Gujarat High Court Case Information System Print SCA/3644/2010 31/ 31 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 3644 of 2010 For Approval and Signature: HONOURABLE MR.JUSTICE [ENTITY] SMT.JUSTICE [ENTITY] 1 Whether Reporters of Local Papers may be allowed to see the judgment ? No 2 To be referred to the Reporter or not ? No 3 Whether their Lordships wish to see the fair copy of the judgment ? No 4 Whether this case involves a substantial question of law as to the interpretation of the [ACT] or any order made thereunder ? No 5 Whether it is to be circulated to the civil judge ? No SHRI [ENTITY] - Petitioner Versus [ENTITY] & 2 - Respondents Appearance : MR [ENTITY] for Petitioner MR [ENTITY], GOVERNMENT PLEADER for Respondents CORAM : HONOURABLE MR.JUSTICE [ENTITY] and HON'BLE SMT. JUSTICE [ENTITY] Date: 30/09/2010 [ENTITY]
(Per : HON'BLE SMT. JUSTICE [ENTITY]) Rule.
Mr.[ENTITY], learned Government Pleader, waives service of notice of Rule on behalf of the respondents.
By filing the present petition under [SECTION] of the [ACT], the petitioner has, interalia, made several prayers in Paragraph-7 of the petition, one of which is the following:
"(C) declaring that the petitioner is entitled to get the relief at the rate of 40% of his contract amount under clause 21 of the Government policy dated 25.2.2004 and further be pleased to direct the respondents to reimburse the amount of relief to the petitioner as per the rate mentioned in clause 21 of the Government policy dated 25.2.2004"
At the very outset, Dr.[ENTITY], learned counsel for the petitioner, states that he does not press any of the other prayers, except the one at Paragraph-7(C), reproduced hereinabove. The petition is, therefore, being heard and decided, with the consent of the learned counsel for the respective parties, only in respect of the prayer made in Paragraph-7(C).
Briefly stated, the relevant facts emerging from the petition are that, by Office Order dated 12.02.2009 of the Commissioner of Fisheries, Government of Gujarat, the petitioner had been granted a fishing contract for Sipu Dam, for a period of five years, with effect from 01.07.2008 to 10.06.2013. The said fishing contract has been given to the petitioner pursuant to participation in the process of inviting tenders through public advertisement, which were opened by a duly constituted Committee. The upset price was fixed at Rs.1,99,145/-. The tender of the petitioner, being found to be the highest at Rs.78,62,786/-, came to be accepted. The petitioner was called upon to pay the first installment of the contractual amount for the first year, which came to Rs.27,51,975/-, which was duly made by him. The petitioner also deposited an amount of Rs.7,86,277/- in a Fixed Deposit towards the security amount. Consequently, the contract was awarded to the petitioner for carrying on fishing, in an effective water area of 727.00 hectares for an annual consideration of Rs.78,62,786/-, on 12.02.2009. Apart from other conditions in the contract, the policy of the Government, as contained in its Resolution No. FDX - 112003 - 1618 - T dated 25.02.2004, by which certain benefits were to be granted in cases of reduction of water level in the reservoir, was also made a part of the contract by virtue of clause-52 thereof.
It is the case of the petitioner that in the year 2009, there was very scanty rainfall in Banaskantha District wherein Sipu Dam is located, and the water level in the said Dam decreased drastically from 727.00 hectares, to 220.00 hectares, as on 31.10.2009. Consequently, the effective water area was reduced to only 30% of the original water area allocated to the petitioner for fishing, leading to serious financial repercussions and business losses, as the quantity of fish netted per day had dwindled and reduced alarmingly. The petitioner, vide letters dated 01.10.2009 and 30.12.2009 addressed to the Commissioner of Fisheries and Superintendent of Fisheries, respectively (respondents No.1 and 2 herein), pointed out that due to insufficient rain, the effective water area in the Dam as well as the level of water was continuously reducing, due to which, he was suffering huge losses. Referring to Government Resolution dated 25.02.2004, more particularly, clause 21 thereof, the petitioner submitted in the said communications that he had become entitled for grant of relief as per clause-21 of the said Resolution, as the effective water area had reduced from what was originally allocated to him, by 21% to 30% in the month of October. The petitioner asserted that as per Government policy contained in the said Resolution when, in the month of October of any year, the effective water area reduces to 21% to 30% of the original area, the contractor would get relief of 40% of the actual contract amount and, in the present case, as the conditions mentioned in the Resolution are fulfilled, he is entitled to get relief to the tune of 40% of the annual contract amount of Rs.78,62,786/-. The petitioner forwarded copies of the letters written by him to the Collector, Banaskantha, who, in turn, forwarded the same to respondent No.2. By letter dated 01.02.2010 respondent No.2 informed the petitioner that as per clause-21 of Government Resolution dated 25.02.2004, relief could only be granted in the eventuality that the District Collector declares that "scarcity" or "semi-scarcity" conditions are prevailing in the District. As this has not been done in the present case, the relief stands denied. It is in the above factual background that the petition has been preferred.
