JUDGMENT
S. Ranganathan, J.
(1) These writ petitions raise certain common questions for determination and have been argued together. Since we have decided to dismiss the writ petitions on a short prelminary, ground, it is not necessary to set out in detail allthe facts which form the background of each of these writ petitions It is sufficient to set out the salient facts necessary to appreciate the point decided and for this purpose, the facts pertaining to Cw 1047183 may alone be narrated.
FACTS of the case : the petitioner, Mangat Ram, was granted a lease by the President of India in respect of a plot of land bearing No. A-l /288, Safdar Jang Residential Scheme. In pursuance thereof an indenture of lease was entered into between the President of E. India and the petitioner on 15th February, 1977. This lease deed was executed by an officer of the Delhi Development Authority (DDA) for and on behalf of and by the order and direction of the President of India.
(2) Under the lease deed a plot of land was granted to the petitioner on certain terms and conditions which are all not relevant for our present purposes. It is sufficient to state that the lessee covenanted with the Lesser, inter alia, as follows :-
“(13)The Lessee shall not without the written consent of the Lesser carry on, or permit to be carried on, on the residential plot or in any building thereon any trade or business whatsoever or use the same or permit the same to be used for any purpose other than that of private dwelling or do or suffer to be done therein any act or thing whatsoever which in the opinion of the Lesser may be a nuisance. annoyance or disturbance to the Lesser and persons living in the neighborhood.
PROVIDED that, if the Lessee is desirous of using the said Residential plot on the building thereon for a purpose other than that of private dwelling the Lesser may allow such change of user on such terms and conditions, including payment of additional premium and additional rent, as the Lesser may in his absolute discretion determine.”
Paragraph III of the lease deed stated, inter alia, that “if there shall have been, in the opinion of the Lesser, whose decision shall be final any breach by the Lessee or by any person claiming through or under him of any of the covenants or conditions contained herein and on his part to be observed or performed, then and in any such case, it shall be lawful for the Lesser, notwithstanding the waiver of any previous causes or right of re-entry upon the Residential plot hereby demised and the buildings thereon, to re-enter upon and take possession of the Residential plot and the buildings and fixtures thereon, and thereupon this Lease and everything herein contained shall cease and determine and the Lessee shall not be entitled to any compensation whatsoever not to the return of any premium paid by him”. The proviso to this paragraph, however, empowered the Lesser, without prejudice to his right of re-entry aforesaid, and in his absolute discration, to waive or condone breaches, temporarily or otherwise, on receipt of such amount and on such terms and conditions as may be determined by him. Paragraph Iv provided that no forfeiture or re-entry should be effected without serving on the lessee a notice in writing specifying the breach complained and if the breach is capable of remedy requiring the lessee to remedy the breach. Further, if the lessee failed within such reasonable time as may be mentioned in the notice to remedy the breach if it is capable of remedy and in the event of forfeiture or re-entry the Lesser may, in his discretion, relieve against forfeiture on such terms and conditions as against forefeiture on such terms and conditions as he thought proper. Paragraph Vii provided all notices, orders, directions, consents of approvals to be given under this lease should be in writing and signed by such officer as may be authorised by the Lt. Governor. Under paragraph Viii (a) all powers exerciseable by the Lesser (President of India) under the lease could be exercised by the Lt. Governor or by any officer or officers authorised by the Lesser to exercise such powers. Clause (b) of paragraph Viii authorised the Lt. Governor to exercise all or any of the powers exercisable by him under the lease but through officer or officers to whom such powers were delegated. Paragraph Xi clarified that the lease was being granted under the Government Grants Act, 1895 (Act Xv of 1895).
(3) On the above plot of land the petitioner, after obtaining the sanction of the concerned civic authorities, constructed a house property. The said premises was leased out to one S.C. Bhaskar some time in 1981 at a monthly rent of Rs. 3,500. The tenant started running a lodging house in the premises from June, 1981 under the name ‘Meera (or Maurya) Inn’. It is this utilisation of the building in question that has raised a number of problems. We are concerned here with a limited question as to the effect of this utilisation vis-a-vis the covenants undertaken by the petitioner in respect thereof under the lease deed.
(4) On 24-4-1981 a notice was served by the Dda for and on behalf of the President of India on the petitioner. In this notice is was stated that the lessee, i.e., the petitioner had made certain deviations to the sanctioned building plan which were contrary to the terms and conditions of the lease deed and he was asked to show cause why the lease of the plot should not be cancelled and why the Lesser should not re-enter upon and take possession of the land in pursuance of paragraph Iii of the said lease deed. The petitioner replied to this notice on 22-5-1981.
(5) Again on 21-2-1982 another notice was issued by the Lesser to the lessee. It was pointed out in this notice that by virtue of the lease deed the petitioner had been required to use the building constructed on the plot of land exclusively for residential purposes. The notice proceeded to say :-
“AND whereas by virtue of clause 11(13) you are not entitled without the written consent of the Lesser to carry on or permit to be carried on, on the residential plot or in any building thereon any trade or business whatsoever or use the same or permit the same to be used for any purpose other than that of residence or do or suffer to be done thereon any act or thing whatsoever which in the opinion of the Lesser may be a nuisance or disturbance to the Lesser and persons living in the neighborhood.
ANDwhereas it has been reported that you are using the said land the building standing thereon or have permitted the same to be use for the purpose of a guest house “Maurya Inn” which is contrary to the terms and conditions of the lease.”
NOTICE was being given that if the misuse was not discontinued within a period of 15 days from the receipt of the notice, the lease would be determined under paragraph 11(13) and possession of the residential plots, buildings and fixtures thereon would be taken without any compensation whatsoever and the premium of the plot deposited by the petitioner would also be forfeited.
