Oil And Natural Gas Corporation ... vs City And Industrial Development ...
2004 Latest Caselaw 825 Bom

JUDGMENT

V.G. Palshikar, J.

1. By this petition, the petitioner Oil & Natural Gas Corporation Limited has challenged the inaction on the part of City & Industrial Development Corporation of Maharashtra Limited (hereinafter referred to as CIDCO) in not executing the agreement of lease with the petitioner company. The company therefore seeks directions in the nature of writs requiring the CIDCO to execute the agreement against the possession of the plots covered by those agreements to the petitioner.

2. It would be worthwhile to note the prayers as made by the petitioner, which are as under:

"(a) that this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or directions, whereby;

(i) the Respondents No. 1 be ordered and directed forthwith to:

(ii) handover possession of the said plot of land admeasuring 24 hectares, demarcated in favour of the petitioners situated at Bhandkhal (Navghar), Taluka Uran along with an approach road and water supply till the boundary of the said plot of land; and

(b) (i) execute a Lease agreement for the period set out more particularly in the Letter of Allotment dated 5th March, 1984 in respect of the said plot of land admeasuring 24 hectares, demarcated in favour of the petitioners and situated at Bhandkhal (Navghar), Taluka Uran,

(ii) direction to respondent No. 2 to direct Respondent No. 1 to comply with (a) and (b) above.

(c) that this Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or directions, calling for the papers and proceedings leading to the Respondents' demand for service charge contained in the letter dated 24th July, 1990 and all other correspondence/communications relating to the said plot of land and after going through the validity and legality thereof, the said demand for service charges in respect of the said plot of land admeasuring 24 hectares, demarcated in favour of the petitioners and situated at Bhandkhal (Navaghar), Taluka Uran be quashed and/or set aside;

(d) that a writ or mandamus or a writ in the nature of mandamus or any other writ, order or direction be issued whereby the Respondents be ordered and directed to pay to the petitioners interest at the rate of 21% p.a. or any other rate as this Hon'ble Court dems fit and proper on the amount of Rs. 1,31,14,000/- from 1st April 1986 till the date on which possession of the said plot of land is handed over to the Petitioners.

(e) that a writ of certiorari or writ in the nature of certiorari or any other writ, order or direction be issued to cancel the allotment of any made by Respondent No. 1 in favour of the Respondent No. 3.

(f) that pending the hearing and final disposal of the writ petition, the Respondents by themselves, their servants and agents be restrained by an order and injunction of this Hon'ble Court from transferring, allotting or dealing with the said plot of land admeasuring 24 hectares, demarcated in favour of the petitioners and situated at Bhandkhal (Navghar), Taluka Uran in any manner whatsoever, save and except giving possession of the same to the petitioners;

(g) interim and ad-interim reliefs in terms of prayer (e) above;

(h) for costs of the writ petition and orders thereon; and

(i) for such further and other reliefs, as the nature and circumstances of the case may require."

3. Prayer (a-ii) seeks a direction to the respondent No. 1 CIDCO to hand over possession of plot of land admeasuring 24 hectares. Prayer (b-i) requires a direction to execute the lease agreement in respect of that plot. Prayer (c) demarcation of 24 hectares of land is sought and claim for service charges is sought to be quashed. Prayer (d) pertains to award of interest at the rate of 21% on a sum of Rs. 1.31 crores given by the petitioner to CIDCO. Prayer (e) pertains to cancellation of allotment in favour of respondent No. 2. Prayers (f) and (g) seeks interim reliefs in terms of the other prayers. Prayer (h) seeks costs and Prayer (i) any other reliefs.

4. From the above prayers, it will thus be clear that all that the petitioner wants is specific performance of certain contracts between the petitioner and CIDCO and it is sought to be obtained via writ jurisdiction without taking recourse of the normal remedy of civil suit. Rule was issued and a detailed reply has been filed by the respondent CIDCO. In the reply CIDCO has raised certain preliminary objections pertaining to the maintainability of the petition and exercise of extra ordinary jurisdiction of this court under Article 226 of the Constitution. It would therefore be necessary that these preliminary objections are decided first.