Dr.[ENTITY], learned counsel for the petitioner, has submitted that the petitioner has been awarded the fishing contract at an annual consideration of Rs.78,62,786/-, and as the water level in the area allotted to him for fishing has drastically decreased from 727.00 hectares to 220.00 hectares, the petitioner has incurred heavy financial losses. That the reduction of the effective water area from 727.00 hectares to 220.00 hectares falls within the criteria of 21% to 30%, as per clause-21 of the Government Resolution dated 25.02.2004, and in view thereof, the petitioner would be entitled to relief at 40% of the annual contract amount. It is further submitted that respondent No.2 is well aware of the factual situation of reduction of the effective water area, as the Executive Engineer of the Irrigation Department has addressed communication dated 30.01.2010 to him, apprising him of this aspect. It is emphatically contended by Dr.[ENTITY] that merely because the Collector has not declared the District to be hit by "scarcity" or "semi-scarcity", the petitioner cannot be deprived of the benefits that should accrue to him as per Government Resolution dated 25.02.2004, which contains the policy of the State in this regard, especially, when it is not disputed that the water level in Sipu Dam had drastically gone down, and the effective water area had reduced considerably. That the petitioner has been unable to net the required quantity of fish and has faced heavy losses. It is further urged that it is for situations such as this that the Government issued the Resolution, with the object of ensuring that persons who have been granted fishing contracts do not suffer due to factors such as reduction of water level and decreased water area, and the respondents may be directed to implement their own policy by granting relief to the petitioner.
On the other hand, Mr.[ENTITY], learned Government Pleader, has vehemently opposed the prayer made in the petition by submitting that it is purely a matter of contract between the petitioner and the respondents and contractual obligations cannot be gone into in a writ petition under [SECTION] of the [ACT], as per law laid down in:
(i) [PRECEDENT],
(ii) [PRECEDENT] and
(iii) [PRECEDENT].
It is further submitted by the learned Government Pleader that the petitioner has addressed letter dated 27.04.2010 to respondent No.1, whereby, he has voluntarily given up the contract with effect from 10.06.2010. The security deposit of the petitioner has also been returned to him, therefore, no contract subsists as of now between the petitioner and the respondents. Referring to clause-21 of Government Resolution dated 25.02.2004, it is contended that the dominant purpose of the Resolution is to give benefit as per the said clause when drought and scarcity conditions are declared and not otherwise. For such relief to be granted, it is incumbent that the District Collector should declare the District to be hit by "scarcity" or "semi-scarcity" conditions, which has not been done in the present case, therefore, the petitioner is not entitled to the benefit of this Resolution. It is further urged by the learned Government Pleader that clause-21 of the said Resolution is to be interpreted, keeping in view the dominant purpose thereof, which is to provide relief in drought, scarcity or semi-scarcity. The situations mentioned in the said clause would become operative only when `scarcity' is declared and not otherwise, therefore, the relief as sought cannot be granted to the petitioner.
In rejoinder, Dr.[ENTITY], has reiterated the arguments earlier made by him, further fortified by the following judgments, to counter the submissions made by the learned Government Pleader:
(a) [PRECEDENT].
(b) [PRECEDENT] - (2009)1 SCC [SECTION]0
(c) [PRECEDENT].
(d) [PRECEDENT].
Before dealing with the submissions advanced on behalf of the respective parties, it would be necessary to examine the judgments relied upon in support of the preliminary objection raised by the learned Government Pleader, regarding the contractual nature of the issues involved in the present petition, and whether they can be gone into by the Court in writ jurisdiction under [SECTION] of the [ACT].
