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Judgment
Umesh Chandra Banerjee, J.—The jurisdiction of the writ Courts in regard to the enforcement of an equity is the principal issue for
consideration in this writ petition.
The petitioner being a Transport Contractor responded to a tender notice by the Oil & Natural Gas Commission for transportation and handling
of drilling equipments. By a letter dt. 25th Jan. 1977 the Commission intimated the petitioner about the acceptance of this tender subject of course
to a formal agreement being executed. The Commission, however, even prior to this execution of the formal agreement issued divers Work Orders
and directed the petitioner to carry out the same and the petitioner in turn also carried out the work in accordance therewith. On 25th Feb. 1977
the formal agreement was executed being effective from 25th Feb. 1977 to 24th Jan. 1978 subject to further extension. The petitioner contended
that in terms of Clause 14 of the agreement, the petitioner was entitled to charge on the basis of volumetric conversion, that is, on the basis of
weight per measurement or on the basis of dead weight, that is actual weight of the goods carried whichever was more. The petitioner further
contended that inadvertently bills were submitted on the basis of actual weight though in fact the petitioner was entitled to raise and submit bills on
the basis of weight by measurement, by reason wherefore the petitioner, on detection of such an error, submitted revised bills. From the records, it
appears however, that the respondent did not make any payment in regard to the revised bill.
Subsequently, however, a further agreement was entered into by and between the petitioner and the respondent commission as regards the
entitlement of the petitioner.
Considering the issues, however, involved in this writ petition, this Court refrains from dealing with the factual aspect of the matter in details,
suffice it to say that certain bills were raised by the petitioner on the basis of the agreement dt. 15th May 1978 and by reason of failure to obtain
payment the petitioner demanded arbitration in terms of the original agreement. On 26th Mar. 1979 the respondent-Commission agreed to refer
the matter to arbitration and appointed one Shri B. N. Shukla as an Arbitrator to decide the grievance of the petitioner in regard to the non-
payment of the bills.
Before the Arbitrator the parties were directed to file their claims and in accordance therewith the petitioner filed the statement of claim on 3rd
Sept, 1979. The Arbitrator, however, on 12th Sept. 1979 allowed one month's time to file the counter statement of facts by the Commission and
on further prayer for extension the time to file the counter statement was extended till 26th Nov. 1979. As appears from records that though
various meetings of the Arbitrator were fixed, but no effective meeting could be held before 15th Jan. 1980. At that meeting as it appears,
however, it was contended on behalf of the Commission that the Arbitrator has had no jurisdiction to entertain the claim of the petitioner The
Arbitrator, however, rejected the contention and fixed a further meeting on 17th Jan. 1980 at 2-30 p.m. Before the matter however, could take
final shape before the Arbitrator, the Commission moved this Court and obtained an order of Stay of proceedings before the Arbitrator on the
ground that the arbitration proceedings held by the Arbitrator was incompetent, without jurisdiction, null and void and not binding. On 11th April
1980 the Arbitrator intimated the parties that he be deemed to have resigned. Incidentally, it is pertinent to record here that the Arbitrator being a
very Senior Officer of the Commission was appointed by the Commission itself on 8th Aug., 1979. The Commission, however, immediately on the
resignation of the Arbitrator withdrew the application before this Court under the Arbitration Act. The writ-petitioner however did not leave the
matter there and made representations before the commission and the commission eventually agreed to form a high powered Committee consisting
of one Deputy General Manager, one Additional Director and one Joint Director (F & A). Since the main plank of the petitioner's submission is in
regard to the Constitution and its power to go into the matter it would be necessary to set out the relevant extract of the Office Memorandum :--
Having considered the situation arising out of the resignation without any reservations as an arbitrator by Shri B. N. Shukla, Addl. Director (T &
S) and the situation and nature of disputes in the matter. Member (On shore) hereby appoints a committee of the following officers to enquire into
the disputes raised by M/S. Friends Carrying Corporation, Calcutta regarding transport contract and recommend settlement of the dispute.
