BIRENDRA NATH DE Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) It is the case of the writ petitioner that he was in Defence Service for 21 years from March 28, 1961 till he retired on March 31, 1982. Under the re-settlement of retired army personnel scheme the petitioner applied in the month of October 1981 for allotment of a Mother Dairy booth to him. In or about the month of January, 1982 the Director General of Re-settlement, Ministry of Defence, New Delhi gave the petitioner an interview and the petitioner was asked to see the Regional Director of the said Directorate at Eastern Zone in Fort William. Thereafter the petitioner met the Regional Director and the petitioner was asked to contact the Mother Dairy authorities. The petitioner contacted the Mother Dairy authorities accordingly and by a letter dated May 5, 1982 the petitioner was appointed Concessionaire for Mini Dairy with effect from May 7, 1982 and the petitioner was directed to deposit security money and comply with necessary formalities. In fact the petitioner was appointed Concessionaire in respect of the Mini Dairy outlet which was numbered as 018 and which has subsequently been changed to No. 216. The said Mini Dairy outlet is situated at 'J' Block, New Alipore, Calcutta-53. The work the petitioner has to do as Concessionaire is to supply milk to the local people of the area in which the petitioner's Milk Dairy is situated. The Mother Dairy authorities will supply requisite quota of milk daily and will fill the tank which is installed in the said Mini Dairy outlet. The customers who would come to collect the milk of Mother Dairy will have to drop a token which they will have to purchase against cash payment for their milk. Then after the dropping of the token, milk will come out from the machine which is installed in the said booth. It has been further alleged in the petition that since his appointment as Concessionaire in respect of the Mini Dairy Booth the petitioner has been carrying on his business as Concessionaire without any complaint from any quarters. It is the further case of the petitioner that sometimes some frivolous complaints have been made against the petitioner but the petitioner has all the time satisfied the authorities about the due discharge of his duties as a Concessionaire since 1982. The petitioner had to execute an agreement with the Mother Dairy authorities in respect of his appointment as Concessionaire. Such agreement is renewable at every six months. It has been alleged in the petition that when milk is supplied to the outlet of the petitioner there is no scope to check the quality of milk supplied by the said Mother Dairy authority. No test is made when the milk is filled in the tank from where milk is supplied to various customers. No sample is given to the petitioner about the standard of milk. But as soon as the milk is filled in the tank the petitioner has to sign a certificate about the standard of milk and about its fat content and other various properties of the milk. Such certificate has to be signed by the petitioner without ascertaining the quality of the milk supplied. It has further been alleged in the petition that the petitioner has to supply milk to various customers at the rate of 2 paise commission on sale of one litre of milk at Rs. 3.40. As such the commission which is given to the petitioner is much less than even 1% of the sale price. It is the further case of the petitioner that the petitioner has to carry on with his activities in the said milk booth for very long hours inasmuch as the said milk booth will have to be kept open for long hours throughout the day and for maintenance of the milk booth and also for cleaning the same some more time is required. The petitioner has to remain engaged in the said booth for more than 12 hours in the course of a day and the said booth has to be kept open all the time without any holiday. As such the petitioner found that the remuneration which he receives is far too inadequate for the number of hours which he has to put in to carry on the said business. As such the petitioner alongwith other Concessionaires formed a union which is known as Mother Dairy Concessionaire Dealer Union, Calcutta, Howrah and Hoogly. The said union is a registered one and its registered No. is 17745. One of the demands of the said union is to raise the said commission. The petitioner is the Joint Secretary of the said Union. It has been further alleged in the writ petition that as soon as the authorities who are respondents herein, came to know of the existence of the said union, they became determined to crush the same and for the said purpose the respondent went on terminating the agreements of various officebearers of the said union. It is the further case of the petitioner that the respondents are also determined to terminate the agreement of the petitioner and for the said purpose started raising some false and frivolous complaints against the petitioner mostly after the last renewal was granted to the petitioner in the month of June, 1986. The last renewal of the petitioner's agreement was granted on June 26, 1986. By a letter dated September 15, 1986, the petitioner was informed that in order to assess the quality of the milk sold from the petitioner's booth sample of milk was drawn in the presence of the petitioner's representative by the Mother Dairy people on September 14, 1986, it was alleged in the said letter that the petitioner's representative refused to put in signature of the same slip. The petitioner was advised to strictly follow the terms and conditions of the agreement The petitioner gave a reply to the said letter. In his reply the petitioner stated that in the newspaper dated August 28, 1986 it appeared that the quality of the milk can be tested in various milk booths with the help of a Lactometer. As such the petitioner requested the authority to adopt the said method for the purpose of testing the quality of milk. Thereafter the authorities did not give any