S GAJINDER SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) The first question that arises for determination in this writ petition is that, even assuming that the petitioner has committed a breach of the contract in question and as such is liable to pay compensation to the respondents Union of India and others, whether the respondents can legally withhold payment of any sum due to the petitioner from the respondents under any other contract or contracts between the petitioner and the respondents and appropriate such sums so withheld towards the satisfaction of its claim for compensation for breach of this contract by deducting such amount of claim or portions thereof from the sums withheld? If the answer to this question is in the affirmative and as such is in favour of the respondents, it will warrant a dismissal of this writ petition. If, however, the answer is in the negative and as such is in favour of the petitioner, even then the further question that would require consideration is that whether the petitioner can obtain any relief in this writ proceeding? Firstly, therefore, to the first question and to a short statement of the facts of the case, which though they lie in a short compass, need not be stated in much details and even a skeletal statement thereof will be sufficient for the disposal of the present petition.

(2.) The petitioner submitted tender for the contract works being construction of provision of deficit O.T.M. Accommodation at Darjeeling and his case is that as at the time of the submission of the tender, the amendments made subsequently to the invitation of the tender by the respondent No. 2 were not known or made known to him, he, by his letter being Annexure-B to the petition, canceller and revoked such tender. The case of the respondents, however, is that the tender of the petitioner was duly accepted without giving any effect to the alleged subsequent amendments and that as the petitioner failed to sign the Work Order and to take over the site and to commence the work in spite of repeated reminders and requests, the contract was cancelled by the respondent No. 2 by his letter dated 22nd Oct., 1978 vide Annexure-XIX to the respondent's affidavit-in-opposition. The petitioner admits the receipt of this letter in para 10 of his petition and states further that thereafter he received another letter dated 16th March, 1979 being Annexure-E to his petition, asking him to deposit Rs. 4,44,000/- for the alleged extra cost of completion of the contract and that when he requested the respondent No. 3 for payment of amounts payable to him in respect of and under other contract works, he received the letter dated 26th March, 1979 from the respondent No. 3, being Annexure-F to the petition, informing him "that the recovery to the tune of Rs. 4.44 lakhs has been indicated by the Chief Engineer. Bengal Zone (respondent No. 2) under his telegram dated 07 Mar 79" with an endorsement thereon to the respondent No. 2 intimating him that no payment would be made to the petitioner till further orders from the respondent No. 2 and that "a recovery to the tune of Rs. 4.44 lakhs has been noted". The other document, which requires to be referred at this stage to complete the narration of facts necessary for the present purpose, is the letter from the respondent No. 2 to the petitioner dated 13th May, 1979 which has been filed by the respondents as Annexure-XXIII to their affidavit, informing the petitioner that the work was being completed at his risk and cost and the additional cost involved was Rs. 4,44,000/- and as the petitioner failed to deposit the amount, though directed to do so by Annexure-E to the petition, "the money is being recovered from any payment due to you" (i.e., the petitioner). Can the respondents do so? Can they withhold payment of amounts due to the petitioner under other contracts and recover therefrom their alleged claim under this contract? If they can, the petition shall fail, but if they cannot, this petition should succeed, unless the extent of powers under Art.226 is not wide enough to include the power to award such a relief.

(3.) Mr. Juneja, learned Counsel for the petitioner, has submitted that though the case of the petitioner is that he having withdrawn and revoked his tender, the respondents could no longer accept the same and thus make it a concluded and binding contract and that there being no contract, the purported cancellation thereof by the respondents and their withholding the payment of amounts due to the petitioner under other contracts and their recovery or attempted recovery from such amounts of their alleged claim against the petitioner under this contract can have no legal basis. But Mr. Juneja has, however, submitted that he is not pressing before me for decision in this proceeding any of the questions as to whether there was a contract or whether the petitioner committed any breach thereof or whether the contract was rightly cancelled, as determination of these questious will involve disputed questions of facts, not determinable in a proceeding under Art.226. Mr. Juneja has accordingly submitted that, even assuming that there was such a contract and that it was broken by the petitioner and as such the respondents may have a claim for compensation against the petitioner for such breach, as alleged, still the respondents cannot have any right or authority to withhold the amount due from the respondents to the petitioner under other contracts and proceed to recover their alleged claim from such amounts, unless such claim is admitted by the petitioner or adjudicated by a Court or other proper authority according to procedure established by law,