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Air Foam Industries (P) Ltd., New Delhi and anr. Vs. Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 255 of 1973
Judge
Reported in10(1974)DLT120
ActsConstitution of India - Article 226
AppellantAir Foam Industries (P) Ltd., New Delhi and anr.
RespondentUnion of India and ors.
Advocates: Ved Vyas,; D.C. Singhania,; M.K. Garg,;
Cases ReferredK. Ramalu v. Director of Tamil Nadu Raffle. Although
Excerpt:
commercial - jurisdiction - articles 19 (1) (f) and 226 of constitution of india - petitioner supplier of goods to government - petition filed for recovery of money withheld by government - money withheld to recover damages on account of breach of earlier contract - claim of money cannot be treated as property of petitioner - jurisdiction under article 226 cannot be invoked to realise such dues. - - they contend that the government cannot withhold the property of the petitioners which they have a righ,t to enjoy. roman and roman ltd). the power conferred on the high court under article 226 must be exercised in accordance with well-established principles (see janardhan reddy v. deputy custodian cum managing officer, bombay',it was laid down that 'a writ of mandamus may be granted only.....prakash narain, j.(1) by this petition under article 226 of the constitution of india the petitioners pray for the issue of an appropriate writ, order or direction in the nature of mandamus and/or otherwise directing the respondents to pay rs. 2,31,663.00 due to the petitioners and an appropriate writ, order or direction in the nature of mandamus and/or otherwise directing the respondents to act in accordance with the order dated may 19,1972 passed by hen'ble mr. justice t. p. s.chawla in 1. a. no. 846 of 1972 in suit no. 158 of 1971 and made absolute by hon'ble mr. justice avadh behari byjudgment and order dated november 15, 1972. (2) petitioner no. 1 is aprivate limited company within the meaning of the companies act, 1956 with its registered office at 27, khan market flats, new delhi......
Judgment:

Prakash Narain, J.

(1) By this Petition under Article 226 of the Constitution of India the petitioners pray for the issue of an appropriate writ, order or direction in the nature of Mandamus and/or otherwise directing the respondents to Pay Rs. 2,31,663.00 due to the petitioners and an appropriate writ, order or direction in the nature of mandamus and/or otherwise directing the respondents to act in accordance with the order dated May 19,1972 passed by Hen'ble Mr. Justice T. P. S.Chawla in 1. A. No. 846 of 1972 in Suit No. 158 of 1971 and made absolute by Hon'ble Mr. Justice Avadh Behari byjudgment and order dated November 15, 1972.

(2) Petitioner No. 1 is aprivate limited company within the meaning of the Companies Act, 1956 with its registered office at 27, Khan Market flats, New Delhi. Petitioner No. 2 is an engineer who describes himself in the petition as a ''self-employed whole time Technical Director 'of petitioner No. 1. The first respondent is the Union of India, the second respondent is the Director-General of Supplies and Disposals, Government of India and the third respondent is Shri J. C. Bhandari, Director of Supplies (Vehicle Directorate), Directorate General of Supplies and Disposals, New Delhi.

(3) The important question of law which has been raised by this petition is whether the reliefs as claimed by the petitioners can be granted to them by the issue of ahigh prerogative writ of mandamus or any other appropriate writ, order or direction in the nature of a mandamus. Accordingly, we issued notice to show cause to the respondents above-named. Detailed affidavits were filed by the respondent and the petitioners also filed rejoinder-affidavits.

(4) In order to decide the question of law that has been raised by the petitioners it is necessary that the facts and circumstances set out in the petition which according to the petitioners entitle them to the reliefs claimed be noticed.

