TaxTMI 
TaxTMI 
TaxTMI 
1989 (3) TMI 400
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.... the course of hearing, there were interim orders issued and the learned Judge directed such interim order to continue for two months from the date of judgment. We feel that such extension of the interim order was granted to facilitate the Writ petitioners to move the appropriate forum and to obtain necessary orders, if so advised. 2. It was the case of the appellant in F.M.A.No. 855 of 1987, that the Respondent authorities viz., West Bengal Housing Board invited offers from the public, in order to enable them to have allotment of flats proposed to be built at Golf Green Urban Complex, Tollygunge under Phase-IV, on certain terms and conditions, which were contained in a brochure and it was directed that the necessary allotments would be made on the basis of' lottery. A Xerox copy of the brochure was produced by Mr. P. K. Das, the learned Advocate appearing for the appellants and the same contained, inter alia, amongst others that the Board shall, have the right to allot portions of land included in the common areas and the facilities of the Estate on lease hold basis to organisation/institution approved by West Bengal Housing Board/Government (Central, or State) with the concu....
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....h was enacted to provide for the constitution of a Housing Board for West Bengal and for matters connecting therewith or incidental thereto and since it was also felt to be expedient to provide for the constitution of such Board and for matters connected therewith or incidental thereto. 5. It has been stated that the lottery as mentioned hereinbefore was held on or about 29th October, 1980, wherein the appellant was selected for allotment of one flat under the concerned ownership flat scheme at the said complex and on 6th March, 1981, a letter from the concerned Board to her was issued, intimating of allotment of flat No. 22/8, on the 3rd floor and stating that balance 40 per cent of the price of her flat, amounting to ₹ 17,781.18p. should be paid by her to the Board through Canara Bank, Chowringhee Road Branch, Calcutta within 60 days from the date of issue of the letter and in default, the allotment will stand automatically cancelled. 6. It was the case of the appellant that thereafter, she duly deposited ₹ 18,197.21p. as part payment of the price of her flat as allotted and such payment included interest and according to her, she also furnished all the requisite do....
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....tant Housing Commissioner of the concerned Board, stating that the appellant has committed breach of the term and conditions as contained in Chapter II, Rule ID of the terms and conditions of the brochure (the relevant particulars whereof we have quoted hereinbefore) and she has also failed to furnish Income-Tax Clearance certificate for 1981-82, 1982-83 and for the current year as per requisition made by the Board, through their letter of 12th September, 1983. The above-mentioned letter has been disclosed as Annexure-H to the petition of motion. 10. It would appear that even thereafter, on 27th April, 1984, a further installment of ₹ 3,271.44P. was paid by the appellant, as part payment of the price of the flat in question, against receipt granted by and on behalf of the cashier of the concerned Housing Board.... This receipt has been disclosed as Annexure-I to the petition of motion. It was the case of the appellant that taking into account all the payments as have, been made by her, she has in fact, made a total part payment of ₹ 42,690. 92P. out of ₹ 60,000/-, which was the aggregate price of the flat as allotted to her. 11. Since there was no compliance wit....
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....e learned Judge had relegated the parties to suit. It should be noted that in the case of Hindusthan Petroleum Corporation as mentioned hereinbefore, the Division Bench of this Court has also observed, that a right derived from an agreement or a contract may be infringed by breach thereof. In all such cases the remedy available is the usual remedy under the laws, namely, specific performers or damages. Irrespective of whether the party committing the breach is a private individual or the State and/or its instrumentalities, in all such cases the parties to the agreement or contract having entered into a contractual relationship they would be governed exclusively by the laws relating to contract. But at the same time a right derived from an agreement with the State may as well be infringed by the State by way of breach thereof but by some administrative action taken in exercise of any statutory power or in exercise of its sovereign power. Simple illustration in our opinion would explain the position. A lease or interest derived under the lease obtained from the State may itself be the subject-matter of acquisition or requisition by the State and such acquisition or requisition by the....
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.... governed by the constitutional provisions but they are governed by the legally valid contract which determines rights and obligations of the parties inter se and that being the position there would be no question of any violation of Article 14 of the Constitution of India or any constitutional provisions when the State or its agents purporting to act within such field of contract. 16. In addition to the above, the answering Respondents also relied on the determinations in the case of M/s- S. Pal & Co. v. State of Tripura & Ors., AIR 1984 Calcutta 379, wherein a learned Single Judge of this Court has observed in the facts of that case that the petitioner was not entitled to any remedy under Article 226 of the Constitution for threatened enforcement of the bank guarantee by the Government. Arbitrariness or illegality of action by the State in the field of contract not governed by any statute falls within the domain of private law which is outside the realm of public law, the remedy for which is to be pursued in the Civil Court and not in the Writ jurisdiction of the High Court. In such a case, no grievance could be made that the Government have deliberately misread and misconstrued....