Sri Krishan Kant, D.C.M.S. (CR), Calcutta
Sri J. Swaroop. Addl. Dir (TPT), Dehradun.
Sri Talukdar, Jt. Director (F & A), Calcutta.
The Committee should have meetings with M/S. Friends Carrying Corporation, Calcutta to go into their grievances and submit recommendations
by 31st Aug. 1980 latest.
If M/S. Friends Carrying Corporation have any objection to the appointment of above committee, they should submit their objection within 48 hrs.
of receipt of this notice.
Sri J. Swaroop Addl. Director (TPT) Dehradun is to receive the charge of the complete papers etc. from Sri B. N. Shukla, Addl. Director (T &
S) Dehradun and give receipt for the same.
In pursuance of the aforesaid, the high powered committee held divers meetings and went into the matter as required by the order of the
member (On shore) noted above. Eventually the committee recommended a settlement and approved and claim of the petitioner to the extent of
Rs. 7,15,383/- as would be evident from a letter written by the petitioner in confirmation to such a settlement and the members of the high
powered committee subscribed their signatures on the letter itself. The letter dt. 13th Oct. 1980 is set out hereinbelow for proper appreciation of
facts :
Sir,
A committee has been appointed by the Member (On shore). ONGC to settle the disputes between ONGC and M/s. Friends Carrying
Corporation Calcutta in respect of the claims made by the FCC for all the transportation of rings and other equipment vide two transport
agreements entered into between the two parties as above.
The committee is recommending the approval of claims as below :
i. The claim for a sum of Rs. 6,15,383/- for all the transportations carried out during the period prior to the second agreement, i.e. 15- 5-78.
ii. A sum of Rs. one lakh as against the claim preferred by the PCC to ONGC for the transportation carried out after 15-5-78 as against the claim
of Rs. 3,25,250/-.
I agree to accept the terms and conditions under which the committee proposes to settle the disputes. 1 further declare that the total payment made
under the recommendations of this committee will be accepted by me in total and full satisfaction of all the claim preferred to ONGC or to the
Arbitrator appointed by the ONGC.
I hereby confirm that I will have no other claim in respect of the transaction referred to above. I may be permitted to record that the understanding
for the settlement is that the total sum of Rs. 7,15,383/- (Rupees seven lakhs fifteen thousand three hundred and eighty three) only payable to me
will be arranged to be paid within a period of three weeks from the date of this declaration by me.
Two principal questions have been raised in this writ petition viz. (a) whether on a true and proper construction, the two documents referred to
above, can be said to have created an equity in favour of the writ petitioner and (b) whether the jurisdiction of the writ Court can be invoked for
the purpose of enforcing the aforesaid equity in favour of the writ petitioner.
Turning on to the first question. Mr. D. P. Gupta appearing for the petitioner contended that formation of a Committee for the purpose of
recommending a settlement leaves no manner of doubt about the true intent of the Commission viz. to bring about a finality in the matter. Mr. Gupta
contended that the authority agreed to abide by the recommendations and as such the doctrine of promissory estoppel has its application to its
fullest extent and the writ Court ought to direct the enforcement of the obligations in so far as the respondent Commission is concerned. Mr.
Sanjoy Bhattacharyya on the other hand however contended that recommendations cannot have any binding effect and it is for the authority to
accept recommendations or not. Mr. Bhattacharyya contended that there cannot be any equity and the writ petition ought to be dismissed as not
maintainable in law. Before however dealing with the rival contentions it would be worthwhile to recapitulate the law in regard to the doctrine of
promissory estoppel and its enforcement by the writ Court.