(5) Petitioner No. 1 is a small-scale industrial unit and, inter alia, carries on the business of manufacturing air-foam compound. According to the petitioners they are one of the very few manufacturers of this commodity in the country. It is contended that the Government of India and public undertakings are the only purchasers of the commodity manufactured by the petitioner----

(6) In 1968 the D.QG.8.&.D entered into a contract with petitioner No. I for supply of this commodity on terms and conditions contained in the acceptance of Tender No SV-6/105/78/323/1/46 dated July 16, 1968. It seems that this contract was cancelled by respondent No. 1 for alleged brech of contract by petitioner No. 1. On the other hand, the case of the petitoner is that,they did not commit any breach of contract but it was the respondent-Government which illegally cancelled the contract. The petitioners have claimed a sum of Rs. 2,31,663.00 from the respondent-Government as damages for breach of contract while the respondents have claimed a sum of Rs. 2,28,900.00 from petitioner No. 1 as general damages. The terms and conditions governing the said contract of 1968 are, inter alia, contained in a pamphlet known as General Conditions of Contract, Form P.G.S.&D.-68.; -Clause 18 therein reads as under.

'18.Recovery of sum due:Whenever any claim for the payment of a sum of money arises out of or under the contract against the contractor, the purchaser shall be entitled to recover such sum by appropriating in whole or in part, the security, if any, deposited by the contractor, and for the purpose aforesaid, shall be entitled to sell and/or realise securities forming the whole or part of any such security deposit. In the event of the security being insufficient, the balance, and if no security has been taken from the contractor, the entire sum recoverable shall be recovered by appropriating any sum then due or which at any time thereafter may become due to the contractor or under the contract or any other costract with the purchaser or the Government or any person contracting through the Secretary. If such sum even be not sufficient to cover the full amount recoverable, the contractor shall on demand pay to the purchaser the balance remaining due. For the purpose of this clause, where the contractor is a partnership firm, the purchaser shall be entitled to recover such amount by appropriating the whole or in part any sum due to any partner of the firm whether in his individual capacity or otherwise.'

Clause 24 of the Conditions of Contract provided for arbitration is the event of any question, dispute or difference arising under the general conditions or any special conditions by which the contract was governed or arising under the contract, or inconnection with the same, except as to any matters the decision of which was specifically provided for by the conditions governing the contract.

(7) On December 15, 1970 and December 17, 19710 two further orders were placed by the respondents on petitioner No. 1 for the supply of foam compound on the terms and conditions set out in Acceptances of Tenders No. Sv 6/105/76/304, 13th September, 1970 PAOM/377 dated December 15, 1970 and No. SV^/101/76/200/9th June, 1970/PAQM/380, dated December 17, 1970 respectively. It is coatended by the petitioners that the supplies under these two acceptances of tender were duly made and the respondents received and appropriated the goods supplied. These two contracts were also governed by similar conditions of contract as the contract of 1968. The petitioners aver and it is not disputed by the respondents, that three bills were submitted by petitioner No. I between December, 1971 and March, 1972 for payment of the price of the goods supplied under the said two contracts of 1970 but payment to the extent of Rs. 2,28,900.00 has still not been made by the respondents to the: petitioners. In spite of repeated demands and requests for payment this amount has not been paid and the respondents arc stated not to have even replied to thecommunications sent by the ' petitioners. There is some controversy's, to whether the amount which is due to the petitioners isRs.2,31,663.00 or whether it is Rs. 2,28,900.00. For the purposes of this petition this difference in the amount is not material. Suffice it to say that some amount due to petitioner No. 1 has not .been paid. The petitioners contend in paragraphs 10 and 11 of the petition that this action of the respondents is grossly illegal, high-handed, arbitratry, in abuse of governmental power and might, and mala fide. They contend that the Government cannot withhold the property of the petitioners which they have a righ,t to enjoy. To quote from what is stated in the petition. 'Right to receive their legal and legitimate dues is the petitioners' . valuable right to property and to deprive the petitioners of its use even 'temporarily is an abridgement of the petitioners' fundamental rights to property.'

(8) The respondents in reply to the show cause issued by this court admit that they have withheld payment to the extent of Rs. 2,28,900.00. It is contended that this amount has been withheld from the bills of petitioner No. 1 submitted in the contracts of 1970 towards the claim of the Government for general damages in respect of the conflict of 1968, and clause 18 aforesaid entitles them to withhold payment.

