Kerala High Court
Ad On Wheels vs Kerala State Road Transport ... on 1 October, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SUNIL THOMAS
FRIDAY, THE 1ST DAY OF OCTOBER 2021 / 9TH ASWINA, 1943
WP(C) NO. 29125 OF 2020
PETITIONERS:
1 AD ON WHEELS
HAVING ITS REGISTERED OFFICE AT RAJADHANI BUILDING,
NORTH BLOCK, EAST FORT, THIRUVANANTHAPURAM-695 023, A
REGISTERED PARTNERSHIP FIRM REPRESENTED BY ITS PARTNER
R. VINOD, S/O. RAVINDRAN NAIR, AGED 55 YEARS, RESIDING
AT TC 21/168, VISHNUPRIYA, NSS SAMAJAM ROAD, KARAMANA,
THIRUVANANTHAPURAM-695 002.
2 R.VINOD
AGED 55 YEARS
S/O. RAVINDRAN NAIR, PARTNER, M/S. AD ON WHEELS,
THIRUVANANTHAPURAM-695 023, RESIDING AT TC 21/168,
VISHNUPRIYA, NSS SAMAJAM ROAD, KARAMANA,
THIRUVANANTHAPURAM-695 002.
3 RANI BIJU
AGED 55 YEARS
D/O. E.K. CHANDRASENAN, PARTNER, M/S. AD ON WHEELS,
THIRUVANANTHAPURAM-695 023 SAMPTHRIPTHI RAJADHANI FORT
P.O., THIRUVANANTHAPURAM-695 023.
4 SHIBU PRABHAKARAN
AGED 54 YEARS
S/O. M.PRABHAKARAN, RESIDING TC 39/1726 (2) GNRA-3H,
DEVIKA GARDENS, MANACAUD P.O., THIRUVANANTHAPURAM-695
009.
5 MOHAMMED RASEFF
AGED 48 YEARS
S/O. LATE MOHAMMED ABDUL KHADER, RESIDING AT HIDA
COTTAGE, KARICHARA, PALLIPPURAM, THIRUVANANTHAPURAM-695
316.
BY ADV R.S.KALKURA
RESPONDENTS:
1 KERALA STATE ROAD TRANSPORT CORPORATION
HAVING ITS REGISTERED OFFICE AT TRANSPORT BHAVAN, FORT
P.O., THIRUVANANTHAPURAM-695 023., REPRESENTED BY ITS
W.P.(C) No.29125/2020 2
MANAGING DIRECTOR.
2 THE MANAGING DIRECTOR
KERALA STATE ROAD TRANSPORT CORPORATION, HAVING ITS
REGISTERED OFFICE AT TRANSPORT BHAVAN, FORT P.O.,
THIRUVANANTHAPURAM-695 023.
3 STATE OF KERALA
REPRESENTED BY THE PRINCIPAL SECRETARY, TRANSPORT
DEPARTMENT, GOVERNMENT OF KERALA, SECRETARIAT,
THIRUVANANTHAPURAM-695 001.
BY ADV SRI.DEEPU THANKAN
OTHER PRESENT:
GP. ADV.VENUGOPAL
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 26.07.2021, THE COURT ON 1/10/2021 DELIVERED THE FOLLOWING:
W.P.(C) No.29125/2020 3
JUDGMENT
The first petitioner is a firm of which petitioners 2 to 5 are the
partners. Ext.P1 is a partnership deed. The first respondent is the KSRTC.
Pursuant to a notification published by the KSRTC calling for tenders for
awarding license to carry courier-cum-parcel service in KSRTC buses for a
period of one year by Ext.P3 notification, the first petitioner firm responded.
