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Judgment
E. Padmanabhan, J.—The writ petitioner prays for the issue of a writ of declaration declaring that the 2nd respondent is not entitled to
collect more than 40% of the licence amount and is liable to refund the 60% of the first and second years lease amount totalling to Rs.64,43,263/=
which is collected in excess to the proportionate permitted 40% fishing area out of the total licenced area of Bhavani Sagar Reservoir which is the
subject area of the licence agreement dated 30.7.2000 and thereby directing the 2nd respondent to refund the same together with interest at 24%
p.a., from the date of deposit till the date of payment and render justice. (Relief extracted as set out in the writ petition).
The petitioner has prayed for the above relief of declaration by which he seeks for compensation or damages with respect to a portion of the
contract, which he claims that the respondent has committed breach or failed to perform and also seeks for specific performance of the portion of
the contract, which the petitioner claims being permitted to fish in respect of the lesser area. The question whether the petitioner could maintain a
writ petition of this nature in respect of a non-statutory contract is the primary question that requires to be examined in this writ petition.
Mr. Mohan Parasaran, learned senior counsel appearing for the respondent vehemently contended that the writ petition is not maintainable as
prayed for, while Mr.K.Ramakrishna Reddy, learned counsel appearing for the petitioner with equal vehemence and verbosity contended that the
writ petition is maintainable and the petitioner is entitled to the relief of declaration prayed for in the writ petition as well as directions prayed for.
The first respondent is not a necessary party, yet the first respondent is impleaded as if it is a necessary party against whom no relief is claimed nor
an averment has been made in this writ petition.
The petitioner claims that the 2nd respondent, who is a grantee of fishery rights in respect of certain areas by the State in turn granted a
licence/lease of fishery rights in favour of the petitioner. The 2nd respondent and the petitioner has entered into a licence agreement on 30.7.2000.
Complaining that the 2nd respondent has violated the terms by not allowing the petitioner to undertake fishing in the entire area for which the
petitioner was granted lease and, therefore, the respondent is not entitled to collect the full lease amount, is the main crux of the contention
advanced.
The 2nd respondent is a Corporation owned by the State Government. The 2nd respondent is not discharging any public function nor a
statutory function. The 2nd respondent has only entered into a contract with the writ petitioner, which is simply contractual and it is not a statutory
contract nor the 2nd respondent exercised any public function with respect to the fishery licence/lease granted in favour of the petitioner by the 2nd
respondent as seen from the instrument of contract entered into between the petitioner and the 2nd respondent.
Complaining that the petitioner has not been permitted to fish in the entire area in respect of which the instrument of licence/lease has been
entered into between the petitioner and the 2nd respondent, the present writ petition has been filed seeking for a declaration that the petitioner is
liable to pay proportionate to the area he was permitted to fish or undertake fish and also seek for a further declaration that for the future also the
respondent is not entitled to collect full fees or consideration agreed to as according to the petitioner the area so permitted to fish is just 40% of the
total area agreed to between the parties. There is serious controversy in this respect and a detailed counter has been filed by the 2nd respondent
denying the entire averments set out in the affidavit filed in support of the writ petition and contending such a claim as false and baseless.
Mr.Mohan Parasaran, learned senior counsel appearing for the 2nd respondent apart from pointing out that the claim of the petitioner that there
has been a reduction in the area of fishing or that the petitioner is prevented by the respondent from fishing as agreed to and in terms of the
stipulations entered into between the parties, seek to contend that the writ petition is not maintainable as it is a pure and simple commercial
transaction.
Mr.Mohan Parasaran, learned senior counsel relied upon certain recent pronouncements of the Supreme Court in support of his contention.
Mr.K.Ramakrishna Reddy, learned counsel appearing for the petitioner contended that the writ petition is maintainable as it relates to fishery rights
and the petitioner could maintain the present writ seeking declaratory relief and mandamus as well.
Mr.Mohan Parasaran, learned senior counsel also pointed out that all these years there has been no whisper nor any grievance has been
expressed by the petitioner to the 2nd respondent in respect to reduction or restriction of area of fishing and as an afterthought the petitioner has
approached this Court belatedly. There is substance in this objection raised by Mr.Mohan Parasaran, learned senior counsel for the respondents.
It is mainly contended by the respondents that the present writ petition is not maintainable since the petitioner seeks to enforce his rights
pursuant to a contract entered into between the petitioner and the 2nd respondent either by way of breach or for enforcement of part of the
contract. The relationship is purely being commercial, no writ is maintainable is one of the substantial contention or objection raised by the counsel
for the 2nd respondent. The 2nd respondent is a transferee of fishery rights in respect of Bhavani Sagar Reservoir and the connected water spread
area by the Government and it has granted fishing licence for the first time to the petitioner as he was the successful bidder in the auction.
