Trans Asian Industries ... vs The Indian Council Of World ...
2001 Latest Caselaw 1876 Del

JUDGMENT

S.K. Mahajan, J.

1. Rule.

With the consent of the parties matter has been heard and disposed of finally.

2. The petitioner had approached respondent No. 1 for taking the premises forming part of Sapru House on license basis. It appears that after negotiations, the respondent agreed to hand over the premises to the petitioner on license basis and an agreement for license was entered into between the parties for giving the premises on license to the petitioner. The petitioner paid a sum of Rs. 5 lakhs as assurance on 15.2.2000 to respondent No. 1 in fulfilllment of his part of the obligations under the aforesaid agreement. The premises could be given on license by respondent No. 1 only after permission to that effect was given by Land and Development Office. Respondent No. 1 was a society registered under the Societies Registration Act. By an Ordinance issued by the Government of India on 1.9.2000, the functions of respondent No. 1 were taken over by the Government and it was declared to be an institution of national importance. All the properties and other assets vested in respondent No. 1 were declared to have vested in the Government. In terms of the ordinance, all contracts entered into and all matters and things engaged to be done by respondent No. 1 immediately before the date of promulgation of the Ordinance shall be deemed to have been incurred, entered into and engaged to be done by the Government (Council). On 19.4.2000, the petitioner paid a further sum of Rs. 13 lakhs 72 thousand to respondent No. 1 by pay order.

3. After the promulgation of the aforesaid Ordinance petitioner wrote to respondent No. 1 to hand over possession of the licensed premises to it. On 19.10.2000, respondent No. 1 wrote to the petitioner that with the promulgation of the President's Ordinance, respondent No. 1 had been declared as a statutory autonomous body and the new management had taken over the charge recently. It was stated that the matter was being looked into and the respondents will revert very soon. In reply to another letter of the petitioner dated 9.3.2001 regarding execution of the lease and handing over the possession, the respondents informed the petitioner that the proposal was under active consideration of the Administrative Ministry and as soon as the decision was taken the same would be communicated to the petitioner. Despite having written this letter the respondents did not inform the petitioner whether they were willing to hand over possession to the petitioner. Petitioner, therefore, on 14.6.2001 wrote to the Minister complaining that the respondents have neither handed over possession to the petitioner company in terms of the agreement entered into between them nor the money was being returned and requested the Minister to personally look into the matter and either hand over possession of the premises to the petitioner or in the alternative the sum of Rs. 18 lakhs 72 thousand deposited by the petitioner with the respondents may be ordered to be refunded with interest. Since no reply was received from the respondents, the petitioner filed the present petition for a direction to the respondents to hand over the possession of the licensed premises to the petitioner for a period of nine years and to pass an order directing the respondent to pay adequate compensation for the losses suffered on account of delay in handing over the possession to the petitioner.

4. On the last date of hearing when the matter came up before the Court, it was put to the counsel that prima facie it appears to the Court that the writ petition may not be maintainable inasmuch as the petitioner had the right to file a suit for specific performance. At request of the counsel, matter was adjourned for today to hear the parties on maintainability of the writ petition.

5. Counsel for the petitioner has relied upon the judgments of the Supreme Court The DFO, South Kheri and others v. Ram Sanehi Singh, The Gujarat State Financial Corporation v. M/s Lotus Hotels Pvt. Ltd., Kumari Shrilekha Vidyarthi etc. v. State of U.P. and others, Mahabir Auto Stores and others v. Indian Oil Corporation and others to contend that where the action of public authority invested with statutory powers was challenged, the writ petition was maintainable and there was no ground to say that the parties having entered into a contract they should have recourse to the proceedings other than a writ petition. It is also contended that it is too late in the day to contend that the instrumentality of the State which would be "other authority" under Article 12 of the Constitution can commit breach of a solemn undertaking on which other side has acted and then contend that the party suffering by the breach of contract may sue for damages but cannot compel specific performance. It is, therefore, the contention of the petitioner that since the respondents are statutory authorities; this Court in a petition under Article 226 of the Constitution of India, can issue directions to them to perform their obligations under the contract.

6. I have carefully gone through the judgments referred to by the petitioner but, in my opinion, they are not applicable to the facts of the present case. Respondents are not invested with statutory powers. The judgments referred to by the petitioner clearly hold that it is only where the action of the public authority invested with statutory powers is challenged, the writ petition will be maintainable, even if the right to relief arises out of an alleged breach of the contract. It is held in those cases that where the agreement was entered info in the performance of the statutory duty cast upon the corporation by the statute under which it was created, the party can file a writ petition under Article 226 of the Constitution for compelling the party to perform its statutory obligations. In the present case, as already mentioned above, the agreement was entered into not under any statutory powers conferred upon the respondents but it was a pure and simple contract entered into between the parties for giving the premises by way of license by the respondents to the petitioner. It was a commercial transaction entered into between the parties. The respondent No. 1 when it had entered into the contract was a society registered under the Societies Registration Act and was not even an instrumentality of the State nor was it "other authority" under Article 12 of the Constitution of India. The contract, therefore, entered into between the petitioner and respondent No. 1 could not be said to be statutory in nature nor any statutory duty was cast upon respondent No. 1 to enter into that contract. In my view, therefore, the respondents cannot be compelled by an order in a petition under Article 226 of the Constitution of India to perform its obligations under the contract. In case the petitioner is aggrieved of breach of any obligation under the contract, the petitioner has a remedy of filing a suit for specific performance of the contract or for refund of the amount which is stated to have been paid by the petitioner to the respondent, as it may be advised. The petition being not maintainable is dismissed with no order as to costs.