JUDGMENT
S.S. Nijjar, J.
1. By agreement of the counsel for both the parties, the writ petition is heard for final disposal. In view of the preliminary objections raised by the learned counsel for the respondents at the time of arguments. We deem it appropriate to make a reference to the pleadings of the parties in extenso.
2. An advertisement was issued by the Food Corporation of India (hereinafter referred to as “the FCI”) for inviting tenders for handling and transport contractor at Food Storage Depot of the FCI at Nakodar. The petitioner submitted his tender, which was accepted by the FCI by telegram dated 5.10.2002. The contract was for a period of two years w.e.f. 5.10.2002 till 4.10.2004. The petitioner was awarded the contract at 158% Above Schedule of Rates (hereinafter referred to as “ASOR”). He was asked to deposit the security amounting to Rs. 35,000/- with Divisional Manager, FCI, Jalandhar within a week time and take up the work immediately. The petitioner immediately approached the office at Nakodar to deposit the security amount. He was told that the security amount is to be deposited at Jalandhar. When he went to Jalandhar, he was told that he should deposit the amount at Nakodar. The petitioner was, therefore, shuffled between the two Offices from 5.10.2002 till 25.10.2002. Ultimately, the petitioner made a written application on 25.10.2002 which is attached as Annexure P2 to the writ petition to the District Manager, FCI, Jalandhar, respondent No. 4 for deposit of the security. The petitioner thereafter went to Nakodar to join as Transport Contractor. He was not permitted to join by Shri Gurdev Ram, Assistant Manager, FCI, Food Storage Depot, Nakodar, District Jalandhar, respondent No. 5. It has been stated that respondent No. 5 was hand in glove with the local contractors. He was, therefore, not interested that the petitioner should be permitted to join or execute the contract. One of the reasons for this could be that the petitioner had taken the contract at 158% ASOR whereas he local contractors were doing the work at much higher rates. Respondent No. 5 was, therefore, least interested to permit the petitioner to join and told him to go and join in the Office of District Officer, Jalandhar. However, the District Officer, Jalandhar again told the petitioner to go to Nakodar. When the petitioner went back to Nakodar to join, he was physically prevented from doing so. In fact, respondent No. 5 had collected a large number of members of the Local Truck Union in his Officer who were obstructing the petitioner in joining. Ultimately, the petitioner gave the joining report in writing on 23.11.2002 (Annexure P3) to respondent No. 5 with a copy to respondent No. 4. Inspite of having accepted the joining report, respondent No. 5 did not permit the petitioner to execute the contract, and rather sent the joining report to District Manager at Jalandhar. There was no need to send the report to Jalandhar as the contract pertains to the Office at Nakodar. Repeated requests of the petitioner for being permitted to execute the contract, were rejected without any reason. When the petitioner went to the Office of respondent No. 5, he was again faced by a hostile crowd of local transport operators of that area. The petitioner was threatened to leave the contract or to face dire consequences. The petitioner was therefore, constrained to file Crl. Misc. No. 50012-M of 2002 on 26.11.2002, for a direction to the Senior Superintendent of Police, Jalandhar, Deputy Commissioner, Jalandhar, Station House Office, Police Station Nakodar District Jalandhar to take appropriate steps to provide police protection to the petitioner so that he may be able to perform his contract and be able to load and transport the food grains from the godown of FCI, Nakodar. The aforesaid petition was disposed of by this Court on 28.11.2002 with the following observations:-
“Heard. The petitioner seeks intervention of this Court in law and order problem which has arisen in Jalandhar.
This petition is disposed of with a direction to the District Magistrate, Jalandhar to look into the matter and take appropriate steps.
Copy of the order be given dasti on payment of usual charges.
Sd/-
Amar Dutt, Judge.”
