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Judgment
Bhat, J.—Letter dt. 25-11-1985 and lender notice dt/- 19-9-1985 issued by respondent-2 are sought to be quashed by a writ of certiorari.
A further writ of mandamus is sought against respondents 1 to 3 commanding them to supply 1200 Kgs. of P. C. II allegedly covered by allotment
order/letter of acceptance No. 10861 dt. 20-3-1982 which are said to have been sold to the petitioners and held by respondent as bailees and in
the alternative relief of refund of deposits with damages and upto date penal interest is claimed thereon. By a further writ of prohibition respondents
1 to 3 are sought to be restrained from allotting/selling/ supplying the said goods to respondent 4 or to any other person.
Facts urged in this writ petition are briefly as under : --
Petitioner 1 is said to have offered to purchase pierced cocoons II (for short PC-II) and in this regard a letter is addressed to respondent 3. The
price of PC II is agreed to be paid at Rs. 37.31 per Kg. A quantity of 1200 Kgs. of PC II is offered to be purchased which offer is accepted by
the respondents and following conditions are laid down with the acceptance of the offer by them.
i) Goods are to be lifted to the tune of 1200 Kgs. at respondents' office at Tilloo Talab, Jammu against hundred percent cash payment.
ii) That before order was placed with petitioners, the petitioner 1 was to deposit Rs. 5,000/- in shape of C. D. R. Later on this amount of Rs.
5,000/- was enhanced to Rs. 7,500/-.
iii) After drawing up of the agreement goods were to be lifted within one month's time.
iv) Petitioners were asked to intimate whether this was acceptable to them: In this regard the expression used in Annexure 'A' to the writ petition
so please intimate"" are mentioned by respondent 3 to the petitioners. Petitioner 1 is said to have appointed petitioner 2 as his agent for executing
the agreement and for making necessary arrangements for collection and disposal of the goods. Intimation in this regard was given to respondent 3
also. Petitioner 1 is said to have been in hurry as he wanted to get back to Calcutta, where he resides, in connection with the celebration of Idd,
therefore petitioner 2 was assigned the job of taking further steps in the matter. Petitioner 2 is said to have handed over an amount of Rs. 7,500/-
and a letter of acceptance to one Shri Pitamber on 24-3-1982 on the promise given by the said Pitamber that he would prepare a C. D. R. for the
amount and get it deposited in the departmental Chest under the relevant head and forward the receipt to the petitioners. In his letter dt. 23-3-
1982, which is Annexure 'B' to the writ petition, petitioner No. 1 is said to have informed respondent 3 that 1200 Kgs. of PC-II may be supplied
to petitioner 2 against cash payment of hundred percent, the C. D. R. of Rs. 7,500/-was enclosed with the letter. Petitioner 2 is said to have
remitted an amount of Rs. 35,000/- by a Demand-draft dt. 2-7-1982 to respondent 3 which was deposited in the Govt. Treasury at Jammu on 3-
3-1983. On this being done, petitioners have claimed goods' because in their opinion execution of the agreement had become redundant but
respondent 3 is said to have insisted on drawing up of the agreement. Accordingly petitioner 2 is said to have deposited Rs. 2.50 non-judicial
stamp paper for the purpose.