(6) This was followed by another notice of 6th August, 1982 where again after referring to the terms of the lease deed and the manner of utilisation of the property by the petitioner, it was pointed out that the petitioner had neither shown sufficient cause nor got the breach removed in spite of an opportunity given to him by the notice dated 21-2-1982. It was stated that by this notice the petitioner was being finally required to show cause within 15 days’ as to why, for the breach of the said clause, the lease should not be cancelled and re-entry effected in terms of paragraph Iii of the lease deed. To this notice the petitioner gave a reply on 16th August, 1982. The petitioner “specifically denied” that the premises were being used as a guest house. According to him the premises were being used for residential purpose by giving it on rent to one or more persons for a definite long period of month or more than amonth. No part of it was being used as a guest house or being used on daily tariff basis. It was stated that even otherwise there were innumerable judgments of the High Court wherein it had been held that such usage is a residential use and not a commercial use. It was, therefore, stated that the contents of the notice given by the Lesser were false and frivolous and that they should be withdrawn. It was also stated that in case any action was taken, the same would be defended at the cost, risk and responsibility of the Lesser.
(7) On 12-1-1983, the Lease Administration Officer, Dda, issued a letter to the petitioner. Reference was made to the previous correspondence and it was stated that as in spite of opportunity given by the notices dated 24-4-1981 and 6-8-1982 the petitioner had not shown sufficient cause as to why, on account of the breach of paragraph 11(13) of the lease deed, the lease of the plot of land may not be determined and the possession of the same be not taken back under paragraph Iii of the said lease deed. The petitioner was informed that the possession of the said plot of land along with the building and fixtures standing thereon would be taken over by the Dda on 19-1-1983. The petitioner made representation on 1-2-1983 which did not yield any result. On the other hand, on 15-4-1983 the Dda informed the Municipal Corporation of Delhi that since the premises on the plot of land leased to the petitioner were being misused by running a guest house in the name and style of ‘Maurya Inn’ contrary to the terms and conditions of the lease deed, the lease of the plot had been determined by the L.G. and that formal possession of the plot and the structure 824 standing thereon had been taken over by the DDA. It was requested that the Municipal Corporation should take action immediately to disconnect water and electric facilities given to the premises in question. Another consequence of the cancellation of the lease deed was that the petitioner received a notice from the Dda under Section 4(1) and Section 4(2)(b)(ii) of the Public Premises (Evictions of Unauthorised Occupants) Act, 1971. By this notice the petitioner was called upon to show cause why an order of eviction should not be passed against the petitioner as he was in unauthorised occupation of the public premises, namely, the building and plot of land in question.
(8) It is in these circumstances that the petitioner has come to this court. On behalf of the petitioner it is intended that he has committed no breach of the lease deed in question. According to him, the only condition imposed by the terms of the lease deed was that the premises constructed on the plot of land should not be used otherwise than for a residential purpose. It is argued that the utilisation of a building as a lodging house constitutes its utilisation only for a residential purpose. It is said that this contention has been upheld by this court in Ramanujam Vs. Ajit Singh (1) and also in Cr/. Mis.(M) 106 to Iii, 124 and 125 of 1979 disposed of on 19th December, 1980. It is, therefore, contended that the determination of the lease deed by the respondents was unjustified and that, therefore, this court should issue appropriate writs to (i) declare that the running of the lodging house is’ a residential purpose; (ii) direct the respondent to forthwith restore the lease of the petitioner; (iii) quash the order dated 12-1-1983; (iv) restrain the respondents from disconnecting the civic amenities to the petitioner; and (v) direct the respondents not to interfere with the lawful and proper use of the leased premises by the petitioner.
(9) Preliminary Objection : On behalf of the respondents, the contention urged by the petitioner that there had been no breach of the terms of the lease deed is refuted. This apart, the respondents have raised a preliminary contention that, even assuming that the respondents were wrong in the above contention, the petitioners were not entitled to invoke the writ jurisdiction of the High Court under Article 226 of the Constitution inasmuch as the action complained of was not a statutory act but was merely the exercise of the powers conferred on a Lesser under the terms of a lease deed. It is contended that though the lease was executed by the President of India and the powers of cancellation of the lease and the re-entry were being exercised on behalf of the President by the Dda, the matter still retained in the domination of a contract and that it was not open to the petitioners to seek enforcement of contractual rights by resort to a writ petition. It is submitted that the appropriate course for the petitioners would be, if so advised, to file a suit against the concerned respondents in a civil court and seek appropriate remedies. Since it appeared to us that there was some force in this preliminary objection, we heard arguments at length thereon. Since we have come to the conclusion that the preliminary objection is well taken and should be upheld, we are proceeding to dispose of these writ petitions on this preliminary objection without going into the other contentions regarding the merits of the cancellation of the lease that have been put forward in the writ petition Radhakrishna Agarwal’s case : IN our opinion, the preliminary objection of the respondent hes to be upheld in view of a number of decisions of the Supreme Court. The first of these is that in M/s. Radhakrishna Agarwal and others v. State of Bihar and others . Since, in our view, this decision fully governs the present case, it is necessary to set out the facts and contentions therein at same length. In the case before the Supreme Court, writ petitions had been filed by the petitioners against the orders of the State Government passed in 1974 revising the rates of royalty payable by the petitioners under a lease of 1970 and subsequently cancelling the lease by a letter of the. 15th March, 1975. The petitioners case was that the revision of the rates of royalty payable by the petitioner during the subsistance of the lease and, thereafter, cancellation of the lease deeds was illegal for various reasons. On behalf of the petitIoners it was argued before the Supreme Court that the State Government, acting in its executive capacity through its Government or its officers, even in the contractual field, cannot escape the obligations imposed upon it by Part Iii of the Constitution and it was urged that the provisions of Article 14 of the Constitution had been intringed. On the other hand, ‘on behalf of the State Government, it was urged that governmental authorities, when acting in the contractual field, could not be controlled by article 14 of the Constitution at all. When the State enters into contract with citizens who carry on their trade it was urged, it does not exercise any special governmental or statutory powers. In such cases the State as well as the citizen with whom, it contracts are both equally subjected to the law of contract. The State is not claiming to be, it was said, above the law of contract governing all parties which subject themselves to the law of contract. The dispute, whether there is or there is not a breach of contract, should be determined by the ordinary civil courts as in every case between ordinary litigants who cannot invoke the powers of the High Court under Article 226 of the Constitution simply because there is a dispute whether an agreement has been broken or not. Equal subjection of all parties including the State, to the same procedural requirements, when such disputes are to be adjudicated upon, means that the State should be placed on the same footing as an ordinary litigant. It should neither enjoy special benefits and privileges, nor be subjected to special burdens and disadvantages. It is true that the special provisions of Article 299 of the Constitution are there to protect public interest so that the contracts by or on behalf of the Government have to comply with the special requirements of form. The question before the court thus was : where once the State enters into the contractual sphere after the requirements of form, contained in Article 299, have been complied with, does it have to take its place, in the eye of law, side by side with ordinary parties and litigants or has it any special obligations or privileges attached to it even when it acts within this field ?