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....Scheme. Then and secondly, he referred to section 17 of the said Act, which deals with the matters to be provided for by Housing Scheme and he placed heavy reliance on sub-section (c) of section 18, on the basis whereof, notwithstanding anything contained in any other law for the time being, enforce Housing Scheme may provide amongst others for... (c) the sale, letting out or exchange of any property included in the scheme and thirdly, to section 26 of the said Act, which enumerates the other duties of the concerned Board. 19. It was contended by Mr. Das that since, after the advertisement as made by the authorities concerned or on the basis thereof, the appellants had changed their position and acted prejudicially to their interest by such changing of position, they were stopped, because of their promise as indicated, in cancelling the allotments as made in their favour. In support of his submissions as above, Mr. Das referred to the case of The Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd., AIR 1983 SC 848 where in the facts of that case, it has been observed that it is too late in the day to contend that the instrumentality of the State which would be "....
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....pel cannot be invoked by the promises unless he suffers 'detriment', or 'prejudice'. It was often said simply that the party asserting the estoppel must have been induced to act to detriment.-' All that is now required is that the party asserting the estoppel must have acted upon the assurance given to him, must have relied upon the representation made to him. It means the party has changed or altered the position by relying on the assurance or the representation. The alteration of position by the party is the only indispensable requirement of the doctrine. It is not necessary to prove further any damage, detriment or prejudice to the party asserting the estoppel. The Court, however, would compel the opposite party to adhere to the representation acted upon or abstained from acting. The entire doctrine proceeds on the promise that it is reliance based and nothing more, apart from observing that the concept of detriment as it now stands, is whether it appears unjust, unreasonable or inequitable that the promisor should be allowed to relise from him assurance or representation, having regard to what the promisee has done or refrained from doing in reliance on the ....
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....e Supreme Court to. the effect that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess, the Government cannot act arbitrarily at its sweet will. There are two limitations imposed by law which structure and control the discretion of the Government in this behalf. The first is in regard to the terms on which largess may be granted and the other, in regard to the persons who may be recipients of such largess. Unlike a private individual the State cannot act as it pleases in. the matter of giving largess and it cannot choose to deal with any person it pleases in. its absolute and unfettered discretion and every activity of the Government has a public element in it and it must therefore, be informed with reason and guided by public interest. If the Government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touch-stone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional, and invalid, apart from indicating that it must follows as a necessary ....
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....icated earlier, it was in fact, Mr. Das's contention that the contracts in the instant cases, vere statutory contracts and to establish whether Courts have right to interfere in case of infraction of such statutory contracts, reference was made by him to the case of Rohtas Industries Ltd. & Anr. v. Rohtas Industries Staff Union & Ors., AIR 1976 SC 425 which was a case of statutory arbitration and while dealing with the powers of the High Court, it has been observed that the expansive and extra-ordinary power of the High Courts under Art. 226 is as wide as the amplitude of the language used indicated and so can affect any person even a private individual and be available for any (other) purpose even one for which another remedy may exist. The amendment to Article 226 in 1963 inserting Art. 226(1 A) reiterates the targets of the writ power as inclusive of any person by the expressive reference to 'the residence of such person'. The Supreme Court has spelt out wise and clear restraints on the use of this extra-ordinary remedy and High Courts will not go beyond those wholesome inhibitions except where the monstrosity of the situation or other exceptional circumstances cry f....
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.... had no real choice when the rules were framed by the Corporation for the officers as refusal to accept the rules would have resulted in termination of their services. It has been indicated that a sub-clause in a rule provided for termination of services of the officers by giving three months' notice and that clause in the rule was struck down by the High Court and the Supreme Court also approved the said decision by observing that considering the inequality in the bargaining power of the parties to the clause in the contract of employment was void under section 23 of the Contract Act as opposed to. public policy, besides being ultra vires Art. 14. In fact, the Supreme Court has observed amongst others that where an interpretation clause defines a word to mean a particular thing, the definition is explanatory and prima facie restrictive; and whenever an interpretation clause defines a term to include something, the definition is extensive. While an explanatory and restrictive definition confines the meaning of the word defined to what is stated in the interpretation clause, so that wherever the word defined is used in the particular statute in which that interpretation clause o....