reply nor the authorities informed the petitioner anything about the report in respect of the sample of milk drawn from the petitioner's booth. It has been alleged that the said allegation relating to the quality of milk drawn from the petitioner's booth is wholly baseless. Thereafter another letter was written to the petitioner by the said authority dated October 29, 1986 to the effect that the petitioner is not maintaining the Milk Stock Register. It was also stated in the last letter that not maintaining account is a violation of the agreement. The petitioner also gave a reply to the said letter. In the said letter the petitioner clarified his stand about such maintaing of record. In the reply given by the petitioner the petitioner made it clear that he has not violated any of the terms and conditions of the ; agreement and as such there is no basis for the allegations levelled in the letter dated October 29, 1986. The petitioner also received two letters dated November 18, 1986 and November 25, 1986 containing various allegations to which the petitioner gave a reply by his letter dated December 2, 1986 mentioning therein that the allegations contained in the aforesaid letters dated November 18, 1986 and November 25, 1986 are baseless and that he has not violated any of the terms of the agreement. By letter dated November 26, 1986 the petitioner was informed by the said authority that his cheque towards payment of milk supplied to him has been dishonoured. Immediately on November 27, 1986 the petitioner paid the amount of Rs. 7,527/- in cash to the said authority and the said authority granted a receipt. It has been alleged in the petition that the difficulty in encashment of the cheque was caused for the reasons beyond the control of the petitioner and the petitioner immediately paid the entire amount. Such an instance of single unintentional lapse on the part of the petitioner in making payment does not authorise the Mother Dairy authority, according to the petitioner, to terminate the agreement. By another letter written to the petitioner by the authorities on December 1, 1986 it was alleged by the authorities that there was lack of order-lines in respect of milk supply but no such particulars about the lack of orderliness was furnished to the petitioner and as such the petitioner could not give any effective reply to such letter. The agreement between the petitioner and the authorities was to continue till December 21, 1986 and for the purpose of renewal of agreement normally the bank guarantee forms were used to be delivered to the petitioner 1 1/2 months in advance for completing the normal formalities but no such bank guarantee form was given to the petitioner. As such the petitioner wrote a letter registered with A/D to the Officer-in-charge, City Office of the said Mother Dairy authority requesting him to send the said form at an early date so that normal formalities are completed. The petitioner, however, did not receive any bank guarantee form from the respondent authority. It is the case of the petitioner that on all previous occasions before renewal of agreement bank guarantee forms were used to be given to the petitioner well in advance for finalisation of normal formalities. This practice has been followed since 1982 when the petitioner was appointed as Concessionaire. Since then every six months the appointment of the petitioner as Concessionaire is being renewed. It is for the first time that such forms were not supplied to the petitioner even after written demand was made for the same. It has been alleged in the petition that the respondents really intend to enforce the clause relating to termination of agreement by automatic expiry of the period of six months and it is for that purpose the forms of bank guarantee were not supplied which was the usual practice on previous occasions. It has been further alleged in the petition that under the agreement the respondents are allegedly empowered under Clause 1 thereof to treat the same as terminated on expiry of six months from the date of last renewal unless the same is renewed and such termination will come into effect without any notice being served upon the petitioner. Under the said Clause 1 the authorities are also empowered to serve at its discretion a notice on the petitioner regarding the expiry of the agreement. There is provision under Clause II of the said agreement to serve one month's notice for termination of the said agreement. It has been alleged that the said agreement is wholly one sided and is unjust and is opposed to public policy. The said agreement has been entered into between parties of unequal bargaining power inasmuch as on the one hand it is the powerful authorities of the Mother Dairy and on the other hand persons like the petitioner entering into such agreement. It has been contended on behalf of the petitioner that the petitioner and/or persons similarly situtated like him are economically weak and have no option except to accept terms contained in the said agreement which are given to the petitioner on the basis of printed form. There is no discussion before entering into such agreement and the petitioner and/or persons similarly placed like him will have to accept the said agreement if they want to be appointed as Concessionaire. The petitioner has to accept all the terms of the said agreement - including various terms which are unconsionable and unjpst and unfair in so far as the petitioner is concerned. The term relating to termination of agreement contained in the said agreement purports to authorise the respondents to terminate the said agreement without any notice being given to the petitioner. Such an agreement is opposed to public policy and confers absolute, arbitrary and unguided power upon the authorities and as such cannot be sustained in law. The learned Advocate for the petitioner further submitted that clause relating to expiry of the said agreement is not only arbitrary but also discriminatory inasmuch as the same