Case: State of Madhya Pradesh and Ors Vs. M.V. Vyavsaya and Company

14. Leave granted. 15. It has been repeatedly held by this Court that the power of the High Court under Article 226 of the Constitution is not akin to appellate power. It is a supervisory power. While exercising this power, the court does not go into the merits of the decision taken by the authorities concerned but only ensures that the decision is arrived at in accordance with the procedure prescribed by law and in accordance with the principles of natural justice wherever applicable. Further, where there are disputed questions of fact, the High Court does not normally go into or adjudicate upon the disputed questions of fact. Yet another principle which has been repeatedly affirmed by this Court is that a person who solemnly enters into a contract cannot be allowed to wriggle out of it by resorting to Article 226 of the Constitution. This Court has also repeatedly emphasised the inadvisability of making interim orders which have the effect of depriving the State (the people of the State) of the revenues legitimately due to it. The court should not take upon itself the responsibility of staying the recovery of amounts due to the State unless a clear case of illegality is made out and the balance of convenience is duly considered. Otherwise, the odium of unlawfully depriving the State/the people of the monies lawfully due to it/them would lie upon the court. Particularly in the case of excise contracts, generally speaking, it is wellnigh impossible to recover any arrears after the event. It is for this reason that the rules of all the States insist upon adequate deposits and securities beforehand to be adjusted towards the last months of the year. These provisions and the spirit underlying them cannot be ignored or violated. Now, in the case of this contract, the loss to the State is the whopping sum of Rs. 2, 88, 54, 431. How much of this loss is attributable to the impugned orders is difficult to assess but it can be said with certainly that but for these orders, the State would have conducted the re-auction in the month of May 1995 in which event the loss to the State would have been far less. The respondent-firm carried on till December 1995 without properly and fully paying the amounts due under the orders of the court. A very, very sad tale. 16. In Chief Constable of the North Wales Police v. Evans [ 1982 (3) ALLER 141, HL] the House of Lords has observed that. "The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment; reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the court." * This principle has been referred to with approval in innumerable decisions of this Court. This decision clearly sets out the limits of the supervisory power under Article 226 of the Constitution and emphasises that the jurisdiction under the said article is neither unlimited nor unrestrained, much less unguided. 17. A Constitution Bench of this Court held in Har Shankar v. Dy. Excise and Taxation Commr. [ 1975 (1) SCC 737 ] that : (SCC p. 748, para 22) "The writ jurisdiction of High Courts under Article 226 of the Constitution is not intended to facilitate avoidance of obligations voluntary incurred." Of course, where there is a statutory violation, interference would be permissible even in the case of a contractor but not where the relevant facts are disputed and which dispute calls for an elaborate enquiry which cannot be conveniently done by the High Court in a writ petition. 18. A perusal of the orders extracted hereinabove show that the learned Single Judge - it appears that almost all the orders are made by the same learned Judge (T. S. Doabia, J.) - has not kept in view of the norms governing the exercise of writ jurisdiction of the High Court. The relevant facts were seriously disputed before him, each party alleging that the other has violated the terms and conditions of licence and the rules. The repeated interim orders passed permitting the supply of liquor to the writ petitioner, sale of liquor by the petitioner under the supervision of the authorities, partial deposits of the amounts with the authorities and release of the balance of the amounts to the writ petitioner, appointment of an Advocate Commissioner to act as a "conduit" between the State and the writ petitioner and appointing a "commission" comprising two advocates to look into and decide the daily disputes arising between the parties - are all the outcome of a total disregard of the norms governing the writ jurisdiction. We are surprised that such orders could ever have been passed by the High Court - at any rate, without safeguarding the interests of the State. The proper course for the High Court was to dismiss the writ petition at the very inception when it was brought to their notice that it involved disputed questions of fact. It is equally relevant to notice that in none of the orders mentioned hereinabove has the learned Judge recorded any finding that the State or its authorities have acted in contravention of the law or that they have failed to perform any of their duties enjoined by any of the relevant statutory provisions. Similarly, no finding is recorded that the licensee (respondent herein) has done what all it had to do under the terms of the contract and the law. Indeed, at one stage, the respondent-firm admitted that it is in arrears of excise revenue but it blamed it on the alleged wrongful acts of the authorities. Yet the learned Judge went on supervising the case on an almost day-to-day basis. This was certainly no part of the High Courts function. It has also resulted in substantial loss of revenue to the State - to the people.