S. Manikandaraj and Others vs The Executive Officer, Special Village Panchayat

K. Chandru, J.—Heard both sides and perused the records.

In the writ petitions of the year 2005, the prayer of the petitioners was to set aside the public notice dated 30.09.2005 passed by the first respondent. In that notification, the Executive Officer of the Special Panchayat, Vilathikulam had called for tenders for building of 16 shops in the eastern side of bus stand maintained by the Special Panchayat.

The grievance of the petitioners was that they have been running shops in the entrance to the bus stand for over 15 years and the Panchayat had allotted vacant sites. They got the site by getting allotment through public auction and last such auction was conducted on 31.03.2005. They being the successful bidders, they were allotted the shops for three years. For these 16 shops only vacant sites was allotted. They have put up the superstructure with heavy investment. Apart from security deposits and they are paying substantial rent every month and hence, they should not be disturbed from doing their business in the present site.

It was also stated that they came to know by the notice dated 30.09.2005 that tenders were called for the construction of shops and they were shocked. There also alleged the conspiracy between the first and second respondents in this venture. Since the Panchayat is receiving a sum of Rs. 40,000/- as ground rents from the shops situated on the eastern side without any investment, the said arrangement should not be disturbed. It was also stated that out of 32 shops built on the western side with heavy investments, for many shops there was no takers. It was also alleged that in demolition the shop Nos. 1 and 2 were left untouched due to mala fide motives and no notice was given for demolition of those superstructures.

These three writ petitions of the year 2005 were admitted on 17.10.2005 and 19.10.2005 respectively. Pending these writ petitions, it was directed that tender process may go on, but there should not be any confirmation without further orders from this Court. With reference to the prayer for injunction, those miscellaneous petitions were dismissed by this Court by an order dated 08.02.2007.

When those writ petitions were pending, W.Ps.4198 to 4206 by the shop keepers came to be filed once again challenging the notification dated 16.04.2007, wherein and by which the Executive Officer of the Vilathikulam Panchayat, gave a notice revoking the licence granted in favour of the petitioners and also directed them to vacate and hand over vacant possession within 15 days. In these writ petitions, notice was ordered to the respondents and an interim-stay was also granted on 27.04.2007. Subsequently, the interim-stay was extended until further orders by this Court by an order dated 12.06.2007.

On behalf of the Executive Officer, Town Panchayat, a counter-affidavit dated 24.12.2005, has been filed. In paragraph: 4 of the counter affidavit, it is stated that the Town Panchayat has granted a temporary licence for a period of three years. Thereafter, tenders were called for under the Integrated Small and Medium Town Development (ISMTD) Plan for construction of new shops. In view of the same, the liecence granted to the shop keepers were revoked. Construction of shops on a permanent basis by the Panchayat is a policy matter.

In paragraph Nos. 6 and 7 of the counter affidavit, it is averred as follows:

I respectfully submit that the scheme has been availed by various Panchayat and certain question arose for consideration before the Government as to the status of the existing shop keepers who were given licence to occupy the vacant site. The Government after consideration passed G.O. No. Rural Development 919 dated 15.06.1984 preference be given to existing shop keepers without going through the public auctions however subject to the guidelines made in G.O. Thus, as per the G.O. though the petitioner hands over the possession he will be given a preference right subject to the rules made in the aforesaid G.O. without going through the process of public auction.

I respectfully submit that the petitioner is not entitled to seek for the prayer to quash the tender notice dated 30.09.2005. The petitioner knowing fully well that the temporary licence granted in his favour has come to be determined on 13.09.2005 being the date of tender on anticipating that a notice of eviction has preempted by coming forward with this writ petition. The petitioner does not have right whatsoever to challenge the policy decisions taken by the Panchayat. It is pertinent to state that the auctions were held and the contract was awarded to the successful bidder. Now the sit has to be handed over to the contractor to complete the project in time. The petitioner by filing this writ petition is trying to delay the developmental activities of the Panchayat. This is causing great hardship to the Panchayat, the ultimate sufferers being the public at large.

In the light of the above factual matrix the arguments of the petitioner are to be considered. The substance of their contentions are that the Special Panchayat cannot be allowed to decide to build shops on the eastern side of the bus stand. The existing ground rent without any further investment is sufficient and that since the petitioners have invested money, they cannot be evicted. In either calling for tenders or the notice for eviction the petitioners were not heard and hence principles of natural justice was violated. No petitioner had produced any legal basis for their continuance in the present place of business.

With reference to the violation of principles of natural justice, in the realm of contract, it is necessary to refer to the decision of the Supreme Court in State of Gujarat and Others Vs. Meghji Pethraj Shah Charitable Trust and Others, . In paragraph No. 22, it was observed as follows:

We are unable to see any substance in the argument that the termination of arrangement without observing the principle of natural justice (audi alteram partem) is void. The termination is not a quasi-judicial act by any stretch of imagination; hence it was not necessary to observe the principles of natural justice. It is not also an executive or administrative act to attract the duty to act fairly. It was as has been repeatedly urged by Shri Ramaswamy a matter governed by a contract / agreement between the parties. If the matter is governed by a contract, the writ petition is not maintainable since it is a public law remedy and is not available in private law field e.g.where the matter is governed by a non-statutory contract. Be that as it may, in view of our opinion on the main question, it is not necessary to pursue this reasoning further

With reference to the power of the Court in interfering with the terms and conditions of a contract in a jurisdiction under Article 226, the Supreme Court in State of U.P. and others Vs. Bridge and Roof Co. (India) Ltd., , dealt with such an issue. In paragraph 16, it was observed as follows:

16.Firstly, the contract between the parties is a contract in the realm of private law. It is not a statutory contract. It is governed by the provisions of the Contract Act or, may be, also by certain provisions of the Sale of Goods Act. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. This is a matter either for arbitration as provided the contract or for the Civil Court, as the case may be. Whether any amount is due to the respondent from the appellant-Government under the contract, and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not, are all matters which cannot be agitated in or adjudicated upon in a writ petition.

Further the Supreme Court, in Kerala State Electricity Board and Anr. v. Kurien E. Kalathil and Ors reported in 2000 6 SCC 2936, dealt with the difference between a statutory contract and non-statutory contract. In paras 10 and 11 of the said judgment, it was observed as follows:

We find that there is a merit in the first contention of Mr. Raval. Learned Counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of a contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract wold not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory.

A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parities to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a convenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties in in the realm of private law. It is not a statuary contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. This is matter for adjudication by a Civil Court or in arbitration if provided for in the contract.

In the light of the above facts and the legal precedents, the case of the petitioners do not merit any acceptance and deserves to be rejected. Therefore, all these writ petitions stand dismissed. Consequently, connected M.Ps are also dismissed. No costs.