Case: M/S. Karnataka State Forest Indus.Corpn Vs. M/S. Indian Rocks

in the recently held Board meeting of KSFIC on 19.12.1995 and the financial position was made known to the Board Members. The decision to take up granite trade by KSFIC was taken only after thorough discussion in the Board for nearly half a dozen times. The seized granite blocks were auctioned by the Corporation with the full knowledge of Government of Karnataka to the Honble Minister of Forests and the Forest Development. In fact Forest Department gave the full support for this activity. Moreover the Mines and Minersals Department can dispose in the public auction only those minerals which are seized under sub-section (4) of 21 of the Act and sub-rule (6) of 43 and minor Minerals left at the quarry after expiry of termination of lease or licences. In this instant case granite blocks are seized under provision of Section 62 of Karnataka Forest Act and this can be disposed off only under Cchapter 12 of Karnataka Forest Rules, 1963. Hence, we request you to kindly prevail upon the Joint Legislative Committee and Mines and Geology Department to issue necessary permits for the remaining Blocks to KSFIC Ltd. as per the rules in force. There is no alternative left for the KSFIC Ltd. to make arrangement for issue of transit permits through Mines and Geology Department to the purchasers for lifting the remaining blocks purchased by them in Tender cum auction sale as the KSFIC Ltd. Is totally unable to refund the deposit amount to the purchasers in the circumstances explained above. But there is nothing to show that the Government of Karnataka acted thereupon or withdrawn its direction contained in its letter dated 16th January, 1996. 37. The plea which was raised, therefore, was not a legal plea but a plea for show of compassion expressing its inability to refund the amount because of financial constraints. Its response to the State was not based on legal premise but it was based on its own difficulty. If the agency had been terminated and had not been restored, we would not know under what authority the appellant had been asking respondents to perform their part of contract. 38. In any view of the matter there is nothing on the records to show that the State of Karnataka and particularly the Joint Committee of the Karnataka Legislative Assembly directed grant of transit permits for transportation of granite blocks. If such permits had been granted, it might have been obligatory on its part while issuing the notice upon the concerned respondents to direct lifting of the remaining blocks of granites enclosing therewith copies of the said permits, but in absence thereof, it is idle to contend, on the one hand that the respondents were bound to perform their part of the contract and on the other that although they have asked for supply of permits, as per rules, they did not obtain the same. 39. Appellant is also guilty of suppressio veri and suggestio falsi. Its action in the entire matter appears to be wholly unfair. It was in a dominant position in terms of the provisions of the contract but then in a case of this nature when its authority to continue to deal with the granite blocks came to be questioned, it was obligatory on its part to clear its position in this behalf. We have no words to express our displeasure also in regard to the conduct of the State. It did not take a positive stand. As a principal, the State of Karnataka was also obligated to disclose the entire facts before the High Court. 40. 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 Article 14 of the Constitution of India, a writ petition would be maintainable. (See ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd. [ (2004) 3 SCC 553. 41. 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. Divan on G.J. Fernandez v. State of Mysore and other, ( [1967] 3 SCR 636 ) is not apposite. In that case itself it was held :- Thus under Art. 162 the State Government can take executive action in all matters in which the legislature of the State can pass laws. But Art. 162 itself does not confer any rule making power on the State Government in the behalf. G.J. Fernandez (supra) was considered in ABL International Ltd. (supra) 42. Furthermore the concession made by the counsel for appellants in the earlier round of litigation also cannot be lost sight of. A specific concession was made. It may be that no specific direction was issued by the High Court therein, but the stand taken by it was clear and unequivocal. 43. Mr. Shyam Divan, when questioned, had very fairly submitted that the conduct of the counsel who had appeared on behalf of the appellant in the earlier round of litigation is not in question and it cannot be said that he acted beyond his authority. 44. If such a stand had taken in the earlier round of litigation we fail to see any reason as to why the concession made by it should not be given effect to. If a right has accrued to the respondents for maintaining a writ so as to compel the State to give effect to an earlier order passed by the Court as has been held by this Court in the case of Commissioner, Karnataka Housing Board v. C. Muddaiah, [ (2007) 7 SCC 689 , the same should not be denied to respondent herein.

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

Explanation:
0[ds]37. The plea which was raised, therefore, was not a legal plea but a plea for show of compassion expressing its inability to refund the amount because of financial constraints. Its response to the State was not based on legal premise but it was based on its own difficulty. If the agency had been terminated and had not been restored, we would not know under what authority the appellant had been asking respondents to perform their part of contract38. In any view of the matter there is nothing on the records to show that the State of Karnataka and particularly the Joint Committee of the Karnataka Legislative Assembly directed grant of transit permits for transportation of granite blocks. If such permits had been granted, it might have been obligatory on its part while issuing the notice upon the concerned respondents to direct lifting of the remaining blocks of granites enclosing therewith copies of the said permits, but in absence thereof, it is idle to contend, on the one hand that the respondents were bound to perform their part of the contract and on the other that although they have asked for supply of permits, as per rules, they did not obtain the same39. Appellant is also guilty of suppressio veri and suggestio falsi. Its action in the entire matter appears to be wholly unfair. It was in a dominant position in terms of the provisions of the contract but then in a case of this nature when its authority to continue to deal with the granite blocks came to be questioned, it was obligatory on its part to clear its position in this behalf. We have no words to express our displeasure also in regard to the conduct of the State. It did not take a positive stand. As a principal, the State of Karnataka was also obligated to disclose the entire facts before the High Court40. 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 Article 14 of the Constitution of India, a writ petition would be maintainable. (See ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd. [ (2004) 3 SCC 55341. 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. Divan on G.J. Fernandez v. State of Mysore and other, ( [1967] 3 SCR 636 ) is not apposite. In that case itself it was held :-Thus under Art. 162 the State Government can take executive action in all matters in which the legislature of the State can pass laws. But Art. 162 itself does not confer any rule making power on the State Government in the behalfG.J. Fernandez (supra) was considered in ABL International Ltd. (supra)42. Furthermore the concession made by the counsel for appellants in the earlier round of litigation also cannot be lost sight of. A specific concession was made. It may be that no specific direction was issued by the High Court therein, but the stand taken by it was clear and unequivocal43. Mr. Shyam Divan, when questioned, had very fairly submitted that the conduct of the counsel who had appeared on behalf of the appellant in the earlier round of litigation is not in question and it cannot be said that he acted beyond his authority44. If such a stand had taken in the earlier round of litigation we fail to see any reason as to why the concession made by it should not be given effect to. If a right has accrued to the respondents for maintaining a writ so as to compel the State to give effect to an earlier order passed by the Court as has been held by this Court in the case of Commissioner, Karnataka Housing Board v. C. Muddaiah, [ (2007) 7 SCC 689 , the same should not be denied to respondent herein.