3. In this petition, it was pointed out that the petitioner had received the three telegrams dated 20.10.2002, 29.11.2002 and 30.11.2002. It was also stated that the telegram dated 29.11.2002 and 30.11.2002 had been issued much prior to the dates mentioned in the telegrams dated 29.11.2002 and 30.11.2002 had been issued much prior to the dates mentioned in the telegrams. The telegrams were clearly pre-dated to create evidence against the petitioner. Pursuant to the orders passed by this Court, the District Magistrate, Jalandhar informed the SSP, Jalandhar by letter dated 10.12.2002 that Truck Operator Union, Nakodar may create law and order problems at the time of lifting of food grains by the petitioner. Keeping in view the orders passed by this Court, the SSP was requested to direct the SHO concerned to provide sufficient police assistance to the Area Manager, FCI so that the law and order could be maintained while the food grains are transported at Nakodar, The SDM Nakodar was directed to be the Duty Magistrate for this operation. The SDM Nakodar investigated the matter and submitted the report dated 12.12.2002 to the District Magistrate, Jalandhar. The SDM in his report has come to the conclusion that the petitioner had been granted the contract. He gave his Joining Report on 10.12.2002. He was given police protection for joining, but the Assistant Manager did not allow the said Contractor to join. The Assistant Manager had been called by the SDM. On 9.12.2C02 and advised to accept the joining report of the petitioner. But the Assistant Manager stated in a casual manner that the petitioner may give his joining report in his office. On 10.12.2002, the petitioner went to the office of respondent No. 5 along with police protection for giving his joining report which respondent No. 5 refused to accept. The SDM has stated that respondent No. 5 is not accepting the Joining Report because of his connivance with the old contractors. The apprehension of the petitioner about danger to his life was accepted by the SDM and he had recommended police protection. The SDM even recommended that legal action may be taken against the Assistant Manager, FCI FSD Nakodar who is not allowing to the petitioner to join duty. Inspite of the aforesaid findings of the SDM, respondent No. 5 did not allow the petitioner to join duty. The petitioner, therefore, sent another joining report to the respondents through courier on 11.12.2002. Even then the petitioner was not allowed to join duty. Again the petitioner submitted representation on 12.12.2002, requesting respondent No. 3, Sr. Regional Manager to allow the petitioner to execute the contract. The petitioner also submitted representations to the Chief Minister, Punjab and the Commissioner, Jalandhar Division, Jalandhar. Even the car of the petitioner was attacked by the Local Transporters when he was going to submit the joining report. Instead of granting any relief, the respondents have arbitrarily cancelled the contract granted to him by orders passed by respondent No. 3. Sr. Regional Manager, FCI, Chandigarh. During the period mentioned above, from October, 2002 onwards the petitioner was not being permitted to execute the contract. The respondents got the work done from the local contractors who were obstructing the petitioner at the rate of 245% ASOR. Notices to this effect were sent to the petitioner stating that the petitioner had failed to execute the contract, which is being carried out at his risk and costs as per Clause X(c) of MTF for loading of the planned as well as wheat export specials. The petitioner had been informed to take up the work forthwith. This letter was written on 2.11.2002. By letter dated 29.11.2002, the petitioner was informed that the work had been done through Shri Jai Ram at the rate of 245% ASOR. The petitioner was directed to deposit the excess amount of Rs. 2,16,989.00 with FCI. The amount was therefore, recovered from the account of the petitioner at Kapurthala. A fax message was sent to the District Magistrate, Kapurthala to recover the amount of Rs. 3,43,138/- (Annexure P15). Since the petitioner is handling a transport contract at Kapurthala, the money has been deducted from the amount payable for the Kapurthala contract. It is further the case of the petitioner that award of contract to the local truck operator at 245% ASOR was managed and planned by the Assistant Manager in connivance with the motive of respondent No. 5 to let the petitioner be thrown out from the contract so that the contract would be awarded at much higher rates to the local truck operators who would then share the booty with the Assistant Manager. The petitioner submitted a representation to the Zonal Manager on 20.4.2003 (Annexure P16). No action has been taken by the Zonal Manager, even though a reminder was also sent by the petitioner on 24.4.2003. The petitioner through this writ petition under Articles 226/227 of the Constitution of India challenges the impugned order, Annexure P12 illegally terminating the contract which had been awarded to the petitioner and the order, Annexure P15 illegally recovering the amount of Rs. 3,45,138/- from the account of the petitioner with regard to the contract at D.M. FCI, Kapurthala.