The doctrine of Promissory Estoppel cannot be termed to be a concept of very recent origin. As early as 1880 this Court in the case of Ganges
Manufacturing Co. v. Sourujmull, reported in (1880) ILR 5 Cal 669 recognises the doctrine of Promissory estoppel as a cause of action. In that
decision Garth C.J. observed :
The fallacy of the argument is in supposing that all rules of estoppel are also rules of evidence. The enactment in Section 115 is. no doubt, in one
sense, a rule of evidence. It is founded upon the well-known doctrine laid down in Pickard v. Sears, (?) and other cases, that when a man has
made a representation to another of a particular fact or state of circumstances, and has thereby wilfully induced that other to act upon that
representation and to alter his own previous position, he is estopped as against that person from proving that the fact or state of circumstances was
not true. In such a case the rule of estoppel becomes so far a rule of evidence, that evidence is not admissible to disprove the fact or state of
circumstances which was represented to exist. But ""estoppels"", in the sense in which the term is used in English legal phraseology are matters of
infinite variety, and are by no means confined to the subjects which are dealt with in Chap. VIII of the Evidence Act. A man may be estopped, not
only from giving particular evidence, but from doing acts, or relying upon any particular argument or contention, which the rules of equity and good
conscience prevent his using as against his opponent. A large number of cases of this kind will be found collected in the notes to Doe v. Oliger (2);
Smith's L.C. 8th Edition (p. 775 et seq.) 679 and whatever the true meaning of Section 2 of the Evidence Act may be as regards estoppels which
prevent persons from giving evidence, we are clearly of opinion that it does not debar the plaintiffs in this case from availing themselves of their
present contention as against the defendants.
The doctrine was also applied by the Bombay High Court, twenty five years later in the case of Municipal Corporation of Bombay v. Secy. of
State, reported in ILR (1905) 29 Bom 580.
The concept of Promissory estoppel therefore had a well-laid foundation even long prior to the decision of the High Tree's case, though the
concept was restated as a recognised doctrine of law. It is no doubt true of course that certain contra trend also appeared on the legal horizon in
England principally because of the well-established principle that the doctrine of equity must always act as a shield and not as a sword. The
concept of consideration has also lent its support in having the contra trend.
So far as our Courts are concerned there seems to be a steady refinement on this branch of law. In the case of Union of India (UOI) and
Others Vs. Indo-Afghan Agencies Ltd., the Supreme Court observed :
That it could not be said that the executive necessity releases the Government from honouring its solemn promise, relying on which citizens have
acted to their detriment. Under the constitutional set up, no person may be deprived of his right or liberty except in due course and by authority of
law; if a member of the executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law --
common or statute the Courts will be competent to and indeed would be bound to protect the rights of the aggrieved citizen. The Supreme Court
further observed that even though the case did not fall within the terms of Section 115 of the Evidence Act, it was still open to a party who had
acted on a representation made by the Government to claim that the Government shall be bound to carry out the promise made by it, even though
the promise was not recorded in the form of a formal contract as required by Article 299 of the Constitution.
The issue was examined by the Supreme Court in a latter decision reported in Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar
Pradesh and Others, , wherein the Supreme Court observed that the doctrine of promissory estoppel is a principle evolved by equity to avoid
injustice. It is neither in the realm of contract nor in the realm of estoppel. The true principle of promissory estoppel seems to be that where one
party has by his word or conduct made to the other, a clear and unequivocal promise which is intended to create legal relationship or affect a legal
relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact
so acted upon by the other party the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would
be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of
whether there is any preexisting relationship between the parties or not. The Supreme Court further observed that there is no reason in logic or
principle why promissory estoppel should not be available as a cause of action if necessary to satisfy the equity. The Supreme Court, extended the
applicability of the doctrine of promissory estoppel against the Government and the defence based on executive necessity has been categorically
negatived. A promise made, knowing or intending that it would be acted on by the promisee and in fact the promisee acting in reliance on i, alters
his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of
the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as
required under Article 299 of the Constitution. The Supreme Court observed that it is elementary that in a Republic governed by the Rule of Law,
no one howsoever high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no
exception and it is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as private
individual so far as the obligation of the law is concerned; the former is equally bound as the latter. The Government cannot claim to be immune
from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may letter its future
executive action.