Petitioner 2 is thereafter said to have been held up at Calcutta due to prolonged and serious illness of his father, therefore he was not able to
pursue the matter. But when he arrived at Jammu after some time, he found that agreement was not drawn and he had approached the office of
respondent 3 a number of times for execution of the agreement but his attempt had yielded no result. Therefore, letters are said to have been
addressed to the respondents for release of the goods because hundred percent advance cost was paid. The amount of Rs. 7,500/- which was
said to have been handed over to one Shri Pitamber, actually is said to have been embezzled by him and he has not furnished C. D. R. for the said
amount before the respondent 3, therefore the petitioner is said to have lodged a complaint against him but before any action could be taken
against him, the said Pitamber who was the dealing Assistant in the office of the respondents had expired. Petitioner 2 is said to have requested the
Minister for Industries and Commerce on 17-8-1985 that he was ready to pay an amount of Rs. 7,500/- as CDR against the misappropriated
amount and had pleaded with him for release of the goods. The Minister had forwarded this communication to respondent 3 with a note that the
petitioner's case was genuine and hard, therefore his grievance should be redressed and information given to the Minister. Copy of this letter is also
on the record an Annexure 'C' to the writ petition. A further representation was made by petitioner 2 to the said Minister when the earlier
representation did not yield any result. The same was forwarded to respondent 2, copy whereof is Annexure 'D' to the writ petition. The
petitioners are said to have approached the State Chief Minister also and their representation was forwarded to various authorities for necessary
action but nothing concrete was done in their favour. The impugned letter, Annexure E to the writ petition calls upon petitioner 2 to take refund of
Rs. 35,000/- deposited in the Govt. Chest or take delivery of PC II for the said amount at the present market rate. Petitioner 2 is also informed
that he failed to execute the agreement with the department in lime and has also failed to lift the goods in time, therefore his amount was being
refunded to him. The choice was left with petitioner 2 in the matter. The petitioner is also aggrieved against the tender notice which is contained in
Annexure 'F to the writ petition whereby 2293 Kgs. Pierced and 2999 Kgs. of cut cocoons are offered for sale.
The petitioners' case is that title in the goods i.e. 1200 Kgs. of PC II had passed in favour of petitioner No. 1 on acceptance of hundred per
cent cost thereof by respondent 3, therefore the said quantity of PC II was the property of the petitioner and he could not be deprived of the
property without payment of compensation. The non-execution of the agreement cannot affect the title of the petitioners' in the goods which have
been sold to them and they have a right to lift the same. The non-execution of the agreement is attributed to respondent 3's inaction. Rs. 7,500/-
are said to have been embezzled by the Dealing-clerk of the respondents, therefore its non-payment would not affect the petitioners' right. Principle
of equitable estoppel is invoked against the respondents, and it is stated that they cannot wriggle out of the transaction. The impugned letter and
tender notice are, therefore, said to be violative of petitioners' fundamental rights and are said to be against Articles 14, 16, 19 and 31 and 311(2)
of the Constitution of India and on the aforesaid premises various prayers are sought.
Objections to the writ petition have been filed by the respondents and they have traversed the facts pleaded in the writ petition. It is stated that
there was no sale as alleged because the petitioners had failed to accept the offer. After more than three years they have woken up because price
of PC II has gone up and they want to gain at the cost of the public exchequer.
At the outset it is to be noted that Articles 16 and 311(2) of the Constitution of India mentioned in sub-para (f) of Para 12 of the writ petition
have no application to the facts of the present case. The framer of the writ petition seems to have been blissfully ignorant about the import of
Articles 16 and 311(2) of the Constitution of India. These two articles relate to public servants. Article 16 guarantees equality of opportunity in
matters of public employment and Article 311(2) postulates that no person who is a member of Civil Service shall be dismissed or removed or
reduced in rank except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being
heard in respect of those charges. These questions do not at all arise in this writ petition.
The sole question which falls for our determination in this writ petition is whether the petitioners have become owners of 1200 Kgs. of PC II and
whether title in the said goods has passed on to them and whether they have paid hundred per cent price in advance. Reliance was placed by the
learned counsel for the petitioners on Sections 4 and 5 of the Sale of Goods Act. Section 4 reads as under : --
4(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.
There may be a contract of sale between one part-owner and another.
(2) A contract of sale may be absolute or conditional.
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the
transfer of the property in the goods is to lake place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an
agreement to sell, (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the
goods is to be transferred.
It defines sale and agreement to sell. A contract of sale requires that seller should transfer or agree to transfer the property in goods to the buyer
for a price. A contract of sale may be absolute or conditional. If under the contract of sale property in the goods is transferred from the seller to the
buyer the contract is called a sale but where the transfer of the property in the goods is lo take place at a future time or subject to some conditions
thereafter to be fulfilled the contract is called an agreement to sell. The agreement to sell may become sale when the time elapses or the conditions,
subject to which the property in the goods is to be transferred, are fulfilled.
Section 5(2) of the Sale of Goods Act provides that contract of sale may be in writing or by a word of mouth or partly in writing and partly by
word of mouth or may be implied from the conduct of the parties.