(9) As already noticed earlier the petitioners had denied the Government's claim for general damages in respect of the contract of 1968 and had asserted their own claim for wrongful cancellation of the contract by the Government. Inasmuch as the Government had demanded payment of Rs. 2,28,900.00 from the petitioners and had threatened to recover that amount from any other bills of the petitioners if payment was not made by a communication dated March 30, 1971, the petitioners preferred in this High Court two applications (1. A. 119 and 1. A. 846 of 1972) under Section 41 read with Schedule 2 of the Arbitration Act, 1940 and Order 39 rule 2 and Section 151 Civil Procedure Code along with a petition (Suit No. 158 of 1971) under Section 20 of the Arbitration Act.

(10) By the petition under Section 20 of the Arbitration Act the petitioners prayed for filing of the arbitration agreement contained in clause 24 of the General Conditions of Contract governing the aforesaid contract of 1968 between the parties and making areference of the respective claims of the parties to the contract. This petition was accepted, the arbitration agreement was ordered to be filed and a reference has been made in accordance therewith. .

(11) The two applications, I .A. 119 of 1972 and l.A. 846 of 1972. were disposed of finally by our brother Avadh Behari, J. on November 15, 1972. In these two applications the prayer was that the respondents be rpstricted front recovering and/or withholding or appropriating and/ or adjusting the. sum of Rs. 2,28,900.00from the other bills of the petitioners as threatened by them in their said letter dated March 30, 1971, and/or in any manner giving effect to the illegal threat contained in the said impugned letter, till the adjudication of disputes and differences through arbitration in accordance with the due process of law. Accepting the two applications an order was passed restraining the Union of India from effecting recovery of the amount claimed by it from the other pending bills of petitioner No. 1

(12) Petitioner No. l'demanded payment of the amounts withheld by the respondents even after proniuncemement of judgment in I.A. 119 of 19712 and I.A. 846 of 1972 but the respondent have not paid up all the amounts due to the petitioner under the said three bills of the two/con- tracts of 1970. The petitioner contend that withholding of the amounts due to them in these cirsumastances amount to arbitrary, mala fide etc. exercise of Governmental powerby the respondents and if vocative of their fundamental right to property as noticed earlier. Hence this petition.

(13) That some amounts are due to petitioner No.1, and those amounts are not being paid by respondent No. 1 cannot be disputed. The question that arises for deteamination is whether payment of these amounts can be enforced in the circumstances set out above by moving a petition under Article 226 of the Constitution of India. The answer to this question will, to some extent, be dependent upon whether the price of goods claimed by the petitioners is petitioners' property or the right to claim payment of price is a right-to property within the meaning of Article 19(1)(f) of the Constitution of India. It will also have to be determined whether withholding of payment of price due by Government or governmental authorities in the above circumstances amounts to a breach of any fundamental rights guaranteed by the Constitution or breach of any statutory or other legal right so as to enable this court in exercise of the jurisdiction conferred on the High Courts under Article 226 of the Constitution to issue awrit of mandamus or a writ, order or direction in the nature of mandamus directing payment of the amounts withheld.

(14) The writs named in Article 226 of the Constitution of India, which a High Court can issue are, what are known as prerogative writs. Whartol defines such writs in his Law Lexican as: 'Processes issued upon extraordinary occasions on proper cause shown'. Halsbury's Laws of England also contains a similar definition and lays down that a prerogative writ is one of the extraordinary remedies which is issued upon cause shown in causes where the ordinary legal remedies are inapplicable, or inadequate. The jurisdiction of the High Court under Attittle 226 of the Constitution is, however, not restricted to the issue of only the five writs specified but extends to issuing of any writ, order or direction as may be appropriate in the exigencies of a particular case. In other words a very wide discretion is given to the High Court in the matter of framing-its writs (See Rashid Ahmed v. Municipal Board, Kairana). All the same this power under Article 226 of the Constitution is not an unlimited one. The limitation is not one arising out of the fact that a wide e discretion is conferred on the courts and that in the exercise of discretion they will imposed upon themselves a wise self-restraint so as not to unduly impede the public administration of the country. The limitation is one of jurisdiction and power (See Veerappa v. Roman and Roman Ltd). The power conferred on the High Court under Article 226 must be exercised in accordance with well-established principles (See Janardhan Reddy v. State of Hyderabad). Different-principles apply to the different kinds of writs, orders and directions that can be issued. We are not here concerned with writs of habeas corpus prohibition, quo warranto or certiorari or any order or direction in the nature of these writs. According to the prayers in the petition we are only concerned with directions or orders or writs' including writs in .the nature of Mandamus.

