Govt. Of Nct Of Delhi & Ors. vs New Variety Tent House & Anr
2012 Latest Caselaw 2004 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Date of decision: 23rd March, 2012

+                          LPA No.553/2010

%        GOVT. OF NCT OF DELHI & ORS.                ....Appellants
                      Through:  Ms. Sangeeta Sondhi, Mr. Sanjeev
                               Narula & Mr. Ashish Virmani, Adv.

                                    Versus

    NEW VARIETY TENT HOUSE & ANR             ..... Respondents
                  Through: Mr. J.P. Sengh, Sr. Adv. with Mr.
                           Mohit Gupta, Sumit Batra & Ms.
                           Ankita Gupta, Advs. for R-1&2.
CORAM :-
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
                                 JUDGMENT

RAJIV SAHAI ENDLAW, J.

1. This Intra-Court appeal impugns the order dated 23 rd March, 2010 of

the learned Single Judge allowing W.P.(C) No.7225/2007 preferred by the

respondents and consequently directing the appellants to release a sum of

`67,57,072/- to the respondents; the appellants have also been burdened

with interest @ `10% per annum for delay in payment and with costs.

Notice of this appeal was issued and the operation of the impugned order

stayed. The writ record has also been requisitioned. The counsels have been

heard.

2. The respondents had filed the writ petition pleading, that they were /

are engaged in the business of supplying tents / tin sheds and other furniture

on hire; that in the years 1998 to 2000, the Directorate of Education of the

appellants had placed an order on the respondents for erection of tin shed

structures in some of the government schools in Delhi; similar orders were

placed on other tent houses also including one Punjabi Tent House; that

during the year 1999-2000 bills for `4,30,943/-, `57,89,526/- and

`5,30,603/- i.e. for a total sum of `67,57,072/- were raised by the

respondents; that inspite of repeated requests and reminders of the

respondents and promises to pay, the bills were not cleared and the

payments withheld ―due to some audit objections...... during the special

audit conducted in the year 2000‖ ; that the appellants have however never

denied their liability to the respondents; that the respondents on 6 th May,

2004 had made a complaint to the Public Grievances Commission also; that

though payments had been denied to the respondents but the appellant in

pursuance to W.P.(C) No.5900/2003 filed by said M/s. Punjabi Tent House

had paid the withheld amount; that the respondents were similarly placed as

M/s. Punjabi Tent House (supra). Mandamus was thus sought for directing

the appellant to release the payment of `67,57,072/-.

3. Though the respondents had pleaded that the work order aforesaid

was placed on them pursuant to a tender enquiry but along with the writ

petition filed only tender notices and nothing else to show that respondents

had participated in the tender or that any order was so placed on them.

Again, though the respondents claimed that an agreement in this regard had

been executed but only a copy of a draft agreement was filed along with the

writ petition. Though photocopies of the bills raised were filed but the same

do not contain any acknowledgment even of receipt thereon. The copies of

few letters claimed to have been written were filed but the same are again

without any official stamp acknowledging receipt. The respondents however

along with the writ petition filed a copy of the response dated 1 st April, 2003

of the appellants to an RTI query but only to the effect that ―the pending

payment of M/s New Variety Tent House has been withheld due to some

audit objections of Dte. of Audit raised during the special audit conducted

in the year 2000 and the same will be considered after the settlement of

Audit paras by the Dte. of Audit‖. Another response dated 21st May, 2003 to

the same effect to another RTI query was also filed along with the writ

petition.

4. The appellant in its counter affidavit to the writ petition before the

learned Single Judge pleaded that the writ petition qua the contractual claim

was not maintainable; that the appropriate remedy was to file a suit for

recovery of money; that the remedy of suit had got barred by limitation; that

the payments claimed pertained to the period 1999-2000 claim wherefor in

writ petition filed in the year 2007 was palpably barred by time. On merits,

though the receipt of three bills aforesaid for `67,57,072/- was not denied, it

was pleaded that no assurance for payment had been meted out at any time.