The 2nd respondent issued a tender notification during the year 2000 fixing the last date as 14.6.2000 at 3.00 p.m., for submission of tender.
The petitioner herein was the successful tenderer and after evaluation he was awarded the contract on 28.7.2000. The bid amount being
Rs.51,13,701/= for the first year and with an increase of 10% for every year apart from royalty and other dues such as reimbursement of staff
salary and other perks, etc.
Though the contract was entered on 28.7.2000, only during the year 2002 for the first time the petitioner expressed a grievance on 20.4.2002
after a lapse of two years and, thereafter, approached this Court. Though the petitioner asserts that the petitioner is being denied of his rights to fish
in certain areas, while admitting that he is permitted to fish only in 40% area as against the contract area and there is reduction of 60% of the area
and, therefore, he is entitled for refund of 60% of the licence amount collected and also a direction that for future also the same standard has to be
followed.
The 2nd respondent has denied the entire allegations in this respect and contended that the petitioner is being permitted to fish in the entire area
as agreed and not otherwise. The controversy that the petitioner is permitted to fish in the entire area or only 40% of the area cannot be decided in
the present writ petition as it is a disputed question of fact since the 2nd respondent has denied the averments and asserted that the petitioner was
and being permitted to fish in the entire extent agreed to. On mere assertion or denial the said disputed question cannot be decided without
evidence being let in by either side as it is a disputed question of fact.
The petitioner has claimed refund of the portion, namely 60% of the lease consideration already paid as it is not proportionate to the area
which the petitioner was allotted to fish and seeks for refund of the amount by way of declaration. That apart, the petitioner also seeks for a
direction that for the future years the respondent should be directed to collect only 40% of the lease amount by way of modification or by partial
rescinding of the contract. In fact the petitioner seeks for an enforcement of the contract not in its entirety but as already pointed out seeks for
rescinding the contract in part and seeks to enforce partially with respect to the lesser area. The petitioner''s claim that he is permitted to fish only in
a limited area of 40% has been denied by the respondent and the respondent has also set out that such a claim is false and it is an afterthought.
It is to be pointed out that the transaction in question is only a commercial contract and not a statutory contract as the relationship between the
petitioner and the 2nd respondent is not governed by any statutory enactment or rule or regulation nor it forms part of public duty.
After considering the contents set out in the affidavit, counter and the reply affidavit, this Court pointed out to Mr.K.Ramakrishna Reddy that
the petitioner has to either institute a suit or initiate such other proceedings as may be open to him in law as the petitioner seeks to claim
compensation or damages for alleged breach on the part of the 2nd respondent as seen from the first portion of the relief prayed for in the writ
petition and also seeks for enforcement of partial contract and rescinding the remaining part as seen from the second part of the relief prayed for.
However, Mr.K.Ramakrishna Reddy persuaded that the writ petition is maintainable. Mr.K.Ramakrishna Reddy relied upon the pronouncement
of the Division Bench judgment of the Gauhati High Court in Basudev Barman Vs. Secretary, Bechamari Gaon Matshyajibi Samabai Samity Ltd.
and Others, and Gujarat Steel Tubes Ltd. Vs. Board of Trustees of Port of Kandla and Another, . The learned counsel also relied upon the
pronouncement of the Apex Court in Shiv Shankar Dal Mills and Others Vs. State of Haryana and Others, . In the considered opinion of this
Court, the above three pronouncements have no application to the facts of the present case and these pronouncements relied upon are clearly
distinguishable on facts. The learned counsel also relied upon the pronouncement in (SALONAH TEA COMPANY LTD. ETC. VS. THE
SUPERINTENDENT OF TAXES, NOWGONG & OTHERS), where the Supreme Court held that a writ petition is maintainable for refund in
respect of an illegal levy and collection thereof. That is not the case here. Hence, the above said pronouncements will not assist the petitioner.
In my considered view, the petitioner is not entitled to seek the relief of declaration or other consequential relief as prayed for under Article
226 as it is not only a disputed question, but it would amount to the petitioner trying to enforce part of his contractual rights and seek for damages
in respect of remaining part.