(10) The court pointed out that the argument of the petitioner/appellants, that the State Government had some special obligations attached to it would have been more plausible if it could have been shown, that the State or its officers or agents had practiced some discrimination against the petitioners/appellants at the vary threshold or at the time of entry into the field of contract so as to exclude them from consideration when compared with others on any unreasonable or unsustainable ground struck by Article 14 of the Constitution. The decision in Elusion equipment and Chemicals Ltd. v. State of West Bengal involved a discrimination at the very threshold or at the time of entry into the field of consideration of persons with whom the Government could contract at all. At that stage, the State acts purely in its executive capacity and was bound by its obligations which dealing with the individual citizens imported into every transaction entered ‘into in exercise of its constitutional powers. But the Court pointed out : “BUT after the State of its agents have entered into the field of ordinary. contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Art. 14 or of any other constitutional provision when the State or its agents purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon the terms of the contract only by some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart from contract.”
THE Supreme Court further proceeded to approve a threefold classification of cases made in the judgment of the Patna High Court which was under appeal before it. It observed:
“THE Patna High Court had, very rightly, divided the types of cases in which breaches of alleged obligation by the State or its agents can be set up into three types. These were stated as follows:-
‘(I)Where a petitioner makes a grievance of breach of promise on the part of the State in cases where on assurance or promise made by the State he has acted to his prejudice and predicament, but the agreement in short of a contract within the meaning of Act, 299 of the Constitution;
(II)Where the contract entered into between the person aggrieved and the State is in exercise of a statutory power under certain Act or Rules framed there under and the petitioner alleges a breach on the part of the State; and
(III)Where the contract entered into between the State and the person aggrieved is non-statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, and the petitioner complaints about breach of such contract by the State.”
IT was pointed out that while cases falling under categories (i) and (ii) could form the subject matter of writ proceedings’, this remedy was not open in the case of third type of contracts. The Supreme Court agreed with the Patna High Court that cases such as Union of India v. R/s. Anglo Afghan Agencies (AIR 1968 Sc 718) (4), the Century Spinning & Manufacturing Co., Ltd., v. Ulhasnagar Municipal Council , belonged to the first category; that the decisions such as K. N. Guruswamy v. The State of Mysore and D.F. O. South Kheri v. Ram Sanehi Singh fell within the second category; and that the case before them should be placed in the third category in which no writ or order can issue, as held in Umakant Seran v. State of Bihar and Lekhraj Sathram Das v. N. M. Shah , “to compel the authorities to remedy a breach of contract pure and simple.”
(11) On behalf of the appellants reliance had been placed on Lekhraj Sathram Das v. N. M. Shah (supra) to contend that there had been a breach of public duty in the case before the Supreme Court and that, therefore, a writ could issue. The submission made was that “whenever a State or its agents of officers deal with the citizen, either when making a transaction or, after making it, acting in exercise of powers under the terms of a contract between the parties, there is a dealing between the State and the citizen which involves performance of ‘certain legal and public duties.’ ” The Court was not inclined to accept this submission as it was a very wide proposition under which several cases of breach of contract by State or its agents or officers would call for interference under Article 226 of the Constitution.” In the opinion of the Court this was not a sound proposition at all. Reliance had also been placed on behalf of the appellants on the decision in the case of D. R. O. South Khari v. Ram Sanehi Singh but it was pointed out that though the source of right in their case was contractual, the action complained was a proper exercise of a statutory power. Certain other cases relied upon were also distinguished and it was pointed out that, in the case before the court allegations on which violation of Article 14 could be based were neither properly made nor established. The Court observed that the correct view to take was that it was only the contract and not the executive power, regulated by the Constitution that governed the relations of the parties in the cases before them.