5. The learned Single Judge impleaded the Directorate of Audit also as

respondent no.4 to the writ petition. A counter affidavit was filed by the

Controller of Accounts (Audit) of the GNCTD also. It was pleaded therein

that complaints had been received from various schools regarding poor

quality of tents and tin sheds for students; on the basis of the said

complaints a special audit was done and report thereof sent to the

Department of Education undercover of letter dated 14 th September, 2000;

that it was for the Department of Education to see whether any lapse existed

in the quality of the work done.

6. The learned Single Judge vide order dated 29 th January, 2010

requisitioned the audit report and found that there were two specific

objections in relation to the respondents; firstly that the work was awarded

to the respondents without approval of Competent Authority and secondly

that there were complaints regarding poor quality of work and which the

Director of Audit had asked the Directorate of Education to consider.

7. The learned Single Judge in the order impugned before us found that

the Directorate of Education without conducting any inquiry into the

complaints was not justified in withholding payments; that there was

nothing to show that any such inquiry regarding the quality of work had

been conducted.

8. The learned Single Judge further held that non-obtaining prior

approval from the Competent Authority could not erase the entire work

done by the respondents and the respondents could not be denied payment

for omission on the part of appellants to take such approval.

9. Qua the plea of the appellants herein of the claim being barred by

limitation, the learned Single Judge observed that the appellants in the reply

dated 3rd July, 2007 to yet another RTI query by the respondents had not

taken the plea of limitation. It was further held that the appellants were

unable to satisfactorily explain as to how the case of the respondents was

different from the case in W.P.(C) No.6644/2007 in which payments had

been directed to be made.

10. Of the three bills, seeking direction for payment of which the writ

petition was filed, two are dated 27th April, 1999 and the other, 23rd July,

1999. The same are for providing tin structures in government schools from

6th July, 1998 to 31st July, 1998, 1st August, 1998 to 30th April, 1999 and

from 1st May, 1999 to 30 th June, 1999 respectively. In the absence of

anything to show otherwise, under Article 12 of the Schedule to the

Limitation Act, 1963, the limitation for recovery of the said hire charges

was three years from the date when the hire became payable i.e. from the

date of the bill. The said period of three years expired with respect to the

first two bills on 26th April, 2002 and for the third bill on 22 nd July, 2002.

There is nothing to show that the date of payment was agreed to be any

other. The writ petition seeking mandamus was filed only on 28 th

September, 2007. There is nothing to show any acknowledgment of liability

within the meaning of Section 18 of the Limitation Act.

11. We have thus wondered whether money claim, suit for which had

become barred by time/limitation, can be allowed in writ jurisdiction. The

answer obviously is no. The learned Single Judge has brushed aside the

valid plea of the appellant of limitation by referring to the directions issued

in the writ petition being W.P.(C) No.6644/2007 filed by one M/s Ramesh

Kumar Brothers. We are however unable to agree with the said reasoning.

Firstly merely because the time barred claim of another has been allowed

does not constitute a reason for allowing another time barred claim. More

important, there is no ‗decision' in the said order on the aspect of limitation.

Also, a reading of the order shows that the liability therein was

unequivocally admitted and at least part of the amount claimed was the

‗security amount'. It is not so in the present case.

12. The respondents had filed the writ petition agitating the claim stated

to be at par with that of M/s Punjabi Tent House. However Punjabi Tent

House had filed their petition in the year 2003 and the same was allowed on

05.08.2004. The respondents waited for more than three years thereafter

also, for filing their petition. Even if it is to be held that the claim of M/s

Punjabi Tent House was also barred by limitation, wrong decision and more

so on the point of law, as the plea of limitation in the present case is, cannot

constitute a precedent for allowing other time barred claims.