Subsequently, by Ext.P4, the first petitioner was informed that the tender
submitted by the petitioner was accepted being the highest bidder, who had
quoted for Rs.6 Lakhs per month. By Ext.P4 dated 18/12/2019, the various
terms and conditions were informed which, inter alia, included payment of
5% on tender allotment, 45% within a period of 30 days thereafter and the
entire remaining 50% within six months. Subsequently, by Ext.P5 the first
petitioner informed that they could not comply with the terms and conditions
regarding the payment and sought extension. By Ext.P6, dated 20/2/2020,
KSRTC directed the first petitioner to pay the entire amount. Accordingly,
Rs.37,51,200/- was claimed to have been paid on 29/2/2020 and a sum of
Rs.18 Lakhs as security deposit on 29/2/2020. By Ext.P8 letter dated
2/3/2020, KSRTC permitted the petitioner to carry courier service utilising the
KSRTC buses. By Ext.P9 communication dated 7/3/2020, KSRTC allotted
space in various bus stands for housing courier office. By Ext.P12 letter
dated 10/3/2020 , the first petitioner sought permission to commence
business and operation of courier service. Towards the middle of March
2020, Covid pandemic spread and hence, according to the petitioner, no
business could be conducted during the lock down period and some time,
thereafter. Virtually, all the businesses came to a stand still. Courier and
parcel services almost ceased to operate. Consequently, by Ext.P13
communication dated 20/3/2020, the petitioner requested to shift the date of
commencement of agreement from 29/2/2020 to 28/2/2021. By Ext.P14
dated 9/4/2020, KSRTC was informed by the first petitioner that they cannot
take up the business on the basis of the agreement having retrospective
effect from 2020. According to the petitioner, this communication was not
replied by the KSRTC. Since Ext.P14 was not replied, by Ext.P15 e mail,
dated 2/6/2020, it was requested that the agreement to be made operational
on the date on which the KSRTC resuming full transport service in the inter
district and state. After receipt of Exts.P14 and P15, the KSRTC called the
first petitioner for a negotiation. By Ext.P17 dated 28/9/2020, the first
petitioner offered to accept the performance of agreement subject to certain
conditions. Negotiations were held thereafter. Exts.P18 to P22 are the
communications which were exchanged between the parties in the
interregnum. Ultimately, by Ext.P23 dated 16/12/2020 issued by the KSRTC
to the first petitioner, it was informed that since the business was not
commenced by the petitioner and there was breach of terms, the contract
was cancelled by the KSRTC. It was claimed by the first petitioner that the
contract became aborted by force majure and the contract stood frustrated
due to the supervening impossibility. The petitioners instituted the writ
petition seeking various prayers. The first prayer sought was to declare that
the petitioner was entitled to have the period of commencement of the
contract extended. The petitioners also sought quashing of Ext.P20,P22 and
P23. An alternative relief sought was that, if for any reason, the court finds
that the extension of time, as sought by the petitioner, could be granted, a
writ or other direction may be issued directing the first respondent to refund
the entire amount of Rs.62,13,603/- and Rs.18 Lakhs paid as security
deposit, along with Rs.1,65,603/- paid by the first petitioner to the first
respondent for allotment of space with 12% interest per annum from the date
of deposit till the date of payment within the time limit fixed by the court.
2. The respondent-KSRTC filed a counter affidavit denying the various
allegations and the claims set up by the petitioners. It was contended that
as per the terms and conditions communicated and the provisional
confirmation order, the licensee was directed to enter into an agreement
within 30 days of the allotment letter. However, due to out break of Covid 19
and the national vide lock down declared by the Central Government from
24/3/2020 onwards, KSRTC could not operate its services. It slowly started
functioning after the lifting of lock down on 8/6/2020 with relaxation and at
present the buses have begun operating its services in a partial manner.