(12) The second decision of the Supreme Court which is relevant to the point at issue is Premji Bhai Parmar and Others v.Delhi Development Authority and Others . The petitioners in that case had been allotted flats under the Middle Income Group Housing Scheme of the Delhi Development Authority (DDA). The terms of the scheme had been contained in a brochure which set out the price of the flats. The petition paid the price took delivery of the fiats. They subsequently appear to have discovered that the price paid by them included a surcharge which had not been charged in the case of certain other colonies. Also, in their opinion, the Dda had no authority to levy any such surcharge. They, therefore, filed writ petitions in Supreme Court under Article 32 of the Constitution for a declaration that the levy of surcharge was illegal and unconstitutional and for a direction for refund thereof together with the interest from the date of levy and collection till the date of refund. In these writ petitions, a preliminary objection was raised by the Dda that the petitions were not maintainable inasmuch as the petitioners had not come to the court for the enforcement of any fundamental right but had invoked is Jurisdiction for a relief of reopening concluded contracts. Dealing with the preliminary objection, the Supreme Court observed :- “THROUGH we are not inclined to reject the petitions on this preliminary objection as we have heard them on merits it is undeniable that camouflage of Article 14 cannot conceal the real purpose motivating these petitions, namely, to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained and petition to .this Court under Art. 32 is not a proper remedy .nor in this Court a proper, fonim for re-opening, the concluded contracts with a view to getting back a part of the purchase price paid and the benefit taken. The undisputed facts are that petitioners offered themselves for registration for allotment of flats that may be constructed by the Authority for Mig scheme. After the registration and when the flats were constructed and ready for occupation brochures were issued by the Authority. One such brochure for allotment of Mig flats in Lawrence Road residential scheme is Annexure R-1 . .. .. They offered to purchase the flats at the price on which the Authority offered to sell the case. After the lots were drawn and they were 1ucky enough to be found eligible for allotment of flats, each one of them paid the price set out in the brochure and took possession of the flat and thus sale become complete. There is no suggestion that there was a mis-statement or incorrect statement or any fraudulent concealment in the information supplied in the brochures published by the Authority on the strength of which they applied and obtained flats. How the seller works out his price is a matter of his own choice unless it is subject to statutory control. Price of property is in the realm of contract between a seller and buyer……….. With this background the petitioners now contend that the Authority has collected surcharge as component of price which the Authority was not authorised or entitled to collect. Even if here may be any merit in this contention, though there is none, such a relief of refund cannot be the subject-matter of a petition under Art, 32. And Art. 14 cannot camouflage the real bone of contention. Conceding for this submission that the Authority has the trappings of a State or would be comprehended in ‘other authority’ for the purpose of Article 12, while determining price of flats constructed by it, it acts purely in its executive capacity and “is bound by the obligations which dealings of the State with the individual citizens import into every transaction entered into in the exercise of its constitutional powers. But After the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines right and obligations of the parties inter se. No question arises of violation of Act. 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which in apart from contract [see Radhakrishna Agarwal v. State of Bihar, (B 1977) Scr 249 at p. 255]. Petitioners were under no obligation to seek allotment of flats even after they had registered themselves. They looked at the price and flats and applied for the flats. This they did voluntarily. They were advised by the brochures to look at the flats before going in for the same. They were lucky enough to get allotment when the lots were drawn. Each one of them was allotted a flat and he paid the price voluntarily. They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of flat………….. In a similar and identical situation a Constitution Pench of this Court in Har Shankar v. The Dy. Excise and Taxation Commr. , has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract would ever have a binding force. The jurisdiction of this Court under Article 32 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. It would thus appear that petitions ought not to have been entertained.” Thus, in the above case the attempt of the petitioners to obtain, through writ petitions, a refund of moneys paid by them under a contract, by putting forward a plea that the ‘levy’ of a Part of the price by the Dda was unconstitutional an illegal was unsuccessful and the Court observed that a writ petition filed for that purpose could not be entertained. No doubt, the case related to writs filed under Article 32 of the Constitution. but the argument there, as in the present case, was that the petitioners’ grievances arose not out of mere contracts but out of the illegal exercise of its statutory duties by the DDA. The above discussion therefore, fully governs the present case as well.
(13) Bishwanath Tea Co. Case. The same principle was reiterated by the Supreme Court in Divisional Forest Officer v. Bishwanath Tea Co. Ltd. . In this case, the tea company had taken certain lands on lease for the purpose of cultivating and raising a tea garden thereon. This lease was subject to the conditions set out there under and also generally to the Assam Land and Revenue Regulation and the rules made there under. The manager of the Tea Company approached the officers of the forest department for permission to cut certain timber for utilising the same for building staff quarters from land-covered under a particular lease.
