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Allied Oil Industries Pvt. Ltd., Durg Vs. State of Madhya Pradesh, Bhopal and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 642 of 1981
Judge
Reported inAIR1983MP158
ActsConstitution of India - Article 226 and 299
AppellantAllied Oil Industries Pvt. Ltd., Durg
RespondentState of Madhya Pradesh, Bhopal and anr.
Appellant AdvocateJ.P. Sanghi, Adv.
Respondent AdvocateR.K. Verma, Dy Adv. General
DispositionPetition dismissed
Cases ReferredState of U. P. v. Vijay Bahadur Singh
Excerpt:
- - 2. the return filed by the state discloses that the permission granted to the petitioner was revoked on the ground that it failed to deposit rs......some correspondence which took place thereafter, by order dated, 8th may 1981 (annexure vii), the state government revoked the order dated 13th february 1979. the petitioner seeks quashing of the order annexure vii. it also seeks issuance of a writ of mandamus commanding the respondents to give effect to its promise and enter into the agreement with the petitioner for adequate supply of sal seeds and to allow it to establish the industry. there is further prayer for issuance of a writ of prohibition restraining the respondents to allow other persons to set up the industry within the area for which the petitioner was selected.2. the return filed by the state discloses that the permission granted to the petitioner was revoked on the ground that it failed to deposit rs. 20,000/- as earnest.....
Judgment:

G. P. Singh, C. J.

1. By order, dated 13th February 1979, M/s. Allied Industries Corporation, which was then a proprietary concern, was selected for establishing Solvent Extraction Plant for certain areas of Madhya Pradesh. This selection was made subject to three conditions. The first condition required the deposit of Rs. 20,000/- as earnest money. The second condition was that the plant will be established within a period of 18 months and in case of default, the State will have the liberty to forfeit the earnest money. The third condition was that the party will have to enter into a contract with the Forest Department for supply of raw material, meaning thereby sal seeds, on terms as may be approved by the Government. M/s. Allied Industries Corporation which, as earlier mentioned, was a proprietary concern was later on registered as a private Limited Company which is the petitioner in this petition. An application was made on behalf of the petitioner for substitution of its name in the order dated 13th February 1979. This permission was granted by order dated 27th October 1960. After some correspondence which took place thereafter, by order dated, 8th May 1981 (Annexure VII), the State Government revoked the order dated 13th February 1979. The petitioner seeks quashing of the order Annexure VII. It also seeks issuance of a writ of mandamus commanding the respondents to give effect to its promise and enter into the agreement with the petitioner for adequate supply of sal seeds and to allow it to establish the industry. There is further prayer for issuance of a writ of prohibition restraining the respondents to allow other persons to set up the industry within the area for which the petitioner was selected.

2. The return filed by the State discloses that the permission granted to the petitioner was revoked on the ground that it failed to deposit Rs. 20,000/- as earnest money; that it did not establish the factory or plant within 18 months from the date of the order; and, that it was not really willing to enter into the required, agreement and adopted dilatory tatties. It is further stated that in April 1981 there was a change in Government policy and a decision was taken for selection of parties for establishment of Solvent Extraction Plants based on the following priorities (i) Tribal Co-operative Society, (ii) other co-opera'ive society and (iii) other entrepreneurs. In view of this policy decision, applications were again invited for establishment of Solvent Extraction Plants by notification dated 29th April 1981 (Annexure VI). It is also stated that it was open to the petitioner to apply in pursuance of this notification.

3. Learned counsel for the petitioner contends that the petitioner was always ready and willing to execute the agreement and that it was not open to the State Government to refuse to execute the agreement on the grounds mentioned in the return. It is also submitted that the condition of deposit of earnest money and the condition of establishment of factory or plant within 18 months had to be fulfilled only after the execution of the agreement and not before. Learned counsel, however, concedes that there was no concluded agreement in favour of the petitioner in accordance with Article 299 of the Constitution. In the absence of any concluded agreement in accordance with Article 299, no right on the basis of any contract arose in favour of the petitioner and there is no legal right which the petitioner can enforce in this petition under Article 226. Even in cases of concluded contracts, the proper remedy is to institute a suit and a writ petition is not maintainable for contractual rights cannot be enforced under Article 226. This is the view which we took in M. P. Oil Extraction Pvt. Ltd. v. State, AIR 1982 Madh Pra 1 at p. 5 para 16. No case has been cited before us in which a writ of mandamus may have been issued to direct the State to execute an agreement in the manner required by Article 299. In our opinion, no such writ can be issued. Further, there is a serious dispute between the parties as to the terms and conditions on which the permission was granted to the petitioner for establishment of the plant. It is also in dispute whether the petitioner was always ready and willing to execute the agreement and was not adopting dilatory tactics. These questions cannot be conveniently decided in a writ petition. Again, before a concluded contract giving rise to an enforceable right came into existence in favour of the petitioner, it was open to the State Government to lay down a new policy for grant of per-mission for establishment of Solvent Ex-tradiction Plants based on certain priorities. In this connection, we may refer to a recent decision of the Supreme Court in State of U. P. v. Vijay Bahadur Singh, AIR 1982 SC 1234. In that case there was auction of certain forest lots. The bids were conditionally accepted. Later on, there was a policy decision to get the work done through the Forest Corporation and all the bids were rejected. It was held by the Supreme Court, reversing the decision of the Allahabad, High Court, that it was competent for the Government to take a policy decision of getting the work done through the Forest Corporation and to reject all the bids, as no contractual right had till then come into existence in favour of any party, similar is the position in the instant case.

4. It was also contended by the learned counsel for the petitioner that in similar circumstances permission to establish Solvent Extraction Plants was granted to M/s. Bastar Oil Mill and Industries Private Ltd. and M/s. Sal Udyog Private Ltd, and there was a discrimination when the petitioner's permission was revoked. The return discloses that the facts and circumstances in which permission granted was implemented in cases of these two parties, who had fulfilled all the necessary conditions, were different. A perusal of the petition will show that the petitioner has not stated the facts fully to make out a case of discrimination.

5. The petition fails and is dismissed. There will, however, be no order as to costs. The security amount be refunded to the petitioner


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