Corporation by its letter dated 20/11/2020 informed the petitioner to enter
into an agreement as agreed initially and start the courier service. The
petitioner failed to do so. The petitioner was the licencee for the period 2018
- 2019 also, the licence fee offered was Rs.13,50,000/- per month. Since the
petitioner was not ready to continue the service and withdrew from the tender
citing high license fee and loss of business, the Corporation floated new
tender . Again licence was allotted to the petitioner with decreased license
fee of Rs.6 Lakhs, considering the fact that the petitioner had conducted the
business with the Corporation in the previous term. It was claimed that
Corporation has taken very lenient view in awarding licence as well as
instructing the petitioner to conduct the business by issuing communication
for the same. The petitioner was duly informed to enter into the agreement
and start business after the lock down was lifted in spite of the fact that the
work was awarded to the petitioner after the long back on 18/12/2019 and
after the issuance of communication, there was no response from the
petitioner, nor the agreement was entered into to start the business, after the
lifting of the lock down by letter dated 20/11/2020. As the petitioner was
awarded works way back in 18/12/2019 and after the issuance of
communications, there was neither response from the petitioner nor an
agreement was entered to start the business as per the terms, the licence
issued was cancelled on 16/12/2020. The license fee and the security
deposit can be refunded only after assigning the liabilities. It was contended
that, disputes relating to contract cannot be agitated,under Article 226 of the
Constitution of India. It has been so held by the various decisions.
3. The first petitioner filed a reply affidavit denying all the above
contentions and produced Exts.P24 to P29 communications to advance the
contention that the KSRTC had committed breach of the terms of the
contract. It was also contended that, they revealed that there was no latches
on the part of the petitioners. On the other hand, respondents themselves
were at fault and had admitted that the licence agreement could not be
executed on account of Covid 19 outbreak and nation wide lock down. It
was further contended that merely because one of the parties to the litigation
raised a dispute regarding the facts of the case, a proceeding under Article
226 of the Constitution of India does not invite an adjudication in a trial court
and in appropriate cases, the writ court has the jurisdiction to entertain the
writ petition involving disputed questions of fact involving a contractual
obligation or involving some disputed question of facts.
4. The basic facts are not in dispute. Learned counsel for the
petitioners relied on a catena of decisions to support the legal principles
involved and also to contend that in exceptional cases, as is available in the
present case, the Constitutional Courts are entitled to exercise the writ
jurisdiction, notwithstanding the fact that element of enforcement of contract
arise. It was contended by the learned counsel for the petitioners that, the
disputed facts are not involved and that the question was whether due to
supervening reasons, the contract got frustrated. It was also contended
that, in the above circumstances, no latches or negligence or breach of
contract can be attributed to the petitioners and hence, by efflux of time and
the supervening impossibilities, the contract got frustrated, necessarily the
petitioners are entitled to refund of the amounts paid, it was contended.
5. Per contra, learned counsel for the respondent -KSRTC opposing
the application, contended that since disputed facts are involved and the writ
petition is not maintainable as held by the few decisions relied on by the
learned counsel. It was contended that, there was no frustration of contract
and the petitioners, by sheer neglect to perform their part of the contract,
violated the terms of contract and has forfeited substantial portion of the
amount paid. They were repaid the amounts which were allowable after
deducting the damages caused to the KSRTC.
6. Learned counsel for the KSRTC relied on the decision reported in
State of U.P. & others v. Bridge and Roof Company (India) Ltd. (1996
(6) SCC 22) to contend that, in disputes relating to terms of private contract,
proper course would be to refer to arbitration or institution of suit and not by
invoking the writ jurisdiction. It was held that, in the contract between the
parties, which is not a statutory contract, the parties are governed by the
provisions of the Contract Act or may be also by certain provisions of Sales
of Goods Act. Any dispute relating to interpretation of terms and conditions
of such a contract cannot be agitated and could not have been agitated in a
writ petition. That is a matter either for arbitration as provided by the contract
or for the civil court, as the case may be. The learned counsel further relied
on the decision reported in Barilly Development Authority and Another v.