The decision of the Supreme Court in the case of Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, was
considered by the Supreme Court in a later decision reported in Jit Ram Shiv Kumar and Others Vs. State of Haryana and Others, . Mr.
Bhattacharyya contended that submissions of the writ petitioners on the basis of the decision of the M.P. Sugar Mills' case cannot hold good in
view of the express disapproval of M.P. Sugar Mills' case in the subsequent decision of the Supreme Court in the case of Jit Ram Shiv Kumar. In
the view of above submissions, let us now consider as to whether there is in fact disapproval express or even otherwise of the earlier decision of
the Supreme Court in the case of M.P. Sugar Mills. In Jit Ram Shiv Kumar's case the Supreme Court observed :
the scope of the plea of doctrine of promissory estoppel against the government may be summed up as follows :
(1) The plea of promissory estoppel is not available against the exercise of the legislative functions of the State.
(2) The doctrine cannot be invoked for preventing the Government from discharging the functions under the Law.
(3) When the officer of the Government acts outside the scope of his authority, the plea of promissory estoppel is not available. The doctrine of
ultra vires will come into operation and the Government cannot be held bound by the unauthorised acts of its officer.
(4) When the officer acts within the scope of his authority under a scheme and enters into an agreement and makes a representation and a person
acting on that representation puts himself in a disadvantageous position, the Court is entitled to require the officer to act according to the scheme
and the agreement or representation, the officer cannot arbitrarily act on his mere whim and ignore his promise on same undefined and undisclosed
grounds of necessity or change the conditions to the prejudice of the person who had acted upon such representation and put himself in a
disadvantageous position.
(5) The officer would be justified in changing the terms of the agreement to the prejudice of the other party on special considerations such as
difficult foreign exchange position or other matters which have a bearing on general interest of the State.
The aforesaid two decisions also came up for consideration before this Court in the case of Central Group v. C. M. D. A. Authority, reported
in (1982) 2 CHN 90 wherein T. K. Basu, J. observed :
In my view there is no real conflict between the decision of Bhagwati J. of the Supreme Court in Motilal Padampat Sugar Mills Co. Ltd. Vs. State
of Uttar Pradesh and Others, and the decision of Kailasam J. of the Supreme Court in Jit Ram Shiv Kumar and Others Vs. State of Haryana and
Others, . Although there are certain seemingly critical references in the judgment of Kailasam J. in the latter decision of the Supreme Court of
certain observations of Bhagwati J. in the earlier decision, as will appear from the latter part of para 24 of the judgment of Bhagwati. J. In Motilal
Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, and the summary of the law of promissory estoppel as enunciated by
Kailasam J. in para 39 of the decision in Jit Ram Shiv Kumar and Others Vs. State of Haryana and Others, the conclusion of the two learned
Judges of the Supreme Court are in my view almost identical.
I am in respectful agreement with the views expressed by Basu J. The view expressed in Jit Ram's case though may be slightly different on the
broader aspect of the matter, but basically there is no difference of opinion far less disapproval, express or otherwise.
In any event the issue now seems to be however purely academic in nature as the Supreme Court itself considered the aforesaid two earlier
decisions in the case of the Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., . In that decision the Supreme Court observed that the
authority cannot arbitrarily, on its mere whim ignore its promise on some undefined and undisclosed grounds of necessity or change the condition to
the prejudice of a person who had acted upon such representation and put himself in a disadvantageous position. The Supreme Court observed
that on this point both the decisions viz. Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, and Jit Ram Shiv Kumar
and Others Vs. State of Haryana and Others, concur. The Supreme Court case itself applied the aforesaid ratio in the Gujarat State Financial
Corporation's case. The Supreme Court, however, pointed out that though Jit Ram's case slightly differs from the M.F. Sugar Mills' case but the
said difference did not in fact change the law as stated above. While dealing with the case (Gujarat State Financial Corporation Supra) the
Supreme Court observed that the principle of promissory estoppel would certainly estop the corporation from backing out its obligation arising
from a solemn promise made by it to the writ petitioner.