THE respondents replied stating that it was unnecessary to ascertain whether the tea estates in respect of which staff quarters were being proposed to be constructed were situated within the grant evidenced by the lease in question, making it clear that if it were not so, full royalty would be payable by the company for cutting, felling and removing timber. That tea company wanted this permission to be issued without insistence on payment of royalty but the Government informed the manager that as the estate on which quarters was to be constructed did not fall within the grant from which timber was to be felled and cut, full royalty had to be paid under clause (2) of Part Iv of the lease deed. After some correspondence, the company paid the amount of royalty demanded by the Government but filed a writ petition contending that upon a true construction of the relevant clause of the grant as also the proviso to Rule 37 of the Settlement Rules, the company was entitled to cut and remove timber without payment of royalty. It prayed that a mandamus be issued directing the Government to issue permit without insisting on payment of royalty whenever timber was to be cut from the leased area for purposes connected with the exploitation of the grant. The High Court rejected a preliminary objection raised on behalf of the Government that the contractual rights and obligations could not be enforced by resort to Article 226 and held, on the merits also that the company’s stand was correct. A writ as prayed was, therefore, granted. The State Government appealed to the Supreme Court. The Supreme Court observed that, unquestionably, the rights and obligations between the parties were governed by the terms of the lease deed in question. Specifically, the respondent company was claiming their right to relief under clause (2) of Part Iv of the lease deed in question. The attempt of the petitioner was to get out of the preliminary objection by raising a contention that the levy of royalty was not supported by law and was an unreasonable restriction on the fundamental right to carry on trade as well as by a reference to Rule 37 of the relevant rules. But the court pointed out that, shorn of all embellishment the relief claimed by the respondent was referrable to nothing else but the term of the lease, namely, Clause 2 Part IV. Maybe, the term was a mere reproduction of the proviso to Rule 37 above referred to but that by itself was not sufficient to contend that what the respondent was doing was to enforce a statutory provision. It was pointed out that the proviso to Rule 37 was a purely enabling provision. The respondent was trying to enforce, through the writ, the right to remove the timber without the liability to pay royalty not under the proviso to Rule 37 which was merely an enabling provision, but the specific term of lease agreed, to between the parties. It was, therefore, held that the High Court was in error in posing itself to a question as to whether the applicant before them was entitled to enforcement of a legal right under the proviso to Rule 37. “The camouflage” the Court observed “successfully worked, but once the cloak is removed, it unmistakably transpires that the respondent was trying to claim benefit of Clause 2 of the lease having fulfillled its pre-condition and obtaining the inclusion of its latter part in the contract of the lease.” With these observations’ the Court proceeded to consider whether such a contractual obligation could be enforced by a writ jurisdiction. After referring to the right pleaded under Article 19 the Court observed: “IT is undoubtedly true that High Court can entertain in its extraordinary jurisdiction a petition to issue any of the prerogative writs for any other purpose. But such writ can be issued where there is executive section unsupported by law or even in respect of a Corporation there is a denial of equality before law or equal protection of law. The Corporation can also file a writ petition for enforcement of a right under a statute. As pointed out earlier, the respondent (Company) was merely trying to enforce a contractual obligation. To clear the ground let it be stated that obligation to pay royalty for timber cut and felled and removed is prescribed by the relevant regulations. The validity of regulations is not challenged. Therefore, the demand for royalty is supported by law. What the respondent claims is an exception that in view of a certain term in the indenture of lease, to writ, Clause 2, the appellant is not entitled to demand and collect royalty from the respondent. This is nothing but enforcement of a term of a contract of lease. Hence, the question whether such contractual obligation can be enforced by the High Court in its writ jurisdiction.
(14) Ordinarily, where a breach of contract is complained of, a party complaining of such breach may sue turn specific performance of the contract, if contract is capable of being specifically performed, or the party may sue for damages. Such a suit would ordinarily be cognizable by the Civil Court. The High Court in its extraordinary jurisdiction would entertain a petition either for specified performance of contract or for recovering damages. A right to relief flowing from a contract has to be claimed in a Civil Court where a suit for specific performance of contract or for damages could be filed. This is so well settled that no authority is needed. However, we may refer to a recent decision bearing on the subject. In Har Shankar v. The Deputy Excise and Taxation Commissioner : the petitioners offered their bids in the auctions held for granting licenses for the sale of liquor. Subsequently, the petitioners moved to invalidate the auctions challenging the power of the Financial Commissioner to grant liquor licenses. Rejecting this contention, Chandrachud J., speaking for the Constitution Bench at page 263 (of SCR) : (at p. 1125 of AIR) observed as under:
THOSE who contract with open eyes must accept the burdens of the contract alone with its benefits. The powers of the Financial Commissioner to grant Liquor licenses by auction and to collect license fees through the medium of auctions cannot by writ petitions be questioned by those who had their venture succeeded, would have relied upon those very powers to found a legal claim. Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract. By such a test no contract could ever have a binding force.’
AGAIN at page 265 (of SCR): (at p. 1126 of AIR) there is a pertinent observation which may be extracted : ‘ANALYSINGthe situation here, a concluded contract must be held to have come into existence between the parties. The appellants have displayed ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching contractual obligations.’
THISapart, it also appears that in a later decision, the Assam High Court itself took an exactly opposite view in almost identical circumstances. In Woodcrafts Assam v. Chief Conservator of Forests, Assam, Air 1971 Assam 92, a writ petition was filed challenging the revision of rates of royalty for two different periods. Rejecting this petition, as not maintainable, a Division Bench of the High Court held that the complaint of the petitioner is that there is violation of his rights under the contract and that such violation of contractual obligation cannot be remedied by a writ petition. That exactly is the petition in the case before us. Therefore, the High Court was in error in entertaining the writ petition and it should have been dismissed at the threshold.”
