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Smart Summary

Factual and Procedural Background

The applicant, Budhmal Radhakishan Parmar, filed an application under Article 226 of the Constitution of India seeking a writ against the State of Rajasthan and certain officials to prohibit them from proceeding with certain grain handling contracts. The applicant alleged that tenders were called for the handling of Grain Stores in Jodhpur Division for 1951, and that he submitted a tender complying with the requirements. He was verbally informed of his appointment as contractor, and the deposits of other tenderers were returned except his. Subsequently, the contract in his favor was cancelled by the Civil Supplies Commissioner and Deputy Commissioner, who called for fresh tenders while the previous contractor continued the work under extensions. The applicant contended that the officers had a duty to specifically perform the contract with him and sought a writ for specific performance.

The State opposed the application, denying that the contract was granted to the applicant and arguing that no writ was warranted as there was no duty to specifically perform the contract.

Legal Issues Presented

  1. Whether the applicant was entitled to a writ of specific performance under Article 226 of the Constitution of India against the State and its officers for the alleged breach of contract.
  2. Whether the High Court should exercise its extraordinary jurisdiction under Article 226 in contractual matters where an alternative remedy by suit for damages is available.

Arguments of the Parties

Applicant's Arguments

  • The applicant contended that the contract was awarded to him and the officers had a public duty to specifically perform the contract.
  • He argued that the cancellation of the contract and calling for fresh tenders was wrongful.
  • He further submitted that reliance on a suit for damages was inadequate because of the requirement to give notice under Section 80 of the Code of Civil Procedure, which would delay injunctive relief.

Respondent's Arguments

  • The State denied that the contract was granted to the applicant.
  • They argued that even if there was a contract, the applicant was not entitled to a writ as there was no duty to specifically perform the contract.
  • They maintained that an adequate remedy was available through a suit for damages for breach of contract.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
P.K Banerjee v. L.J Simonds (A.I.R 1947 Calcutta 307) Where a specific and adequate remedy is available by way of suit for breach of contract, no relief can be granted under Section 43 of the Specific Relief Act. The court relied on this precedent to hold that the High Court should not exercise its extraordinary jurisdiction under Article 226 when a suit for damages is an adequate remedy.

Court's Reasoning and Analysis

The Court refrained from deciding whether the contract was actually granted to the applicant, considering it unnecessary at this stage. Assuming the contract was concluded and later repudiated by the State, the Court examined whether the applicant was entitled to relief under Article 226. It held that the High Court's extraordinary writ jurisdiction should not be exercised in contractual disputes where an adequate and convenient remedy by way of suit for damages exists. The Court referred to the precedent in P.K Banerjee v. L.J Simonds, where relief was denied under the Specific Relief Act because a suit was available. The Court acknowledged the applicant's argument that Section 45(g) of the Specific Relief Act prohibits writs against servants of the Crown to enforce claims on the Crown, but noted that Article 226's wide powers do not justify intervention in contractual matters where damages suffice. The requirement of notice under Section 80 of the Code of Civil Procedure was found not to negate the adequacy of the remedy by suit, as the applicant could be compensated by damages even if suit filing was delayed.

Holding and Implications

DISMISSED WITH COSTS

The Court dismissed the application, holding that no writ should issue under Article 226 for specific performance of the contract. The direct effect is that the applicant must pursue a suit for damages if aggrieved by the breach of contract. No new precedent or broader principle was established beyond reaffirming the limitation on writ jurisdiction in contractual disputes where adequate remedies exist.

    Budhmal v. Shri Gulabsingh

    Wanchoo, C.J:— This is an application by Budhmal Radhakishan Parmar under Art. 226 of the Constitution of India for issue of a writ, order or direction against the State of Rajasthan, and the Commissioner, Civil Supplies, Jaipur, and the Deputy Commissioner, Civil Supplies, Jodhpur, prohibiting them from proceeding with certain contracts with respect to grain.

    2. The facts alleged by the applicant are that tenders were called for a contract for handling work in connection with the Grain Stores of Jodhpur Division for the; year 1951. In that connection, the applicant made a tender, and complied with the necessary directions in that behalf. All the tenders received were opened, and the applicant was verbally informed that he would be appointed contractor for the said work for the year 1951. Thereafter, the deposits of the other tenderers were returned, while the deposit of the applicant was retained. Later, however, the Civil Supplies Commissioner and Deputy Commissioner cancelled the contract in favour of the applicant, and called for fresh tenders. In the meantime, the work was carried on by the old contractor, who was given extension from time to time. It was contended that it was the duty of the officer concerned in their public character to perform specifically the contract with the petitioner, and to refrain from committing a breach thereof, and the petitioner was, therefore, entitled to a writ ordering the officers concerned and the State of Rajasthan for specific performance of the contract.

    3. The application has been opposed on behalf of the State of Rajasthan and the officers concerned. The fact alleged by the applicant, namely, that he had been granted the contract, has not been admitted. It has also been urged that in any case, the applicant is not entitled to any writ at all, as there was no duty laid on the State or the officers to perform specifically the alleged contract.

    4. We do not think it necessary for the purposes of this case to decide the question whether the contract for the work was in fact granted to the applicant. That is a matter which may have to be decide if and when the applicant decides to bring a suit for damages for breach of contract against the State, and we would not like to prejudice the decision of that issue by any remarks on that point at this stage. For the purposes of the present application, we shall assume that the contract was concluded between the State and the applicant, and that later the State went back on that contract, and decided to call for fresh tenders. The question that arises then is whether the applicant is entitled to any relief under Art. 226 of the Constitution of India in these assumed circumstances. We are of opinion that this Court should not exercise its extraordinary jurisdiction under Art. 226 of the Constitution in a case like the present, where, even if there has been a breach of the contract, a specific, adequate and convenient remedy is available by a suit for damages for breach of contract. In this connection we may refer to the case of P.K Banerjee v. L.J Simonds (A.I.R 1947 Calcutta 307). There also an application for a writ was made under sec. 45 of the Specific Relief Act in a case based on contract. It was hell that as there was other specific and adequate remedy available by way of suit, no relief could be granted under sec. 43 of the Specific Relief Act.

    5. Learned counsel for the applicant wants to distinguish this case on the ground that sec. 45 of the Specific Relief Act in so many words provides in Clause (g) that the High Court will not make any order on any other servant of the Crown, as such, merely to enforce the satisfaction of a claim upon the Crown. He urges that there is no such prohibition under Art. 226 of the Constitution. We may, however, point out that this was an additional ground on which the learned Judges of the Calcutta High Court dismissed that application. Further, though it is true that Art. 226 of the Constitution of India is very general in terms, and gives very wide powers to this Court, it would not use those extraordinary powers in cases arising out of contractual relationship, where there is specific remedy available otherwise, and where the harm done can be compensated for by a suit for damages for breach of contract.

    6. Learned counsel also urges that before bringing a suit, the applicant would have had to give notice under sec. 80 of the Code of Civil Procedure, and thus would not have been able to get an injunction in time. But where, as in this case, the damage done to him can be compensated for by a decree for damages, the fact that he could not file the suit for two months does not mean that there was not an adequate remedy available to him.

    7. We are, therefore, of opinion that there is no cause for the issue of a writ in this case. The application is hereby dismissed with costs to the State. We fix Rs. 80/- as the fees of the learned Government Advocate.

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    Budhmal v. Shri Gulabsingh
    (Nov 19, 1951)