(15) Halsbury describes a writ. of mandamus as follows:-

'THEwrit of mandamus is a high prerogative writ of a most ex- , tensive remedial nature, and is, a cominand issuing from the High Court of Justice directed to any person, corporation, or inferior Court, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duty. Its purpose is to supply defects of justice; and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy for enforcing such right; and it may issue in cases where, although there is an alternative legal remedy, yet such mode of redress is less convenient, beneficial and effectual.'

(16) Blackstone defines mandamus to be 'a command issuing in the King's name from the Court of King's Bench, and directed to any person, corporation or inferior Court of Judicature within the King's dominions, requiring them to do some particular thing therein specified, which appertains to their office and duty, and which the Court of King's Bench has previously determined, or at least supposes, to be consonant to right and justice.'

(17) The Supreme Court of India has also repeatedly laid down the principles governing the issue of a writ of mandamus and orders, directions or writs in the nature of a mandamus. As was laid down in Dr. Rai Shivendra Bahadur v. Governing Body of the Nalanda College, Bihar Skarif and others, : (1962)ILLJ247SC : 'In order that mandamus may issue to compel the respondents to do something it must be shown that the statutes impose a legal duty and the appellant has a legal right under the statutes to enforce its performance.' Again in Lehrai Sathramdas Lalvani v. N. M. Shah. Deputy Custodian cum Managing Officer, Bombay', it was laid down that 'a writ of mandamus may be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge that statutory obligation. The chief function of the writ is to compel the performance of public duties prescribed by the statute and to keep the subordinate tribunals and officers exercising public functions within the limits of their jurisdictions. 'The judgment of a bench of this court to which one of us was a party (judgment delivered by Prakash Narain, J.) in Civil Writ Petition No. 27 of 1972), National Seeds Corporation Employees Union (Reg. & Recognised) and another v. National Seeds Corporation dated February 8, 1972, clearly set out after noticing the principles laid down by the Supreme Court, the circumstances in which a mandamus is issued. As was observed therein ; 'Mandamus is issued on certain principles, which are, where a person, corporation or tribunal is required to perform any public duty or where it is required to perform any statutory duty imposed upon the respondent. A mandamus is in the nature of a command issuing from the High Court directing any person, Corporation or inferior court or Tribunal or authority to do a particular act or thing which that person or authority etc. is under a legal duty to perform or do. It is a coercive writ and not a corrective writ.' A mandamus lies to secure the performance of a public or statutory duty, as was laid down by the Supreme Court in Praga Tools Corporation v. C. V. Imanual. In short, thereforee, the condition precedent for the issue of mandamus is that there is in one claiming it a legal right to the performance of a legal duty by one against whom it is sought. It is not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. It is, however, necessary that the command in the nature of mandamus is issued to compel performance of a constitutional or other statutory or public duty.

(18) Another salient feature which must be kept in mind is that a mandamus or a writ, order or direction in the nature of mandamus may be issued as a consequential relief when a particular order or act of public or statutory authority is struck down but is ordinarily not issued solely directing the State or any other authority or Corporation or person to refund money (See Suganmal v. State of Madhya Pradesh). Where an aggrieved party comes to Court for a declaration of the existence of a right in him the High Court can to give a complete relief after declarating the existence of the right claimed or a declaration that a right has been infringed, issue a mandamus . as a consequential relief. The High Courts have power for the purposes of enforcement of fundamental rights and statutory rights in these circumstances to give consequential relief by ordering repayment or payment of money, as was laid down by the Supreme Court in State of Madhya Pradesh and another v. BhaVal Bhai. A writ of mandamus cannot issue for enforcement of any claim or right. Rules in the nature of administrative instructions without any statutory force cannot be subject-matter for the issue of a mandamus and enforcement or non-enforcement of such rules through a writ petition is not possible. (See State of Assam and another v. Ajit Kumar Sarma). We find, thereforee, a mandamus can issue only for the enforcement of a fundamental or statutory right.

