Point of law: Stated simply, 'unjust enrichment' means retention of a benefit by a person that is unjust or inequitable. 'Unjust enrichment' occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else. The doctrine of 'unjust enrichment', therefore, is that no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of 'unjust enrichment' arises where retention of a benefit is considered contrary to justice or against equity.

JUDGMENT :

J.B. PARDIWALA, J.

1. This litigation disappoints us a lot. This is a litigation in which the State (principal) is telling the contractor (writ-applicant) that we did award a work of contract in your favour during the period of crisis, i.e. during the Covid pandemic lockdown, to be completed within a period of ten days from the issue of the work order. The State says that it did fix the terms and conditions of the contract, including the rates to be paid to the contractor. The State further says that the contractor did a remarkable job by completing the entire work to its satisfaction within a period of ten days. The State also says that, in accordance with the work order and the rates fixed, the contractor may be entitled to claim the requisite amount. However, in the end, the State says that we will not pay the full bill amount to the contractor as the State now believes that the fixation of the rates at the relevant point of time was a very hasty decision on their part and that the rates fixed at the relevant point of time were on a higher side.

2. The aforesaid stance of the State has led to the present litigation.

3. Fairness in State action is the soul of good governance. Every action of the State where it infringes the constitutional mandate or is opposed to basic rule of law or suffers from the infirmity of patent arbitrariness, judicial intervention is inevitable. Government enjoys great freedom while entering into contracts with private parties, but even that freedom is circumscribed by the rule of fairness, transparency and objectivity. It is more so where the Government is dealing with State largesse. The State holds monopoly in certain fields and where this privilege of monopoly is utilized for the purposes of allocation of works, it takes the colour of State largesse as both the State or its instrumentalities or public statutory bodies and the bidder are expected to benefit from such distribution and/or allocation of such works by way of contracts.

4. By this writ-application under Article 226 of the Constitution of India, the writ-applicants have prayed for the following reliefs :

“(a) That this Hon’ble Court may be pleased to issue a writ of mandamus and/or any other appropriate writ, order or direction directing the respondents to forthwith release the pending payment qua Work Order No.209 and Work Order No.212 to the petitioners;

(aa) That this Hon’ble Court may be pleased to issue a writ of mandamus and/or any other appropriate writ, order or direction quashing and setting aside the letter/order dated 05.08.2021 being a non-speaking order and issued in stark violation of the agreed upon Work Order conditions;

(b) That this Hon’ble Court may be pleased to issue a writ of mandamus and/or any other appropriate writ, order or direction quashing and setting aside the Work Order dated 17.09.2020 and 20.10.2020;

(c) That this Hon’ble Court may be pleased to hold and declare that unilateral alteration of rates by the respondents, after completion of works amounts to arbitrary exercise of powers as also amounts to breach of principles of natural justice;

(d) That pending admission, hearing and final disposal of the present petition, this Hon’ble Court may be pleased to direct the respondents to release the pending payment to the petitioners qua Work Order No.209 and Work Order No.212;

(e) That this Hon’ble court may be pleased to issue adinterim ex-parte relief in terms of Para (d) herein above;

(f) That this Hon’ble Court may be pleased to award cost of the present petition to the petitioners;

(g) Pass such other order(s) as this Hon’ble Court deems fit in the facts and circumstances of the case.”

5. The facts giving rise to this writ-application may be summarised as under :

With the onset of the COVID-19 pandemic in the country from early March 2020 and with the cases being reported in multiples of thousands, th