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....e it has so far not the monopoly of inland water transportation is not sufficient to divest it of its character of an instrumentality or agency of the State. It is nothing but the Government operating behind a corporate veil, carrying out a governmental activity and governmental functions of vital public importance. There can thus be no doubt that the Corporation is "the State" within the meaning of Art. 12 of the Constitution and also observing that Central Inland Water transport Corporation Ltd. is not only a Government Company as defined in section 617 of the Companies Act, but is wholly owned by the Central Government and two State Governments jointly. It is financed entirely by these three Governments and is completely under the control of the Central Government, and is managed by the Chairman and Board of Directors appointed by the Central Government and removable by it. In every respect it is thus a veil behind which the Central Government operates through the instrumentality of a Government Company. The activities carried on by the Corporation are of vital national importance. It is ridiculous to describe the Corporation as of. great importance to public interest ....
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....oration can afford to dispense with the services of an officer. It will find hundreds of others to take his place but an officer cannot afford to lose his job because if he does so, there are no hundreds of jobs waiting for him. A clause such as clause (i) of Rule 9 is against right and reason. It is wholly unconscionable. It has been entered into between parties between whom there is gross inequality of bargaining power. Rule 9(i) is a term of the contract between the Corporation and all its officers. It affects a large number of persons and it squarely falls within the principle formulated above. A clause such as Rule 9(i) in a Contract of employment affecting large sections of the public is harmful and injurious to the public interest for its tends to create a sense of insecurity in the minds of those to whom it applies and consequently is against public good. Such a clause, therefore, is opposed to public policy and being opposed to public, it is void under section 23 of the Contract Act. While on the point, reference was further made by Mr. Das, to the Bench decision in M/s. Gupta Biscuits Pvt. Ltd. v. United Commercial Bank & Anr., 1987(1) Cal L.J. 474, where this Court had o....
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....urther that since the State or a statutory authority as in this case, was required to act fairly and not arbitrarily, in exercise of their statutory powers and the said Board has admittedly acted contrary to such provisions, the learned trial Judge should have held that interference in this case was just and required, and in not doing so, the learned trial Judge had not acted duly. Mr. Das further indicated that the case of M/s. S. Pal & Co. v. The State of Tripura & Ors. (supra), and the determinations as made therein, cannot be made applicable in the facts of this case since in that case, there was no allegation of any breach of statutory contract which incidentally is the case here. 25. It was the further submission of Mr. Das that since the refusal to allot the flats to the appellants in these two appeals, were cases of unfair discrimination, as others have been allotted flats in the self same and similar circumstances, so there was unfair discrimination in the instant case and that being the position, following the observations of the Supreme Court in the case of Manager, Government Branch Press & Anr. v. IX B. Belliappa, AIR 1979 SC 429, the learned trial Judge should have, ....
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....lment of all the conditions for getting allotment, the transfer of the flat since allotted to an applicant is a matter of course and consequential to allotment of the flat. Such an allotment can only be cancelled if the allottee fails to pay the price within the stipulated time and/or fails to obtain permission from the authorities of the Urban Land (Ceiling and Regulation) Act, 1976, apart from holding further that the said Board cannot refuse transfer of a flat already allotted to an applicant eligible to get allotment of such flat, if such applicant gets permission from the competent authority and pays the price of the flat and other outgoings within the stipulated time. The rules and/or guidelines do not provide that successful allottees will not get the effect of allotment on execution of the deed of transfer in his or her favour on the score that subsequently a member of the family of the allottee happens to own a house and/or a flat and paragraph 5 of the Brochure published by the West Bengal Housing Board for allotment and transfer of the flat in Golf Green Complex governs the terms and conditions of such transfer and the General Guidelines are "basically informative i....
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....uty Excise and Taxation, Commissioner & Ors., AIR 1975 SC 1121 with particular reference to paragraph 23 of the report which indicates that a writ petition is not an appropriate remedy for impeaching validity of contractual obligation. In that case the Supreme Court was considering the question of grant and allocation of liquor shops under the Punjab Excise Act, 1914 and in proceedings arising out of an appeal from a judgment and order under Art. 227 of the Constitution of India. Then, he referred to the observations in the case of Premjibhai Parmer & Ors. v. Delhi Development Authority & Ors., AIR 1980 SC 738 and specific reference-was made by him to para graphs 7 and 8 of that report. It would appear that a preliminary objection was raised by the authority that the concerned objections were not maintainable under Art. 32 of the Constitution inasmuch as the petitioners did not come to the Court for enforcement of a fundamental-right conferred upon them under Part III of the Constitution, but they had invoked jurisdiction of the Court for a relief of re-opening of concluded contract and also submitted that if the Court accepts the contention of the petitioners, they would derive an....
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....rdinarily examine it unless the action has some public law character attached to it. Broadly speaking, the Court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field. The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and it may not be attempted. The question must be decided in each case with reference to the particular action the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances. When the State or an instrumentality of the State ventures in to the corporate. world and purchases the shares of a company, it assumes to itself the ordinary role of a shareholder, and dons the robes of a shareholder, with all the rights available to such a shareholder. There is no reason why the State as a shareholder should be expected to state its reasons when it aware or change the management, by a resolution of the Company like an other shareholder, and then....
