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C.K. Achuthan Vs. State of Kerala and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtKerala High Court
Decided On
Case NumberA.S. No. 354 of 1958
Judge
Reported inAIR1959Ker239
ActsConstitution of India - Articles 16 and 226
AppellantC.K. Achuthan
RespondentState of Kerala and ors.
Appellant Advocate M.T. Paikeday, adv.
Respondent Advocate V. Rama Shenoi, Government Pleader, For Respondent 1 and;P. Govinda Menon
DispositionAppeal dismissed
Cases ReferredVedachala Mudaliar v. Divisional Engineer
Excerpt:
.....by the petitioner are not amenable to correction in exercise of the powers under article 229 of the constitution and dismissed the application for the issue of a writ. 8. the state further raised the contention that there has been absolutely no discrimination and that the orders complained of, arc not amenable to be questioned under article 226 of the constitution. the government, as well as any individual, has got a right to enter or not into a contract with a particular person. the government, as well as any individual, has the right to decide on the terms of the contract. on the other hand, both the state and the third respondent have taken up positions that there is no concluded contract and even if there is a contract, clause 20 gives an absolute power to the district medical..........government passed the order dated 28-3-1958 stating that in the matter of supply of milk to the government medical institutions in the cannanore district, the third respondent will be given contracts on the basis of prices fixed by the revenue department and this also was communicated to the appellant. to avoid a contention that the telegram of the director of, health service dated 25-3-58 may not amount to a termination of the contract, the district medical officer, cannanore (2nd respondent) issued a notice to the appellant on 5-5-1958 under clause 20 of the conditions of tender, informing him that the contract relating to the supply of milk stands terminated on the expiry of. one month from the date of receipt of that notice. that notice was also received by the appellant on.....
Judgment:

Vaidialingam, J.

1. This is an appeal by the petitioner in O. P. 201/58 against the order of Mr. Justice Raman 'Nayar dismissing the said O. P.

2. Our learned brother has dismissed the application on the ground that the orders complained of by the petitioner are not amenable to correction in exercise of the powers under Article 229 of the Constitution and dismissed the application for the issue of a writ.

3. After hearing Mr. Manuel T. Paikeday, learned counsel for the appellant and the Government Pleader and Mr. P. Govinda Menon, Counsel for the respondents, we are of opinion that the conclusions arrived at by Mr. Justice Raman Nayar are correct and this appeal has to be dismissed.

4. The short facts leading up to the filing of the application in this court are as follows:

5. On 9-11-1957, the State of Kerala called for tenders for the supply of diet and other hospital requirements for the year 1958-59 for the Head-quarters Hospital at Cannanore. The appellant appears to have made a tender for several articles including milk whereas the third respondent, the Cannanore Co-operative Milk Supply Society Ltd., made a tender for the supply of milk alone. The terms ot the tender are contained in Ext. P4. The tender of the appellant was accepted by the Director of Health Services, Trivandrum by his letter dated 17-3-1958 and it was dulv communicated to the appellant. Vide Ext. P1. But under Ex. P2, dated 25-3-1958, the Director of Health Services cancelled the acceptance of the tender of the appellant for one item namely milk. This cancellation was followed by another letter of the District Medical Officer dated 39-3-58, Ext. P3, enclosing the proceedings of the Government dated 28-3-58. The contract was assigned to the third respondent on the basis of prices fixed by the Revenue Department.

6. The appellant challenged the proceedings covered by the order of the Government dated 29-3-1958 and prayed for quashing the same. The ground on which the order was challenged was that after the acceptance of the tender of the appellant, there is a concluded contract and the department is not entitled to cancel the same. The orders covered by Exs. P2 and P3 were also challenged on the ground that they are opposed to the principles of natural justice inasmuch as the appellant was not given any opportunity to show cause against the cancellation of his contract. The appellant also alleged that the orders were void and illegal. A common counter-affidavit was filed on behalf of the State of Kerala and the District Medical Officer, Cannanore. It was stated in the said counter-affidavit that the general policy of the Government was for encouraging co-operative societies' enterprise, wherever possible, arid that the tender of the appellant had been accepted by the Director of Health Services overlooking this policy of the Government,

When his attention was drawn to the same, he cancelled the acceptance of the appellant's tender by his order dated 25-3-1958. Following this, the Government passed the order dated 28-3-1958 stating that in the matter of supply of milk to the Government Medical institutions in the Cannanore district, the third respondent will be given contracts on the basis of prices fixed by the Revenue department and this also was communicated to the appellant. To avoid a contention that the telegram of the Director of, Health Service dated 25-3-58 may not amount to a termination of the contract, the District Medical Officer, Cannanore (2nd respondent) issued a notice to the appellant on 5-5-1958 under Clause 20 of the conditions of tender, informing him that the contract relating to the supply of milk stands terminated on the expiry of. one month from the date of receipt of that notice. That notice was also received by the appellant on 12-5-1958.

7. The State also relied, among other clauses of the tender, specially on Clause 20 which gives an unqualified right to the superintendent to terminate, without assigning any reason, the contract either wholly or in part on one month's notice. The only limitation is that it is to be done within 3 months from the date of the commencement of the contract. The contractor will not be entitled to any compensation whatsoever in respect of such termination. The State also took up the plea that there is no concluded contract inasmuch as the agreement has not yet been entered into. Viewed either as a rejection of the tender or as a cancellation of a concluded contract, the State contended that tho orders passed are within the terms of the tender notice.

