MARWAR TENT FACTORY Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner (in CW 357/71) claims to be a tent manufacturer on the approved list of contractors of the Directorate General of supplies and Disposals, Govt, of India. In pursuance of the acceptance of tender dated March 13, 1968 the petitioner agreed to supply tents of a total cost of Rs. 62,03,650.00 of the agreed apecifications and quality to the Union of India. According to the terms and conditions of the contract, 95 per cent of the agreed purchase price of the tents was to be paid after inspection and acceptance of the same by the inspecting Officer and on proof of their despatch. The balance 5 per cent was to be paid after their receipt in good good condition by consignee. Petitioner supplied total contracted quantity in nine consignments, tendered for inspection during the months of June, July, August and September, 1968. All the consignments were inspected by the Inspecting Officer and accepted. On proof of their despatch 95 per cent of the price was paid to the petitioner. The balance 5 per cent was also paid to it after receipt of the consignments by the consignse on the basis of three certificates issued by the consignee in September, 1968 that they were received in good condition. After a lapse of over two years, thereafter, by letter dated March 9, 1971 the Director General of Supplies and Disposals, New Delhi called on the petitioner to pay a sum of Rs. 92,363.00 as compensation for breach of a warranty of the contract. Failing payment, the letter said, the Pay and Accounts Officer, New Delhi will be asked to deduct this amount from any of the petitioner's pending or future bills. The petitioner has prayed for the quashing of this letter. The demand for Rs. 92,363.00 and the threat to deduct this amount from the pending or future bills, the petitioner maintains, is wholly illegal and without jurisdiction and amounts to deprivation of his property without the authority of law. The petitioner also contends that he was never heard before creating the liability against him and the threat to deduct this amount from the other monies due and payable to it "being penal in nature" is liable to be quashed.

(2.) In the counter affidavit, the respondents maintain that the writ petition is not maintainable as Article 226 of the Constitution cannot he invoked in the matter of determination of rights and obligations of the parties arising out of contract. On merits it is urged that the tents when received by the consignees were not found to be of the specifications governing the supplies and the respondents were within their rights to set off their dues and adjust the same from the pending and future bills of the petitioner under clauses 18 and 18A of the agreed General Terms and Conditions which governed the contract. The demand for the payment of Rs. 92,363.00 is maintained to be perfectly legal and in order.

(3.) The preliminary objection as to maintainability of the writ petition cannot be decided in the abstract. Before dealing with this question, we, therefore, advert to the con- tentions that need to be examined on merits.