MADHUSUDAN CHOUDHARY Vs. STATE OF BIHAR

JUDGEMENT

(1.) The appellant filed a writ application seeking appropriate writ directing the respondents, namely, the Government of Bihar and its officials, to make payment of the dues for the work done by it under the contract. The appellant' case is that it has entered into a contract with the respondents on 26-2-1987 for construction of a canal in Chakulia Division and although it has completed 90% work awarded to it under the said contract, but the respondents are not making the payment for the work done by it in spite of request made to that effect and the recommendation made by the Executive Engineer. The writ application having been dismissed by the learned single Judge, the appellant has filed this appeal.

(2.) The contract between the Government and the appellant is a non-statutory contract. It is well settled that non-statutory contract can neither be enforced nor can any direction be issued to remedy its breach under Article 226 of the Constitution. In this connection in Bareilly Development Authority v. Ajay Pal Singh, AIR 1989 SC 1076, the Supreme Court has laid down as under (at page 1083) :-"There is a line of decisions where the contract entered into between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple : Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCR 249 : (AIR 1977 SC 1496), Premji Bhai Parmar v. Delhi Development Authority, (1980) 2 SCR 704 : AIR 1980 SC 738 and D.F.O. v. Biswanath Tea Company Ltd. (1981) 3 SCR 662 : AIR 1981 SC 1368."In State of U. P. v. Bridge and Roof Company (India) Ltd. (1996) 6 SCC 22 : (AIR 1996 SC 3515), the relevant extract of which is reproduced below, the Supreme Court has reiterated the same view declaring that this Court under Article 226 of the Constitution can neither enforce the non-statutory contract nor can issue any direction in connection therewith (at pages 3519-3520) :"Firstly, the contract between the parties is a contract in the realm of private law. It is not a statutory contract. It is governed by the provisions of the Contract Act or, may be, also by certain provisions of the Sale of Goods Act. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. That is a matter either for arbitration as provided by the contract or for the civil Court, as the case may be. Whether any amount is due to the respondent from the appellant-Government under the Contract and, if so, how much and the further question whether retention of refusal to pay any amount by the Government is justified, or not, are all matters which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition, viz., to restrain the Government from deducting a particular amount from the writ petitioner' bill(s) was not a prayer which could be granted by the High Court under Article 226. Indeed, the High Court has not granted the said prayer.Secondly, whether there has been a reduction in the statutory liability on account of a change in law within the meaning of sub-clause (4) of clause 70 of the Contract is again not a matter to be agitated in the writ petition. That is again a matter relating to interpretation of a term of the contract and should be agitated before the arbitrator or the civil Court, as the case may be. If any amount is wrongly withheld by the Government, the remedy of the respondent is to raise a dispute as provided by the contract or to approach the civil Court, as the case may be, according to law. Similarly if the Government says that any overpayment has been made to the respondent, its remedy also is the same."In Assistant Excise Commissioner v. Issac Peter, (1994) 4 SCC 104 : (1994 AIR SCW 2616) the Supreme Court has declared that doctrine of fairness and reasonableness cannot be read into contracts to which State is a party. The relevant extract from Paragraph No. 26 of the said decision of the Supreme Court is as under

(3.) The learned counsel for the appellant has, however, submitted that there are many cases decided by the apex Court and this Court, wherein non-statutory contracts have been enforced in writ jurisdiction and directions have been issued to the Government to make payment of the dues arising under such contract. In this connection reliance has been placed by the learned counsel on M/s. Hindustan Sugar Mills v. The State of Rajasthan, AIR 1981 SC 1681 : (1981 Tax LR 1125), Kumari Shrilekha Vidyarthi v. State of U. P., (1991) 1 SCC 212 : (AIR 1991 SC 537), M/s. Hyderabad Commercials v. Indian Bank, AIR 1991 SC 247 : (1990 All LJ 872), Union of India v. M/s. Graphic Industries Co., (1994) 5 SCC 398 : (1994 AIR SCW 4617) and M/s. Pancham Singh v. The State of Bihar, 1991 (1) PLJR 352 : (AIR 1991 Patna 168) (FB). It is not possible to agree with the learned counsel. The cases cited by him have not laid down any such law as is canvassed by him.