The law, therefore, is now well-settled to the effect that where Government or a Governmental agency makes a promise knowing or intending
that it would be acted upon by the promisee and if the promisee acting in accordance therewith and thereby alters his position, the Government or
the Governmental agency would be held to be bound by the promise and the promise would be enforceable against the Government or the
Governmental agency at the instance of the promisee, notwithstanding that there is no consideration for the promise or that the promise has not
been reduced to writing in the form of a contract as required under Article 299 of the Constitution. Government or the Governmental agency has a
duty to the public in general to act fairly and reasonably so as to create a feeling amongst the general public that the latter would not be deprived of
justice and fair play. This ought to be the most accepted methodology of any administration and contra belief or contra action on the part of the
Government or the Governmental agency would lead not only to a social catastrophe but violate the basic principles of rule of law. Fair play and
justice ought to be the basic criterion on which a governmental agency should act. The concept of justice and Rule of Law is not however a static
one. but it ought to keep pace with the socio-economic changes in the country. In this context the observations of Bhagwati J. in the Motilal
Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, is very apposite :
It must be remembered that law is not a mausoleum. It is not an antique to be taken down, dusted, admired and put back on the shelf. It is rather
like an old vigorous tree, having its roots in history, yet continuously taking new grafts and putting out new sprouts and occasionally dropping dead
wood. It is essentially a social process, the end product of which is justice and hence it must keep on growing and developing with changing social
concepts and values. Otherwise, there will be an estrangement between law and justice and law will cease to have legitimacy"".
Mr. Bhattacharyya, appearing for the Commission, strenuously contended that the doctrine of promissory estoppel ought not to be given an
extended meaning and should be restricted in the discharge of statutory duties by the Government or by the governmental agency. I am however
unable to accept the said contention. Doctrine of promissory estoppel ought to be applied against the government or the governmental agency
where the interest of justice, morality and common fairness clearly dictate such a course. It is however also true that the word of caution as
observed by Bhagwati J. in Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, ought not to be lost sight of that the
doctrine of promissory estoppel is an equitable doctrine and it must yield when the equity so requires. But if it is found by the Court that it would
be inequitable to hold the government to the promise made by it, the Court would not raise an equity in favour of the promisee and enforce a
promise against the government. Similarly, if the government is able to show that public interest would be prejudiced, the law Courts would have to
balance the public interest and to determine which may the equity lies and to pronounce its verdict accordingly. But while claiming exemption from
liability to carry out the promise it must be on some definite and disclosed ground of necessity or expedience. The government ought to disclose to
the Court sufficient and fuller details as to why there ought not to be any enforcement of the promise made by it. The Court would not act on the
mere ipse-dixit of the Government, for it is the Court which has to decide and no! the government whether the government should be held exempt
from liability. This is the essence of the Rule of Law. (Vide M.P. Sugar Mills v. State of U.P.) (supra).
To say that the doctrine of promissory estoppel is restrictive in its applicability so far as the statutory obligations are concerned in my view,
cannot be termed to be a proper exposition of law considering the changing structure of the society. Involvement of government or governmental
agencies in ordinary trade and commerce is now a practical reality which cannot and ought not to be overlooked while dealing with the issue under
consideration. If a promise can form part of a cause of action connected With statutory obligation, it is too late in the day to contend that it ought to
be restricted to the extent above and no further extension ought to he allowed. As most succinctly stated by Bhagwati J. that law is not antique to
be taken down, dusted and put back on the shelf again, but it is essentially a social process and it must keep on growing and developing with the
changing social concepts and values. The concept cannot be restricted in a strait-jacket formula and be applied only in certain specified cases. The
ever-growing needs of the changing society cannot lend support to the strait-jacket theory. Nobody is above the law and the government, as
stated above, is no exception. The law must keep pace with the time, consider the social changes and suitably be expanded so as lo meet the
interest of justice in the present day context. To apply the law under the changed circumstances in an expanded form is a plain exercise of the
judicial power and the law Court would be failing in discharging its duty to that effect if the concept of justice demands so. Justice must be
administered in accordance with the needs of the people, the structure of the society, having due regard to the socio-economic conditions prevalent
in the country. It is no defence to say that performance of the promise would be arduous in regard to the enforcement of the doctrine of promissory
estoppel by the law Courts, though of course, due regard ought to be had to the caution administered by the Supreme Court in Motilal Padampat
Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, as noted above.
