No Writ of Mandamus can virtually grant writ for Specific Performance of Contract under A. 226: SC

NO WRIT OF MANDAMUS CAN VIRTUALLY GRANT A WRIT FOR SPECIFIC PERFORMANCE OF THE CONTRACT UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA: SC

Cause Title: Municipal Council Gondia v. Divi Works and Suppliers, HUF and Others

Case Number: Civil Appeal No. 1538/2022

Quorum: Justice M. R. Shah and Justice B. V. Nagarathna

Judgment Date: 28/02/2022

Counsel for Appellant: Shri. Gaurav Agrawal

Counsel for Respondents: Shri. R.L. Khapre

Author: Pragash B, Advocate, Madurai Bench of Madras High Court

To View/Download Judgment: Municipal Council Gondia v. Divi Works and Suppliers, HUF and Others

Background of the Case

The appellant – Municipal Council is running educational institutions/ schools and there was a requirement for benches, almirahs and tables in a school run by it. In consonance, a resolution dated 12.12.2018 was passed for purchasing desks, benches, almirahs and tables. An e-tender was issued by the appellant vide letter dated 19.09.2019 and bids were invited. The first respondent participated in the tender and was declared as the successful bidder and the same was sanctioned by the Standing Committee of the Municipal Council. An agreement was executed between the first respondent and the appellant and work order dated 07.02.2020 was issued in favour of the first respondent.

Due to Covid-19 Pandemic and Lockdown imposed, the Government of Maharashtra published G.R. dated 04.05.2020 by which it was provided that the non-priority expenditure should not be incurred. In pursuance, the President of Municipal Council, Gondia vide communication dated 18.05.2020 informed the Chief Officer that as the Municipal Council was not having any income due to ongoing lockdown and most of the schools were closed due to pandemic, no purchases should be made and no proposal for the same should be forwarded. Then the Chief Officer of the Municipal Council informed the first respondent that the work order has been suspended until further orders. Then the municipal Council cancelled the work order till further orders as the supply was not urgent and as per report from the Education Officer, the first respondent had not taken any further steps to supply as per the work order.

Feeling aggrieved and dissatisfied with the action of the Municipal Council vide letter dated 07.07.2020 suspending/ cancelling the work order till further orders, the first and second respondents have preferred W.P. No. 1984/2020 before the Honourable Bombay High Court, Nagpur Bench. The impugned judgment and order set aside the action of the Municipal Council vide letters dated 18.05.2020 and 07.07.2020 and has held that the first respondent is entitled to make the supply in pursuance of the work order to the Municipal Council and consequent to which it is entitled to the payments as per the terms of the work order. The High Court has issued a writ of mandamus virtually granting the relief of specific performance of the contract/ work order. Now the present appeal is preferred before the Honourable Supreme Court of India.

Findings of the Court

The Honourable Supreme Court of India observed that there are no manufactured goods readily available which can be supplied to the appellant. Nothing was on record before the High Court that the goods were in fact and actually manufactured by the first respondent as per the specifications and the requirements of the Council and as per the work order. In absence of any evidence and material on record and there being disputed questions of facts, the High Court ought to have not passed the impugned order directing the Council to continue the work order and accept the goods from first respondent and make payments to him. No writ of mandamus could have been issued virtually granting the writ for specific performance of the contract/ work order in writ petition under Article 226 of the Constitution of India. The respondents ought to have been relegated to file a civil suit for appropriate relief of losses/ damages, if any, sustained. (Para 8)

The Honourable Apex Court held

“ Even otherwise on merits also the High Court has erred in setting aside the communication dated 18.05.2020 and 07.07.2020. The High Court has not at all appreciated the reasons for suspending/ cancelling the work order till further orders. It is to be noted that the decision dated 07.07.2020 was taken pursuant to the G.R. dated 04.05.2020 which was necessitated due to Covid-19 Pandemic and there was a lockdown and the schools were closed and that the Council had no sufficient funds. Even the said decision was taken after calling for a report from the Education Officer in regard to the tender/ work order issued to the original writ petitioner No. 1 and the Education officer informed that the original writ petitioner No.1 has not taken any further steps in regard to supply of material as per the work order. Therefore, the High Court has erred in quashing and setting aside the communication dated 07.02.2020 in exercise of powers under Article 226 of the Constitution of India.” (Para 8.1)

In view of the above and for the reasons stated above the present appeal succeeds. The impugned judgment and order passed by the High Court in W.P. No. 1984/2020 is quashed and set aside. Consequently, the original writ petition stands dismissed. However, it is made clear that this shall not preclude the original writ petitioners in initiating appropriate proceedings before the civil court for the damages/losses, if any suffered by them, which may be considered in accordance with law and on its own merits and on the basis of the evidence to be led. The present appeal is accordingly allowed to the aforesaid extent. No costs. (Para 9)