1989 Supreme(AP) 419

Andhra Pradesh High Court
Judges : K.RAMASWAMY
Mallikarjuna Chemicals, Piduguralla - Appellant
Versus
Chief Marketing and Movements Singareni collieries Ltd., Hyderabad - Respondent
Decided On : 09-19-89

Headnote:

Whether the writ petition is maintainable? Whether the first respondent being an instrumentality of the State cannot act arbitrarily refusing to supply the raw material for the existence and continuance of the avocation of the petitioner in burning lime. Whether the action of non-supply is arbitrary, capricious and whimsical. Whether it is also violative of the principles of natural justice.

Fact of the Case:

The petitioner is a Small Scale Industry registered with the Government of Andhra Pradesh. It has established a lime kiln at Piduguralla in Guntur district to burn lime. Coal is its raw material. The Singareni collieries (first respondent) is a public sector undertaking, admittedly an instrumentality within the meaning of Article 12 of the Constitution. It has monopoly to exploit coal and to supply it to various public and private undertakings, industries, etc. The Joint Commissioner of industries made recommendation to the first respondent of the petitioner’s requirement at 230 metric tonnes per month. The first respondent had agreed to supply the coal (there is a dispute as regards the quantum of coal required or supplied which is not material for decision in this case to resolve the dispute ). During the year 1986, the petitioner was supplied with coal for seven months and thereafter it was stopped for five months even at the reduced rates. It is the case of the petitioner that in the month of January 1989, dispute the petitioner approaching the first respondent for supply of the coal it has not been supplied and its repeated attempts proved futile. Due to failure to supply the coal, it had to close down the factory and threw 50 workers out of employment. The petitioner cannot have coal from anywhere. Even if the petitioner is permitted to import coal from outside State, it would be at a prohibitive cost which it cannot afford to have. The petitioner when approached repeatedly, it received a reply dated July 30, 1988 that “the petitioner unit is a non-existent one”. The 3rd respondent - District Manager (Joint Director) of Industries Department through his letter dated september 21, 1988, informed the first respondent that the petitioner-unit is still existing with fire brick kiln" and requested to supply coal every month with an intimation to the said office and yet, the petitioner has not been supplied with coal. Thus, it is seeking a writ or direction to the first respondent to supply coal at the agreed quantity of 230 metric tonnes per month.

Finding of the Court:

The writ petitions are maintainable. The action of non-supply is arbitrary, capricious and whimsical. It is also violative of the principles of natural justice.

Issues: Whether the writ petition is maintainable? Whether the first respondent being an instrumentality of the State cannot act arbitrarily refusing to supply the raw material for the existence and continuance of the avocation of the petitioner in burning lime. Whether the action of non-supply is arbitrary, capricious and whimsical. Whether it is also violative of the principles of natural justice.

Ratio Decidendi: The State, its instrumentalities, Corporations or agencies are free to enter into contracts with the citizens or legal persons. Before entry into the contract at the threshold the constitutional requirement of giving fair treatment to the citizen or persons is mandatory; On entering into the contract-qua the contract, the State, its instrumentalities, Corporations or agencies while acting in public interest should see that they act on the basis of the terms and conditions of the convenants of the contract. It is not free like a private citizen to terminate the contract arbitrarily or unreasonably or carpriciously; The State, its instrumentalities or agencies- statutory Corporations or other authorities must have public duty to perform in its dealings with the citizen or the person with whom it entered into contractual relations. The distinction between public law remedy and private law field has become gradually thin. The arms of the Court are long enough to reach injustice wherever it is found; The actions of the state, its instrumentalities, Corporations, agencies or authorities must be supported by reasons; Each case must be considered on its own factand find whether the impugned action is in the public interest; If complicated q uestions of fact, which are the foundation for grant of relief, are involved for adjudication, the Court would refuse to grant the relief and relegate the party to civil suit. Alternative remedy is not always a test for the obvious reason that the remedy for a civil injury is always available in a civil court. But if the facts are undisputed and the disputation is one of law, the Court would make a declaration of law on the admitted facts, A citizen or the person need not be denied of the efficacious or expeditious adjudication and remedy by the Court under Art. 226. No notice before termination of contract need be issued and principles of natural justice need not be observed. But fairly play must be observed.

Final Decision: The writ petitions are accordingly allowed, but in the circumstances, there will be no order as to costs. Advocate’s fee : rs. 350/-, in each.