1 WP3506/2011 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD WRIT PETITION NO. 3506 OF 2011 The Ahmednagar Municipal Corporation Through Commissioner, Ahmednagar Municipal Corporation Ahmednagar Petitioner V E R S U S M/s Samiksha Construction Company Thane, Proprietor : Ravindra Meghraj Rathod, Age 36 years, Occupation Business, Through Jaywant Pandit Nalawade, Age 55 years, Occupation Business, Resident of Nepti Naka, Datrange Mala, Ahmednagar Respondent Shri. Subodh P. Shah, Advocate for the petitioner Shri D.V. Soman, Advocate for the respondent - sole CORAM : A.V. NIRGUDE, J. DATED : 22nd July, 2011 ORAL JUDGMENT : 1. As indicated earlier vide order dated 4th May, 2011, writ petition is taken up for final hearing. 2. Rule. Rule made returnable forthwith. 3. Heard. 4. This writ petition is challenging the order dated 1st April, 2011, passed by the learned District Judge – 3, Ahmednagar, in Miscellaneous Civil Appeal No. 38 of 2011, that arose from an interim order passed by the Civil Court in Regular Civil Suit No. 08 of 2011. The respondent was the plaintiff. The case of the respondent / plaintiff was as under : 5. The petitioner/defendant floated a tender in November, 2009 for giving contract of waste management. The respondent/plaintiff ultimately succeeded in securing the contract. After approval of the standing committee, on 26th April, 2010, the agreement was executed on 10th August, 2010, and on 11th August, 2010, the actual work of garbage collection 2 WP3506/2011 started. However, within few days, the petitioner/defendant found that the respondent/plaintiff was not performing his duties properly and was not removing the garbage. There occurred correspondence between the parties, and ultimately on 15th September, 2010, the contract was terminated. In the contract, there was a term which empowered the Corporation to terminate the contract for unsatisfactory performance of the contractor, after giving due notice. Pursuant to this term, the Deputy Municipal Commissioner of the petitioner/defendant terminated the contract on 15th September, 2010. The aggrieved contractor, the respondent here, filed Regular Civil Suit No. 8 of 2011, on 4th January, 2011, for declaration that the termination was illegal and for injunction to prevent the Corporation from interfering in his work of garbage collection. He moved an application for temporary injunction. But, the learned Judge of the trial Court rejected the same mainly on the ground that if an injunction sought was granted, it would amount to specific performance of contract, which cannot be specifically enforced. The learned Judge also observed that from 15th September, 2010, the work of garbage collection was not done by the respondent/plaintiff(contractor). The learned Judge also referred to Section 14 of the Specific Relief Act and held that the injunction sought cannot be granted. The respondent/plaintiff went in appeal before the learned District Judge – 3, Ahmednagar, by filing Miscellaneous Civil Appeal No. 38 of 2011. The learned Judge however upheld his case and granted temporary injunction which was sought for the reasons that the Deputy Municipal Commissioner could not have terminated the contract, because he had no such powers and because he had not obtained prior approval of the standing committee. He further held that if the contract is not reinstated, the 3 WP3506/2011 respondent/plaintiff would suffer irreparable loss. The Corporation filed this writ petition for challenging the said decision. 6. The learned Advocate appearing for the petitioner argued that the learned District Judge – 3, Ahmednagar, erred in not referring to Section 14 of the Specific Relief Act, and according to him, on the face of it, the order is illegal. On the other hand, the learned Advocate appearing for the respondent, while supporting the impugned order, asserted that the termination of the contract is no longer remained in realm of the private contract, but it is in the public domain. He asserted that having regard to the Judgment of the Supreme Court in the case of Ramana Dayaram Shetty v. The International Airport Authority of India and others (AIR 1979 Supreme Court 1628), it is clear that the Municipal Corporation has violated the doctrine of performance of duty fairly and reasonably. A useful reference on this point can also be made to the Division Bench Judgment of this Court in the case of Oil and Natural Gas Corporation Ltd. v. M/s. Streamline Shipping Co. Pvt. Ltd. (2002 (3) All MR 404). He also asserted that in the situation the Corporation was under obligation to act fairly and reasonably. He said, the doctrine is developed in the administrative law field to ensure the rule of law and to prevent failure of justice where the action is administrative in nature. I am afraid, this argument though looks quite attractive, is not helpful to him, because his suit is not based on this ground. The suit is filed to protect the contractual right of the respondent/contractor, and so, the learned Judge of the trial Court was justified in referring to Section 14 of the Specific Relief Act. Section 14 of the Act is the relevant provision to decide as to whether the respondent/plaintiff would get any relief at this stage. Section 14 of the Act reads as under : 14. Contracts not specifically enforceable.