(i) [PRECEDENT], (supra), has been cited by the learned Government Pleader. This is a case of removal of a Railway employee from service. The Supreme Court has held that in a petition challenging the order of removal, the Union of India, which represents the Railway Administration, is a necessary party.
We fail to understand how this judgment can have any relevance in the present case. Though initially, the State of Gujarat had not been made party-respondent to the petition, however, by order dated 31.08.2010, it has been joined as respondent No.3 and notice issued, pursuant to which the learned Government Pleader has appeared.
(ii) In [PRECEDENT] (supra), also relied upon on behalf of the respondents, the Supreme Court was dealing with a case wherein the Food Corporation terminated an agreement as regards a private storage agency. The notice to this effect was challenged by the petitioner therein. The High Court allowed the petition and set aside the notice of termination. The Food Corporation carried the matter by way of Special Leave Petition to the Supreme Court, which took the view that the High Court was not justified in quashing the impugned notice, especially when the terms and conditions of the contract permitted the termination of agreement by either of the parties. In this context, it was observed by the Supreme Court that the High Court could not have gone into the question of contractual obligations in its writ jurisdiction under [SECTION] of the [ACT]. On facts, the Supreme Court found that the High Court had misread the documents on record and had reached an erroneous conclusion that no policy decision was taken by the Food Corporation of India to terminate the storage agency in the State of West Bengal.
This case turns upon its own facts, which are essentially different from those obtaining in the case in hand, where the issue is not regarding termination of the contract but of application of a Government policy contained in a Government Resolution, when according to the petitioner, the conditions mentioned in the Resolution are fulfilled. This judgment would not advance the case of the respondents any further, in this regard.
(iii) In [PRECEDENT] (supra), cited by the learned Government Pleader, the National Highway Authority of India ("NHAI") had issued a tender notice calling for tenders for collection of toll on a portion of the highway running through Rajasthan. The respondent gave its bid in response thereto in two parts; the first part being an offer that the bid would not be withdrawn during the bid validity period and/or that on acceptance, the performance security would be furnished and the agreement signed. The second part of the offer dealt with terms and conditions pertaining to performance of contract of collection of tolls. As security for the purpose of the first part, the respondent furnished a Bank Guarantee in the sum of Rs.50 lakhs as bid security. The Bank Guarantee furnished was "on demand Bank guarantee" which specifically provided that it could be enforced "on demand"
if the bidder withdraws his bid during the period of bid validity period or fails to furnish the performance security or to sign the agreement. The respondent withdrew his bid before the expiry of 120 days. The NHAI accepted the offer of the respondent, but as it had withdrawn its bid, the performance guarantee was not furnished and the agreement not entered into. The NHAI thus encashed the Bank Guarantee of Rs.50 lakhs which led to the filing of the petition before the High Court. In this factual background, the Supreme Court held that in a claim arising out of breach of contract, a dispute relating to the terms of the offer is a contractual dispute and a writ petition against the same is not maintainable.
The above mentioned case turns upon its own facts, whereas the factual matrix of the case on hand is on an entirely different footing. The issue in the present case is not of withdrawal of a bid or breach of contract, but of availing of certain benefits flowing from a Government policy read into the contract itself, on fulfilment of certain conditions. This judgment would, therefore, not be relevant or helpful to the respondents in the present case.
Coming to the judgments cited by the learned counsel for the petitioner:
(a) In [PRECEDENT] (supra), the Supreme Court found on the facts of that case that the dispute therein could be dealt with by the High Court and it was not necessary that the matter may be relegated to the Civil Court.
This judgment is rendered on the facts of that case and may not be of much help to the case of the petitioner.
(b) In [PRECEDENT] (supra), it is held thus by the Supreme Court:
"38. Although ordinarily a superior court in exercise of its writ jurisdiction would not enforce the terms of a contract qua contract, it is trite that when an action of the State is arbitrary or discriminatory and, thus, violative of [SECTION] of the [ACT], a writ petition would be maintainable. (See [PRECEDENT]]).