4. The respondents have filed a joint written statement through the District Manager, FCI, Jalandhar (respondent No. 4). The case as set up by the petitioner has been denied. The grant of the contract to the petitioner is not disputed. It is, however, stated that the petitioner was required to deposit 50% security amount with the FCI at Jalandhar within a week time. A telegram was issued to the petitioner to this effect on 10.10.2002. Since the petitioner did not respond to the Corporation’s request, reminder telegram was issued on 14.10.2002. In this telegram, it was pointed out that the security be deposited within seven days failing which “the work will be got done at your risk and costs”. A time bound notice was also issued to the petitioner by Regional Office vide letter dated 19.10.2002. The petitioner deposited the requisite amount of security at the District Office of the Corporation at Jalandhar on 25.10.2002. Again on 26.10.2002, the petitioner was requested to join the work at Nakodar and to carry out the depot operation as per the direction of respondent No. 4. Since the petitioner did not join at the Centre upto 29.10.2002, he was sent a telegram on that date to join the work and to ensure loading of the food grains, failing which action would be taken against the petitioner in accordance with the tender conditions. There was still no response from the petitioner. Hence telegram dated 1.11.2002 was sent. Since the petitioner inspite of repeated reminders failed to join work at Nakodar depot, risk and cost arrangements on day to day basis were made through Jai Ram contractor on 245% ASOR under intimation to the petitioner. It is stated that respondent No. 5 cannot be hand in glove with any other contractor. The allegations of the petitioner are mere concoction and protests in order to avoid the risk and cost clause against the petitioner due to his lapses. The respondents admit the SDM, Nakodar called respondent No. 5 to his office on 9.12.2002 and insisted to accept the joining report of the petitioner in Office which was refused by respondent No. 5 as it was against the procedure and norms of joining the contract. Respondent No. 5 requested the SDM to direct the petitioner to submit his joining report in the depot where he has to carry out the work. The mode of transfer and infrastructure available with the petitioner could only be judged and verified at the depot. Due to failure of the petitioner to resume work inspite of the repeated requests and notices from respondents No. 3, 4 and 5, the contract of the petitioner was terminated and the work was got done at his risk and costs. To recover the risk and costs, the petitioner was requested by the District Office letter dated 13.12.2002 to deposit the amount of Rs. 3,43,138/-. It is admitted that the petitioner deposited the security on 25.10.2002 with the District Office at Jalandhar. It is denied that respondent No. 5 was against the petitioner or in favour of anybody. It is also denied that the petitioner was made to shuttle between Nakodar and Jalandhar. The petitioner was aware that the security had to be deposited at Jalandhar. There was no occasion for him to visit at Nakodar for the said purpose. It was mentioned in the telegram dated 5.10.2002 that he had to deposit the security with Deputy Manager, FCI, Jalandhar. He approached the District Office only on 25.10.2002 when the security offer was accepted on the same date. It is denied that the petitioner was physically threatened to prevent him from joining by respondent No. 5. The petitioner was unable to execute the contract and therefore, he has made malicious and baseless allegations to pre-empt the invoking of the risk and costs clause against him. According to the respondents, the joining report dated 23.11.2002 (Annexure P3) is a fabricated document and the petitioner deserves to be prosecuted under Section 464 and 471 of the Indian Penal Code. According to the respondents, the receipt register of the District Office, Jalandhar attached with the written statement as Annexure R7 does not anywhere indicate the receipt of the aforesaid letter. Thus, no question of forwarding the joining report to District Office at Jalandhar arises at all. The Despatch No. 807 