IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mr. P.V. Rajamannar, Chief Justice and Mr. Justice Venkatarama Ayyar,JJ.
The Indian Tobacco Corporation by its Managing Partner N. Krishnaswami
Versus
The State of Madras, represented by the Secretary to the Government of Madras, Food Department, Fort St. George, Madras
Writ Appeals Nos. 53, .54, 55 and 56 of 1953.
Decided On : 17 August 1953
CONTRACT - MANDAMUS - WRIT OF MANDAMUS - CONDITIONS PRECEDENT - PUBLIC DUTY - ALTERNATIVE LEGAL REMEDY - ARTICLE 226 OF THE CONSTITUTION - SCOPE AND APPLICABILITY - ALTERNATIVE REMEDY BY WAY OF SUIT - INTERIM RELIEF - SECTION 80 OF THE CODE OF CIVIL PROCEDURE.
Fact of the Case:
The petitioners, a partnership firm, entered into a contract with the Madras Government for the distribution of fertilizers in the State for three years. The contract was subject to termination if the Government of India discontinued the Central Fertiliser Pool arrangement. The Government invited fresh tenders for the sale of fertilizers before the expiry of the contract period. The petitioners filed applications under Article 226 of the Constitution seeking a writ of mandamus or other appropriate writ to prevent the Government from considering or accepting the new tenders.
Finding of the Court:
The Court held that the prerogative writ of mandamus was not available in the case as it is only granted to compel the performance of duties of a public nature and not for the enforcement of contractual obligations. The Court further held that Article 226 of the Constitution does not confer an alternative remedy to the usual remedy by way of suit and that directions in the nature of a writ of mandamus should not issue under this article except to a public, or quasi-public body or officer under an obligation, statutory or otherwise, to do or refrain from doing anything which is likely to interfere with the rights of persons.
Issues: 1. Whether a writ of mandamus can be issued to enforce contractual obligations? 2. Whether Article 226 of the Constitution confers an alternative remedy to the usual remedy by way of suit?
Ratio Decidendi: 1. The prerogative writ of mandamus is only granted to compel the performance of duties of a public nature and not for the enforcement of contractual obligations. 2. Article 226 of the Constitution does not confer an alternative remedy to the usual remedy by way of suit and that directions in the nature of a writ of mandamus should not issue under this article except to a public, or quasi-public body or officer under an obligation, statutory or otherwise, to do or refrain from doing anything which is likely to interfere with the rights of persons.
Final Decision: The Court dismissed the appeals and held that the applications under Article 226 of the Constitution in these cases were misconceived and were rightly dismissed by the lower court.
These four appeals preferred under clause 15 of the Letters Patent against the common judgment of Subba Rao, J., disposing of four applications under Article 226 of the Constitution of India involve the same point and may be disposed of together. It will be convenient to refer to the facts in one of the applications, namely, W.P. No. 568 of 1953. The facts in the other applications are substantially identical.
The petitioners in W.P. No. 568 of 1953, namely, the Indian Tobacco Corporation, are a partnership firm carrying on business at Madras. In June, 1951, the Madras Government called for tenders for the distribution (by sale) of ammonium sulphate and superphosphate fertilisers in the State of Madras for three years from July, 1951 to end of June, 1954, from firms of repute and standing having depots and branches in such of the districts of the Madras State in which they desired to take up distribution. The petitioners were one of the firms which sent tenders. The Government accepted the tender made by the petitioners as well as the tenders by 13 other firms for distribution of the fertilisers throughout the Presidency. The petitioners were allotted the districts of Anantapur, Bellary, Cuddapah, Chittoor, Kurnool and Guntur for distribution. The contract was to terminate on 30th June, 1954, automatically, subject however to the condition that the contract was liable to be terminated earlier without notice if the Government of India decided to discontinue the Central Fertiliser Pool arrangement and throw open the fertiliser business to the trade, in which case the stocks received by the Government or still to be received by them under the Central Pool arrangement should continue to be sold by the tender firms according to the terms of the agreement until the said stocks were disposed of. The price at which the fertilisers were supplied by the Government to the tender firms was fixed as well as the price at which they had to be sold to the ryots. But these latter were so fixed as to allow the firms a commission of Rs. 15-8-0 per toll to cover their expenses and profit. This amount of commission was subsequently reduced in April, 1953, to Rs. 12 per ton. On 8th July, 1953, the Director of Agriculture, Madras, invited by advertisement in the newspapers tenders for the sale of ammonium sulphate in terms more or less identical with the tender notice issued by the Government in 1951. The petitioners alleged that tenders had been received from several firms and the Government were considering them for acceptance. The petitioners charged that as the contract with them subsisted till 30th June, 1954, invitation for fresh tenders was a breach of the Government’s contractual obligations. It was therefore submitted that the Court should issue a writ of mandamus or other appropriate writ directing the State of Madras to forbear from considering or accepting the new tenders called for by the Government by their notice dated 3rd July, 1953, published on 8th July, 1953, or doing any act in derogation of the petitioner’s right under the contract in their favour till the termination thereof on 30th June, 1954.
This and the three other similar applications were dismissed by Subba Rao, J., without even notice to the State. He made a short order thus:
“The petitioners’ case is that the Government is committing an anticipatory breach of-contract. If so he can have his remedies under general law. I do not think this is a fit case for issuing a writ. Dismissed.”
Mr. K.S. Sankara Ayyar, learned counsel for the appellants, contended that the writ of mandamus was the appropriate remedy to which they were entitled in the circumstances of this case and that even if a writ of mandamus as such could not be issued directions could be issued under article 226 which would give the appellants the relief sought by them, namely, a prevention of the threatened breach of contract by the Government.
It appears clear to us that the prerogative writ of ma
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