5. For doing so, we must note certain undisputed facts which would raise to the present petition. In 1982 the petitioner claimed allotment of 24 hectares of land. Rs. 1.2 crores were paid by July 1985. Then there extensived lengthy correspondence between the parties. There were several disputes referred to in these correspondence mainly pertained to payment of certain service charges by the petitioner to the respondent No. 1 which according to respondent No. 1 was the condition precedent for entering into the contract of lease of the properties belonging to the respondent No. 1. Through out this period the petitioner continued demanding possession of the land involved. Ultimately on 9-8-2001 this petition was filed. As aforesaid, reply was filed by CIDCO and no interim relief was granted. Special Leave petition against the refusal of interim relief was dismissed by the Supreme Court of India on 12-9-2002. Thereafter the petition came up for hearing on 8th July 2004 and earlier also. Parties were extensively heard on the question of preliminary objections. Detail submissions are made by the petitioner as also by the respondents requiring this court to decide the petition on preliminary objections. We will therefore consider the preliminary objections regarding maintainability of the writ petition for enforcement of contracts as raised by the petitioner. However we must note that in so far as this court is concerned a view has been taken by a Division Bench of Bombay High Court in Raja Bahadur Mill's case that in contractual matters writ jurisdiction should not be invoked. The entire case law on this point was considered by this court while coming to that conclusion of remedy of civil suit being the proper remedy ought to be pursued before writ jurisdiction is invoked. This judgment of this court has been affirmed by the Supreme Court of India when the S.L.P. against the judgment was rejected by the Supreme Court of India. In so far as this court is concerned therefore, the question of invoking writ jurisdiction without first availing the basic remedy of civil suit for enforcement of contractual reference, has been acquired finally. According to the Bombay High Court such suit must be followed and writ jurisdiction cannot be invoked for sorting out of contractual obligations or liability.

6. The learned counsel appearing on behalf of the petitioner was informed about this judgment and he sought time and addressed us on the aspects of that judgment. Basically the submission of the learned counsel was, certain judgments of the Supreme Court of India have not been noticed in that case and the alternate remedy or basic remedy of civil suit was existed upon at the stage of admission and it cannot now be done when the petition is being heard finally.

7. We would like to make it clear therefore that atleast this Bench is bound to follow the judgment in Raja Bahadur Mill's case as one of us was the auther of that judgment. My learned colleague agrees with me on this point. In fact it is not necessary therefore to go any further for requiring dismissal of this petition on the ground of availability of basic remedy by way of civil suit. However, the learned counsel appearing for the petitioner submitted that this question regarding admission stage and final hearing stage would also require deliberation and consideration by this court. Hence we will first note what we have held in Raja Bahadur Mill case. In para 37 we held that since exception of the constitution under Article 226 has been considered by various judgment of the Supreme Court of India and it is settled principle of law, apart from being a sound practice to insist on following of alternate efficacious remedy before entertaining or exercising writ jurisdiction under Article 226. We have also noted in our judgment 2/3 exceptions to this basic rule. It has been carved out by the Supreme Court and we have emphasised that the exception must remain exception and cannot become rule. In para 38 the Division Bench observed thus:

"In fact the legal position, as also the observations made hereabove embarks as a settled position in law and there is no need to reiterate it at length. We feel obliged to do it because inspite of the clear law existing a tendency to file writ jurisdiction circumventing the normal and alternate remedy is on the increase. The above quoted are not the only reasons to such circumvention and there could be a many more. But we do not intend to go on the analyse those reasons also, in this case. Ultimately therefore we most sincerely hope that this aspect of not entertaining writs when alternate remedy is available would be adequately considered by all courts having this jurisdiction."

8. It was inspite of the above dicta that the learned counsel appearing for the petitioner argued that the judgment in Raja Bahadur Mill's case will have to be confined for requiring recourse to alternate remedy at the adission stage itself.

9. We will therefore consider the cases cited at the bar by the learned counsel appearing on behalf of the petitioner. It must be observed that all the judgments cited basically pertains to hearing of writ petitions even when alternate remedy is available and the observations on which reliance is placed in those several judgments basically flow from the fact that the petitions in those cases were pending for more than five years. The pendency in this case is less than a year and half.

10. In Assam Sillimanite Ltd. and Anr. v. Union of India and Ors. the Division Bench of the Supreme Court has observed that when a writ petition was pending in the court for 17 years it would not be proper to ask petitioner to file suit for compensation. Here the pendency as pointed out in any event is not more than three years. Relying on this judgment it cannot therefore be said that the petitioner in the present case should not be driven to follow the basic remedy. Then the judgment in L. Hirday Narain v. Income Tax Officer was pressed into service with heavy reliance. On placitum (C) where the Supreme Court was observed that when the High Court entertaining petition and heard it on merit, the objections of its maintainability cannot be raised in the Supreme Court of India. Here we thrushold all the objections of respondent No. 1 from hearing the petition on merit. Hearing in this case is restricted to maintainability of the petition in the face of basic remedy of civil suit. The similar effect is in the Division Bench decision of this court from Goa, where petition of 1992 was decided in the year 2000, the delay being of 8 years. The judgment next relied upon is a single Bench judgment in Procter and Gamble India Ltd. v. Municipal Corporation of Greater Bombay reported in 2004 (I) Mh.L.J. page 406. There also petitions were pending since 1993 and were decided in the year 2003 i.e. after pendency of 10 years. All these judgments cannot be applied in the present case because here the pendency is less than three years.

