Case details

Court: Supreme Court of India
Decided: 28 February 2022
Bench: M.R. Shah
Citations: 2022 INSC 244[2022] 2 S.C.R. 426
Type: Judgment (Appeal(s) allowed)

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Citation: [2022] 2 S.C.R. 426 (search it on the Supreme Court's e-SCR portal)

Supreme Court of India

MUNICIPAL COUNCIL GONDIA versus DIVI WORKS & SUPPLIERS, HUF & ORS. on 28 February 2022

Cites 0, Cited by 0

426

SUPREME COURT REPORTS

[2022] 2 S.C.R.

MUNICIPAL COUNCIL GONDIA

DIVI WORKS & SUPPLIERS, HUF & ORS.

(Civil Appeal No. 1538 of 2022)

BFEBRUARY 28, 2022

[M. R. SHAH AND B. V. NAGARATHNA, JJ.]

Constitution of India: Art. 226 – Appellant-Municipal Councilis running educational institutions – A resolution was passed forpurchasing school furniture – Original writ petitioner no. 1C(respondent No.1) was declared successful bidder and work orderwas issued in its favour – However, on outbreak of Covid-19pandemic and lockdown in force, the State Government publishedG.R. dated 4.5.2020 providing that owing to Covid-19 restrictionsimpacting government finances, non-priority expenditure should notDbe incurred – Pursuant thereto, Municipal Council informedrespondent No.1 regarding suspension of work order until furtherorders – Municipal Council cancelled the work order after obtainingreport from the Education officer that respondent No.1 had not takenany further steps in regard to supply of furniture as per the workorder and that since the supply of furniture was not urgent in natureE– On writ petition, High Court held that respondent No.1 is entitledto make the supply in pursuance of the work order – Hence theinstant appeal – Respondent No.1 submitted that they have alreadymanufactured the goods which are customized and therefore, if theMunicipal Council is not directed to lift the goods prepared/gotFprepared as per the work order, it would suffer a huge loss – ThisCourt directed on 7.2.2022 that as the schools have restarted, theofficial of the appellant would visit the place where the manufacturedgoods are kept and identify the goods which are immediatelyrequired, at this stage which shall not be less than 25% of the totalquantity manufactured – On inspection of the goods, the officialGfound that the goods did not meet the requirement of the work order– Even respondent No.1 had admitted that goods were not available– Held: There are disputed questions of fact such as whether in factthe goods were manufactured as per the specifications or not –Nothing was on record before the High Court that goods were inHfact and actually manufactured by respondent No.1, as per the specifications and the requirements of the Council and as per thework order – In absence of any evidence on record and there beingdisputed questions of facts, High Court ought not to have passedthe impugned judgment directing the Council to continue the workorder and accept the goods from respondent No.1 and to make thepayments as per the work order – Even otherwise, no writ ofmandamus could have been issued virtually granting the writ forspecific performance of the contract/work order in a writ petitionunder Art.226 of the Constitution of India – Respondent No.1 oughtto have been relegated to file a civil suit for appropriate relief oflosses/damages, if any, sustained – Writ jurisdiction.

Allowing the appeal, the Court

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Conclusion

Allowing the appeal, the Court

HELD: By the impugned judgment, the High Court hasissued a writ of mandamus virtually granting the relief of specificperformance of the contract/work order. From the impugnedjudgment, it appears that the High Court was made to believethat the original writ petitioners had already manufactured thegoods which are customized and as per the specifications andthe work order. However, it is now found that there are nomanufactured goods readily available which can be supplied tothe appellant-Council. There are disputed questions of fact suchas whether in fact the goods were manufactured as per thespecifications or not. Nothing was on record before the HighCourt that goods were in fact and actually manufactured by theoriginal writ petitioner No.1, as per the specifications and therequirements of the Council and as per the work order. Inabsence of any evidence and disputed questions of facts, theHigh Court ought not to have passed the impugned judgmentand order directing the Council to continue the work order andaccept the goods from the original writ petitioner No.1 and tomake the payments as per the work order. Even otherwise, nowrit of mandamus could have been issued virtually granting thewrit for specific performance of the contract/work order in awrit petition under Article 226 of the Constitution of India. Theoriginal writ petitioners ought to have been relegated to file acivil suit for appropriate relief of losses/damages, if any,sustained. Even otherwise on merits also the High Court has AB

DEFG

Aerred in setting aside the communication dated 18.05.2020 and07.07.2020. The High Court has not at all appreciated the reasonsfor suspending/cancelling the work order till further orders. Itis to be noted that the decision dated 07.07.2020 was takenpursuant to the G.R. dated 04.05.2020 which was necessitateddue to Covid-19 Pandemic and there was a lockdown and theBschools were closed and that the Council had no sufficient funds.Even the said decision was taken after calling for a report fromthe Education Officer in regard to the tender/work order issuedto the original writ petitioner No.1 and the Education Officerinformed that the original writ petitioner No.1 has not takenCany further steps in regard to supply of material as per the workorder. [Paras 8, 8.1][431-E-H; 432-A-D]CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1538of 2022.