shown in Annexure P3 does not exist as per the records maintained in the depot. The report of the SDM, Annexure P8 dated 12.12.2002 states that respondent No. 5 had been directed on 9.12.2002 to accept the joining report of the petitioner. This is contrary to the fact that the petitioner claims to have submitted the joining report on 23.11.2002. There is no mention of the joining report dated 23.11.2002 in the report, Annexure P8. It is denied that the petitioner ever approached the Office of respondent No. 5 at Nakodar for joining work. It is further stated that the telegram dated 29.11.2002 is in fact dated 29.10.2002, and therefore, there is no question of pre-dating the telegram as alleged by the petitioner. The respondents further state that they were not party to the Criminal Misc. Petition and no directions were issued to them by this Court. The petitioner may not have made any effort to join the contract for fear of other contractors for which the answering respondents cannot be held responsible. If respondent No. 5 had maliciously not accepted the joining report of the petitioner, the matter could have been reported to the higher authorities of the Corporation, such as DM, Jalandhar. The stand taken by respondent No. 5 before SDM, Nakodar that the petitioner should submit the joining report at the depot where the work is to be executed was correct as verified by the Committee of Officers of the District Office who have reported that respondent No. 5 is nowhere guilty of not accepting the joining report of the petitioner at the Office of the SDM. The respondents further stated that on 21.12.2002, the Deputy Commissioner, Jalandhar was informed about the non-joining of the petitioner to undertake the contract. The Committee of three officers was constituted to find out the reality and facts of the case. As per the report of the Committee, it is established that there is no delay on the part of any officer/official for non-accepting of joining report of the petitioner. Instead the petitioner himself is deliberately not joining as Transport Contractors for reasons best known to him and is passing the buck to FCI officials for the same. The Deputy Commissioner was further informed that in order to enable the petitioner to resume work at Nakodar, risk and costs arrangements made through Jai Ram on day to day basis for loading of food grains special scheduled for 24.12.2002 and 30.12.2002 because of the failure of the petitioner to join the special scheduled for 24.12.2002 had lapsed and was cancelled by railways for which the FCI suffered huge financial losses. The petitioner was again asked by telegram dated 25.12.2002 to make arrangements for loading of food grains Special on 30.12.2002, but he did not turn up, on account of which the Special schedule for 30.12.2002 also lapsed. The respondents also deny that the risk and cost arrangements have been made through the outgoing contractor.
5. The petitioner has filed a replication. The stand in the writ petition has been reiterated. It is stated that Annexure P3 is not a false and fabricated document. The averments made to this effect by the respondents are denied. It is further stated that when the petitioner appeared before the SDM, he made a statement that he had already submitted the joining report at the Food Storage Depot at Nakodar, but was not allowed to join. On 9.12.2002, respondent No. 5 was called by the SDM and advised to permit the petitioner to join, but again the petitioner was not permitted to join, Thereafter, the sequence of events narrated in the petition are reiterated. It is stated that inspite of the advice of the SDM, respondent No. 5 was adamant not to permit the petitioner to join. Under this compulsion, the petitioner had sent the joining report on 11.12.2002 through courier. It is further stated that since the Assistant Manager was adamant in not permitting the petitioner to join, it is not surprising that the same is not mentioned in the despatch register. The petitioner also denies the averments of the respondents that the telegram. Annexure R4 is dated 29.10.2002. The stamp on the top of the telegram bears the date of 29.11.2002 and 30.11.2002 at the bottom i.e., the date of the receipt of the telegram.