DELHI High Court decisions : In the above contract we may also refer to a decision of a bench of this Court in M/s. Jasjeet Films (Pvt.) Ltd. and another v. Delhi Development Authority and others (12). In that case, the petitioners were the lessee of certain lands under the Government Grants Act. The lease had been granted to them after a public auction and for purposes of constructing the cinema house thereon. The cinema house was constructed but the petitioners failed to make payment of the annual rental for the year 1971-72 within the stipulated time. Thereupon the Delhi Development Authority issued a demand notice to the petitioner. According to the terms of the lease-deed the arrears of annual rental would also be recovered as arrears of land revenue. On receipt of the demand notices the petitioner filed the writ petitions. The principal contention of the petitioners was that the Dda had failed to carry out certain improvements, or to make provisions of certain formalities which they had promised at the time of grant of the lease and that in the circumstances the convenant to pay rent could not. be enforced. This contention was rejected on the merits. But the Court observed: “EVEN assuming that the petitioners have an enforceable equitable claim against the D.D.A. can they in law, seek extraordinary remedy of mandamus in this Court? We have shown earlier that the D.D.A. Act and the Home Ministry Instructions do not amount to any representation in law. The liability for the payment of the ground rent arises out of the contract and the lease-deed between the parties. This liability is created by express agreement in writing between the D.D.A. and the petitIoners. The entire transaction is in the realm of contract or private law and not in the realm of public law at all. The doctrine of promissory estoppel as stated in the M. P. Sugar Mills case is limited to public law areas. It appears that the allegations regarding the representation through the D.D.A. Act and the Home Ministry Instructions are being pressed with a view to bring the case within the ratio of M. P. Sugar Mills case. We are of the view that the petitioners cannot derive any support for their claim from the said decision of the Supreme Court. Since the transaction is entirely in the realm of contract, the petitioners will have to file a suit to enforce the specific performance of the contract or to claim damages, by means of a civil suit. Writ petition is not a remedy for enforcing contractual obligations. The petition fails on this ground alone.”
(15) A somewhat similar question was considered by a Bench of this Court in Sanjiv Prakash v. New Delhi Municipal Committee . It is sufficient to set out only a few of the facts of that case which are relevant for our present purpose. The New Delhi Municipal Committee had devised a scheme for allotting shops in the Palika Bazar Complex. Some of the shops were allotted in accordance with the terms and conditions of a tender which had been submitted by the allottees. Certain other shops had been allotted to certain stall-holders of Panchkuin Road in lieu of their surrendering their shops in that road so as to enable the New Delhi, Municipal Committee to utilise the lands under their stalls for widening the road. The Committee had also evolved a scheme of trade zoning restriction by which only some trades were permitted to be carried on in each zone of the Complex. It was the common case of the parties that this restriction was not made applicable to the shopkeepers of Panchkuin Road. The allottees did not conform to the trading zoning restriction as a result of which they were served with notices for showing cause as to why their licenses should not be cancelled and hence the writ petitions. The learned single Judge allowed the writ petitions holding that the Committee could not insist on the allottees adhering to the zoning system which had cracked up, particularly when the Panchkuin Road traders were under no such obligation. He also did not think that the mere fact that the petitioners had themselves tendered for a particular zone knowing fully well the restrictions of the zone made any difference. Appeal by the New Delhi Municipal Committee on this aspect of the case was allowed by a Division Bench of this Court. After pointing out that the Panchkuin Road stall-holders and the other tenderers formed two distinct categories, the Bench observed: “THE terms and conditions for 177 shops were published and were known to each of the tenderers when he gave the tender. To make now a grievance that because of the Panchkuin traders not observing trade zoning restriction they are suffering losses is really to ask for a relief on the alleged ground of breach of terms of the license-deed and not on the ground of any infection of constitutional sights of the appellant, for it is well settled that “after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter se’. No question arises of violation of Article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field. perform any act. In this sphare, they can only claim rights conferred upon them by contract and are bound by the terms of the contract [see Radhakrishna Agarwal v. State of Bihar .”
(16) We should also like to refer to Jamna Devi v. UOI- C.W. 783172 decided on 25-5-1982 (14) by one of us (Ranganathan, J.) in which a writ was issued, following Radhakrishna Agarwal’s case, to restrain the Union from re-entering certain premises given to the petitioner on lease for alleged infringement of its terms and conditions. The judgment itself points out that that was a case which fall within the category of cases represented by D.F.O. South Kheri v. Ram Senehi Singh rather than that represented by M/s. Radhakrishna Agarwal’s case . If interpreted more broadly, that decision cannot prevail in the face of the later Supreme Court decisions and the decisions of this Court which have been referred to above.
(17) Cases relied upon by the petitioners : The above decisions, in our opinion, fully bear out the contention raised by the learned counsel for the respondents in the present case that the present writ petitions under Article 226 are not maintainable and that they should be rejected accordingly. Learned counsel for the petitioners, however, tried to meet this point by referring to some decisions which may now be noticed. The first decision relied on is that of Chowgule and Company, Goa and another v. Union of India and others (AIR 1982 Goa 19) (15). But, here though the levy or charges which was complained of was properly made under a contract, the contract was entered into by virtue of the statutory provisions contained in the Electricity Act, 1910. The charges, though mentioned in the contract, were levied by virtue of the power conferred on the licencing authority under Section 23, read with Section 51A of the said Act. It is very clear tat the facts of this case bring it squarely into the second category of cases referred to by the Patna High Court and approved by the Supreme Court in M/s. Radhakrishna Agarwal and others v. State of Bihar and others . The second decision relied upon was that in D.F.O. South Kheri v. Ram Sanehi Singh . This case has been distinguished by the Supreme Court itself in M/s. Radhakrishna Agarwal’s case (supra) as one falling in the second category of cases. Reference was next made to the recent decision of the Supreme Court in Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd. . But before referring to the decision in this case it is necessary to refer to the decision in Ramana Dayaram Shetty v. The International Airport Authority of India and others on which learned counsel for the petitioner placed the greatest reliance. Counsel took us through several passages in this authority and tried to urge before us that, after this decision, even acts of the State or local authority in the contractual field would be open to review for petitions under Article 226 of the Constitution. Counsel indeed urged that all the Court had to consider in a case of this type was whether the grievance arose in the context of the exercise of a governmental function or not. It was contended that if, as in the present case, the matter out of which the grievance of the petitioner arose is a governmental function then the further circumstance that the right sought to be enforced was that under a contract should not deter the Court from entertaining the petition and issuing appropriate directions to the Government under Article 226. It was submitted that in the present case the Dda by virtue of powers vested in it under the Development Act as well as by way of delegation by the President of India was exercising full control over practically the entire land in Delhi so as to ensure that what land was properly and equally distributed for purposes conducive to the development of the city. It was, therefore, said that entering into leases, the working of the leases, the enforcement of the rights under the various leases and even their cancellation were all constituent elements of the exercise of his statutory functions and that, therefore, this was a case eminently fit for consideration under Article 226 of the Constitution.