In LIFE INSURANCE CORPORATION OF INDIA VS. ASHA GOEL reported in 2001 (2) SCC 160, Mohapatra, J., speaking for the
Bench, held thus :-
Article 226 of the Constitution confers extraordinary jurisdiction on the High Court to issue high prerogative writs for enforcement of the
fundamental rights or for any other purpose. It is wide and expansive. The Constitution does not place any fetter on exercise of the extraordinary
jurisdiction. It is left to the discretion of the High Court. Therefore, it cannot be laid down as a general proposition of law that in no case the High
Court can entertain a writ petition under Article 226 of the Constitution to enforce a claim under a life insurance policy. It is neither possible nor
proper to enumerate exhaustively the circumstances in which such a claim can or cannot be enforced by filing a writ petition. The determination of
the question depends on consideration of several factors like, whether a writ petitioner is merely attempting to enforce his/her contractual rights or
the case raises important questions of law and constitutional issues, the nature of the dispute raised; the nature of inquiry necessary for
determination of the dispute etc. The matter is to be considered in the facts and circumstances of each case. While the jurisdiction of the High
Court to entertain a writ petition under Article 226 of the Constitution cannot be denied altogether, courts must bear in mind the self-imposed
restriction consistently followed by High Courts all these years after the constitutional power came into existence in not entertaining writ petitions
filed for enforcement of purely contractual rights and obligations which involve disputed questions of facts. The courts have consistently taken the
view that in a case where for determination of the dispute raised, it is necessary to inquire into facts for determination of which it may become
necessary to record oral evidence a proceeding under Article 226 of the Constitution, is not the appropriate forum. The position is also well settled
that if the contract entered between the parties provide an alternate forum for resolution of disputes arising from the contract, then the parties
should approach the forum agreed by them and the High Court in writ jurisdiction should not permit them to bypass the agreed forum of dispute
resolution. At the cost of repetition it may be stated that in the above discussions we have only indicated some of the circumstances in which the
High Court have declined to entertain petitions filed under Article 226 of the Constitution for enforcement of contractual rights and obligation; the
discussions are not intended to be exhaustive. This Court from time to time disapproved of a High Court entertaining a petition under Article 226
of the Constitution in matters of enforcement of contractual rights and obligation particularly where the claim by one party is contested by the other
and adjudication of the dispute requires inquiry into facts. We may notice a few such cases; Mohd. Hanif v. State of Assam; Banchhanidhi Rath v.
State of Orissa; Rukmanibai Gupta v. Collector, Jabalpur; Food Corpn. of India v. Jagannath Dutta and State of H.P. v. Raja Mahendra Pal.
In U.P. Pollution Control Board and Others Vs. Kanoria Industrial Ltd. and Another, , the Apex Court, which is relied upon by
Mr.Ramakrishna Reddy, had occasion to consider the question in respect of illegal levy, where it was laid down that a writ of mandamus could be
issued directing refund of illegal levy of tax or money realised without authority of law. This is not the case here and the said pronouncement relied
upon has no application at all to the facts of the case as this is not a case of illegal levy.
The petitioner herein is not challenging any statutory levy as illegal nor claimed refund of tax or levy which has been collected without authority.
On the other hand, in this case the petitioner seeks for recovery of a portion of the amount paid by him as damages or compensation for alleged
breach of contract and also seeks to enforce part of the contract with modification and to direct the 2nd respondent to collect only 40% of the
lease amount. The amount so far collected has not been held to be illegal or without authority but what the petitioner has paid is in terms of the
contract, a commercial contract entered between the petitioner and the respondent.
That apart, the very claim of the petitioner that he was permitted to fish only in 40% of the area and not the entire area as agreed to between
the parties has been very stoutly denied by the 2nd respondent. Therefore, it is a disputed question. Having paid the amount for nearly two years, it
is rather too late in the day for the petitioner to come before this Court that the respondents are liable to refund 60% of the amount collected while
alleging breach of contract. Not only it is a disputed question of fact, but it is a payment under the contract and for the alleged breach for which the
petitioner has to go before a competent civil court and establish his right to recover damages. It cannot be assumed that the respondents should
have collected only 40% of the amount even assuming that the area in which the petitioner was permitted to fish has been reduced as alleged. The
quantum of compensation, if any, has to be adjudicated by a competent court for the alleged breach and till then the petitioner cannot claim that
what has been collected is illegal or without authority.
In Kerala State Electricity Board and Another Vs. Kurien E. Kalathil and Others, , the Apex Court held thus :-
We find that there is a merit in the first contention of Mr.Raval. Learned counsel has rightly questioned the maintainability of the writ petition.
The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages
actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under
Article 4(1). We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory
contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory
body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting
parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in
coming to the conclusion that the contract in question was statutory in nature.
A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions.
Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that
one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning
of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory
body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with
property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The
contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and
conditions of such a contract could not have been agitated in a petition under Article 4(1) of the Constitution of India. That is a matter for
adjudication by a civil court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the
appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have
relegated to other remedies.
In a recent pronouncement in Verigamto Naveen Vs. Government of Andhra Pradesh and Others, , Rajendra Babu, J., speaking for the Bench
held thus :-
On the question that the relief as sought for and granted by the High Court arises purely in the contractual field and, therefore, the High Court
ought not to have exercised its power under Article 4(1) of the Constitution placed very heavy reliance on the decision of the Andhra Pradesh High
Court in Y.S. Raja Reddy v. A.P. Mining Corpn. Ltd. and the decisions of this Court in Har Shankar v. Dy. Excise & Taxation Commr.,
Radhakrishna Agarwal v. State of Bihar, Ramlal & Sons v. State of Rajasthan, Shiv Shankar Dal Mills v. State of Haryana, Ramana Dayaram
Shetty v. International Airport Authority of India and Basheshar Nath v. CIT. Though there is one set of cases rendered by this Court of the type
arising in Radhakrishna Agarwal case much water has flown in the stream of judicial review in contractual field. In cases where the decision-making
authority exceeded its statutory power or committed breach of rules or principles of natural justice in exercise of such power or its decision is
perverse or passed an irrational order, this Court has interceded even after the contract was entered into between the parties and the Government
and its agencies. We may advert to three decisions of this Court in Dwarkadas Marfatia & Sons v. Board of Trustees of the Port of Bombay,
Mahabir Auto Stores v. Indian Oil Corpn. and Shrilekha Vidyarthi (Kumari) v. State of U.P. Where the breach of contract involves breach of
statutory obligation when the order complained of was made in exercise of statutory power by a statutory authority, though cause of action arises
out of or pertains to contract, brings it within the sphere of public law because the power exercised is apart from contract. The freedom of the
Government to enter into business with anybody it likes is subject to the condition of reasonableness and fair play as well as public interest. After
entering into a contract, in cancelling the contract which is subject to terms of the statutory provisions, as in the present case, it cannot be said that
the matter falls purely in a contractual field.
In the present case it has been rightly pointed out that the terms and stipulations or agreement as seen from the concluded contract is neither
subject to the terms of the statutory provision nor it falls within the sphere of public law. On the contrary, the agreement between the petitioner and
the 2nd respondent is purely contractual, a commercial contract.
In AIR 1997 993 (SC) , Jeevan Reddy, J., (as he then was), speaking for the Bench, while following the Constitution Bench in Har Shankar
Vs. Dy. Excise and Taxation Commissioner held thus :-
A Constitution Bench of this Court held in Har Shankar v. Dy. Excise and Taxation Commr. that: (SCC p.748, para 22)
The writ jurisdiction of High Courts under Article 4(1) of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred.
Of course, where there is a statutory violation, interference would be permissible even in the case of a contract but not where the relevant facts are
disputed and which dispute calls for an elaborate enquiry which cannot be conveniently done by the High Court in a writ petition.
In State of Gujarat and Others Vs. Meghji Pethraj Shah Charitable Trust and Others, , the Apex Court held thus :-
We are unable to see any substance in the argument that the termination of arrangement without observing the principle of natural justice (audi
alteram partem) is void. The termination is not a quasi-judicial act by any stretch of imagination; hence it was not necessary to observe the
principles of natural justice. It is not also an executive or administrative act to attract the duty to act fairly. It was - as has been repeatedly urged by
Shri Ramaswamy - a matter governed by a contract/agreement between the parties. If the matter is governed by a contract, the writ petition is not
maintainable since it is a public law remedy and is not available in private law field, e.g., where the matter is governed by a non-statutory contract*
. Be that as it may, in view of our opinion on the main question, it is not necessary to pursue this reasoning further.
In the light of the overwhelming authorities and various pronouncements, it is clear that the writ petition is misconceived and not maintainable
either seeking for the return of portion of the money paid by him complaining breach by the 2nd respondent or for enforcement of the contract in
partial modification of the agreement of lease or licence entered into between the petitioner and the 2nd respondent. Being a commercial
transaction not being statutory, the petitioner has to necessarily go before the competent civil court having jurisdiction, if such a suit is maintainable
in law as of today and if it is not barred by law of limitation or any other law.
In the circumstances, while sustaining the objections raised by Mr.Mohan Parasaran, learned senior counsel, the present writ petition is
dismissed. Parties shall bear their respective costs. Consequently, connected W.P.M.P.s are also dismissed and W.V.M.P. Filed by the 2nd
respondent is allowed.