1989 (3) TMI 400 - HC - Indian Laws

High Court Upholds Judgment on Statutory Contract Compliance

Kanchan Vora and Bepin Vora Versus West Bengal Housing Board

The High Court upheld the judgment dismissing the writ proceedings, finding the appellant had not complied with the terms and conditions of the statutory ... - Issues Involved:1. Jurisdiction of the High Court under Article 226 to interfere in contractual matters.2. Nature of the contract between the appellant and the West Bengal Housing Board.3. Applicability of the doctrine of promissory estoppel.4. Compliance with the terms and conditions of the Brochure.5. Arbitrary and discriminatory actions of the West Bengal Housing Board.6. Validity of the cancellation of allotment of flats.Issue-wise Detailed Analysis:1. Jurisdiction of the High Court under Article 226 to interfere in contractual matters:The High Court analyzed whether it had jurisdiction under Article 226 to interfere in matters arising out of contractual obligations. It referred to several precedents, including Hindusthan Petroleum Corporation v. Shyam Ganeriwala and Radha Krishna Agarwal v. The State of Bihar, which established that a breach of contract by the State or its instrumentalities does not automatically invoke constitutional remedies unless there is an element of arbitrariness or violation of statutory provisions. The Court concluded that while it generally does not interfere in pure contractual disputes, it can do so if the contract is statutory in nature or if there is a breach of statutory duty.2. Nature of the contract between the appellant and the West Bengal Housing Board:The Court examined whether the contract between the appellant and the West Bengal Housing Board was a statutory contract or a simple contract. It concluded that the Brochure issued by the Board had a statutory character as it was framed under the West Bengal Housing Board Act, 1972. Therefore, the contract was not a simple contract but had statutory elements, which required the Board to act fairly and not arbitrarily.3. Applicability of the doctrine of promissory estoppel:The appellant argued that the doctrine of promissory estoppel should apply as they had acted to their detriment based on the promises made by the Board. The Court referred to Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd. and Delhi Cloth & General Mills Ltd. v. Union of India, which discussed the principles of promissory estoppel. The Court noted that the appellant had changed their position based on the Board's promises and that the Board could not go back on its promises if it would be inequitable to do so.4. Compliance with the terms and conditions of the Brochure:The appellant was required to comply with specific terms and conditions outlined in the Brochure, including submitting income tax clearance certificates. The Court found that the appellant had not fully complied with these terms, despite being given opportunities to do so. The appellant's failure to provide the necessary documents justified the Board's refusal to allot the flat.5. Arbitrary and discriminatory actions of the West Bengal Housing Board:The appellant claimed that the Board's actions were arbitrary and discriminatory. The Court referred to Kasturi Lal Lakshmi Reddy v. The State of Jammu & Kashmir, which emphasized that the State must act reasonably and in public interest. The Court found that the Board's actions were not arbitrary or discriminatory as the appellant had failed to comply with the required terms and conditions.6. Validity of the cancellation of allotment of flats:The Court examined whether the cancellation of the allotment was valid. It noted that the appellant had not complied with the necessary terms and conditions, and the Board had acted within its rights to cancel the allotment. The Court upheld the validity of the cancellation but allowed the appellant an opportunity to comply with the terms within a specified period, after which the Board should reconsider the allotment.Conclusion:The High Court dismissed the appeal and upheld the judgment of the learned Single Judge, which dismissed the writ proceedings. The Court noted that the appellant had not complied with the necessary terms and conditions of the Brochure, justifying the Board's refusal to allot the flat. The Court, however, allowed the appellant an opportunity to comply with the terms within four weeks, and directed the Board to reconsider the allotment if compliance was made. The Court maintained the status quo for eight weeks to facilitate this process.