39. There cannot be any doubt whatsoever that a writ of mandamus can be issued only when there exists a legal right in the writ petition and a corresponding legal duty on the part of the State, but then if any action on the part of the State is wholly unfair or arbitrary, the superior courts are not powerless. Reliance placed by Mr [ENTITY] on [PRECEDENT] is not apposite. In that case itself it was held: (AIR p.1757, para 12) 12. Thus under [SECTION], the State Government can take executive action in all matters in which the legislature of the State can pass laws. But [SECTION] itself does not confer any rule-making power on the State Government in that behalf.
[PRECEDENT] was considered in [PRECEDENT])".
(c) In [PRECEDENT] (supra), the Supreme Court, on the question whether the relief sought by the appellants therein in a contractual matter, could be granted in a writ petition when a suitable efficacious alternative remedy is available by way of a civil suit, relied on the relevant extract from the case of [PRECEDENT], and observed as under:
"52. On the basis of the above conclusion of ours, the question still remains why should we grant the reliefs sought for by the appellant in a writ petition when a suitable efficacious alternate remedy is available by way of a suit. The answer to this question, in our opinion, lies squarely in the decision of this Court in the case of [PRECEDENT] (supra) wherein this court held:
The requirement of [SECTION] should extend even in the sphere of contractual matters for regulating the conduct of the State activity. Applicability of [SECTION] to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, the State cannot thereafter cast off its personality and exercise unbridled power unfettered by the requirements of [SECTION] in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more. The personality of the State, requiring regulation of its conduct in all spheres by requirement of [SECTION], does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirement of [SECTION] and contractual obligations are alien concepts, which cannot coexist. The [ACT] does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the preamble. Therefore, total exclusion of [SECTION] - non-arbitrariness which is basic to rule of law - from State actions in contractual field is not justified. This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals.
Unlike the private parties the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of [SECTION] being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of [SECTION] by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of [SECTION]. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under [SECTION] of non-arbitrariness at the hands of the State in any of its actions.
On the basis of the above, the Apex Court came to the following conclusion:
"53. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in [SECTION] of the [ACT] "
(d) In [PRECEDENT] (supra), it is held that the administrative authority is equally bound by the norms, standards and procedures laid down by it for others and any departure from such standards or principles would be invalid unless it can be supported or justified on some rational and non-discriminatory ground and that this rule would bind not only the Government but all Corporations and bodies acting as instrumentalities and agencies of the government in the grant of largesse, jobs, Government contracts and issue of quotas, and licences etc. Having considered the principles of law enunciated by the Supreme Court in [PRECEDENT] (supra), relied upon in [PRECEDENT] (supra), we are of the view that the same will be applicable in the present case. The Supreme Court has held clearly and unequivocally, that though, ordinarily, a superior Court would hesitate to exercise its writ jurisdiction in order to enforce the terms of a contract however, when it is found that the action of the State or its instrumentality is arbitrary or discriminatory; violative of [SECTION] of the [ACT]; contrary to public good and public interest; and when the State or its instrumentality acts unfairly, unjustly and unreasonable in its contractual, constitutional or statutory obligations, a writ petition would be maintainable, even in the contractual field.
Though, as held in [PRECEDENT], the Court may not exercise powers of judicial review in contractual matters where serious disputed questions of facts arise requiring appreciation of evidence, contractual matters of the State are not totally beyond the purview and scope of judicial review of the Court. However, each case has to be decided on its own facts.
In light of the above principles of law enunciated by the Supreme Court, which are applicable and relevant to the issues involved in the present case, the preliminary objection raised by the learned Government pleader cannot be sustained. It is by now well settled that Courts are not entirely precluded from entertaining a writ petition involving disputed questions of fact in appropriate cases where the action of the State, even in the contractual field, is found to be unjust, unreasonable and contrary to public good and public interest. The present case is not one where disputed questions of fact are involved or where evidence is required to be led. Further, it is not a case where it can strictly be said that the claim is based upon a breach of contract. In essence, the petitioner claims benefit of the Government Resolution containing the policy of the State, which has been read into the terms of the contract itself. This, in itself, does not debar the Court from entertaining the petition and adjudicating upon the issues involved, especially as the challenge is to the action of the State in depriving the petitioner of the benefits flowing from the Government policy in an unfair, unreasonable and unjust manner.