11. The next judgment on which reliance was placed is in Kasinka Trading and Anr. v. Union of India and Anr. reported in AIR 1995 (1) S.C. page 274 . It deals with promissory estoppel. The submission being that where the doctrine of promissory estoppel is sought to be applied, writ jurisdiction can be invoked and the parties need not be relegate to the regular basic remedy of civil suit. However this judgment does not contain any observations by the Supreme Court that in such a case writ petition must be entertained.

12. The next judgment is reported in Vasantkumar Radhakisan Vora v. The Board of Trustees of the Port of Bombay which also deals with promissory estoppel. We must therefore make it clear at this stage that even if the facts give raise to the doctrine of promissory estoppel, there is nothing in law ascertaining the civil court of its jurisdiction from deciding the question of existence and application of promissory estoppel as merely raised. The question raised is of promissory estoppel and the respondent Corporation as a Government undertaking, writ must be entertained. In our humble opinion the submission has to be rejected.

13. The next judgment cited is in Padma v. Hiralal Motilal Desarda and Ors. reported in AIR 2002 S.C. 3252 . This judgment relates to what are the duties of CIDCO and how the public undertaking like CIDCO should be transparent in its activity and they should act in public good and are within the four corners of law. The argument appears to be that since the action of the CIDCO in refusing to make agreement and in failure to deliver the possession does not act with the four corners of law governing it and therefore writ should be granted under Article 226 instead of insisting the petitioner to approach the trial court. This is a judgment of the Supreme Court of India delivered in the year 2002. It does not make any reference to another judgment of the Supreme Court delivered in the year 1999, where the Supreme Court has laid down as follows:

"The rights of respondent No. 1 if any, are stated to be based upon a contract for which he was obliged to avail of the alternative efficacious remedy of filing a suit either for the recovery of the money or for rendition of accounts. It is contended that the discretionary powers vested in the High Court under Article 226 of the Constitution could not have been exercised in the facts and circumstances of the case. Though, we find substance in the submission of the learned counsel for the appellant, yet we are not inclined to allow the appeal and dismiss the writ petition of respondent No. 1 only on this ground. It is true that the powers conferred upon the High Court under Article 226 of the Constitution are discretionary in nature which can be invoked or the enforcement of any fundamental right or legal right but not for mere contractual rights arising out of an agreement particularly in view of the existence of efficacious alternative remedy. The Constitutional court should insist upon the party to avail of the same instead of invoking the extra ordinary writ jurisdiction of the court. This does not however debar the court from granting the appropriate relief to a citizen under peculiar and special facts notwithstanding the existence of alternative efficacious remedy. The existence of the special circumstances are required to be noticed before issuance of the direction by the High Court while invoking the jurisdiction under the said Article. In the instant case, the High Court did not notice any special circumstance which could be held to have persuaded it to deviate from the settled proposition of law regarding the exercise of the writ jurisdiction under Article 226 of the Constitution. For exercise of the writ jurisdiction , the High Court pressed into service the alleged fundamental right to livelihood of the respondent which was found to have been violated by not making him the payment of the amounts claimed in the writ petition, it is true that Article 21 of the Constitution is of utmost importance, violation of which, as and when found, directly or directly, or even remotely, has to be looked with disfavour. The violation of the right to livelihood is required to be remedied. But the right to livelihood as contemplated under Article 21 of the Constitution cannot be so widely construed which may result in defeating the purpose sought to be achieved by the aforesaid Article. It is also true that the right to livelihood would include all attributes of life but the same cannot be extended to the extent that it may embrace or take within its ambit all sorts of claim relating to the legal or contractual rights of the parties completely ignoring the person approaching the court and the alleged violation of the said right. The High Court appears to have adopted a very generous, general and casual approach in applying the right to livelihood to the facts and circumstances of the case apparently for the purpose of clothing itself with the power and jurisdiction under Article 226 of the Constitution. We are sure that if the High Court had considered the argument in the right perspective and in the light of various pronouncements of this court, it would not have ventured to assume jurisdiction for the purpose of conferring the State largest of public money, upon an unscrupulous litigant who preferred his claim on his proclaimed assumption of being as important as the Government of the State and equal thereto."