(19) Mr. D. C. Singhania. the learned counsel for the petitioner has urged that apart from enforcement of a fundamental or statutory right a mandamus can also issue for the enforcement of a legal right as distinct from a fundamental or statutory right. He contends that to recover what is due to him is a legal right and inasmuch as withholding payment amounts to a denial of this right the petitioners can approach this court to issue a mandamus directing the respondents to pay the amounts, the just dues of the petitioner No. 1. In support of this contention we were first referred to the State of Madhya Pradesh v. Ranojirao Shinde. The Supreme Court in this case was concerned with the question whether the Madhya Pradesh Abolition of Cash Grants Act of 1963 was ultra virus the provisions of the Constitution. The impugned Act abolished the cash grants which the respondents were entitled to receive from the Government of Madhya Pradesh but provided for the payment of certain compensation to the grantees. The High Court had held that the impugned statute was ultra virus Article 19(1)(f) of the Constitution and was not saved by sub-article (5) thereof. In the Supreme Court the finding of the High Court that cash grant was property within the meaning of that expression in Articles 19(1)(f) and 31 of the Constitution was not challenged. It was, thereforee, observed that a right to a sum of money is property. Inasmuch as the compensation provided was not considered to be adequate and the abolition of the cash grants in these circumstances was held to amount to the State appropriating to itself the property of others which is not within its hand it was held that the statute was ultra virus Article 19(l)(f). This decision does not advance the argument of the learned counsel for the petitioners that a mandamus can be issued to enforce a legal right as opposed to fundamental and statutory rights.

(20) Mr. Singhania next referred to the Stale of Madhya Pradesh v. Bhailal Bhai. We have already referred to this decision earlier and reference to paragraphs 14. 15 and 17 of the speech of Das Gupta, J. does not avail the learned counsel for the petitioners.

(21) Similarly Satwmt Singh Sawhney v. D. Ramarathnam, Assistant Passport Officer, New Delhi, relied upon by Mr. Singhania is of little assistance in supporting the proposition that any legal right can be enforced by claiming the issue of a writ of mandamus.

(22) Our attention was invited by Mr. Singhania to a full bench decision of the Madhya Pradesh High Court in M/s. Shree Ganesh Trading Co., Saugor v. The State of Madhya Pradenh. This was a petition by a contractor who took the contract of purchase of Tendu leaves for the year 1970 from the Government and sought renewal of the contract for subsequent years on the same terms by issue of a mandamus. In our opinion this decision also does not help Mr. Singhania for as was observed in paragraph 22. ' There can be no doubt that prerogative powers cannot beused solely for the purpose of enforcing the contractual rights or obligations. But necessarily the enforcement is for enforcing the fundamental rights or statutory rights. In the present case we may observe that the rights and liabilities, although originating in a contract, are not purely contractual, but they are partly contractual and partly statutory......' Indeed referring to the decision of the Supreme Court in D. F. 0. South Kheri v. Ram Snehi Singh, which has also been relied upon by Mr. Singhania, it was observed that the appropriate cases in which an obligation can be enforced by issue of a writ in the nature of mandamus are 'alone cases where the obligation sought to be enforced is associated with public duty or public interest and there is no adequate alternate remedy for its enforcement and justice of the case enquires that it should be enforced. ' On facts it was found that the trade in Tendu leaves was a State monopoly under a valid statute. To work out the power conferred under section 12 of the Act for sale of tendu leaves a scheme was formulated for the whole of the State as contained in the tender notice. The tender notice and the agreements entered into with the purchasers contained a representation inbinding terms that if the conditions mentioned in the renewal clause are satisfied, there will be yearly renewal of the agreement up to 31st December, 1972. The agreements were entered into not with one person but with a large number of persons. In these circumstances, if the agreements were not renewed by the Government on a wrong and arbitrary construction of the renewal clause the resulting large scale avoidance of agreements made with the purchasers gets associated with public interest. In this background there was a public duty to renew the agreement if the relevant conditions are fulfillled. The alternate remedy by way of suit was not considered adequate in view of the shortage of time. Thus. what was compelled by issue of mandamus ;o renew the contracts was, what was held to be a public duty and what was enforced by granting relief to the petitioner was a right although originating in a contract but which was held to be not only as contractual rights but partly contractual and partly statutory. We, thereforee, overrule the contention that the right spelt out by he petitioner, though a legal right can be enforced merely as such by claiming the issuance of a writ of mandamus.

