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2016 Supreme(All) 1032

ALLAHABAD HIGH COURT
BEFORE : SUDHIR AGARWAL AND SHAMSHER BAHADUR SINGH, JJ.
M/s. JAI GOSWAMI ELECTRIC WORKS ALLD. ....Petitioner
Versus
UNION OF INDIA AND OTHERS ....Respondents
(Civil Misc. Writ Petition No. 42697 of 2002, decided on 19th May, 2016)

Advocates:
Counsel :
Vishnu Gupta, B.C. Naik and Shashi Nandan for the Petitioner; S.C. for the Respondents.

Headnote:Contract—Payment—Direction for—Mandamus sought by petitioner is nothing but grant of a money decree in extraordinary equitable jurisdiction under Article 226 which ought not to have been granted—Alleged work performed by petitioner has also not been approved by competent authority and, therefore, payment has been held up—Petition dismissed with cost. [Paras 12 and 13]

       Result; Petition Dismissed.

       

JUDGMENT

By the Court.—Heard learned counsel for petitioner and perused the record.

2. By means of this writ petition filed under Article 226 of Constitution, petitioner has sought following relief:

(a) issue a writ, order or direction in the nature of appropriate nature commanding the respondents to make payment of balance amount against actual work done in respect of contracts Nos. 230-Elect /TRD/ALD/WC/97/61 dated 19.11.97 and Contract No. 230/Elect/TRD/ALD/113 dated 19.3.98 within one month from the date of passing order by this Hon’ble Court together with interest @ 2% per month.”

3. Petitioner is Railway Contractor and pursuant to an agreement for work, he has performed some work but his payment has not been made. Since payment has been approved by competent authority, therefore, prayer has been made that respondents be directed to make payment.

4. When questioned as to how for realization of money pursuant to a contractual work writ petition under Article 226 is maintainable, learned counsel for petitioner placed reliance on Apex Court’s decision in Hindustan Sugar Mills, M/s. v. State of Rajasthan, AIR 1981 SC 1681.

5. We have considered the above decision in Hindustan Sugar Mills, M/s. v. State of Rajasthan (supra) and find that sale of cement and price was controlled by Cement Control Order, 1967 issued under the provisions of Essential Commodities Act, 1955 (hereinafter referred to as “Act, 1955”). The Company supplied cement to the Central Government through Director General of Supplies and Disposals. The amount of sales tax payable by Company on the aforesaid cement was to be paid by Government which was disputed on the ground that there was contract for such payment and matter was decided by Court holding that there is no legal liability on the Central Government to pay amount of sales-tax. However, having said so, Court also observed that in a democratic society governed by rule of law, a Government is expected to be inspired by ethical and moral values and should do what is fair and just to the citizen, regardless of legal technicalities. Court expected that Central Government will not seek to defeat legitimate claim of assessee for reimbursement of sales tax on the amount of the freight by adopting a legalistic attitude. Thereafter a Review Application was filed by Company showing that there was a Clause in Rate Contract of Director General of Supplies and Disposals providing that sales tax, if legally leviable, will be paid in addition to the price given in clause of the Rate Contract. In that view of the matter, Review Application was allowed and observation that Central Government was not bound to pay amount of sales tax legally was deleted and Court said as under:

“Where there is such a clause the Central Government is bound to pay the amount of sales tax on the freight component of the price and we hope and trust that the Central Government will honour its legal obligation and not drive the appellant to file a suit for recovery of the amount of such sales tax. We hopefully expect that the Central Government will not try to shirk its legal obligation by resorting to any legal technicalities for we maintain that in a democratic society governed by the rule of law, it is the duty of the State to do what is fair and just to the citizen and the state should not seek to defeat the legitimate claim of the citizen by adopting a legalistic attitude but should do what fairness and justice demand.”

6. There was no issue raised, argued and decided by Court that for the purpose of recovery of money pursuant to contract, writ petition under Article 226 would be maintainable. This question has been considered specifically in Hindustan Petroleum Corporation Limited and another v. Dolly Das, 1999 (4) SCC 450, wherein Court said that in absence of any constitutional or statutory rights being involved, a writ proceeding would not lie to enforce contractual obligations even if it is sought to be enforced against State or to a















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