13. The counsel for the appellants has cited State of Madhya Pradesh v.

Bhailal Bhai AIR 1964 SC 1006 to contend that though the provisions of

Limitation Act do not apply to the granting of relief under Article 226

however the maximum period fixed by the Legislature as the time within

which the relief by a suit in a civil court must be brought may ordinarily be

taken to be a reasonable standard by which delay in seeking remedy under

Article 226 can be measured. Reliance is also placed on Binny Ltd. v. V.

Sadasivan AIR 2005 SC 3202 in support of the proposition that contractual

obligations are beyond the zone of judicial review.

14. We may however notice that the judgment (supra) in Bhailal Bhai

has been overruled on another aspect, in Mafatlal Industries Ltd v Union of

India (1997) 5 SCC 536. We may further notice that the Supreme Court in

Tilokchand Motichand v H.B. Munshi (1969) 1 SCC 110 has in the

majority judgment held that the extraordinary remedies under the

Constitution are not intended to enable the claimant to recover monies, the

recovery of which by suit is barred by limitation. It was further held that

where the writ remedy under Article 226 corresponds to a remedy in an

ordinary suit and the latter remedy is subject to the bar of a statute of

limitation, the Court in its writ jurisdiction acts by analogy to the statute,

adopts the statute as its own rule of procedure and in the absence of special

circumstances imposes the same limitation on the summary remedy in writ

jurisdiction.

15. The Supreme Court in Kerala Agro Machinery Corporation Ltd V.

Bijoy Kumar Roy (2002) 3 SCC 165 held that the stage of proceeding has

no relevance so far as the question of limitation is concerned. Similarly in

S.S.Balu V. State of Kerala (2009) 2 SCC 479, it was held that relief on the

ground of delay alone can be denied even though relief is granted to other

person similarly situated.

16. We may also record that for extension of limitation, no reliance can

be placed on response to RTI query. In the present case, the response is not

found to contain any admission of liability so as to extend the period of

limitation.

17. The counsel for the respondents has referred to:-

a. Shankara Co-op. Housing Society Ltd. v. M. Prabhakar AIR 2011

SC 2161 - but which is not found to be applicable;

b. Union of India v. Tantia Construction Pvt. Ltd. 2011 (4) SCALE

745 laying down that the alternative remedy of arbitration is not an absolute

bar to the invocation of writ jurisdiction;

c. Zonal Manager, Central Bank of India v. Devi Ispat Ltd. (2010) 11

SCC 186 to the same effect;

d. Food Corporation of India v. SEIL Ltd. (2008) 3 SCC 440 - on the

scope of interference in writ jurisdiction in contractual matters;

e. Noble Resources Ltd. v. State of Orissa (2006) 10 SCC 236 also

laying down that contractual matters are not totally beyond the scope of

judicial review;

f. A. Angoubi Singh v. State of Manipur AIR 2005 Gauhati 92 - where

direction for discharging contractual obligations was issued in writ

jurisdiction;

g. ABL International Ltd. v. Export Credit Guarantee Corporation of

India Ltd. 2003 (10) SCALE 815 - on the disputed questions of fact

capable of being gone into in writ jurisdiction;

h. Ganga Retreat & Towers Ltd. v. State of Rajasthan (2003) 12 SCC

91 also found to be not applicable;

i. Harbanslal Sahnia v. Indian Oil Corpn. Ltd. (2003) 2 SCC 107 -

also on the rule of alternative remedy being a rule of discretion;

j. Smt. Gunwant Kaur v. Municipal Committee, Bhatinda (1969) 3

SCC 769 laying down that the High Court in exercise of powers under

Article 226 has jurisdiction to determine questions of fact even if they are in

dispute.

We are afraid none of the aforesaid judgments come to the rescue of

the respondents on the aspect of limitation.

