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High Court Of Delhi
AIR FOAM INDUSTRIES PRIVATE LIMITED,NEW DELHI - Appellant
Versus
UNION OF INDIA - Respondent
Civil 255 of 1973
Decided On : 04/20/1973
MANDAMUS - WRIT OF - CONDITIONS PRECEDENT - LEGAL DUTY - LEGAL RIGHT - ENFORCEMENT OF FUNDAMENTAL OR STATUTORY RIGHT - RIGHT TO PROPERTY - PRICE OF GOODS - DEBT DUE - ACTIONABLE CLAIM - TRANSFER OF PROPERTY ACT, SECTION 3 - CONSTITUTION OF INDIA, ARTICLES 19(1)(F), 31, 226.
Fact of the Case:
Petitioner No. 1, a small-scale industrial unit, entered into a contract with the Government of India for the supply of air-foam compound. The contract was later cancelled by the Government for alleged breach of contract by the petitioner. The petitioner claimed damages for breach of contract, while the Government claimed general damages. Two further orders were placed by the Government on the petitioner for the supply of foam compound, which were duly supplied and received by the Government. The petitioner submitted bills for payment of the price of the goods supplied, but payment to the extent of Rs. 2,28,900 was withheld by the Government. The petitioner filed two applications 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 under Section 20 of the Arbitration Act, praying for filing of the arbitration agreement and making a reference of the respective claims of the parties to the contract. The applications were disposed of by the High Court, restraining the Government from recovering the amount claimed by it from the other pending bills of the petitioner. The petitioner demanded payment of the amounts withheld by the Government, but the Government did not pay up all the amounts due to the petitioner. The petitioner filed a petition under Article 226 of the Constitution of India, praying for the issue of a writ of mandamus or a writ, order or direction in the nature of mandamus directing payment of the amounts withheld.
Finding of the Court:
The High Court held that a writ of mandamus can issue only for the enforcement of a fundamental or statutory right. The right claimed by the petitioner, though a legal right, cannot be enforced merely as such by claiming the issuance of a writ of mandamus. The price due to a seller is not his property in the hands of the purchaser. A debt due is not property within the meaning of Article 19(1)(f) of the Constitution. The withholding of payment of price due by Government or governmental authorities in the circumstances of the case does not amount to a breach of any fundamental rights guaranteed by the Constitution or breach of any statutory or other legal right so as to enable the High Court to issue a writ of mandamus or a writ, order or direction in the nature of mandamus directing payment of the amounts withheld.
Issues: 1. Whether a writ of mandamus can issue for the enforcement of a legal right as opposed to fundamental and statutory rights? 2. Whether the price due to a seller is his property in the hands of the purchaser? 3. Whether a debt due is property within the meaning of Article 19(1)(f) of the Constitution?
Ratio Decidendi: 1. A writ of mandamus can issue only for the enforcement of a fundamental or statutory right. A legal right as opposed to fundamental and statutory rights cannot be enforced by claiming the issuance of a writ of mandamus. 2. The price due to a seller is not his property in the hands of the purchaser. 3. A debt due is not property within the meaning of Article 19(1)(f) of the Constitution.
Final Decision: The petition was dismissed in limine.
( 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. and. D entered into a contract with petitioner No. I for supply of this commodity on terms and conditions con- tained 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. andd.-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 Gove
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