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....es. They had no choice but to accept the said Rules as part of their contract of employment. There is gross disparity between the Corporation and its employees, whether they be workmen or officers. The Corporation can. afford to dispense with the services of an officer. It will find hundreds of others to take his place but an officer cannot afford to lose his job because if he does so, there are not hundreds of jobs waiting for him. A clause such as clause (i) of Rule 9 is against right and reason. It is wholly unconscionable. It has been entered into between parties between whom there is gross inequality of bargaining power: Rule 9(i) is a term of the contract between the Corporation and all its officers. It affects a large number of persons and it squarely falls within the principle formulated above. A clause such as Rule 9(i) in a Contract of employment affecting Urge sections of the public is harmful and injurious to the public interest for its tends to create a sense of insecurity in the minds of those to whom it applies and consequently is against public good. Such a clause, therefore is opposed to public policy and being opposed to public policy, it is void under section 23 ....
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....atutory complexion cannot be enforced by this short, though, wrong cut. Hence, a writ petition merely to enforce an agreement entered into between the employees and the co-operative Bank about giving certain percentage of promotions to existing employees is not maintainable. While on the point Mr. Dutta also placed strong reliance to the case of The Divisional Forest Officer v- Biswanath Tea Company Ltd. (supra), in which case a Company tried to enforce through a Writ Petition the right to remove timber without the liability, to pay royalty and it was held that the Company was not enforcing its right under Rule 37 of the Assam Land & Revenue and Local Rates Regulations but was seeking to enforce a contractual right under the specific terms of contract of lease agreed between the Company and the Government. Such contractual right, therefore", it has been observed, could not be enforced through a Writ petition. 31. We have indicated earlier that submissions were made by the learned Advocate appearing for the appellants on promissory estoppel. Mr. Dutta on a reference to the pleadings claimed that such arguments, not having either been taken in the writ proceedings nor any excep....
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.... indicated hereinbefore, a Division Bench judgment of this Court in the case of Union of India v. Narayan Chandra Chakraborty, 1982(1) CHN I, was also referred to and relied on by Mr. Dutta which has indicated that pleadings have to be interpreted not with formalistic rigour but with due consideration of or awareness of low legal literacy of the people. In that case the learned Judge in his judgment in accepting the respondent's claim founded on the basis of promissory estoppel has mainly relied on the decision of the Supreme Court reported in AIR 1979 SC 621. Since in judgment appealed against observations of the Supreme Court in that case so far as relevant to the facts of this case has been quoted in extenso to avoid proximity it is not necessary to reiterate the same. From the said decision it appears that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or effect a legal relationship to appeal in future knowing or intending that it would be acted upon by the other party to whom promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party....
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....levant pleadings as indicated earlier, was absent. On the effect of paucity of pleadings on promissory estoppel, reference was made by Mr. Dutta to the cases of The Gujarat State Financial Corporation v. M/s. Lotus Hotel Pvt. Ltd. (supra), and he claimed that if the said determination is strictly scanned, it would appear that this Court in the state of pleadings in this case, would not be entitled to make any interference in this case ad same was also the submission of Mr. Dutta on the determinations as made in the case of Delhi Cloth and General Mills Ltd. v. Union of India (supra). In that case on or about 19th April, 1969, the appellant Company filed a complaint under sections 14(1)(a) and (b) of the Railway Act, 1890 before the Railway Rates Tribunal, Madras and contended that the Railway Board was estopped and/or precluded from going back on the assurance of quoting station confessional rate 85-B when the Company had invested a large amount of capital in setting up the factory at a place away from the refinery or port and the rate charges by the Railway for the carriage of Naptha between two stations as mentioned, was unreasonable under section 41(1)(b) of the Railways Act, 19....
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....ndependently, if the provisions or terms of the Brochure in question, have been followed and complied with. Above being our views and our considered opinion, we cannot disagree with the observations in Biswanath Sarkar v. State of West Bengal (supra), and hold, as indicated earlier, that if the terms of the Brochure are duly complied with and an intending allottee duly complied with the terms of the same or performs his obligations thereunder, allotment of flats cannot and should not be refused. 35. The distinguishing features of the above mentioned Division Bench judgment of this Court and the present one is that, in that case, after the intending applicant complied with the necessary terms, allotment was made in his favour and here, even if the intending claimants made the applications, they have found, not to have duly complied with the necessary terms and requirements and as such, allotments were refused. If the said claimant had really, complied with the terms of the Brochure like the facts of the other case, there would have been no justification, for refusing allotment to her. But, she, in our view has not duly and appropriately complied with the necessary and relevant term....