ORDER
Rajendra Babu, J.
1. The petitioner was awarded a contract for purchase of various categories of wheat lying in various godowns within the State pursuant to the tender notification as per Annexure-A. Thereafter the petitioner entered into a contract with the Food Corporation of India. The petitioner not having been able to lift certain goods wrote a letter as per Annexure-D to extend the time in order to enable them to fulfill the commitments pursuant to the tender. But the respondents not having acceded to the request, proceeded to take action for forfeiting the Earnest Money deposited as per Clause (c) of Schedule II to the tender notification by a letter communicated as per Annexure-M. The petitioner in this Petition is seeking for a declaration that the action proposed to be taken as per the letter Annexure-N dated 14-6-1991 is arbitrary, illegal and void and consequently to direct the respondents to refund the earnest money deposit of Rs. 2,84,000/-.
2. When a public authority has entered into a contract with an individual and a problem crops up thereto, whether or not the aggrieved party can resort to Article 226 of the Constitution of India often arises. The law in this regard is well settled and is as follows;
(i) When public authority has already entered into a contract the relations are no longer governed by Constitutional provisions but by contract.
(ii) Within the field of contract violation of a Constitutional provision including Article 14 thereof cannot arise and all that a party can claim are only rights under a contract and such rights can be enforced only through Civil Proceedings and not through Writ Proceedings, which are inapt for deciding disputed questions of fact.
(iii) The State or its agency or instrumentality, and the private party stand on the same footing in the Law of Contract. State does not enjoy any special Governmental or statutory power,
(iv) Nor will principles of natural justice essential to State action in other contexts have any relevance or application when the impugned action is in pursuance of a contract.
The only exceptions being:
(i) When the contract is in exercise of a statutory power;
(ii) Where State is liable pursuant to promissory estoppel;
(iii) Where State is at ‘threshold’ of entering into contract in choosing the other party with which it wishes to deal.
3. However, the learned Counsel for the petitioner contended, that the State action being always for public good and in public interest unlike contracts between private parties, the public law obligation arising under Article 14 of the Constitution, that it has to be free from arbitrariness even in performance of contracts, relying on the Decision in SRI LEKHA v. STATE OF UP, .
4. The correspondence produced before the Court and referred to by me earlier establishes that the petitioner was not able to lift the wheat within the stipulated time in terms of the contract. Whether that clause relating to forfeiture of contract could not be invoked can be considered only in the background of whether there is any breach of contract on the part of petitioner or not. The action in invoking the said forfeiture of E.M.D. clause ignoring the request of the petitioner to extend time to lift the goods in the circumstances stated by them, is in terms of the contract or not, is also a matter falling within the area of Law of Contracts. Such matters cannot be decided appropriately except on taking evidence and giving findings on fact. When the contract did not contain any statutory terms or obligations and statutory power or obligation which could attract Article 14, a petition under Article 226 of the Constitution is not an appropriate remedy as held in RADHA KRISHNA AGARWAL v. STATE OF BIHAR, AIR 1977 SC 1496 and KULCHHINDAR v. HARDAYAL, .
In this case, the contract having no statutory complexion at all and having been already entered into and there being no contention based on promissory estoppel, the same does not fall under the exceptional categories referred to above.
5. When admittedly the petitioner has not been able to comply with the terms of the contract and public authority invokes the terms of contract, such action cannot be termed as arbitrary so as to be hit by Article 14 of the Constitution. Whether the public authority should have exercised its discretion in extending the time to lift the goods or not, or invoked the forfeiture clause, are matters which cannot be thrashed out in this Proceeding for the reasons stated already. Hence, the more appropriate remedy for the petitioner is by way of a Civil Suit. I therefore,
decline to entertain this Petition. Rejected.