18. We may notice that the Apex Court recently in Godavari Sugar Mills

Ltd. Vs. State of Maharashtra (2011) 2 SCC 439 after a consideration of

the entire case law including Suganmal Vs. State of Madhya Pradesh AIR

1965 SC 1741, U.P. Pollution Control Board Vs. Kanoria Industrial Ltd.

(2001) 2 SCC 549 and ABL International Ltd. (supra) , made the legal

proposition clear as under:-

(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 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;

(ii) If a right has been infringed--whether a fundamental right or a

statutory right and the aggrieved party comes to the Court for

enforcement of the right, it will not be giving complete relief if

the Court merely declares the existence of such right or the fact

that existing right has been infringed. The High Court, while

enforcing fundamental or statutory rights, has the power to give

consequential relief by ordering payment of money realized by

the Government without the authority of law;

(iii) A petition for issue of writ of mandamus will not normally be

entertained for the purpose of merely ordering a refund of

money, to the return of which the petitioner claims a right. The

aggrieved party seeking refund has to approach the Civil Court

for claiming the amount, though the High Courts have the

power to pass appropriate orders in the exercise of powers

conferred under Article 226 for payment of money;

(iv) There is a distinction between cases where a claimant

approaches the High Court seeking the relief of obtaining only

refund and those where refund is sought as a consequential

relief after striking down the order of assessment etc. While a

petition praying for mere issue of writ of mandamus to the

State to refund the money alleged to have been illegally

collected is not ordinarily maintainable, if the allegation is that

the assessment was without a jurisdiction and the tax collected

was without authority of law and therefore the respondents had

no authority to retain the money collected without any

authority of law, the High Court has the power to direct refund

in a writ petition;

(v) It is one thing to say that the High Court has no power under

Article 226 to issue a writ of mandamus for making refund of

the money illegally collected. It is yet another thing to say that

such power can be exercised sparingly depending on facts and

circumstances of each case. For instance, where the facts are

not in dispute, where the collection of money was without

authority of law, there is no good reason to deny a relief of

refund to the citizens;

(vi) Where the lis has a public law character or involves a question

arising out of public law functions on the part of the State or its

authorities, access to justice by way of a public law remedy

will not be denied.

19. In our view the present case does not fall in any of the categories

enumerated above. As far as reliance on ABL International Ltd. is

concerned, a reading of the said judgment shows that the Court on a perusal

of the facts therein found no question which required any oral evidence and

found the dispute in that case to be only as to the interpretation of the

various clauses of the policy subject matter of that petition. However that is

no so here.

20. The Supreme Court in Jagdish Mandal Vs. State of Orissa (2007) 14

SCC 517 held that the power of judicial review will not be permitted to be

invoked to protect private interest at the cost of public interest or to decide

contractual disputes. It was also held that a writ petition in the contractual

matters would be entertained only if there is an element of public interest in

the litigation. No such element of public interest is found in the present case.

21. Recently, the Apex Court in Kisan Sahkari Chini Mills Ltd. Vs.

Vardan Linkers AIR 2008 SC 2160 also reiterated that public law remedy

under Article 226 of the Constitution of India is not available to seek

damages for breach of contract or specific performance of contract unless

the contractual dispute has a public law element. Reference may also be

made to Binny Ltd. Vs. V. Sadasivan (2005) 6 SCC 657 where the Apex

Court held that even in the matter of termination of employment, no public

law element is involved and the remedy of the employees is under the civil

or labour law only. It was further held that the powers under Article 226 are

to be exercised by applying the Constitutional provisions and judicial

guidelines and violation, if any of the fundamental rights and the Court

would be reluctant to exercise the power of judicial review in rights on the

basis of contracts. It was further held that a contract would not become

statutory simply because it has been awarded by a statutory body.

22. Applying the aforesaid principles, the writ petition to enforce the

contractual claim was not maintainable and more so when the claim was

barred by time.

23. We accordingly allow this appeal and set aside the order dated 23rd

March, 2010 impugned herein; axiomatically the writ petition filed by the

respondents is dismissed. No order as to costs.

RAJIV SAHAI ENDLAW, J

ACTING CHIEF JUSTICE

MARCH 23, 2012 ‗pp '