From the Judgment and Order dated 05.01.2021 of the High CourtDof Judicature at Bombay, Nagpur Bench at Nagpur in Writ PetitionNo.1984 of 2020.

Mohit P. Khajanchi, Mahesh Dhatrak, C. George Thomas, GauravAgrawal, Advs. for the Appellant.

ER. L. Khapre, Sr. Adv., Ms. Anagha S. Desai, Rahul Chitnis,Sachin Patil, Aaditya A. Pande, Geo Joseph, Ms. Shwetal Shepal, Advs.for the Respondents.

The Judgment of the Court was delivered by

M. R. SHAH, J.F

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 05.01.2021 passed by the High Court of Judicature atBombay, Nagpur Bench at Nagpur in W.P.No.1984 of 2020, by which,the High Court has allowed the said writ petition preferred by respondentNo.1& 2 herein – original writ petitioners (hereinafter referred to as theGoriginal writ petitioners) and has quashed and set aside the action on thepart of the appellant in cancelling the work order and by which the HighCourt has held that original writ petitioner No.1 is entitled to make thesupply in pursuance of the work order dated 07.02.2020 to the appellant herein and consequent to which it will be entitled to the payments as perthe terms of the work order, original respondent No.2 – Municipal Council,Gondia through its Chief Officer has preferred the present appeal.

2. The appellant – Municipal Council is running educationalinstitutions/schools. There was a requirement for benches, almirahs andtables in a school run by it. Accordingly, resolution dated 12.12.2018came to be passed for purchasing desks, benches, almirahs and tables.An e-tender was issued by the appellant vide letter dated 19.09.2019 byvirtue of which, bids were invited. That original writ petitioner No.1participated in the tender and was declared the successful bidder andthe same was sanctioned by the Standing Committee of the MunicipalCouncil. Thereafter, an Agreement came to be executed between theoriginal writ petitioner No.1 and the appellant, as a result of which, workorder dated 07.02.2020 came to be issued in favour of original writpetitioner No.1. However, in view of the Covid-19 Pandemic and thelockdown in force, the Government of Maharashtra published G.R. dated04.05.2020 by which it was provided that owing to Covid 19 restrictionsimpacting government finances, non-priority expenditure like in the presentcase, should not be incurred. In pursuance of above G.R., the Presidentof Municipal Council, Gondia vide communication dated 18.05.2020informed the Chief Officer that as the Municipal Council was not havingany income due to ongoing lockdown and most of the schools wereclosed due to pandemic, no purchases should be made and no proposalfor the same should be forwarded. In view of the above, the Chief Officerof the Municipal Council informed the original writ petitioner No.1 thatthe work order had been suspended until further orders. It is the case onbehalf of the appellant that after obtaining the report from the EducationOfficer that the original writ petitioner No.1had not taken any furthersteps in regard to supply of material as per the work order and havingfound that since the supply of desks, benches etc., was not urgent innature during the time of pandemic and considering the G.R. dated04.05.2020, the Municipal Council cancelled the work order till furtherorders.

2.1 Feeling aggrieved and dissatisfied with the action of theMunicipal Council vide letter dated 07.07.2020 suspending/cancellingthe work order till further orders respondent No.1 & 2 herein – originalwrit petitioners preferred W.P. No.1984 of 2020 before the High Court.By the impugned judgment and order the High Court has set aside the ABC

Aaction of the Municipal Council vide letters dated 18.05.2020 and07.07.2020 and has held that original writ petitioner No.1 is entitled tomake the supply in pursuance of the work order dated 07.02.2020 to theMunicipal Council and consequent to which it is entitled to the paymentsas per the terms of the work order.

B3. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court, the Municipal Council has preferredthe present appeal.