Ajai Pal Singh and others (1989) 2 SCC116) to contend that the writ petition
in this case is not sustainable. It was held in that decision that there is a line
of decisions where the contract entered into between the State and persons
aggrieved is non -statutory and purely contractual, that the rights are
governed only by the terms of the contract. Hence, no writ or order can be
issued under Article 226 of the Constitution of India so as to compel the
authorities to remedy a breach of contract pure and simple. In State of
Bihar & others v. Jain Plastics And Chemicals Ltd.(2002) 1 SCC 216) , it
was held that question of fact which was based on serious disputed
questions or rival claims arising out of the breach of contract are required to
be investigated and determined on the basis of evidence led in a civil suit. To
further buttress this argument, the learned counsel relied on a Division
Bench decision of this Court in W.P.(C) No.27395/2020 and on
K.K.Saksena v. International Commission on Irrigation and Drainage
and Others ( 2015) 4 SCC 670). In the later case, it was affirmed by the
Supreme Court that contractual and commercial obligations are enforceable
only by ordinary civil action and not by judicial review.
7. To counter the above contentions of the respondents and to
advance the arguments that in certain cases a writ jurisdiction is
maintainable, the learned counsel for the petitioners relied on the decision
reported in Hindusthan Construction Company Ltd. v. KSEB 1999 (2)
KLT 30). In para 9 of the above decision, it is stated that though the
decisions taken by the Board and the orders issued by the Board are in
reference to the contractual work, in so far as the decision and the orders are
concerned, they are taken by the Board, as a public statutory body and
hence susceptible to a writ jurisdiction. In ABL International Ltd. &
another v. Export Credit Guarantee Corporation of India Ltd. & others.
(2004 KHC 506) , the question that came up for consideration was whether
the writ petition under Article 226 of the Constitution of India was
maintainable to enforce a contractual obligation of the State or its
instrumentality. In the above proceedings which commenced from the writ
petition filed before the Single Judge of the Calcutta High Court, the prayer
sought was to quash the letter of repudiation was issued by the first
respondent and for a consequential direction to the first respondent to make
payment of the dues to it under the contract of insurance. Since the only
limited question was whether the letter of repudiation sustainable in law, it
was held by the Supreme Court that writ was maintainable in such cases. In
Punjab National Bank & others v. Atmanand Singh and Others (2020
KHC 6374), it was held that even in the case of disputed question of fact of
complex nature requiring production of documentary evidence, though it
should not normally be entertained by High Court, however, even in certain
disputed questions of fact, on sound judicial principles and considering the
nature of controversy, a writ petition under Article 226 was sustainable.
8. A reference to the above three decisions clearly show that the
consistent view taken by the Supreme Court was that normally, disputed
questions of fact and enforcement of contractual obligation arising from
breach of contract are to be adjudicated in civil jurisdiction. However, the
court had held that in exceptional cases wherein such a detailed enquiry
was not contemplated or substantial questions of disputed facts are not
involved, a writ jurisdiction may be sustainable. In all the above cases
referred above, disputed question of facts were not involved and the attack
was essentially based on legal issues.
9. Having considered the parameters laid down by the various
decisions, the question that arises for consideration in the present case is
whether the disputed question is susceptible to the writ jurisdiction or
adjudication or arbitration. As mentioned earlier, basic facts including the
acceptance of the tender, communication regarding the terms of the contract
and payment of money are not in dispute. It is also seen on facts that though
the petitioner was informed about the awarding of the contract, by Ext.P5, an
extension was sought. It was granted and substantial payments were made
thereafter. There is no dispute that during March 2020, due to Covid, lock
down was declared and the KSRTC services were brought to a stand still. It
is also admitted that commercial activities stood paragsed for a long period.
In the above circumstance, petitioner issued Ext.P13 communication, by
which the request was made to commence the agreement. After the lifting of
lock down, the KSRTC resumed its activities and reached full fledged
transportation some time later. In the above circumstances, whether Ext.P13
request was sustainable is a crucial disputed fact. This is an important factor
to be adjudicated to decide whether there was frustration of contract and
whether circumstance was such that, performance of contract was beyond
the control of the petitioners. It is also to be noted that virtually the
petitioners did not commence their work for long. The petitioner have a
definite contention that the contract stood frustrated. To substantiate the
legal principles involved in the frustration, the learned counsel relied on the
following decisions; T.V.Kochuvareed v. Mariappa Goundan (1953 KLT SN
16) ( C.No.44) , Satyabrata Ghose v. Mugneeram Bangur and Co.and
Another (1954 KHC 413(SC), Thomas v. Moran Mar Baselious
Ougen(1979 KHC 305), Thomas v. Piravanthoor Panchayat (1985 KLT
SN 47), Xavier v. Joseph(1994 (2) KLT SN 26,) Vigneshwara Bhar v.