(23) Mr. Singhania's main contention, however, was that the right claimed by the petitioners is a right to property and so, when price of goods is withheld it amounts to infraction of the fundamental rights guaranteed by Articles 19(l)(f) and 31 of the Constitution. In other words what he contends is that price due to a seller is his property in the hands of the purchaser.

(24) In support of this contention we were first referred to the celebrated privy purses case decided by the Supreme Court In re : H. H. Maharajadhiraja Madhay Rao Jivaji Rao Scindia Bahadur and others etc. v. Union of India. The facts of this case are well-known and so, need not be set out It was held that privy purses payable to the rulers of former Indian States are property within the meaning of Articles 19 and 31 of the Constitution. In holding this it was observed that as soon as an Appropriation Act is passed there is established a credit debt and the outstanding privy purse becomes the property of the rulers in the hands of the Government. It is a sum certain and absolutely payable. In coming to this conclusion their Lordships of the Supreme Court discarded the old concept of property. In paragraph 59 of the speech of Hidayutullah, C. J. the four stages through which a debt or a liability to pay passes were laid down. Referring to these Mr. Singhania urged that inasmuch as his claim has passed the third stage when the liability is both ascertained and admitted, the amount claimed has become the property of the pettioners in the hands of the Government. There is a fallacy in the argument of the learned counsel. What the learned Chief Justice observed was that after the liability is both ascertained and admitted then it is property of the debtor in the creditor's hand. What is established is a credit debt. In the present case petitioner is the creditor and the Government is the debtor and the property is still in the hands of the debtor. Unlike an act like the Appropriation Act being passed, there is no earmarking of funds for payment to the petitioners. Liability to pay on appropriation and debt due are two distinct things. The judgment in this case, thereforee, does not advance the proposition that merely because the amount with held is admittedly due but is not being paid this amount is the property of the petitioners of which it is deprived in violation of its fundamental rights.

(25) In Iron & Hardware (India) Company v. Firm Shamlal & Bros, Chalga, C.J. observed that a claim for breach of contract is not a debt. This decision relied upon by Mr. Singhania, thereforee, has no relevance.

(26) In Calcutta Gas Company (Proprietary) Ltd. v. State of West Bengal, relied upon by Mr. Singhania, the Supreme Court was, inter alia, concerned with who can apply for enforcement of a legal right and invoke the jurisdiction of the High Court under Article 226 of the Constitution of India. The decision in this case is of no assistance to dilate upon the contention about a debt due being property within the meaning of the term in Articles 19 and 31 of the Constitution.