14. This aspect was not before the Supreme Court and the Supreme Court was dealing with public interest litigation and conduct the activities of public body. Here the activities of the CIDCO are not challenged as against the public good but they are challenged as committed breach of law. This judgment of 2002 is therefore of no use to the petitioners.

15. The learned counsel then relied on the case of Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai and Anr. . There the Supreme Court has laid down that action of State and its instrumentalities in the field of landlord-tenant relationship should be tested not under rent control legislation but under Constitution where violation of Article 14 was alleged by Bombay Port Trust. It is pertinent to note that this appeal of the Supreme Court arose from original suit filed in the Civil Court. Consequently therefore when the Supreme Court says that the action of the State or its indulgence has to be scrutinised in the constitution, it means under the provisions of the constitution for breach of constitutional rights. This judgment also is of no help to the petitioner. In that case the Supreme Court of India has observed in very clear terms that it shall be the duty of the writ court for insisting upon the party to avail efficacious alternate remedy instead of invoking extra ordinary jurisdiction of the court. It is also then observed that in extra ordinary case jurisdiction under Article 226 can be invoked inspite of the presence of alternate remedy, for certain definite reasons and special circumstances, which are required to be noted before exercising the jurisdiction. In our opinion present is a simple case of breach of contract merely because the respondent is a Government of Maharashtra undertaking and the petitioner is a Government of India undertaking, the undertakings should be allowed to circumvent the law because of the status of the Government undertakings. No injury of any kind would be caused to the petitioner, if they take resort to the normal remedy of filing suit.

16. Another judgment is in Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay which pertains to Bombay Rent Act and we could not find anything in that judgment to suggest that alternate remedy of civil suit should be given a go back merely because the litigants are Government undertakings. Then reliance is placed on a Division Bench decision of this court in Pratap B. Nalage v. State of Maharashtra and Ors. reported in 2001 (2) Mh.L.J. page 682. In the present case there are no disputes on facts and there is no impediments that this court should exercise its jurisdiction under Article 226. Apart from the fact that there are factual disputes, several contentions raised on merit of the petition, would require factual proof of the fact alleged. For instance, certain payments made or certain demands made have to be factually proved. This judgment is therefore of no use to the petitioner.

17. Reference was then made to certain observations in Halsbury's Law of England and Pennington's Company Law by some English authors. We however see no reason to refer to any English Law when the law laid down by us is very clear and ambiguous and the judgment in State of Himachal Pradesh v. Raja Mahendra Pal and Ors. is also very clear and unambiguous.

18. As will be seen from our discussion above that all the cases relied upon dealt with old pending cases where pendency is more than five years or more. In the present case that is not the fact. In our judgment in Raja Bahadur Mills case we have taken note of the several judgments of the Supreme Court in extensive. In para 35 of the judgment this court has taken judicial note of the fact that entertaining writ petitions directly when alternate remedy of suit is available also results in substantial loss to the State exchequer. In the present case itself the petitioner a Government of India undertaking making huge properties for thousands of crores of rupees per year, wants this court to exercise its extra ordinary jurisdiction to a payment of Rs. 250/- as court fees, to avoid payment of admiral court fee, which would be more than 1.2 crores. Merely because the petitioner is a Government of India undertaking it cannot therefore be allowed to circumvent the law of court fees in the State of Maharashtra.

19. We also gave note of judgment of Supreme Court of India in Kerala State Electricity Board and Anr. v. Kurien E. Kalathil and Ors. where the Supreme Court of India considered interference of the High Court under Article 226 in contractual matter and observes thus:

"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. A statute may expressly or impliedly confer power on a statutory body 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 of itself affect the principles to be applied. The disputes about the meaning of a convenant in a contract or its enforceability have to be determined according to the usual principles of the Contract. Every act of a statutory body need not necessarily involve and exercise of statutory power."

Then the Supreme Court went on to observe on the question of construction of a contract which reads thus:

10. We find that there is a merit in the first contention of Mr. Rawal, 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 of itself affect the principles to be applied. The disputes about the meaning of a convenant 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 been relegated to other remedies."

20. From the above observations of the Supreme Court it will be clear that writ jurisdiction should not be used for interfering in contractual matters. In the face of this judgment, in our opinion, we would be exceeding our constitutional limits laid down by the Supreme Court in entertaining or enforcing contractual obligations. Hence in our considered opinion therefore there is no reason whatever for which we should alow the Government of India undertaking to by pass alternate remedy of civil suit and entertain directly the writ petition at its instance.

21. In the result therefore the petition fails and it is dismissed on the ground of maintainability with cost of Rs. 2500/-, reserving the right to file civil suit to the petitioner, if it so desire.

22. C.A. No. 1583/04 is also disposed of in view of the observations made above.