Srikrishna Bhat (2006 (1) KLT SN 94), Syed Khursed Ali v. State of
Orissa and Another (2007 KHC 7548), Alluri Narayana Murthy Raju v.
Dist.Collector Visakhapatnam Dist.and Others (2008 KHC 7457),
Kuriakose v. State of Kerala (2009 (4) KLT SN 17), Delhi Development
Authority v. Kenneth Builders & Developers Ltd. And Others (2016 KHC
6421)
10. Rival contentions are set up by both sides. The claim of frustration
set up by the petitioners was seriously opposed by the contesting
respondents. There was no frustration of contract since the respondent was
ready and willing to continue the terms of the offer made and the petitioners
willfully refrained from executing the agreement. It was also stated that after
a short period of lock down, transportation system came to the normalcy and
there was no supervening impossibility regarding performance of the terms
of the contract. This is also a relevant factor which needs to be adjudicated
on the basis of evidence let in by both sides.
11. Petitioners have also a case that the contract has become void . To
substantiate it, the petitioner relied on the decision reported in Mary v.
State of Kerala and Others (2013 (4) KHC 372). According to the
petitioners, they are entitled for refund of the entire amount deposited . The
learned counsel, relying on the decision reported in Krishna and
Company (M/s.) v. Government of A.P. And Others (1993 KHC 1359)
contended that the petitioners were prevented from exercising their rights
and consequently, entitled for the refund of the amount. This fact is also
disputed by the KSRTC by contending that the petitioners voluntarily
refrained from performing their parts of the duties.
12. Evaluation of the facts disclosed show that there are few matters
which are in serious issue and calls for an adjudication, before conclusion
can be arrived at as to whether there was a frustration of contract or due to
supervening reasons, the contract became void as claimed by the plaintiffs.
Having considered this, I am of the opinion that the subject matter and the
issue involved is beyond the writ jurisdiction of this court. The writ petition is
not sustainable, which is accordingly dismissed reserving the right of the
petitioners to seek appropriate relief by appropriate civil proceedings. It is
made clear that this court has not made any comment on the rival
contentions set up by the parties at each stage.
The writ petition is accordingly dismissed.
Sd/-
SUNIL THOMAS
Judge
dpk
APPENDIX OF WP(C) 29125/2020
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE PARTNERSHIP DEED DATED
22.8.2015 ENTERED INTO BETWEEN THE
PETITIONERS 2 TO 5.
EXHIBIT P2 TRUE COPY OF THE ACKNOWLEDGEMENT OF
REGISTRATION OF FIRM DATED 30.9.2015
ISSUED BY THE REGISTRAR OF FIRMS IN
RESPECT OF IST PETITIONER PARTNERSHIP.
EXHIBIT P3 TRUE COPY OF THE TENDER NOTIFICATION
DATED 17.10.2019 ISSUED BY KSRTC.
EXHIBIT P4 TRUE COPY OF THE ORDER DATED 18.12.2019
ISSUED BY THE KSRTC TO THE IST
PETITIONER.
EXHIBIT P5 TRUE COPY OF THE LETTER DATED 17.1.2020
ISSUED BY THE PETITIONER TO THE KSRTC.
EXHIBIT P6 TRUE COPY OF THE LETTER DATED 20.2.2020
ISSUED BY KSRTC TO THE IST PETITIONER.
EXHIBIT P7 TRUE COPY OF THE RECEIPT NO.109953 AND
RECEIPT NO.109952 DATED 29.2.2020 ISSUED
BY THE KSRTC.