Application of the principles laid down in Sections 4 and 5 of the Sale of Goods Act would largely depend on the facts pleaded by the
petitioners. Though the facts have been traversed but the points which emerge from the documents and the pleadings may be summarised as under
: --
i) That on 22-3-1982 respondent No. 3 informed petitioner No. 1 in response to his letter dt. 18-3-1982 that 1200 Kgs. of PC II can be lifted
from Talab Tilloo on payment of hundred per cent cost at the rate of Rs. 37-31 per Kg.
ii) That before the goods are lifted, Rs. 5,000/-which was later on enhanced to Rs. 7,500/-are to be deposited in the shape of C. D. R. with the
respondents.
iii) That goods are to be lifted within one month from the date of execution of the agreement.
iv) That intimation was sought from petitioner No. 1 as to whether these terms were acceptable to him or not, which is indicative from the words in
the letter to the effect ""so please intimate"".
v) Petitioner 2 is given an authority to lift 1200 Kgs. of PC II on payment of hundred per cent cost and respondent 3 is informed that C. D. R. for
Rs. 7,500/- is enclosed.
vi) in fact no C. D. R. was enclosed because the petitioners have averred in the writ petition that the amount of C. D. R. was allegedly embezzled
by one Shri Pitamber.
vii) That petitioner 2 had gone to Calcutta and was not available thereafter because, as stated by him, he was held up there due to serious and
prolonged illness of his father.
viii) That a draft of Rs. 35,000/- dt. 2-7-1982 is alleged to have been sent to respondent 3 by petitioner 2, which is said to have been deposited in
the Govt. Treasury by respdt. 3 on 3-3-1983.
ix) That thereafter non-judicial stamp paper worth Rs. 2-50 for drawing up of the agreement is deposited with respondent 3 because no formal
agreement was executed within time nor was intimation given by the petitioners as to whether the terms were acceptable to them.
x) The first communication after 23-3-1982 is the representation of petitioner 2 to the Minister-in-charge of Industries, dt. 17-8-1985. Thereafter
another representation dt. 4-9-1985 is also sent by the petitioners to the Minister concerned. The Minister has directed respondent 3 to look into
the matter because in his opinion the petitioners' case was genuine and the grievance was required to be redressed.
On the aforesaid basis, learned counsel for the petitioners submitted that the sale was complete and title in the goods has passed over to the
petitioners the moment they had deposited Rs. 35,000/- with the respondent 3 through Bank draft This argument appears to be fallacious because
about the completion of the sale averments made in the writ petition are traversed. It is further to be noted that price alleged to have been paid by
the petitioners was deficient by about Rs. 10,000/- and delivery of the goods was not made to them nor had the respondents agreed to make
delivery of the goods on payment of Rs. 35,000/- to the petitioners. Mere acceptance of the amount by the respondents would not be construed
as an acceptance on their part of the sale price of the goods. At best the transaction between the parties can be held to be agreement to sell and
not sale because for complete sale delivery of goods in pursuance of the agreement of sale was required to take place.
The conditions attached to the letter contained in Annexure A to the petition were never fulfilled. The essential condition of sale was deposit of
the amount in the shape of C. D. R. and drawing up of the agreement and goods were to be lifited within one month from the date of the
agreement. These conditions were never fulfilled. As to who observed these conditions in breach is a matter which needs evidence and we are
afraid that in writ jurisdiction we cannot hold an enquiry into the disputed questions of fact. The petitioners claim that they were ready to fulfil their
part of obligation, the respondents' case is that the petitioners were defaulters. As to who was ready and who was defaulter can be agitated and
decided in a civil suit.
Intimation as required by Annexure 'A' to the petition, about the acceptance of the conditions of sale of PC II by the petitioners does not seem
to have been furnished to respondent 3. Therefore Annexure 'A' to the petition, at best, remains an agreement to sell subject to certain conditions
which conditions, according to the respondents, were violated by the petitioners.
Promise of one or both parties to the contract is dependent upon the happening of certain events or coming into being of a state of affairs and
the time from which performance of the agreement can be claimed. The event which was to take place for constituting sale or the state of affairs
which was required to come into existence did not exist therefore promise cannot be enforced by the petitioners. As to who was a defaulter is a
matter which needs an enquiry, because if we say something on that point in this petition that may prejudice the petitioners in some other
proceedings which they may be advised to seek. Therefore, we refrain from saying anything about the conduct of the petitioners which does not
seem to be free from doubt.