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. It has been repeatedly held by this Court that the power of the High Court under Article 226 of the Constitution is not akin to appellate power. It is a supervisory power. While exercising this power, the court does not go into the merits of the decision taken by the authorities concerned but only ensures that the decision is arrived at in accordance with the procedure prescribed by law and in accordance with the principles of natural justice wherever applicable. Further, where there are disputed questions of fact, the High Court does not normally go into or adjudicate upon the disputed questions of fact. Yet another principle which has been repeatedly affirmed by this Court is that a person who solemnly enters into a contract cannot be allowed to wriggle out of it by resorting to Article 226 of the Constitution. This Court has also repeatedly emphasised the inadvisability of making interim orders which have the effect of depriving the State (the people of the State) of the revenues legitimately due to it. The court should not take upon itself the responsibility of staying the recovery of amounts due to the State unless a clear case of illegality is made out and the balance of convenience is duly considered. Otherwise, the odium of unlawfully depriving the State/the people of the monies lawfully due to it/them would lie upon the court. Particularly in the case of excise contracts, generally speaking, it is wellnigh impossible to recover any arrears after the event. It is for this reason that the rules of all the States insist upon adequate deposits and securities beforehand to be adjusted towards the last months of the year. These provisions and the spirit underlying them cannot be ignored or violated. Now, in the case of this contract, the loss to the State is the whopping sum of Rs. 2, 88, 54, 431. How much of this loss is attributable to the impugned orders is difficult to assess but it can be said with certainly that but for these orders, the State would have conducted the re-auction in the month of May 1995 in which event the loss to the State would have been far less. The respondent-firm carried on till December 1995 without properly and fully paying the amounts due under the orders of the court. A very, very sad tale.A perusal of the orders extracted hereinabove show that the learned Single Judge - it appears that almost all the orders are made by the same learned Judge (T. S. Doabia, J.) - has not kept in view of the norms governing the exercise of writ jurisdiction of the High Court. The relevant facts were seriously disputed before him, each party alleging that the other has violated the terms and conditions of licence and the rules. The repeated interim orders passed permitting the supply of liquor to the writ petitioner, sale of liquor by the petitioner under the supervision of the authorities, partial deposits of the amounts with the authorities and release of the balance of the amounts to the writ petitioner, appointment of an Advocate Commissioner to act as a "conduit" between the State and the writ petitioner and appointing a "commission" comprising two advocates to look into and decide the daily disputes arising between the parties - are all the outcome of a total disregard of the norms governing the writ jurisdiction. We are surprised that such orders could ever have been passed by the High Court - at any rate, without safeguarding the interests of the State. The proper course for the High Court was to dismiss the writ petition at the very inception when it was brought to their notice that it involved disputed questions of fact. It is equally relevant to notice that in none of the orders mentioned hereinabove has the learned Judge recorded any finding that the State or its authorities have acted in contravention of the law or that they have failed to perform any of their duties enjoined by any of the relevant statutory provisions. Similarly, no finding is recorded that the licensee (respondent herein) has done what all it had to do under the terms of the contract and the law. Indeed, at one stage, the respondent-firm admitted that it is in arrears of excise revenue but it blamed it on the alleged wrongful acts of the authorities. Yet the learned Judge went on supervising the case on an almost day-to-day basis. This was certainly no part of the High Courts function. It has also resulted in substantial loss of revenue to the State - to theorder dated 22-5-1995 records an "undertaking" given by the licensee-firm to the High Court to the effect that "all financial commitments to which he may ultimately be found liable would be met by him". The writ petitions filed by the respondent-firm have been dismissed. His licences have cancelled, re-auction conducted and loss due to the State - to the people - has been ascertained. The High Court ought to enforce the undertaking now by proceeding against the respondent-firm (licensee) and all its partners. The violation of the undertaking, it needs to be mentioned, amounts to contempt of court. It is the duty of the court to try to repair the damage to the extent possible. No one should be allowed to suffer on account of the act(s) of the court.