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1985 Supreme(Cal) 213
High Court Of Calcutta
U. C. BANERJEE
SURENDRA PRASAD - Appellant
Versus
OIL AND NATURAL GAS COMMISSION - Respondent
Matter No. 591 of 1981
Decided On : 05/28/1985
Dipankar Gupta, S.PAL CHAUDHARY, SANJOY BHATTACHARJYYA
The writ court has jurisdiction to enforce an equity in favour of a petitioner and can compel the government or governmental agency to perform its part of the bargain.
Headnote:
EQUITY ENFORCEMENT - JURISDICTION OF WRIT COURTS - PROMISSORY ESTOPPEL - GOVERNMENT'S PROMISE - ENFORCEABILITY - WRIT COURT'S POWER TO ENFORCE EQUITY - WRIT COURT'S JURISDICTION TO DIRECT PAYMENT.
Fact of the Case:
The petitioner, a transport contractor, responded to a tender notice by the Oil and Natural Gas Commission (ONGC) for transportation and handling of drilling equipment's. ONGC accepted the tender subject to a formal agreement being executed. Before the execution of the formal agreement, ONGC issued work orders and the petitioner carried out the work. The formal agreement was executed from 25th Feb. 1977 to 24th Jan. 1978 subject to further extension. The petitioner contended that they were entitled to charge on the basis of volumetric conversion or actual weight, whichever was more. The petitioner submitted revised bills for the difference, but ONGC did not make any payment. A further agreement was entered into between the petitioner and ONGC regarding the petitioner's entitlement. The petitioner raised a dispute and demanded arbitration. ONGC agreed to refer the matter to arbitration and appointed an arbitrator. The arbitrator resigned, and ONGC withdrew its application under the Arbitration Act. The petitioner made representations to ONGC, which agreed to form a high-powered committee to enquire into the disputes and recommend a settlement. The committee recommended a settlement and approved the petitioner's claim to the extent of Rs. 7,15,383/-. The petitioner agreed to accept the terms and conditions of the settlement and confirmed that the total payment would be accepted in full and final satisfaction of all claims against ONGC.
Finding of the Court:
1. The doctrine of promissory estoppel can be invoked against the government or a governmental agency where the interest of justice, morality, and common fairness clearly dictate such a course. 2. The government or governmental agency has a duty to the public in general to act fairly and reasonably so as to create a feeling amongst the general public that the latter would not be deprived of justice and fair play. 3. The writ court has jurisdiction to enforce an equity in favour of a petitioner and can compel the government or governmental agency to perform its part of the bargain. 4. The writ court can mould the relief in order to do justice between the parties, including directing payment in the event of a breach of any statutory duty or manifest injustice.
Issues: 1. Whether an equity exists in favour of the petitioner. 2. Whether the jurisdiction of the writ court can be invoked for the purpose of enforcing the equity.
Ratio Decidendi: 1. The doctrine of promissory estoppel applies to the government or governmental agencies when the interest of justice, morality, and common fairness require it. 2. The government or governmental agencies have a duty to act fairly and reasonably towards the public and to avoid depriving them of justice and fair play. 3. The writ court has jurisdiction to enforce an equity in favour of a petitioner and can compel the government or governmental agency to perform its part of the bargain. 4. The writ court can mould the relief in order to do justice between the parties, including directing payment in the event of a breach of any statutory duty or manifest injustice.
Final Decision: The writ petition was allowed, and a writ of mandamus was issued commanding the respondent Commission to implement the recommendations of the high-powered committee as evidenced in the memorandum dated 13th Oct. 1980.
( 1 ) THE jurisdiction of the writ Courts in regard to the enforcement of an equity is the principal issue for consideration in this writ petition.
( 2 ) THE petitioner being a Transport Contractor responded to a tender notice by the Oil and Natural Gas Commission for transportation and handling of drilling equipment's. By a letter dt. 25th Jan. 1977 the Commission intimated the petitioner about the acceptance of this tender subject of course to a formal agreement being executed. The Commission, however, even prior to this execution of the formal agreement issued divers Work Orders and directed the petitioner to carry out the same and the petitioner in turn also carried out the work in accordance therewith. On 25th Feb. 1977 the formal agreement was executed being effective from 25th Feb. 1977 to 24th Jan. 1978 subject to further extension. The petitioner contended that in terms of Cl. 14 of the agreement, the petitioner was entitled to charge on the basis of volumetric conversion, that is, on the basis of weight per measurement or on the basis of dead weight, that is actual weight of the goods carried whichever was more. The petitioner further contended that inadvertently bills were submitted on the basis of actual weight though in fact the petitioner was entitled to raise and submit bills on the basis of weight by measurement, by reason wherefor the petitioner, on detection of such an error, submitted revised bills. From the records, it appears however, that the respondent did not make any payment in regard to the revised bill.
( 3 ) SUBSEQUENTLY, however, a further agreement was entered into by and between the petitioner and the respondent commission as regards the entitlement of the petitioner.
( 4 ) CONSIDERING the issues, however, involved in this writ petition, this Court refrains from dealing with the factual aspect of the matter in details, suffice it to say that certain bills were raised by the petitioner on the basis of the agreement dt. 15th May, 1978. and by reason of failure to obtain payment the petitioner demanded arbitration in terms of the original agreement. On 26th Mar. 1979 the respondent-Commission agreed to refer the matter to arbitration and appointed one Shri B. N. Shukla as an Arbitrator to decide the grievance of the petitioner in regard to the non-payment of the bills.
( 5 ) BEFORE the Arbitrator the parties were directed to file their claims and in accordance therewith the petitioner filed the statement of claim on 3rd Sept. 1979. The Arbitrator, however, on 12th Sept. 1979 allowed one month's time to file the counter statement of facts by the Commission and on further prayer for extension the time to file the counter statement was extended till 26th Nov. 1979. As appears from records that though various meetings of the Arbitrator were fixed, but no effective meeting could be held before 15th Jan. 1980. At that meeting as it appears, however, it was contended on behalf of the Commission that the Arbitrator has had no jurisdiction to entertain the claim of the petitioner The Arbitrator, however, rejected the contention and fixed a further meeting on 17th Jan. 1980 at 2-30 p. m. Before the matter however, could take final shape before the Arbitrator, the Commission moved this Court and obtained an order of Stay of proceedings before the Arbitrator on the ground that the arbitration proceedings held by the Arbitrator was incompetent, without jurisdiction, null and void and not binding. On 11th April, 1980 the Arbitrator intimated the parties that he be deemed to have resigned. Incidentally, it is pertinent to record here that the Arbitrator being a very Senior Officer of the Commission was appointed by the Commission itself on 8th Aug. , 1979. The Commission, however, immediately on the resignation of the Arbitrator withdrew the application before this Court under the Arbitration Act. The writ-petitioner however did not leave the matter there and made representations before the