8. The State further raised the contention that there has been absolutely no discrimination and that the orders complained of, arc not amenable to be questioned under Article 226 of the Constitution. They contended that these are purely administrative orders and neither Government nor its officers were dealing as quasi-judicial authority.

9. The third respondent, the Cannanore Cooperative Milk Supply Society Ltd., also filed a counter-affidavit substantially supporting the stand taken by the State. It is not necessary to traverse their contentions because the question will be, not whether the giving of the contract to the third respondent was proper, but whether the cancellation of the contract of the appellant was within the rights of the State.

10. Mr. Justice Raman Nayar was of the view that the Executive Government is free to contract with whom it pleases and on what terms, for the supply of goods required by the State. The learned Judge further was of the opinion that if there was a concluded contract on the terms of the tender notification, Ex. P4 and if the cancellation of the same was wrongful and amounts to a breach of contract, the appellant's remedy is to sue on the contract, for which he must seek his remedy elsewhere. The cancellation of a contract, even if wrongful as alleged by the appellant, is not amenable for correction and review under Article 226. In this view, the learned Judge dismissed the application with costs.

11. In appeal before us, Mr. Manuel T. Paikeday has more or less repeated the same contentions urged before the learned Judge. In addition to that, the learned counsel raised a contention that the fundamental right of his client guaranteed under Article 16 has been infringed in this case. He has contended that there is a concluded contract and that the Government have no power to cancel the same and the order of cancellation is illegal, void and without jurisdiction.

12. Regarding the final order dated 5-5-58 of the Dist. Medical Officer cancelling the contract by virtue of the powers vested in him under Clause 20 of the conditions of tender, Mr. Paikeday argued that the decision to cancel the contract has been already arrived at by the Government and therefore, this order is not one passed by the District Medical Officer in conformity with Clause 20. According to Mr. Paikeday, the right to cancel the contract vests only in the absolute discretion of the District Medical Officer and in this case, he has not exercised the said right by himself after deliberation, but he acted only as a mouthpiece for the Government.

13. In this connection, Mr. Paikeday has referred us to certain decisions to the effect that persons or authorities acting under Statutes must act only on their independent judgment and not be directed by outside authorities.

14. In our opinion, the grievance of the appellant to the wrongful termination of his contract, if it is really wrongful termination in law, cannot be agitated in proceedings under Article 226 of the Constitution. We do not sec any scope for the application of Article 16 of the Constitution in this case. Even on the allegations of the appellant himself the matter is one arising out of a contract entered into with him by the representatives of the State and according to him, there has been a wrongful termination of his contract. In this connection, we may refer to the observations of the Supreme Court in the decision reported in Satish Chandra 7. Union of India, AIR 1953 SC 250 at p. 252 which was a case governed by contract and where a breach of contract was sought to he challenged in proceedings under Article 32 of the Constitution. Their Lordships observed at page 252 as follows:

'There was no compulsion on the petitioner to enter into the contract he did. He was as free under the law as any other person to accept or to reject the offer which was made to him, Having accepted, he still has open to him all the rights and remedies available to other persons similarly situated to enforce any rights under his contract which have been denied to him. assuming there are any, and to pinsue in the ordinary Courts of the land such remedies for a breach as are open to him, to exactly the same extent as other persons similarly situated'

Their Lordships further observed on the same page: 'Article 16(1) is equally inapplicable. The whole matter rests in contracts.' 'The. learned Judges further observed on the same page:

'But of course the State can enter into contracts of temporary employment and impose special terms in each case, provided they are not inconsistent with the Constitution, and those who chose to accept those terms and enter into the contract are bound by them, even as the State is bound.'

15. Their Lordships in that case, were of the view that the remedy by way of an application for the issue of a writ, was misconceived.

16. We may also refer to the decision of the learned Chief Justice and Mr. Justice T.L. Venkatarama Iyer of the Madras High Court reported in Indian Tobacco Corporation v. State of Madras AIR 1954 Mad 549 to he effect that writs cannot be granted for enforcement of contractual obligations. The learned Judges have farther held that an application under Article 226 is not an alternative remedy to the usual remedy by way of suit. We may also refer to the observations of the learned Chief Justice and Mr. Justice Raj'agopala Ayyangar of the Madras High Court in the decision reported in Vedachala Mudaliar v. Divisional Engineer, Highways A.I.R. 1955 Mad, 365. At page 366 the learned Judges observe;

'The appellant has no fundamental right to insist upon the Government or any other individual doing business with him. The Government, as well as any individual, has got a right to enter Or not into a contract with a particular person. The Government, as well as any individual, has the right to decide on the terms of the contract...... ...............It cannot be said that an insistence on such a term being fulfilled in any way infringes the fundamental right of the person with whom the contract is being entered into.'

17. Mr. Paikeday raised various contentions regarding the merits of the case namely, the scope of Clause 20 of the tender, the power of the District Medical Officer to act under that clause and various other ma'.ters relating to this contract. On the other hand, both the State and the third respondent have taken up positions that there is no concluded contract and even if there is a contract, Clause 20 gives an absolute power to the District Medical Officer to cancel the contract without assigning any reasons and that the appellant has entered into this contract with eyes open and he has no right to complain about the same. We express no opinion on the different contentions of the appellant and the respondents, nor do we express any opinion as to whether the appellant has other rights which he can enforce in other ways. We are only dealing with an application under Article 226 tor the enforcement of a fundamental right and the only point we decide is that no fundamen'al right has been infringed.

18. The appeal fails and is dismissed with costs of respondents 1 and 2, Rs. 50/- and the costs of the third respondent fixed at Rs. 50/-


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