6. As noticed earlier, at the time of arguments, learned counsel for the respondents has raised two preliminary objections. He has submitted that the writ petition deserves to be dismissed as it involves disputed questions of fact. In support of this submission, learned counsel relies on a judgment of the Supreme Court rendered in the case of Kerala State Electricity Board and Anr. v. Kuriene Kalathtt and Ors., 2000(6) S.C.C. 293. Learned counsel has further submitted that this court cannot grant any relief to the petitioner as it would amount to specific performance of the contract. The claim of the petitioner can be duly compensated by grant of damages. In such circumstances even the Civil Court would not be competent to grant the relief of specific performance, as it would be barred under Section 14(i)(a) of the Specific Relief Act, 1963. No mandamus can be issued for the specific performance of the contract by the High Court in exercise of jurisdiction under Articles 226/227 of the Constitution of India. In reply, Mr. Patwalia has, however, submitted that since the aforesaid objections were not taken in the written statement, the respondents cannot be permitted to raise the objections at this stage. No material has been placed on the record by the respondents in support of the preliminary objections which have been raised. Even otherwise the writ petition does not involve any disputed questions of fact. In fact the entire relevant material is on record to enable the petitioner to make a prayer for the relief claimed.
7. We have noticed the pleadings at length, to satisfy ourselves as to whether there is any substantial dispute on facts. It is undoubtedly true that this Court, whilst exercising jurisdiction under Articles 226/227 of the Constitution of India, would not investigate complicated disputes with regard to facts. But this is a rule of practice and caution adopted by the High Courts. Generally speaking, this Court would be slow to interfere in matters where an in depth investigation may be necessary on facts which are disputed. However, in the present case, we find that the basic facts on which the petitioner claims the relief are well-established on the record. From a perusal of the pleadings notice above, it becomes apparent that;-
i) The petitioner is an established contractor with the FCI.
ii) The petitioner is executing contracts from other depots of the FCI in districts Kapurthala and Ropar.
iii) The contract for Nakodar was granted to the petitioner for a period of two years w.e.f. 5.10.2002 till 4.10.2004.
iv) The petitioner is prepared to perform the contract at the rate of 158% ASOR.
v) The petitioner deposited the security on 25.10.2002, but till date he has not been permitted to execute the contract.
8. From a reading of the aforesaid facts, we are satisfied that the petitioner is not in any manner responsible for non-performance of the contract.
9. The observation of the Supreme Court in the case of Kerala State Electricity Board (supra) would be of no avail to the case put forward by the learned counsel for the respondents. In the aforesaid case, the Supreme Court held as follows;-
“10. We find that there is a merit in the first contention of Mr. Ravat. Learned counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject matter of a writ petition. Whether the, contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not became statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature.
11. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. This is a matter for adjudication by a Civil Court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have relegated to other remedies.”
10. In the aforesaid case before the Supreme Court, the action of the respondents was not impugned on the touchstone of Article 14. There were also no allegations of mala fide, bias, victimisation or favouritism. The dispute had already been referred to the Labour Court. The question involved was with regard to the interpretation to be placed on a clause of contract. It was disputed that the contractor had actually paid the revised wages. Even considering the aforesaid facts, the Supreme Court held that “If a term of contract is violated, ordinarily the remedy is not the writ under Article 226”. We are of the opinion that he observations of the Supreme Court are consistent with the well-settled principles that in matters of contract, which involve resolution of complicated questions of fact, writ petition under Article 226 will not be the appropriate remedy. As we have noticed above, In our opinion, in this case the petitioner has clearly established the case pleaded in the writ petition. The grievance of the petitioner is that he has been unfairly and unreasonably prevented from executing the contract. Therefore, the Court has to examine as to whether respondent No. 5 has acted malafide, arbitrarily and in breach of Article 14 of the Constitution of India.
