CHELLAPPAN Vs. EXECUTIVE ENGINEER

JUDGEMENT

(1.) A difficult but interesting question the decision of which may be of considerable consequence arises in this case. The question relates to the validity of the revenue recovery proceedings taken against the petitioner by the Revenue authorities to recover what is claimed as due from him as damages for breach of the contract he had entered into with the Executive Engineer, PWD. (B&R) Division, Trivandrum. That the petitioner tendered for the work of construction of certain structures in the State Guest House premises at Trivandrum on 21-6-1975, that the Executive Engineer concerned accepted his tender, that the petitioner executed an agreement on 17-7-1975 for completion of the work before the end of December, 1975 and the work was not completed within the period specified in the agreement are admitted facts. The petitioner has some explanation to offer for the delay in the completion of the work. According to him necessary materials which the PWD. had to supply him in accordance with the terms of the agreement were not supplied in time. By the time they were supplied the petitioner is said to have fallen ill consequent upon which he is said to have sought for extension of time for completion of the work. But then even before the period agreed upon for completing the work had expired the contract was terminated. That it was so terminated is not disputed. It was terminated on 13-11-1975 and the security deposit was forfeited. It was stated in Ext. P3 letter issued by the first respondent that the petitioner is seen to have abandoned the work after completing the foundation masonry for a portion of the compound wall at the entrance, that repeated requests were made to the petitioner to complete the work with the least delay, that he had been told repeatedly that the progress was very slow, that therefore the work could not be completed within the specified period and that there was no progress as required by the terms of the contract which enabled the first respondent to cancel the contract. I am not called upon in this case to decide whether there was sufficient excuse for the petitioner for defaulting to carry out the work according to the time schedule contemplated by the parties or whether there were circumstances which may justify the termination of the contract. That would be beyond the province of this Court as I will presently indicate. But the further contention of the petitioner is that recovery sought to be made from him of an amount of Bs. 31843/-as intimated by Ext. P4 ought not to be permitted. The petitioner complains that he was never given an opportunity to show how this amount could be claimed as damages and that he was never given an opportunity to show that the case that loss was caused by rearrangement of work had no basis. The complaint is that the unilateral determination by the Executive Engineer of the quantum of damages and proceedings for recovering such quantum were not warranted by law.

(2.) The two questions which therefore arise in this case are: (1) Whether this Court should go into the question as to the propriety of the termination of the contract by the first respondent and (2) Whether revenue recovery proceedings can be resorted to recover what is claimed as damages due as a result of breach of contract.

(3.) When the State enters into a contract with the citizen the rights of the parties to the contract are determined solely on the terms of the contract and the remedies available for breach of contract to either of the parties would be in terms of the contract, in the matter of entering into contractual relations the State is exercising its executive power and the provisions of Part III of the Constitution impose certain restrictions in the matter. It is not open to the State to pick and choose the persons with whom it proposes to enter into a contract. In other words, the exercise of such executive power at the stage prior to the entering into a contract is liable to be examined by a court with a view to see whether there is an infringement of the fundamental rights guaranteed to a citizen. All citizens must have similar opportunity to propose entering into contract with the State. But when a contract is entered into the position of the citizen who enters into a contract with the State is just that of any other contracting party. He cannot complain of violation of Art.14 in the matter of execution of the contract. Thus, for instance, he cannot complain that while some contractors have been given extension of time he has not been given similar extension, that while heavy penalties are imposed on him in terms of such contract such penalties have not been imposed on other contracting parties. If he is liable under the terms of contract to be subjected to such penalty he cannot complain against the State that the concession shown to others must be shown to him, for, the question of violation of Art.14 in the matter of performance of the contract does not arise. Consequently if he seeks a remedy on account of the conduct of the other party to the contract such remedy would be the same as that available to him under a contract with a party other than the State. If his contract had been with another citizen or another individual he could not come to this court in proceedings under Art.226 of the Constitution complaining that termination of the contract was bad. His remedy, if any, would then lie elsewhere. The position would not be different simply because he has contracted with the State. Therefore this Court will not examine the question whether the State was right in its stand that the petitioner was guilty of such conduct as to enable the State to terminate the contract.