LexKISAN SAHKARI CHINI MILLS LTD. AND ORS. versus VARDAN LINKERS AND ORS.
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A B c D E F [2008] 6 S.C.R. 528 KISAN SAHKARI CHINI MILLS LTD. AND ORS. v. VARDAN LINKERS AND ORS. (Civil Appeal No. 5543 of 2004) APRIL 15, 2008 [R.V. RAVEENDRAN & LOKESHWAR SINGH PANTA, JJ.] Constitution of India, 1950 -At1.226 - Writ Petition - In regard to contractual dispute - High Court allowed writ petition anti quashed order of the Secretary (Sugar), whereby order of the Assistant Cane Commissioner, granting permission to First Respondent to lift 85,000 quintals of mo/asses from the five sugar mills in question at a price of Rs. 1271- per quintal, was cancelled - Challenge to - Held: On facts, the order of Assistant Cane Commissioner could not be considered to be a contract for supply of 85, 000 quintals of mo/asses to First Respondent - There was no material before the High Court to assume or come to the conclusion that there was a concluded contract- Cancellation order passed by the Secretary (Sugar) was fully justified and in public interest - No justification for the High Court to invoke the principles of legitimate expectation, estoppel, acquiescence and principle of part performance to make out a contract, where none existed or to give directions to the five independent sugar mills to supply huge quantities of molasses to First Respondent without any contract at an admittedly low price of Rs. 1271- per quintal - Administrative Action - Judicial Revi101w - Scope. Contract - Breach of - Remedy - Held: Remedies for G breach of contract being purely in the realm of contract are dealt with by Civil Courts - Public law remedy, by way of a Writ Petition under Art. 226 of the Constitution, is not available to seek damages for breach of contract or specific performance of contract - However, where contractual dispute has a public H /aw element, power of judicial review under Art.226 of the 528 + KISAN SAHKARI CHIN! MILLS LTD. AND ORS. v. 529 VARDAN LINKERS & ORS. -.ir Constitution may be invoked - Constitution of India, 1950 - A Art. 226. Sale of molasses produced by the six State controlled sugar mills in the State of Uttaranchal was controlled through the Molasses Sales Committee B ,+ constituted by the State Government. Tender notice was f issued inviting offers for purchase of molasses produced by five State controlled sugar mills from "bona fide consumers" outside the State. First Respondent, a proprietary concern in the State of Uttar Pradesh, submitted tender for purchase of molasses from one c sugar mill. It did not make any offer for purchasing molasses from the other four mills. As prices offered by the tenderers were found to be very low, the Assistant Cane Commissioner held negotiations with them. During negotiations, First Respondent purportedly offered to D ~+ purchase the entire stock of molasses of the five sugar mills at price of Rs.127/- per quintal. The Assistant Cane Commissioner passed order dated 26-3-2004, permitting the First Respondent to lift a total quantity of 85,000 quintals of molasses from the five sugar mills by 31-05- E 2004 at a price of Rs.127/- per quintal. Around that time, the State Government received several reports that the prevailing price of molasses was much higher. Finding serious irregularities in the order dated 26-3-2004 issued by the Assistant Cane Commissioner, the Secretary F _.+.. (Sugar) passed order dated 8-4-2004, staying operation of the order dated 26-3-2004 passed by the Assistant Cane Commissioner. First Respondent challenged the decision by filing writ petition in High Court praying inter a!ia to issue G directions to the appellants (the State Government, Controller of Molasses, Molasses Sale Committee and the five Sugar Mills) to continue the supply of molasses to him so that the entire allotted quantity of 85,000 quintals could be lifted on or before 31-5-2004. It contended that H 530 SUPREME COURT REPORTS [2008] 6 S.C.R. A the order dated 26-3-2004 was in pursuance of a concluded contract for sale of molasses and therefore the decision of staying the operation of the allotment letter was invalid and illegal. High Court, in the meanwhile, issued an interim direction to the State Government to B hold inquiry in the matter. Accordingly, the Secretary (Sugar) held inquiry and after giving hearing to First Respondent passed a detailed order dated 24-4-2004, holding that there was no valid contract for supply of molasses to First Respondent and therefore the
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