Disputes arising out of purely contractual obligations cannot be entertained by High Court in exercise of extraordinary writ jurisdiction: SC allows appeal of Katra Municipal Committee in J&K
Justices B.R. Gavai & Sandeep Mehta [09-05-2024]

Read Order: MUNICIPAL COMMITTEE KATRA & ORS v. ASHWANI KUMAR [SC- CIVIL APPEAL NO(S). 14970-71 OF 2017]

LE Correspondent

New Delhi, May 13, 2024: In a case pertaining to a tender issued by the Katra Municipal Committee inviting bids for supply of mules and laborers for transportation of pilgrims to the holy shrine of Mata Vaishno Devi, the Supreme Court has held that after participating in the process being fully conscious of the terms and conditions of the auction notice, the respondent-bidder was estopped from questioning the legality of such notice.

The issue for adjudication before the Division Bench of Justice B.R. Gavai and Justice Sandeep Mehta was whether the High Court in exercise of writ jurisdiction, was entitled to entertain a dispute which was purely civil in nature filed for claiming monetary relief/damages arising from fallout of contractual obligations.

In this case, the appellant-Municipal Committee, Katra issued a Notice Inviting Tender(NIT) inviting bids for supply of mules and mazdoors essentially involved in transportation of pilgrims from the base camp at Katra to holy shrine of Mata Vaishno Devi, atop the Trikuta hill. Several bids were received in response to the said NIT. The respondent herein was the second highest bidder, who subsequently became the highest bidder, as Pritam Das, the original highest bidder did not come forward to execute the contract. 

Accordingly, the contract came to be offered to the respondent who accepted the offer so given. The tenure of the contract as per NIT was from April 1, 2010 till March 31, 2011. In terms of Clause-8 of the NIT, the successful bidder was required to deposit 40% of the bid amount within 24 hours from the time of acceptance, i.e. on or before 31st March, 2010. It was also enjoined upon the bidder to deposit 5 post dated cheques along with bank guarantee to secure the amount for remaining tenure of the contract period.

The respondent sought relaxation in the Clause-8 of the NIT on the ground that the condition of furnishing bank guarantee for the remainder amount was unjust and arbitrary.Having failed to get a favourable response from the Municipal authorities, the respondent filed a civil suit seeking a declaration that Clause-8 of the NIT was arbitrary. The suit was accompanied by an application seeking temporary injunction and the same was allowed.

After conclusion of the contract period, the respondent filed a writ petition before the High Court contending that his contract was supposed to commence from 1st April, 2010 and was to run for a period of 365 days till 31st March, 2011. However, the said period was truncated because the same could be commenced from 10th May, 2010 only and hence, the respondent suffered a loss of collection of earnings for a period of 33 days. He, therefore, claimed a pro-rata amount of Rs. 71,06,276/- being the purported loss suffered on account of the curtailment of the contract period by 33 days. The Single Bench of the High Court, directed the appellants herein to consider the claim of the respondent within six weeks. The claim of the respondent was rejected.

The intra court appeal preferred by the appellants and the cross-appeal filed by the respondent seeking a direction upon the appellant to refund the total amount of Rs.71,06,276 along with interest at 12% per annum without making any deductions, stood rejected by common judgment. These orders were subjected to challenge at the instance of Municipal Committee, Katra and its officials in these appeals by special leave.

The Bench opined that the situation at hand was squarely covered by the latin maxim ‘nulluscommodumcaperepotest de injuria sua propria’, which means that no man can take advantage of his own wrong. This principle was applied by this Court inUnion of India v. Maj. Gen. Madan Lal Yadav [LQ/SC/1996/667] .

“It is beyond cavil of doubt that no one can be permitted to take undue and unfair advantage of his own wrong to gain favourable interpretation of law. It is a sound principle that he who prevents a thing from being done shall not avail himself of the non- performance he has occasioned. To put it differently, ‘a wrong doer ought not to be permitted to make profit out of his own wrong’. The conduct of the respondent-writ petitioner is fully covered by the aforesaid proposition”, the Bench held.

On facts of the case, the Bench mentioned that once the respondent-writ petitioner had participated in the tender process being fully conscious of the terms and conditions of the auction notice, he was estopped from taking a U-turn so as to question the legality or validity of the terms and conditions of the auction notice. 

By dragging the matter to litigation, the respondent himself was responsible for the delay occasioned in issuance of the work order which deprived him of the opportunity to work for the entire period of 365 days. It was further observed that the quantification of the damages would require entering into disputed questions of facts and hence, the High Court ought to have relegated the writ petitioner(respondent herein) to the competent Court for claiming damages, if so advised.

Placing reliance upon the judgment in Union of India and Ors. v. Puna Hinda (2021) [LQ/SC/2021/2984 ], the Bench Said’ “Law is well settled that disputes arising out of purely contractual obligations cannot be entertained by the High Court in exercise of the extra ordinary writ jurisdiction.”

Thus, allowing the appeal, the Bench quashed the impugned judgments.