(18) We do not think that the decisions cited by the learned counsel support this wide proposition. We have already referred to the decision in M/s. Radhakrishna Agarwal’s case, Parmar’s case as well as in the case of Bishwanath Tea Co. Ltd. which reject such a contention in no uncertain terms. The “camouflage of statutory obligations” raised by the argument in the present case is much thinner and more unreal than that with which the argument was enveloped in the Bishwanath Tea Co. and Parmar cases, discussed above. There is, in this case, no “statutory flavour” in regard to the contract in question. The mere fact that the lease was entered into in pursuance of an enabling power in the Government Grants Act to Statutory Registration can be no more useful to the petitioner than the fact that the terms of the lease deed in Bishwanath Tea Co.’s caste were in pursuance of an enabling provision in rule 37 of the relevant regulations. Though this itself is sufficient answer to the contention raised by the petitioner, we would also like to point out that neither Ramana Dayaram Shetty nor that of Gujarat State Financial Corporation .support the very broad contention raised by the petitioner. There are paragraphs 11, 12 and 20 in the former case which show that the Court was primarily concerned with a case of the Government prerogative “to enter into contracts” with such persons as it might like and not with actions taken by the Government under the terms of a contract entered into by it. They do not support the extreme argument that the enforcement of a contractual right becomes amenable to interference under Article 226 once it is found that the party to the contract exercising the right is the Government, a statutory authority or some other instrumentality. Learned counsel for the petitioners relied on certain passages from Ramana Dayaram Shetty v. The International Airport Authority of India and others where the discussion is in the context of the question whether the Airport Authority was a State instrumentality. These massages have, in our opinion no relevance in the present context. The question here is not whether the Dda is a State instrumentality or not-it clearly is-but the question is whether the grievance complained of is a grievance flowing from the exercise of public duty of a statutory authority or other sovereign power or whether the grievance turns purely on the interpretation and enforcement of a contract between the parties. The decision in Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd. is also not of much help to the petitioners. In that case the appellant Corporation had entered into a contract with the Lotus Hotels Pvt. Ltd. agreeing to advance certain monies to the Hotel. The contract provided that the advance will be made at an interest of 12″ per cent p.a. if re-finance to the Corporation was available from the Industrial Development Bank of India (IDBI) at 9% p.a., but, that, otherwise, interest from the Hotel will be charged at 13% p.a. The IDBI refused to give finance to the Corporation for certain reasons which were extraneous to the contract between the Corporation and the Lotus Hotel and as a consequence the Corporation also wanted to back out of the agreement with the Hotel. A petition under Article 226 of the Constitution of India by the Hotel was accepted by the High Court and the Supreme Court and a writ of mandamus was issued to the Corporation to disburse the loan as agreed upon. In so doing, the Supreme Court applied the principle of promissory estoppel and restrained the Corporation from backing out of its obligations arising out of a solemn promise made by it to the Hotel. The decision was also rested on another ground :
“VIEWING the matter from a slightly different angle altogether, it would appear that the appellant is acting in a very unreasonable manner. It is not in dispute that the appellant is an instrumentality of the Government and would be ‘other authority’ under Article 12 of the Constitution. If it be so, as held by this court in R. O. Shetty v. International Airport Authority of India the rule inhibiting arbitrary action by the Government would equally apply where such corporation dealing with the public whether by way of giving jobs or entering into contracts or otherwise and it cannot act arbitrarily and its action must be in conformity with some principle which meets the test of reason and relevance.
NOW if appellant entered into a solemn contract in discharge and performance of its statutory duty and the respondent acted upon it, the statutory corporation cannot be allowed to act arbitrarily so as to cause harm and injury, flowing from its unreasonable conduct, to the respondent. In such a situation, the court is not powerless from holding the appellant to its promise and it can be enforced by a writ of mandamus directing it to perform its statutory duty. A petition under Article 226 of the Constitution would certainly lie in direct performance of a statutory duty by ‘other authority’ as envisaged by Article 12.”
(UNDERLININGours)
FROM these observations it will be seen that the case fell within the second category of cases discussed in M/s. Radhakrishna Agarwal’s case . We have, therefore, come to the conclusion that neither of these decisions support the broad proposition contended for by the petitioners’. These two decisions do not contain anything to whittle down the principle enunciated in M/s. Radhakrishna Agarwal’s case and followed in Parmar and Bishwanath Tea Co.’s cases.