purports to authorise the respondents to dicriminate between one Concessionaire and another in the matter of terminating the agreement specially when they are not required to record reasons in justification of such termination. The said clauses specially the clauses 1,2 and 52 of the said agreement are thus violative of the provisions contained in Section 23 of the Contract Act as also Article 14 of the Constitution of India. The learned Advocate further submitted that an adequate means of livelihood cannot be secured to the citizens by keeping the said means of livlihood dependent on the absolute whim, caprice or fancy of the respondent authorities. Securing the means of livelihood means and implies that there must be some security and predictability about earning which is the source of livelihood and also security and safety of the tenure of the agreement on which means of livelihood the citizens depend. It has been submitted further by the learned Advocate for the petitioner that in the instant case the meagre income earned by the petitioner on the basis of commission from the said agreement is the only source of livlihood of the petitioner. But the respondents have made the same to depend on mere vagaries and fancy of the authorities concerned by virtue of clauses 1, 2 and 52. Such clauses of the said agreement are, therefore, opposed to the Directive Principles of State Policy contained in Clause (a) of the Article 39 and Article 41 of the Constitution of India inasmuch as adequate means of livelihood and effective provisons for securing the right to work cannot be achieved if the aforesaid clauses of the said agreement are allowed to remain. The impugned clauses of the said agreement, namely Clauses 1, 2 and 52 are, therefore, wholly opposed to public policy and are also violative of provisions contained under Articles 39(a) and 41 of the Constitution of India. It has further been submitted that when the agreement with the petitioner was renewed from time to time, the petitioner has acquired the legitimate expectation and interest of getting the same renewed. The said expectation of the petitioner cannot be denied except on the ground of misconduct or except after giving the petitioner an opportunity of being heard in the matter. In the instant case according to the petitioner the respondents are seeking to terminate the petitioner's agreement without any proved ground of misconduct and without giving the petitioner any chance to refute the allegations against him but the respondents are seeking to terminate the said agreement on the basis of mere flimsy pretexts which are not existent and without giving any opportunity of being heard in the matter. The action of the respondent in applying the said clause is wholly arbitrary and the said action of the respondent in purporting to terminate petitioner's agreement is violative of the provisions contained in Article 14 of the Constitution of India. It has further been alleged that the respondents are acting on the basis of extraneous consideration, namely terminating the petitioner's agreement just for the reason that he is one of the office bearers of the said Union which demands improvement of conditions for work as Concessionaire of Mother Dairy. It is only because of the legitimate trade union activities of the petitioner that he is being victimised by the respondent authorities. It has been alleged that the action of the respondents in purporting to terminate the agreement of the petitioner is only malafide in character being vitiated both by malice in law and malice in fact. It has been alleged that even though the respondents have not in writing informed the petitioner that his agreement will not be renewed and the said ; agreement automatically lapsed on December 21, 1986 by virtue of the impugned clauses land 2 of the said agreement. According to the petitioner there is grave and imminent threat to the petitioner's fundamental right. Accordingly the petitioner claimed in the writ petition a declaration that the provisions of the agreement and clauses 1, 2 and 52 of the said agreement between the petitioner and the Mother Dairy, Calcutta are opposed to public policy and also violalive of provisions contained Section 23 of the Indian Contract Act and Articles 14, 39(a) and 41 of the Constitution of India and for issue of a writ in the nature of Mandamus commanding the respondents to renew the petitioner's appointment as Concessionaire and from December 21, 1986 and also to forbear from acting on the basis of the said clauses of the said agreement and further forbear from taking any step for terminating his appointment as Concessionaire.

(2.) Mr. Ganguly learned Advocate for the ppetitioner relied upon the following decisions in support of his contention:

(3.) Laxminarayan Ram Gopal & Son Ltd. v. Govt. of Hyderabad through the Commissioner, Excess Profits Tax 4.Olga Tellis & Ors v. Bombay Municipal Corporation and Ors. 5. The Manager, Govt Branch Prss & Anr. v. D.B. Belltappa reported in (1979-I-LLJ-156) 6. Chingleput Bottlers v. Majestic Bottling Co. 3. The learned Advocate for the petitioner referred to the observations of the Supreme Court in the case of Ramana v. International Airport Authority of India (supra) to the effect inter alia that when the Government is trading with the public, "the democratic form of Government demands equality and absence of arbitrariness and discrimination such transactions..... The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with any one, but if it does so, it must do so fairly without discrimination and without unfair procedure." This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licenses or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and like a private individual, deal with any person it pleases, but its action must be in confromity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largesse including award of jobs, contracts, quotas, licenses etc. must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.