4. The present appeal was heard by this Court on 07.02.2022. Itwas submitted on behalf of the original writ petitioners that in fact theyChave already manufactured the goods which are customized andtherefore, if the Municipal Council is not directed to lift the customizedmanufactured goods which the original writ petitioners prepared/gotprepared as per the work order, the original writ petitioners would suffera huge loss. This Court passed the following order on 07.02.2022: -

D“Having heard learned counsel appearing on behalf of therespective parties and considering the fact that as such on theorder being placed by the petitioner, the respondent has alreadymanufactured the goods which are customized and during the lasttwo years, there may be some difficulty faced by the petitionerdue to COVID-19 pandemic. But, now as the schools have re-Estarted, we direct the official of the petitioner to visit the placewhere the manufactured goods are kept and identify the goodswhich are immediately required, at this stage which shall not beless than 25% of the total quantity manufactured and also make aschedule with respect to the balance goods manufactured andFwhen the goods will be lifted and payment shall be made.

Put up on 21.02.2022.”

5. Shri Gaurav Agrawal, learned counsel appearing on behalf ofthe appellant – Municipal Council has submitted that pursuant to theorder passed by this Court on 07.02.2022, the official of the CouncilGvisited the premises of respondent No.1 on 10.02.2022. The officials ofthe Council were asked to visit Nagpur which they did on 11.02.2022.On inspection of the goods, it was seen that the goods do not meet therequirement of the work order and that they were not prepared for theCouncil as claimed by the original writ petitioners before this Court. It ispointed out that even vide communication dated 18.02.2022 respondentH

No.1 had admitted that goods were not available. It is therefore submittedthat there are no manufactured goods available as per the specificationsand the requirements of the Council and as per the work order and eventhe manufactured goods are not available till date, and hence there is noquestion of accepting any goods as per the work order as directed bythe High Court.

6. Shri R.L. Khapre, learned Senior Advocate appearing on behalfof the original writ petitioners has tried to explain the reasons as to whythe manufactured goods are not available. It is submitted that as morethan two years have passed and the goods manufactured withspecifications were dismantled for proper storage as well as maintenanceincluding polishing thereof and were kept in the available space/storageat Nagpur as it was practically impossible to store such huge quantity ofmaterial for such a long period due to unavailability of space as well ashaving regard to the their maintenance. Therefore, it is requested togrant some time for reassembling the goods in question for supply asearly as possible.

7. We have heard the learned counsel appearing on behalf of therespective parties at length.

8. At the outset, it is required to be noted that by the impugnedjudgment and order the High Court has issued a writ of mandamus virtuallygranting the relief of specific performance of the contract/work order.From the impugned judgment and order passed by the High Court itappears that the High Court was made to believe that the original writpetitioners had already manufactured the goods which are customizedand as per the specifications and the work order. However, it is nowfound that there are no manufactured goods readily available which canbe supplied to the appellant – Council. There are disputed questions offact such as whether in fact the goods were manufactured as per thespecifications or not. Nothing was on record before the High Court thatgoods were in fact and actually manufactured by the original writpetitioner No.1, as per the specifications and the requirements of theCouncil and as per the work order. In absence of any evidence andmaterial on record and there being disputed questions of facts the HighCourt ought not to have passed the impugned judgment and order directingthe Council to continue the work order and accept the goods from theoriginal writ petitioner No.1 and to make the payments as per the workorder. Even otherwise, no writ of mandamus could have been issued A

Avirtually granting the writ for specific performance of the contract/workorder in a writ petition under Article 226 of the Constitution of India. Theoriginal writ petitioner sought to have been relegated to file a civil suitfor appropriate relief of losses/damages, if any, sustained.

8.1 Even otherwise on merits also the High Court has erred inBsetting aside the communication dated 18.05.2020 and 07.07.2020. TheHigh Court has not at all appreciated the reasons for suspending/cancellingthe work order till further orders. It is to be noted that the decision dated07.07.2020 was taken pursuant to the G.R. dated 04.05.2020 which wasnecessitated due to Covid-19 Pandemic and there was a lockdown andthe schools were closed and that the Council had no sufficient funds.CEven the said decision was taken after calling for a report from theEducation Officer in regard to the tender/work order issued to the originalwrit petitioner No.1 and the Education Officer informed that the originalwrit petitioner No.1 has not taken any further steps in regard to supplyof material as per the work order. Therefore, the High Court has erred Din quashing and setting aside the communication dated 07.02.2020 inexercise of powers under Article 226 of the Constitution of India.

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

Devika Gujral

Appeal allowed.