(27) It was also urged that the debt due to the petitioners is their property in the hands of the Government because the debt due is an actionable claim within the meaning of Section 3 of the Transfer of Property Act and is capable of being transferred as contemplated by Section 6 of that Act. As the definition of' actionable claim ' in Section 3 of the Transfer of Property Act itself shows it means a claim to any debt etc. which the civil courts recognise as affording grounds for relief. So, even if a debt like the one in the present case is an actionable claim which is transferable or can be assigned, what is transferred or assigned is the ground which the civil courts recognised for affording a relief. An actionable claim is thus not property within the meaning of Article 19(1)(f) of the Constitution but may be property only in the sense that a right to claim is a valuable right which the Transfer of Property Act recognises as capable of being transferred, assigned etc. The decisions in the privy purses' cases, in our opinion, does not lay down the proposition that any actionable claim is property within the meaning of Article 19(1)(f). Indeed, the privy purses were held to be property after the Appropriation Act is passed as the property of the former Indian Princes in the hands of the Central Government. Mr. Singhania also referred to the Official Liqvidtor, People's Insurance Company Lt. v. Mangal Singh, to contend that right to receive compensation is property as creditor's right to recover is property. He contended that the decision of the Delhi High Court relied upon by him finds support for this proposition from the decisions of the Punjab High Court reported in Thakar Das v. Chief Regional Settlement Commissioner, and Harnam Singh v, D. K. Puri. The fallacy of the broad proposition propounded by the learned counsel becomes apparent on a careful scrutiny of the facts and circmstances which gave rise to the laying down of the proposition that compensation determined under the Displaced Persons (Compensation & Rehabilitation) Act becomes, by virtue of Section 8, a debt due to the displaced person and so, can be attached, unlike the position obtaining under the Land Acquisition Act. A similar view was taken by the Bombay High Court in the reported decision. The Khudabadi Bhaikhand Co-operative Credit Bank Ltd. v. N. S. Verma. The distinction that has to be kept in mind is that the compensation determined payable in from the compensation pool or privy purses payable from the Consolidated Fund of India on passing of the Appropriation Act amounts to earmarking funds for payment of a particular debt. In the case of money due to a party from the Government under a contract there is no such earmarking of the amount that is payable under the contract. Thus, we cannot persuade ourselves to agree with Mr. Singhania that the debt due to the petitioners under the contracts of 1970 by way of price payable for goods supplied is property as cotemplated by Articles 19(1)(f) & 31 of the Constitution.

(28) We are not impressed with the argument that all legal rights stand on the same footing as statutory rights and fundamental rights. It is no doubt true that entering into contracts is the executive power of the Union of India but not complying with the terms of a contract does not amount to failure to exercise statutory power or failure to perform public or statutory duty. The contention that Article 14 of the Constitution is attracted in the facts of this case has merely to be stated to be rejected. Reliance on the decision of the Supreme Court in Satwant Singh Sawhney's case is misplaced. The impugned act of withholding payment, even if it is arbitrary, cannot be called discrminatory. As observed by the Supreme Court in Budhan Chowdhry v. The State of Bhiar, the Constitution does not assure unanimity of decision or immunity from merely erroneous action by the executive agencies of the State.

(29) It was next urged that the State cannot unduly enrich itself at the cost of the petitioners and the alternative remedy of filing a suit cannot be a bar to the filing of the writ petition if the rights and duties conferred emanate from the contract. In support of this we are referred to the decision of the Supreme Court in the case of The D. F. 0. South Kehri, and others noticed earlier, and a single bench decision of the Madras High Court in K. Ramalu v. Director of Tamil Nadu Raffle. Although it is not necessary to decide this question in the view that we have already taken, yet we may observe that the decision of the Supreme Court relied upon does not advance the broad proposition enunciated by the petitioners. As far as the decision of the Madras High Court is concerned all that we can say is that if it advances the proposition advocated by the learned counsel we are in respectful disagreement with it. However, as we read the decision the ratio of the case really is what was laid down by the Supreme Court in its well-known decision in C. A. Nos. 885-893 of 1967, Union of India and others v. Indo Afghan Agencies Ltd., decided on November 22, 1967.

(30) We were referred to a number of decision where tax illegally collected was ordered to be refunded by the issue of a mandamus. It is not necessary to notice all of them. Suffice it to say that those were cases in which mandamus was issued as a consequential relief after striking down either the statutory provision under which the tax was collected or the action of collecting the tax. Those decisions do not help the learned counsel for the petitioners.

(31) In substance the present petition amounts to invok in the jurisdiction of the High Court under Article 226 to decide a money suit. The jurisdiction conferred by Article 226 is not meant for this purpose. If money is due to the petitioners their remedy is in the ordinary courts of law by a civil action.

(32) The second relief sought by the petitioners amounts to filing of an execution application to enforce the order passed by our brother Avadh Behari. J., if at all the order amounts to a direction for payment of the money claimed by the petitioners. As we read the judgment of Avadh Behari, J. it does not amount to an order for payment of money.

(33) The result is that we find no force in this petition and dismiss the same in liming. We may, however, make it clear that as the petition had not been admitted an order dismissing it in liming is being passed but counsel for the parties were heard at considerable length and that too after full adffidavits and counter-affidavits had been filed. In the circumstances of the case we make no orders as to costs.


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