and GST particulars to settle the said invoices. The petitioners failed to submit the necessary details and accordingly the counters in 19 separate petitions filed vide W.P.Nos.18255/2021, 18389/2021, 18244/2021, 18226/2021, 18410/2021, 18408/2021, 18250/2021, 18386/2021, 18364/2021, 18308/2021, 18181/2021, 24203/2021, 26663/2021, 26308/2021, 27366/2021, 26942/2021, 27340/2021, 27315/2021, 30395/2021 and all those writ petitions are pending. Instead of submitting the details of their supplies for settlement of the invoices raised by them chose to file the above writ petition seeking injunction from pay the dues payable to the 6th respondent and other agencies (italics supplied)."

14. As contended by the Respondent No.2 and the

Respondent No.6, the amended prayer made in the present

Writ Petition is in the nature of an injunction being sought

against the payment to be made by the Respondent No.2 to

the Respondent No.6. This prayer is made on the basis

that there are certain amounts due from the Respondent

No.2 to the present Writ Petitioners. It is a matter of fact

that for recovery of such claims, the Writ Petitioners have

already filed W.P.Nos.26663, 26308, 18410, 8369, 18389,

18226 and 18181 of 2021 and the same are sub judice for

consideration and adjudication before this Court. It

appears that the instant Writ Petitioners intended to secure

the amounts by seeking an injunction to the effect that the

money shall be kept in reserve through an Order of this

Court until the amounts are paid to them by the

Respondent No.2. The prayer in the pending Writ Petitions

is being contested by the Respondent No.2 herein/APCO.

Though it is not specifically stated in the Counter-Affidavit

of the Respondent No.2 that the Respondent No.2 is

disputing the amounts, such submission was made during

the course of the arguments by the Ld. Counsel appearing

for the Respondent No.2. In Paragraph No.6 of the

Counter-Affidavit, which is extracted herein above, it has

been stated that necessary particulars in support of the

claim raised by the Writ Petitioners were sought by the

Respondent No.2 and that the Writ Petitioners have failed

to submit such particulars.

15. From the narration of the above facts, without

making any comment on merits in the pending Writ

Petitions (W.P.Nos.26663, 26308, 18410, 8369, 18389,

18226 and 18181 of 2021), this Court would draw an

inference that the claim raised by the Writ Petitioners is yet

to be determined by this Court in the abovementioned Writ

Petitions. It is only after determination of the actual

amounts as to what each of the Writ Petitioner is entitled,

the cause of action, if any, would arise. This Court opines

that the cause of action for seeking an injunction for

securing certain monies lying in the credit of the

Respondent No.2, that too to the detriment of Respondent

No.6, in the nature of an attachment, cannot be

countenanced for the simple reason that without there

being a determination of a pending debt, an attachment of

this nature cannot be countenanced, especially against the

State agency (Respondent No.2). The Respondent No.2 is

not a „fly-by-night operator‟, that if the designated funds are

expended, the Writ Petitioners may not be able to realise

their debt. Without making any observations on merit, as

it could prejudice the cause of the parties in the

W.P.Nos.26663, 26308, 18410, 8369, 18389, 18226 and

18181 of 2021, this Court is of the opinion that the

amended prayer made in the present Writ Petition is

premature in nature. This Court cannot pass an Order in

the nature of an injunction or an attachment to secure the

debt, which is yet to be finally determined by this Court in

the other Writ Petitions, to the detriment of the Respondent

No.6. Insofar as the contention that the Respondent No.2

cannot transact with either a non-member or a primary

power loom society, this Court is not able to give any

determination because the nature of the prayer that is

made is only for seeking a mandamus to the effect that the

payment released to the Respondent No.6 by the

Respondent No.2 as being illegal and that a specific prayer

has not been made invoking jurisdiction of this Court to

examine whether the Respondent No.2 could transact any

business with the Respondent No.6 which is admittedly a

non-member and also a power-loom.

16. In this view of the matter, the Writ Petition is

dismissed with liberty to the Writ Petitioners to approach

this Court as and when the final determination in respect

of the dues is finally arrived. There shall be no order as to

costs.

17. In view of the above findings, this Court is not

inclined to consider the Contempt Case. Hence, the

Contempt Case is closed.

18. It is made clear that any observations made in

this Order shall not cause prejudice to anyone and that

such observations, if any, are made only for a just disposal

of the present case.

19. Interlocutory Applications, if any, stand closed

in terms of this order.

________________________________ G. RAMAKRISHNA PRASAD, J Dt: .04.2023.

SDP

THE HON'BLE Mr. JUSTICE G. RAMAKRISHNA PRASAD

W.P.No. 11647 OF 2022 & C.C.No.3645 OF 2022

_____.04.2023

W

SDP