No mandamus can be issued virtually granting writ for specific performance of contract to bidder without appreciating reasons for suspension of work order by tender author in wake of Covid restrictions: SC

Read Judgment: Municipal Council Gondia V. Divi Works & Suppliers, Huf & Ors. 

Pankaj Bajpai

New Delhi, March 1, 2022: Finding that there was nothing on record before the High Court that goods were in fact actually manufactured by bidder (Divi Works – Respondent) as per the specifications and the requirements of the tender author (Municipal Council – Appellant), the Supreme Court has opined that the High Court ought not to have passed the judgment and order directing the Municipal Council to continue the work order and accept the goods and make the payments as per the work order to the bidder.

A Division Bench of Justice M.R. Shah and Justice B.V.  Nagarathna observed that no writ of mandamus could have been issued virtually granting the writ for specific performance of the contract/work order in a writ petition under Article 226 without appreciating the reasons given by the Municipal Council for suspending/canceling the work order till further orders in the wake of covid restrictions.

Going by the background of the case, Municipal Council (Appellant) is running educational institutions/schools. Since there was a requirement for benches, almirahs and tables in a school run by it, a resolution came to be passed for purchasing desks, benches, almirahs and tables. Accordingly, the Appellant invited bids wherein Divi Works & Suppliers (Respondent) participated in the tender and was declared the successful bidder. Thereafter, an Agreement came to be executed between the Respondent & Appellant, as a result of which, work order came to be issued in favour of Respondent. However, in view of the Covid19 Pandemic and the lockdown in force, the President of Municipal Council, Gondia informed the Chief Officer that as the Municipal Council was not having any income due to ongoing lockdown and most of the schools were closed due to pandemic, no purchases should be made. In view of the same, the Chief Officer of the Municipal Council informed the Respondent that the work order had been suspended until further orders. 

Feeling aggrieved and dissatisfied with the action of the Municipal Council suspending the work order till further orders, the Respondents approached the High Court, which set aside the action of the Municipal Council and held that First Respondent is entitled to make the supply in pursuance of the work order to the Municipal Council and consequent to which it is entitled to the payments as per the terms of the work order. 

After considering the submissions, the Top Court found that the High Court was made to believe that the Respondents had already manufactured the goods which are customized as per the specifications and the work order. 

However, it is found that there are no manufactured goods readily available which can be supplied to the appellant – Council and there are disputed questions of fact such as whether in fact the goods were manufactured as per the specifications or not, added the Court.

Speaking for the Bench, Justice Shah noted that due to Covid19 Pandemic there was a lockdown and the schools were closed and that the Council had no sufficient funds. 

Even the said decision was taken after calling for a report from the Education Officer in regard to the tender/work order issued to the Respondent and the Education Officer informed that the Respondent has not taken any further steps in regard to supply of material as per the work order, added the Bench.  

Accordingly, the Apex Court quashed the order passed by the High Court.