Having considered the law on the subject it therefore remains to be seen as to whether on facts there exists an equity in favour of the petitioner
or whether the Doctrine of promissory estoppel can be invoked in the facts and circumstances of the case under consideration.
From the narration of facts as above, it appears that the dispute in question was referred to the arbitration of one Sri B. N. Shukla, a Senior
Officer of the Commission and for the reason as detailed above the arbitrator resigned and at the persistent efforts of the petitioner a high powered
committee was formed. The language used in the order of appointment of the high powered committee is significant and to be dealt with care. The
recital of the office Memorandum dt. 18th Aug. 1980 viz., ""Having considered the situation arising out of the resignation without any reservation as
an arbitrator by Sri B. N. Shukla Addl. Director (T & S) and the situation and nature of disputes in the matter .....regarding transport contract and
recommended settlement of the dispute"" goes to show that the member on shore wanted a finality in the matter and the intention to do so is clearly
spelt out from the above. Further, if the recital is read with the following :
The Committee should have meetings with M/s, Friends Carrying Corporation Calcutta to go into their grievances and submit recommendations
by 31st August, 1980 latest.
M/s. Friends Carrying Corporation have any objection to the appointment of above committee, they should submit their objection within 48 hrs. of
receipt of this notice.
Sri J. Swaroop Addl. Director (TPT) Dehradun is to receive the charge of the complete papers etc. from Sri S. N. Shukla, Additional Director (T
& S) Dehradun and give receipt for the same.
It leaves no manner of doubt in regard to the intention of the member on shore, being the appropriate authority in the matter. Settlement is to
be arrived at by the high powered committee. A Governmental agency appointing a high powered committee for the purpose of settling the
disputes cannot, in my view, subsequently turn round and say that there exists no obligation whatsoever to accept the recommendation on the part
of the commission. The stand of the Commission in the counter-affidavits as well as before this Court was that it was a mere recommendation and
no importance is to be attached thereon. The Commission further urged that the recommendation may or may not be accepted by the concerned
authority. If that be the case the obvious question therefore arises as to why there ought to be such a high-powered committee to enquire into the
dispute for the purpose of settlement. Is it a mere farcical show so as to keep the contractor at bay for some more time? If it be so, then it is high
time law courts ought to tell them that the actions are contrary to all recognised principles of law and justice. But in my view this is not so and the
intent of the commission as appears from the office memorandum dt. 18th Aug. 1980 is clear enough. The stand taken by the Commission that it is
merely recommendary in nature and cannot be enforced in a Court of Law has obviously been necessitated by reason of the recommendations
actually made by the high powered committee. Is it fair on the part of the governmental agency not to honour its commitment simply because of the
fact that recommendations have gone against the Commission? The office memorandum dt. 18th Aug. 1980 cannot be termed to be an unilateral
action of the commission, but very much a bilateral one because of the specific words used therein and the position becomes clear if read with the
letter dt. 13th Oct. 1980. The claim has been approved to a lesser extent and such approval was duly authenticated by the signatures appearing on
the letter sent by the petitioner to the Commission.