11. We also do not find merit in the submission of Mr. Garg that as the petitioner can be sufficiently compensated by grant of damages, therefore, no mandamus can be issued to the respondents directing them to permit the petitioner to execute remainder of the contract. Having noticed the manner in which the petitioner has been deprived of the opportunity to execute the contract, it would be putting a premium on the wrong already committed by respondent No. 5 to decline the relief to the petitioner. Generally speaking, and in normal circumstances, a writ petition under Articles 226/227 of the Constitution of India, would not be entertained, if the same is filed with the ulterior motive of avoiding the bar to the specific enforcement of a contract contained under Section 14(1) of the Specific Relief Act, 1963. Under this Section, the contract cannot be directed to be specifically enforced which is a contract for the non-performance of which compensation in money is an adequate relief. In the present case, the petitioner has challenged the wholly arbitrary and unreasonable action of respondent No. 5 in deliberately not permitting the petitioner to execute the contract. In such circumstances, it would be wholly inappropriate for this Court not to entertain the writ petition praying for a command to the respondents to execute bona fide the statutory duties which they are bound to perform in accordance with law. The petitioner has entered into contracts with the respondents for transportation of food grains from different depots. For future competition, the petitioner would have to establish the earlier satisfactory performance in similar contracts. Denying the relief of Mandamus to the petitioner in the present petition would adversely affect the chances of the petitioner for competing for similar contracts with regard to other depots in the future. When glaring irregularities committed by Officers of Corporation, which is an instrumentality of the State, are brought to the notice of the High Court, it cannot stand as a mute spectator. The wholesome jurisdiction of this Court under Articles 226/227 of the Constitution of India to do substantial justice, in the facts and circumstances of a particular case, cannot be fettered by technicalities.
12. We do not find any substance in the submission of Mr. Patwalia that the preliminary objections raised by the respondents cannot be considered as the same are not specifically pleaded in the written statement. Undoubtedly, it would have been more appropriate if the respondents had pleaded the preliminary objections in the written statement so that the petitioner would not have been taken by surprise. However, since the objections are purely legal in nature, we have permitted the learned counsel for the respondents to raise the same. It is worthwhile noticing that both the objections taken by the learned counsel for the respondents are not required to be supported by any further pleadings. The two preliminary objections can be taken on the basis of the facts pleaded by the parties, Therefore, no real prejudice has been caused to the petitioner by the preliminary objections being raised at the stage of arguments only.
13. Serious allegations of mala fide have been made against respondent No. 5 in the writ petition. Mr. Patwalia has vehemently argued that respondent No. 5 is hand in glove with the local contractors and has deliberately prevented the petitioner from executing the contract. According to the learned Sr. Counsel, the contract has been deliberately handed over to the local contractor at an exorbitant rate of 245% ASOR.
14. Mr. Garg has vehemently argued that the petitioner is entirely at fault. As noticed in the pleadings, the petitioner did not submit the joining report on the contract within the stipulated period. He deliberately came to join at Nakodar while in fact he ought to have gone to Jalandhar office. He has further submitted that even if obstruction is being caused by the local contractors, the petitioner cannot legitimately claim that respondent No. 5 has failed to perform his duty. Repeatedly, the petitioner has been asked to execute the contract, which he has failed to do so. Mr. Garg has further submitted that even though the petitioner has deposited the security, it would not be possible to permit the petitioner to perform the remainder of the contract as it would cause unnecessary complications. It is also submitted by the learned counsel that the deductions are being made from the amounts due to the petitioner from the other contract as the work which was allotted to the petitioner is being done on a day to day basis through Jai Ram, contractor.
15. We have considered the submissions made by the learned counsel for the parties. Undoubtedly, allegations of malafide have to be proved by clear and cogent evidence. As noticed earlier, the petitioner is a bonafide contractor who was granted the contract after offering better rates than any other competitors. It also becomes evident that the petitioner has been prevented from performing the contract due to the law and order situations created by the local contractors. This fact is evident from the order passed by this Court on 28.11.2002. Clear direction was issued to the District Magistrate, Jalandhar to look into and take appropriate steps. The matter was referred by the DM, Jalandhar to SDM, Nakodar for enquiry. The SDM has given the following categoric findings:-
“From
Sub Divisional Magistrate
Nakodar
To
District Magistrate
Jalandhar.
No.4661/2/30 dated 12.12.2002
Sub: Application from Harmesh Chand s/o Sh. Shiv Chand r/o Bhedian PO Kathgarh Tehsil Balachaur Distt. Nawanshahar.