- (1) The following contracts 4 WP3506/2011 cannot be specifically enforced, namely:-- (a) a contract for the non-performance of which compensation in money is an adequate relief; (b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms; (c) a contract which is in its nature determinable; (d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise. (2) Save as provided by the Arbitration Act, 1940 (10 of 1940), no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract (other than an arbitration agreement to which the provisions of the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit. (3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-section (1), the court may enforce specific performance in the following cases:- (a) where the suit is for the enforcement of a contract,- (i) to execute a mortgage or furnish any other security for security for securing the repayment of any loan which the borrower is not willing to repay at once: Provided that where only a part of the loan has been advanced the lender is willing to advance the remaining part of the loan in terms of the contract; or (ii) to take up and pay for any debentures of a company; (b) where the suit is for,- (i) the execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership; or (ii) the purchase of a share of a partner in a firm, (c) where the suit is for the enforcement of a contract for the 5 WP3506/2011 construction of any building or the execution of any other work on land: Provided that the following conditions are fulfilled, namely:- (i) the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work; (ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief; and (iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed. 7. The learned Advocate for the respondent/plaintiff tried to bring his case within the exception mentioned in sub-section (3), clause (c), sub- clause (2). He asserted that since the contract was awarded to his client, his client has made substantial investment in machinery, vehicles etc, and so, his client has a substantial interest in the performance of the contract and that the interest is of such a nature that the compensation would not be adequate relief in case of breach. This aspect has not been dealt with in the plaint as well as in the affidavit in support of the application. Indeed, the contract awarded to the respondent/plaintiff required him to invest in vehicles and man power, but beyond that, there was no need for the respondent/contractor to “relate the work to land”. Clause (c) of sub-section (3) is covering certain types of contracts which are “related to land”. The contract in question is certainly not related to land, and so, this argument is also devoid of merit. The case of the petitioner/defendant would squarely fall within the parameters of Section 14 of the Act. In fact, this case would fall within the parameters of sub-section (1), clauses (a), (b) and (c), and so, 6 WP3506/2011 there indeed was no question of granting temporary injunction. 8. Before I conclude this order, I would like to add a few lines. The respondent/plaintiff was fortunate enough to bag this contract. This contract was for a period of three years, and as said above, the contractor was under obligation to invest substantial amount in vehicles and in man power. However, from very first month of the contract, there occurred difference of opinion between the contractor and the Municipal Corporation, and the Corporation had apparently some reason to opine that the work was not satisfactorily done. I am not inclined to enter into the question as to whether the termination occurred trifle too early or that the decision was arbitrary etc. But, I would say that after giving a contract of this nature for such a long period, the authorities could have been more considerate. On the other hand, it seems, the respondent/contractor was also not positive towards the work which he was given. From the tenor of the plaint, it appears that he started picking up faults in the terms of the contract which he had signed voluntarily a few days earlier. This also indicates that the respondent/contractor did not exhibit adequate business acumen. I would also express my view that from this incident, both the parties would learn lesson.In future in case, the Corporation floats another tender and in case the respondent/contractor once again competes for such a contract, the corporation would treat him fairly forgetting the this incident. The petition should succeed. The writ petition is allowed. The impugned Judgment and order dated 1st April, 2011, passed by the learned District Judge, Ahmednagar, in Misc. Civil Appeal No. 38 of 2011 stands set aside. Rule is made absolute. ( A.V. NIRGUDE, J. ) SRM/wp/3506/11/22/7/11/ok 7 WP3506/2011