There is no manner of dispute that the high powered committee did recommend certain specified sum for the transportation work carried out for
the period prior to the second agreement i.e. 15th May 1978 and another specified sum for the period after 15th May 1978 as against a much
higher claim. The petitioner's definite case, as made out is. that the high powered committee as a matter of fact required the petitioner to submit a
declaration that the total payment of Rs. 7,15,383 as recommended by the said committee would be in full and final satisfaction of the total claim
against the Commission. The petitioner further contended that the petitioner was also required to confirm that there was no other claim against the
respondent in respect of the transaction under dispute. In para 47 of the petition the petitioner contended that on or about 13th Oct. 1980 the
petitioner submitted his acceptance of the terms and conditions to the committee's recommendations as well as declaration as required to the
committee in writing. The said declaration was countersigned by the respondents 3, 4 and 5 on the same day. The counter-affidavit filed by the
members of the high powered committee however does not deal with the contentions raised in para 47 of the petition.
Another significant feature is the non production of the original records pertaining the recommendations of the high powered committee.
Opportunities were granted to the commission to produce the records but in spite of that nothing was produced in regard to the same. A note
however dt. 18th Aug. 1980 signed by member (on shore) goes to show that the high powered committee should go into the details and meet
M/S. Friends Carrying Corporation and to recommend the settlement of the dispute. The language of the note dt. 18th Aug. 1980 is in consonance
with the office Memorandum as detailed above.
The basic facts therefore remain that the contractor raised a dispute which was referred to Arbitration but by reason of certain unforeseen
circumstances the Arbitrator resigned and a high powered committee was appointed to go into the matter and to recommend a settlement.
Simultaneously objections were invited from the party in regard to the personam of the high powered Committee within 48 hours. It is also to he
noted that the high powered committee was directed to obtain all papers and documents from the erstwhile Arbitrator so as to enable the
committee to reach at a correct finding. The fact further depicts that the high powered committee did in fact held diverse meeting and
recommended the settlement of the dispute to the extent of Rs. 7,11,383 as against the claim of Rs. 10 lakhs by the contractor.
The counter-affidavit filed by the respondents including the members of the committee does not at all decry the recommendation but goes to
suggest that it is a mere recommendation and has no binding force so as to transform it to be a promise to pay the recommended amount. Mr.
Gupta appearing for the petitioner submitted and in my view rightly that had there been a case that the recommendations were unjust and not in
accordance with law one could have understood the same. But the case made out by the respondents that it is a mere recommendation in my view
cannot be accepted. A definite step has been taken by the respondent commission to arrive at a finality in regard to the dispute. The Contractor
petitioner accepted the same only to see an end to the long drawn dispute. In the normal course of events the contractor in terms of the agreement
could have asked for a fresh Arbitration and admittedly award would have a binding force in so far as the parties are concerned. Instead of the
same the commission has given an asurance to the contractor that the high powered committee would do the needful in the matters. The contractor
has lost its valuable right under the agreement only on the representation of the Commission. In my view, it is too late in the day to contend
otherwise. Considering the language used in the office memorandum, the same was in my view, intended to be final and as such has had a binding
effect. In that view of the matter. I am of the opinion that there exists an equity in favour of the petitioner.
The next question that arises for consideration is whether the jurisdiction of the writ Court can be invoked for the purpose of enforcing the
equity. Mr. Bhattacharyya contended that enforcement of the equity in this case would mean and imply passing of a money decree by the writ
Court and as such the writ Court would assume the jurisdiction of a Civil Court without going into the factual aspect of the matter and without any
evidence whatsoever. I am however unable to accept the contention of Mr. Bhattacharyya that enforcement of equity would mean and imply
assumption of jurisdiction of the Civil Court. The petitioners in this writ petition are seeking to enforce compliance of the obligation in terms of the
office memorandum as more fully detailed above. In my view the writ Court would be within its jurisdiction to enforce the equity, as found to be
existing in this case and can compel the government or the governmental agency to perform its part of the bargain. I am conscious of the fact that
the writ Court should not transgress its limit and should be extremely cautious in not over stepping its jurisdiction, but if an act of the Government
or the Governmental agency is apparently not in accordance with the rule of law. equity and fair play, it would be a plain exercise of judicial power
for the writ Court to intervene. In this context, strong reliance was placed on the observations of the Supreme Court by the Counsel for the
petitioner, in the case of the Gujarat Steel Tubes Ltd. and Others Vs. Gujarat Steel Tubes Mazdoor Sabha and Others, of the abovementioned
decision the Supreme Court observed that
While the remedy under Article 226 is extraordinary and is of Anglo-Saxon vintage, it is not a carbon copy of English process. Article 226 is a
sparing surgery but the lancet operates where injustice suppurates. While traditional restraints like availability of alternative remedy hold back the
court, and judicial power should not ordinarily rush in where the other two branches fear to tread, judicial daring is not daunted where glaring
injustice demands even affirmative action. The wide words of Article 226 are designed for service of the lowly numbers in their grievances if the
subject belongs to the Court's province and the remedy is appropriate to the judicial process. There is a native hue about Article 226 without being
anglophilic or Anglophobic in attitude. Viewed from this jurisprudential perspective we have to be cautious both in not overstepping as if Article
226 were as large as an appeal and not failing to intervene where a grave error has crept in.