The petitioners did not seem to be oblivious of the fact that time was essence of the fulfilment of the conditions. Therefore, it is stated that
petitioner 1 could not come to Jammu for doing the needful on account of the prolonged illness of his father. How far this fact is going to help the
petitioners is not for this court to decide but can be decided in a regular civil suit.
If the default is committed by the petitioners-buyers then they can claim the part payment paid by them for the goods and they are entitled to
recover the purchase price which they have paid, and the seller may claim damages or set off against that claim. That part payment of Rs. 35,000/-
is offered back to the petitioners because the promise or the agreement has fallen through, the petitioners under law are entitled to receive the
payment back which is offered to them.
It is also incorrect to suggest that the goods were sold and sale had taken place merely because offer of purchase was accepted by the
petitioners. The conditions which were attached to the offer were never fulfilled. Therefore, it cannot be said that without the conditions being
fulfilled agreement to sell would become sale. Title in the goods had never passed on to the petitioners, it always remained with the respondents.
Had the agreement been executed in time, security deposited in the shape of C. D.R. made and willingness shown after execution of the agreement
that the goods will be lifted within one month, sale could be said to have taken place but in the absence of the fulfilling of the conditions which were
attached to the transactions the argument of the learned counsel for the petitioners cannot be accepted.
The petitioners have brought before this court a matter which involves determination of disputed questions of fact. In our writ jurisdiction, it is
not possible for us to hold an enquiry about the truth or otherwise of the facts averred in the writ petition, and denied by the other side. This can
appropriately be done in a civil suit.
The relief of mandamus as prayed for in the writ petition cannot also be granted because there is no statutory obligation cast on the
respondents to allow the petitioners to lift the quantity of PC II which was agreed to be purchased by them by virtue of Annexure A to the writ
petition. That agreement has fallen through and we have already stated that we do not want to express our opinion as to who was responsible for
breach of the promise. There is no corresponding right in the petitioners which can be enforced by this court in its writ jurisdiction. It is now well
settled that for grant of mandamus the applicant must satisfy the following conditions : .
a) that he has a legal right to the performance of the legal duty by the party against whom the mandamus is sought and such right must be subsisting
on the day of the petition;
b) the duty that may be enjoined by mandamus may be imposed by the. Constitution, Statute, Common Law or by rules or orders having the force
of law.
None of the aforesaid conditions exist in the present case. The agreement to sell has fallen through, sale was never completed and conditions
attached for completion of sale were never fulfilled. Therefore, no right even at common law vests in the petitioners which can be enforced by this
court in its writ jurisdiction. We cannot command the respondents to do a certain thing which they are not obliged to do. With the breach of
conditions which were attached to the offer, the responsibility of the respondents has ceased towards the petitioners. The petitioners cannot now
seek any relief against the respondents u/s 103 of the Constitution of the State/Article 226 of the Constitution of India. Their remedy lies
elsewhere. They seem to have been ill-advised and misguided for seeking a remedy by way of writ.
It was not necessary for us to assign reasons for dismissing the writ petition in limine. But we have given reasons with a view to putting a curb
an the tendency of bringing frivolous litigation of this nature before this court.
The impugned letter DA 25-11-1985 (Annexure E to the writ petition) is perfectly valid. We in the writ jurisdiction, in the interest of equity,
would have also directed refund of the amount to the petitioners but the respondents seem to have been conscious of their duties and principles of
law, have ordered refund of the amount to the petitioners or given them choice to purchase PC II for the said amount at the present cost.
The petitioners have also claimed alternative relief of refund of the deposit, which according to them is Rs. 42,500/- but on record we are
convinced that respondents hold only Rs. 35,000/- which they have already ordered to be refunded. As regards damages and compensation or
interest on the amount, the petitioners cannot claim that in the writ petition. If so advised, they may seek appropriate remedy for its realisation. The
tender notice contained in Annexure 'F' to the writ petition, does not suffer from any illegality,
The Writ Petition is, therefore, dismissed in limine. We leave the parties to bear their own costs.