Admittedly, the petitioner was awarded the fishing lease for a period of five years after being found to be the highest bidder and having offered the tender price of Rs.78,62,786/- as against the upset price of Rs.1,99,145/-. It is not disputed that the contract was awarded for fishing in an effective water area of 727.00 hectares. Clause-21 of the Government Resolution dated 25.02.2004 reads thus:
" Recovery of contract amount when water body dries up due to drought:-
In drought or in cases where due to scanty rain, the water body does not contain sufficient water or where the water totally dries up or in such cases where the village/ area in which the water body is located is declared as hit by scarcity or semi-scarcity by the District Collector, the relief/ benefit in the contractual amount of such water body shall be granted by the District Officer, provided that the conditions of [SECTION] and [SECTION] are not violated."
It is further stipulated that the concerned officer of the Fisheries Department would take into consideration the data in respect of "scarcity" for the month of October of the relevant year prepared by the concerned officer of the Irrigation Department, conduct a site inspection and reduce it into writing in the daily register, and thereafter give the benefit / relief to the contractor in the following terms:
Sr. No. Water area for the month of October in proportion to the effective water area fixed for the upset price Rate of benefit 31% upto 40% 30% of the contract amount 21% upto 30% 40% of the contract amount Less than 20% 50% of the contract amount The above clause which is to be read into the terms and conditions of the contract clearly spells out the policy of the State Government, which is evidently to give relief / benefit to persons who have been granted fishing contracts, in the event that the effective water area for which the contract has been granted reduces or dries up and the contractor has to bear financial losses due to such occurrence. The extent to which relief is admissible has been clearly stipulated in the above table.
Undisputably, the petitioner had written letter dated 01.10.2009 to respondent No.1, informing him in the month of October that, due to scanty rain, the effective water area as per the contract granted to him had been substantially diminished and the water level had also gone down, making it difficult for him to carry on fishing activities, and that he was facing grave financial difficulties. The petitioner, therefore, claimed the relief / benefit contained in Government Resolution dated 25.02.2004 as he was entitled to do so as per policy. This letter was followed by another letter dated 30.12.2009 from the petitioner to respondent No.2, reiterating the same.
As per the said Government Resolution, information regarding reduction of water level and effective water area is to be given to the concerned authorities in the month of October every year. This has been done by the petitioner. Respondent No.2 even wrote to the concerned authority in the Irrigation Department in this regard who, in reply, addressed communication dated 30.01.2010 to respondent No.2, informing him that the effective water level as of 31.10.2009 had reduced to 220.00 hectares. This aspect is not denied by the respondents. On the contrary, it is clear from the communication dated 30.01.2010 of the concerned Engineer of the Irrigation Department of Sipu Irrigation Scheme, that the effective water level of Sipu Dam as of 31.10.2009 had reduced to 220.00 hectares. The learned Government Pleader could not successfully dispute the reduction of water level and resultant diminishing of the effective water area allocated to the petitioner for the purpose of fishing before us. Resultantly, the situation arising out of this state of affairs, namely, inability of the petitioner to net the required quantity of fish and resultant financial losses incurred by him, is also not specifically denied. The assertion of the learned Government Pleader is that though the Government Resolution does envisage grant of relief in certain situations mentioned in clause-21, the same can only be granted in the eventuality that the District Collector declares the District to be hit by "scarcity" or "semi-scarcity". According to him, as no such declaration has been made by the District Collector, the petitioner is not entitled to receive any benefit or relief under the said Resolution.
In our view, this submission does not merit acceptance. Not only does it appear to be an incorrect interpretation of clause-21 of the Resolution dated 25.02.2004, but it is not in consonance with the Government policy contained in the said Resolution, the object and intention for formulation of which is to provide relief to persons such as the petitioner who have incurred financial losses due to inability to net the required quantity of fish consequent upon the reduction of water level and diminishing of the effective water area, wherein fishing activities are to be carried out.