Sh. Harmesh Chand s/o Sh. Shiv Chand Village Bhedian Tehsil Balachaur, Distt. Nawan Shahar was awarded contract of Transport Carriage (handling and transporting of goods) of F.C.I. F.S.D. Nakodar. He gave his joining report at F.S.D. Nakodar but on dated 10.12.2002, he was given police protection for joining but the Assistant Manager did not allow the said contractor to join. I wish to submit here that I called for the Assistant Manager on 9.12.2002 and advised him that the joining report of the new contractor may be accepted as per law but he stated in a casual manner that he may give his joining report in his office. On dated 10.12.2002, Harmesh Chand Contractor went to F.C.I. F.S.D. Centre along with the police protection for giving his joining report, but the Assistant Manager refused to accept the joining report. Here it seems that due to the connivance of the Assistant Manager F.C.I. F.S.D. Nakodar with the old contractors, he is not accepting the joining report. Thereafter, Harmesh Chand told me that he has given the joining report through courier. Harmesh Chand Contractor has requested that there is danger in his life, so he has demanded the police protection. So I recommend that police protection may be given to the new contractor and along with the same, legal action may be taken against the Assistant Manager, F.C.I. F.S.D. Nakodar who is not allowing for joining the duty.
Sd/- Sub Divisional Magistrate
Nakodar.”
16. A perusal of the above shows that respondent No. 5 was given full opportunity to perform his duty and to permit the petitioner to join. The advice of the SDM was callously disregarded by respondent No. 5. The SDM was casually informed that the petitioner can submit joining report in the office of respondent No. 5. The petitioner went along with the police protection for giving joining report, but respondent No. 5 refused to accept the same. There is a categoric finding of the SDM that due to the connivance of the Assistant Manager, FC1 FSD, Nakodar with the old contractor, he is not accepting the joining report. The petitioner even pleaded before the SDM that there is danger to his life. So he demanded police protection. The SDM has recommended that the police protection be given to the petitioner. It has also been recommended that legal action be taken against respondent No. 5, who is not allowing the petitioner to execute the contract. Respondent No. 5 has not cared to challenge the aforesaid remarks in any proceedings in any court of law. He has not even cared to file a reply to the allegations of malafide made in the present writ petition even though he has been impleaded by name. Counsel for the respondents merely stated that a joint written statement has been filed. From the record it becomes apparent that the written statement has been filed by respondent No. 3. He cannot possibly be in a position to answer the allegations which have been made specifically against respondent No. 5. Since there is no reply to the allegations made in the writ petition against respondent No. 5, the same have to be accepted, as pleaded. Faced with this situation, Mr. Garg has pointed out that the report of the SDM asking respondent No. 5 to take the joining report of the petitioner is contradictory. The petitioner had claimed that he has submitted the joining report on 23.11.2002. Therefore, there was no occasion to ask respondent No. 5 to take the joining report on 12.12.2002. We are unimpressed with the aforesaid submission. A perusal of the report which has been reproduced above, clearly shows that the SDM was making genuine efforts to settle the dispute. Merely because the joining report dated 23.11.2002 is not mentioned in the report Annexure P8 would not lead to the conclusion that the report of the SDM is contradictory in nature.
17. Mr. Garg has also placed strong reliance on the report submitted by a Committee of three Officers of Food Corporation of India in which it is held that there is no irregularity on the part of the Assistant Manager (D) FSD, Nakodar in refusing to accept the joining report of the petitioner in the office of the SDM i.e., outside the depot premises as desired by the SDM, Nakodar. We are of the opinion that Mr. Patwalia has rightly submitted that the aforesaid report cannot be relied upon as the petitioner was not associated with the enquiry. Not only this, no notice was issued to the SDM also whose decision is sought to be nullified in the aforesaid enquiry report. It is also noteworthy that the enquiry report is not given by any higher authority of the Food Corporation of India. The Enquiry Committee consisted of G.S.Bhatia, Asstt. Manager (STG), D.K. Aggarwal, Asstt. Manager (A/CS) and Amarjit Kaypee Asstt. Manager (Cont) RTC, FCI DO, Jalandhar. These officers are of the same Rank as respondent No. 5. In our opinion, the report of this Committee is a mere eye wash which has only been given to nullify the findings recorded by the SDM, Nakodar.
