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1984 Supreme(Cal) 262

High Court Of Calcutta
Amitabha Dutta
S.PAUL AND CO. - Appellant
Versus
STATE OF TRIPURA - Respondent
C. O.  250 (W)  Of  1984
Decided On : 07/23/1984

Advocates Appeared:
B.K.BACHAVAT, K.B.KANJILAL, K.DUTTA, N.N.Gupta, S.N.DUTTA

A writ petition is not an appropriate remedy for impeaching contractual obligations.

Headnote:

CONTRACT - BANK GUARANTEE - ENFORCEMENT - CONDITIONS PRECEDENT - LOSS OR DAMAGE - DETERMINATION - ARBITRARINESS - WRIT JURISDICTION - CONTRACTUAL OBLIGATIONS.

Fact of the Case:

The petitioner, a sole agent for the sale of Tripura State Lottery Tickets, challenged the State Government's threat to encash a bank guarantee furnished by the petitioner, claiming that the bank guarantee was conditional and could not be enforced until the loss, if any, was determined and quantified by a competent court. The petitioner also contended that the State Government could not demand vouchers from the petitioner for payments made to agents/sellers, as the contract did not require such vouchers and the State Government had previously settled accounts without demanding vouchers.

Finding of the Court:

The court held that the writ petition was not maintainable, as the dispute arose out of a concluded contract between the petitioner and the State Government and could not be adjudicated under Article 226 of the Constitution. The court also held that the petitioner was not entitled to any remedy under Article 226 for the alleged threat of breach of contract by the State Government, as the remedy for such breach lay elsewhere.

Issues: 1. Whether the writ petition was maintainable for adjudication of a dispute arising out of a concluded contract? 2. Whether the State Government could demand vouchers from the petitioner for payments made to agents/sellers?

Ratio Decidendi: 1. The court held that a writ petition is not an appropriate remedy for impeaching contractual obligations. After the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Art. 14 or of any other constitutional provision when the State or its agents, purporting to act within this field perform any act. 2. The court held that the petitioner had a duty, irrespective of any contract to that effect, to produce vouchers by which items of disbursement are supported as part of the obligation to render proper accounts to the principal on demand under Section 213, Contract Act. The principal is not estopped from enforcing it.

Final Decision: The writ petition was dismissed without any order as to costs.

AMITABHA DUTTA, J.

( 1 ) THE petitioner M/s. S. Paul and Co. , a registered firm was appointed sole agent for sale of Tripura State Lottery Tickets by a concluded contract of agency in the form of written agreement dt. 23rd Oct. 1982, in modification of an earlier agreement dt. 12th Nov. 1981 and the sole agency continued till the 166th draw of the lottery which was scheduled to be held on Oct. 4, 1983, after which it stood terminated by mutual agreement.

( 2 ) CLAUSES 8, 9 and 16 of the said agreement dt. 23rd Oct. 1982 (Annexure 'a' to the writ petition) were as follows : --"8. That in consideration of the grant of the sole agency the sole agent shall pay to the Government a sum equivalent to 60% of the value of the tickets, balance 40% being retained by the sole agent as commission including expenses on publication of result, publicity for the lottery, checking of tickets and other organisational and administrative expenses of the sole agency. That it shall be obligatory for the sole agent always to pay in advance and/or execute bank guarantee equivalent to net values payable to the Government in terms of the foregoing paragraphs in lieu of lots of tickets earmarked for each draw, to the Government. It is agreed that the accounts in connection with a draw shall be completed squared up and/or settled by the sole agent within fifteen days from the date of each draw. 9. In order to popularise and to give an impetus to the purchasers of the tickets, the sole agent shall stand authorised to make direct payment in respect of claims from the individuals/agent/sub-agents/ sellers in prescribed form and to prize winners up to Rs. 1,000/- (Rupees One Thousand) for prize money/share of agents/ sellers com mission/incentive, etc. , on prizes on surrendering of the prize winning tickets counterfoils invoices and the amount so paid would be reimbursed/ adjusted by the Government. Amount paid by the sole agent towards the prize winning tickets/commission/incentives should be submitted by the sole agent so as to reach the Government within the, period prescribed in the rules. 16. That copies of invoices issued by the sole agent to the agents against sale of tickets by sole agent will be forwarded to the Government on demand for records and verification. "

( 3 ) DURING the material period lottery tickets worth Rs. 27,00,000/- used to be earmarked for each dsaw and 60% of that value is Rs. 16. 20 lacs. The petitioner furnished two bank guarantees for Rs. 16. 20 lacs each to secure payment of the contractual money to the Government of Tripura, one of which being dt. 21-10-1982 from United Industrial Bank, Ultadanga Branch expired on October 21, 1983. The other bank guarantee was executed by the Branch Manager of the Vysya Bank, Chittaranjan Avenue, Branch, Calcutta for Rs. 16. 20 lacs favouring Government of Tripura being Bank Guarantee No. 13/83 dt. 4th July 1983 for one year which has been renewed for another year during the pendency of this case. A copy of the said bank guarantee No. 13/83 is annexure 'c' to the affidavit-in-reply sworn on the 2nd July 1984. Under it the bank guarantees payment of the sale money of the lottery tickets sold by the petitioner firm and "agrees to reimburse the amount of loss, if any, subject to the maximum limit of Rs. 16,20,000/- only. "

( 4 ) PETITIONER's case may be briefly stated. According to the scheme operative from the 118th draw a fixed sum of Rs. 1,18,000/- was the reimbursable sum on account of payments made by the petitioner towards agents/sellers' incentives in terms of Clause 9 of the agreement dt. 23-10-1982 and that the petitioner received adjustment of the entire sum of Rs. 1,18,000/- per draw up to 141st draw. The Government of Tripura accepted the claim for such reimbursement without asking for any supporting vouchers from the petitioner. But from the 142nd draw up to 156th draw both inclusive the said sum of Rs. 1,18,000/- for each draw has been kept unadjusted although reimbursement cla






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