This is clear from a close reading of clause 21 which has been reproduced hereinabove. As it is not the case of the respondents that the conditions contained in [SECTION] and [SECTION] have been violated by the petitioner, clause-21 would, per-se, be applicable to his case. Clause 21 makes it clear that the policy contemplates more than one situation wherein relief can be granted to the affected party. The word 'or' has been used to differentiate different eventualities contemplated therein, each separate from the other. The said clause envisages that there should either be a drought, or the water body should contain insufficient water due to scanty rainfall, or the water in the water body should totally dry up, or the area in which the water body is located should be declared as hit by scarcity or semi-scarcity by the District Collector. Any one of such eventualities entitles the petitioner for grant of relief in the contractual amount by the concerned authorities. The prevalence of any one such eventuality is sufficient for entitlement to the relief contemplated under clause 21 and a plain reading makes it clear that it is not necessary that more than one, or all, eventualities mentioned therein should exist together. In short, declaration of "scarcity" or "semi-scarcity" is only one of such eventualities mentioned therein, and not a condition precedent. The intention in framing of the policy contained in the above clause is manifestly clear, which is to provide relief in the event that one of the situations contemplated by the said clause occurs. The declaration of the District Collector cannot be said to govern all other eventualities contemplated in the clause. It is, in our view, only one of the conditions in which relief will be granted and is but a formality. An absence of such a formal declaration even when one of the situations contemplated in the clause has occurred, would not nullify the Government policy, which is to provide relief in such cases. To read the clause in the manner suggested by the learned Government Pleader would render the same otiose and nugatory. Besides, it would be violative of, and contrary to, the basic purpose and intention for formulation of the policy by the Government, which is undeniably to provide relief to affected persons.
The submission of the learned Government Pleader that the petitioner has voluntarily abandoned the contract by letter dated 27.04.2010, and the Earnest Money has been refunded to him, thereby disentitling him for grant of relief under the Government Resolution, cannot hold good. The petition has been affirmed on 18.03.2010 and the letter dated 27.04.2010 is a subsequent development. Even otherwise, the petitioner became entitled to the grant of relief in October 2009 itself, during the subsistence of the contract, when the water body had diminished substantially and he had informed the concerned authorities in the month of October, as required. Moreover, the Irrigation Department has, by its communication to respondent No.2, confirmed the reduction in the effective water area, therefore, the condition for grant of relief as per clause-21, stands satisfied.
The State has an obligation to act fairly and justly while performing all executive actions, more expressly so, when giving effect to its own policies formulated for the public good. This obligation flows from [SECTION] of the [ACT] which mandates that the actions of the State should not be arbitrary or unreasonable. This very principle would govern the action of the State in the sphere of contractual matters. Having formulated a specific policy contained in Government Resolution dated 25.02.2004, more specifically clause-21 thereof, clearly specifying the intention of providing relief to the affected parties in situations contemplated therein, the State cannot be heard to say that this policy cannot be sought to be enforced as it forms a part of the contract, or that relief cannot be granted in spite of the fact that one of the conditions stipulated therein is fulfilled, merely because the District Collector has not formally declared "scarcity" or "semi-scarcity" conditions in the concerned District. As already discussed hereinabove, such a declaration by the District Collector is a formal acknowledgment that the conditions entitling the affected party for grant of relief exist, but it would not act as a condition precedent for granting relief, in the event that the situation(s) contemplated by the policy contained in clause-21 exist. The inclusion of the Resolution dated 25.02.2004 in the contract would not disentitle the petitioner from maintaining the present petition or for grant of benefits flowing therefrom, especially when his case is fully covered by the said Resolution.
We are, therefore, of the considered view that the action of the respondents in not granting relief to the petitioner when he is entitled to receive the same is unfair and unreasonable, and the petitioner is entitled for grant of relief as per clause-21 of the Government Resolution dated 25.02.2004, mentioned therein. By denying the benefit of the Government Resolution to the petitioner in spite of repeated communications by him to the concerned authorities has resulted in creating a situation whereby the petitioner has been compelled to give up the contract, due to heavy financial losses. Besides, it is not only the petitioner who has suffered heavy losses but the State also loses a substantial amount annually due to this action.
For reasons stated hereinabove, the petition succeeds. The respondents are directed to grant relief to the petitioner to the extent to which he is entitled under clause-21 of the Government Resolution dated 25.02.2004. The respondents are further directed to pay interest at the rate of 6% per annum on the amount payable to him, from 01.11.2009 till the date of payment. In addition thereto, respondent No.1 shall pay costs, quantified at Rs.10,000/-, to the petitioner. The amount of relief, interest and costs shall be paid to the petitioner within a period of one month from the date of this judgment. Rule is made absolute to the above extent.
([ENTITY], J.) (Smt.[ENTITY], J.) (sunil)