EXHIBIT P8 TRUE COPY OF THE CIRCULAR DATED 2.3.2020
ISSUED BY KSRTC.
EXHIBIT P9 TRUE COPY OF THE CIRCULAR DATED 7.3.2020
ISSUED BY KSRTC IN RESPECT OF THE
CONTRACT.
EXHIBIT P10 TRUE COPY OF THE CIRCULAR DATED 13.3.2020
ISSUED BY THE KSRTC TO THE IST
PETITIONER.
EXHIBIT P11 TRUE COPY OF THE RECEIPT NO.109958 DATED
13.3.2020 ISSUED BY THE KSRTC TO THE IST
PETITIONER.
EXHIBIT P12 TRUE COPY OF THE LETTER DATED 10.3.2020
ISSUED BY THE IST PETITIONER TO THE
KSRTC.
EXHIBIT P13 TRUE COPY OF THE LETTER DATED 20.3.2020
ISSUED BY THE IST PETITIONER TO THE
KSRTC.
EXHIBIT P14 TRUE COPY OF THE EMAIL LETTER DATED
9.4.2020 ISSUED BY THE IST PETITIONER TO
THE KSRTC.
EXHIBIT P15 TRUE COPY OF THE EMAIL DATED 2.6.2020
ISSUED BY THE IST PETITIONER TO THE
KSRTC.
EXHIBIT P16 TRUE COPY OF THE LETTER DATED 28.9.2020
ISSUED BY THE KSRTC TO THE IST
PETITIONER.
EXHIBIT P17 TRUE COPY OF THE
LETTER/REPRESENTATION/REPRESENTATION
DATED 28.9.2020 ISSUED BY THE IST
PETITIONER TO THE KSRTC.
EXHIBIT P18 TRUE COPY OF THE EMAIL DATED 28.10.2020
ISSUED TO THE IST PETITIONER BY THE
KSRTC.
EXHIBIT P19 TRUE COPY OF THE DRAFT AGREEMENT ENT OVER
TO THE IST PETITIONER BY THE KSRTC.
EXHIBIT P20 TRUE COPY OF THE LETTER DATED 20.11.2020
ISSUED BY THE KSRTC TO THE IST
PETITIONER.
EXHIBIT P21 TRUE COPY OF THE COMMUNICATION DATED
30.11.2020 ISSUED BY THE IST PETITIONER
TO THE KSRTC.
EXHIBIT P22 TRUE COPY OF THE LETTER DATED 15.12.2020
ISSUED BY THE KSRTC THROUGH EMAIL TO THE
PETITIONER.
EXHIBIT P23 TRUE COPY OF THE COMMUNICATION DATED
16.12.2020 ISSUED BY THE KSRTC TO THE
PETITIONER.
EXHIBIT P24 THE TRUE COPY OF THE LETTER DATED
17.10.2018 ISSUED BY THE RESPONDENT TO
THE PETITIONER ACCEPTING THE BID OF THE
PETITIONER FOR A PERIOD OF ONE YEAR FROM
5.10.2018 TO 4.10.2019.
EXHIBIT P25 TRUE COPY OF THE COMPLAINT DATED
14.4.2020 ISSUED BY THE PETITIONER
THROUGH E-MAIL TO THE RESPONDENT.
EXHIBIT P26 TRUE COPY OF THE LETTER DATED 10.3.2020
ISSUED BY THE PETITIONER TO THE
RESPONDENT.
EXHIBIT P27 TRUE COPY OF THE LETTER DATED 30.11.2020
ISSUED BY THE PETITIONER TO THE
RESPONDENT.
EXHIBIT P28 TRUE COPY OF THE LETTER DATED 6.12.2019
ISSUED BY THE PETITIONER TO THE FIRST
RESPONDENT.
EXHIBIT P29 TRUE COPY OF THE LETTER DATED 7.11.2019
ISSUED BY THE FIRST RESPONDENT TO THE
PETITIONER.