18. We are of the considered opinion that the action of respondent No. 5 in not permitting the petitioner to execute the contract is mala fide and therefore, wholly arbitrary and violates Articles 14 and 19(1)(g) of the Constitution of India.
19. Surprisingly, in a communication addressed by the Distt. Manager to the Deputy Commissioner-cum-District Magistrate, Jalandhar on 21.12.2002 justifying the action of respondent No. 5, it has been mentioned as follows;-
“At the moment the risk & cost arrangements have been suspended temporarily to prove an open opportunity to Sh. Harmesh Chand to join and undertake the transportation work of Nakodar Centre. It is, therefore, requested that Sh. Harmesh Chand s/o Sh. Shiv Chand may kindly be suitably advised to join at Nakodar as T.C. for loading of food grains spls. scheduled for 24.12.2002, 30.12.2002 and thereafter for which this Officer will extend all needed assistance help in undertaking the work.”
20. Taking a cue from the aforesaid Mr. Patwalia has submitted that even at this stage, the petitioner is prepared to commence the work immediately. The petitioner is even prepared to make his own arrangements for the trucks. Mr. Garg, learned Sr. Counsel has however, submitted that this would now cause too many complications. According to the learned counsel for the respondents, the writ petition deserves to be dismissed.
21. We are unable to accept the submissions made by Mr. Garg. It is by now a well-settled proposition of law that the State action even in the realm of contracts has to be fair, free from arbitrariness and must not be unreasonable. The State action also has to be free from malice in law. This view of ours finds support from the observation of the Supreme Court made in the case of Mahabir Auto Stores and Ors. v. Indian Oil Corporation and Ors., (1990)3 Supreme Court Cases 752 which is as follows:-
“12… In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 of the Constitution and must be reasonable and can be taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down..”
22. Again in the case of Food Corporation of India v. Kamdhenu Cattle Feed Industries, J.T. 1992(6) S.C. 259, the Supreme Court has categorically laid down as follows;-
“7. In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is “fairplay in action”. Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this element forming a necessary component of the decision making process in all State actions.”
23. We have examined the actions of respondent No. 5, keeping in view the principles of law laid down by the Supreme Court. As observed earlier, we find that the actions of respondent No. 5 are unfair and unreasonable, and therefore, cannot be justified under Article 14 of the Constitution of India. The work which was contracted to be completed by the petitioner at the rate of 158% ASOR is being got done on day to day basis from Shri Jai Ram at the rate of 245% ASOR. The huge difference in the rates, in our opinion, speaks volumes about the unfair treatment meted out to the petitioner. This huge difference in the rate is being deducted frem the amount due to the petitioner from handling the transport contract at Kapurthala. Not only the petitioner has been deprived of the benefits of the legitimate contract lawfully granted to him, the respondent Food Corporation of India has been put to huge loss. The deduction of the amount from the account of the petitioner at Kapurthala is without any sanction of law.
24. In view of the foregoing discussion, we allow the writ petition. Writ in the nature of Certiorari is issued quashing the order dated 17.1.2003 (Annexure P12) by which the contract of the petitioner has been cancelled and the order dated 30.3.2003 (Annexure P15) by which the District Magistrate, Kapurthala has been directed to recover the amount of Rs. 3,43,138/- from the account of the petitioner at Kapurthala. Writ in the nature of Mandamus is issued directly the respondents to permit the petitioner to continue to work in pursuance to the contract awarded to the petitioner on 5.10.2002. No costs.
25. Copy of this order be given dasti on payment of usual charges.