(19) We do not wish, however, to be understood as saying that there are no circumstances at all in which a contract entered into on behalf of the Government would be amenable to interference under Article 226 of the Constitution. This branch of law is still in a process of evolution. The proliferation of statutory authorities and public corporations has brought into existence a huge contractual field in which the terms and conditions of the contract are practically dictated by the monopolistic limbs of State or other public authority and the other party to the contract has very little say in regard to the terms and conditions to which he is supposed to have agreed. In this state of things situations are likely to arise which may justify interference under Article 226 even in such cases. We may indicate two situations, in which, it seems to us, an exception can be made to the general rule outlined in M/s. Radhakrishna Agarwal’s case and the other cases referred to above. The first covers cases where, after entering into a contract, the Government purports to exercise certain rights under the contract but, in reality, the Government is exercising its executive power in an arbitrary and unreasonable manner, so as to violate the fundamental rights of citizens. In such cases, though the Government is ostensibly acting under the terms of a contract it can be said, in reality, to be an exercise of the executive power of the State that is being challenged. This may be a way of looking at the decision in Gujarat State Financial Corporation v. Lotus Hotel Pvt. Ltd. In that case, as already discussed, the agreement itself envisaged the possibility of a re-finance not being available and provided that, in that contingency, the Corporation’s loan would carry interest at 13% p.a. Despite the specific provision to this effect in the contract the public corporation, which was a State authority, acted arbitrarily so as to cause harm and injury flowing from its unreasonable conduct to the respondent. The conduct of the State Corporation did not at all flow out of any of the terms of the contract. Though, in form, it appeared to be a case where the Corporation was refusing to perform its obligations under the contract, in truth and fact it was a case where the Corporation was acting arbitrarily and outside the terms of the contract. It was a case of colourable exercise of a power available purportedly under the contract but which was in truth not available and which was explicable only as a high-handed and arbitrary conduct of a statutory authority. The decision in Jamna Devi’s case, referred to earlier, can also be explained on this principle.
(20) The second situation which comes to mind perhaps involves an extension of the same principle. This is of cases where a term of a contract “imposed” by the State or authority on the citizen is contrary to law and, thus, non est. An action of the State, insisting on the observance of such a term of the 847 contract would, in substance, be an act in the exercise of its executive or statutory power rather than as a contracting party simpliciter. A striking illustration of this situation is provided by the recent decision of one of us (Wad, J.) in Modern Automobiles v. Union of India (CW 777183) (18) and a batch of connected cases disposed of on 30-11-1983. The petitioners in that batch of cases were successful tenderers for the purchase of certain stores from the Director General, Supplies and Disposals (DGS&D), Government of India. Both parties to the contract were registered dealers under the Delhi Sales Tax Act, 1975. Earlier, the contraction used to be exempt from sales tax on their furnishing a declaration form (ST-I) in accordance with the provisions of the Sales Tax Act. However, on 28-12-1981, the DGS&D passed an office order to the effect that declaration forms should not be accepted from purchasing dealers and directing that they should pay sales-tax on their purchases separately. The form of contract was also amended to introduce a special condition to the above effect. It was such an amended contract entered into between the parties that came up for consideration before the Court. The petitioners seem, subsequently to have realised that the above new condition in the contract was contrary to the express provisions of the Sales Tax Act, and they filed writ petitions challenging the validity of the office order and of the amendment to the special conditions of contract. The DGS&D resisted the writ petitions on the ground that the condition was not inconsistent with the Sales Tax Act and that, in any event, the petitioners having agreed to such a term contractually should be deemed to have waived their right to exemption. Wad. J. found that the Sale’s Tax Act and Rules conferred a right to exemption on the purchasing dealer on giving a declaration form, and a duty on the selling dealer to accent such a form. On the second argument, the learned Judge observed :
“IT is then submitted that the right to exemption is waived by the petitioners through a contract. What is challenged in the petitions is not only the contract. but also the amendment in the general conditions of contract introduced by Office Order 120 dated 28-12-1981. Right to claim exemption is created by the Act and Rules. The Special or General Conditions of Contract must act in furtherance of and not contrary to the statutory provisions. Amendment to Clause 10 in the Special Conditions to the effect that sales-tax declaration forms will not be accepted is directly in breach of Rule 7(1) also. Direction to pay sales-tax in the said amendment is contrary to Sections 4 and 5 of the Act. The validity of this amendment has been separately challenged by, the petitioners and they are entitled to do so. Once it is held that the said amendment to Clause 10 is contrary to Sections 4 and 5 of the Act and Rule 7(1) of the Rules and, therefore, void it is obvious that no such term can be incorporated in a contract with the purchasing dealers. It is no answer to say that the purchasing dealer has agreed to the incorporation of an illegal term of a contract. It must be remembered that these are standard form contracts and being Government contracts are mostly one-sided. The citizen as a contracting party has no liberty to settle the terms of the contract as in the normal commercial contracts. If he is not to be out of business he has no option but to agree to the terms of contract already settled by the Government. A citizen has a right to expect that the government will respect the statutory provisions and would not act contrary to it by imposing different terms in the contract. A term in a contract, contrary to the expressed provisions of a statute is illegal and void and the contract would be read as if no such illegal condition exists in a contract.”
IT is not necessary, for the purposes of the present case, to discuss these aspects at greater length or express a final opinion in regard thereto. Suffice it to say that, in the present case, there are no unusual features of the above type. The case is a clear and simple one of enforcement of an ordinary contractual right which is fully governed by the principle of the Radhakrishna Agarwal’s case.
(21) CONCLUSION: For the reasons discussed above, we uphold the preliminary objection raised on behalf of the respondents that the petitioners are not entitled to seek the issue of a writ from this court directing the respondents not to re-enter the premises in question. As we have already stated, we have not gone into the question of the interpretation of the lease deed and we express no opinion on the merits of the respective contentions urged by the parties in this regard. Towards the end of the hearing, the petitioners also sought to raise a contention that the cancellation of the lease had not been done by an authority competent to do so. As we are dismissing the writ petitions on a preliminary ground, we express no opinion on this plea. It will be opened to the petitioners to take these and other objections open to them in law in appropriate proceedings, if any, that the petitioners may be advised to take to seek an enforcement of their rights. The writ petitions, therefore, fail and are dismissed in liming as not maintainable.