The Supreme Court further observed :
Dual jurisdictional issues arise here which have been argued at some length before us. The position taken up by Sri Sen was that the High Court
could not under Article 226, direct reinstatement, and even if felt that the arbitrator had gone wrong in refusing reinstatement, the Court could only
demolish the order and direct the arbitrator to reconsider the issue. What belonged, as a discretionary power, to a tribunal or other adjudicatory
body, could not be wrested by the Writ Court. To put it pithily, regarding the relief of reinstatement, the arbitrator could but would not and the
High court would but could not. (We will deal later with the points that the arbitrator had himself no power u/s 114 of the Act but did have it in
view of the wide terms of reference).
The basis of this submission as we conceive it, is the traditional limitations woven around high prerogatives writs. Without examining the
correctness of this limitation, we disregard it because while Article 226 has been inspired by the royal writs its sweep and scope exceed hide-
bound British process of yore. We are what we are because our constitution trainers have felt the need for a pervasive reserve power in the higher
judiciary to right wrongs under our conditions. Heritage cannot hamstring nor custom constrict where the language used is wisely wide. The British
paradigms are not necessarily models in the Indian Republic. So broad are the expressive expressions designedly used in Article 226 that any
order which should have been made by the lower authority could be made by the High Court. The very width of the power and the disinclination to
meddle, except where gross injustice or fatal illegality and the like are present, inhibit the exercise but do not abolish the power.
In regard to the question of assumption of jurisdiction of the Civil Court or passing of a decree for specific performance of a contract, I am of
the view that if an equity is found to be existing in favour of the petitioner, then the writ court as stated above is authorised to enforce the equity and
the writ court is not really concerned with the future performance of the contract as the same will take its own course in accordance with law. This
view finds support from the decision of this court in the case of Central Group v. Calcutta Metropolitan Development Authority (1982 2 CHN 90)
(supra).
Mr. Bhattacharyya lastly contended that the prayer in the petition in any event ought not to be granted and the writ petition ought to be
dismissed since the writ court has no jurisdiction to direct payment. The decisions cited by Mr. Gupta in regard to the reliefs and the writ court's
powers to direct payment in my view do not assist Mr. Gupta's contention inasmuch as all decisions a statutory duty was imposed upon the
authority to make the payment, but the facts are contrary in this case. It is now well settled that the writ court can direct payment in the event of a
breach of any statutory duty, but not otherwise. But in my view, when there is manifest injustice and after coming to a finding that an equity exists in
favour of the petitioner, the writ court can mould the relief in order to do justice between the parties. The concept of justice cannot be restricted on
to a strait jacket formula, but is very wide and the law courts exist to do justice and come in aid of a person who seeks justice against an
administrative caprice and its ipse-dixit.
In the premises this application succeeds. Let a writ of mandamus be issued commanding the responding Commission to implement the
recommendations of the high-powered committee as evidenced in the memorandum dt. 13th Oct. 1980. There shall, however, be no order as to
costs.