STATE OF MADHYA PRADESH AND ORS versus M/S. M.V. VYAVSAYA AND CO.

Citation: [1996] SUPP. 9 S.C.R. 321 · Decided: 28-11-1996 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed

Judgment (excerpt)

STATE OF MADHYA PRADESH AND ORS 
v. 
M/S. M.V. VYAVSAYAAND CO. 
NOVEMBER 28, 1996 
[B.P. JEEVAN REDDY AND S.C. SEN, JJ.] 
Constitution of India, 1950 : 
A1ticle 226 : 
Wlit Petition-Case, i11volvi11g disputed questions of fact-111terim or-
ders resulting i11 heavy loss to the revenue of the State-Held, the orders are 
outcome of total disregard of the nomis of the writ jwisdictiol1'. 
Power under-Of High Cow1-Is a supervisory power and not akin to 
appellate power. 
Jwisdictio11 unde1-<:ase involvi11g questions of fact-High Court nor-
mally does not go into and adjudicate upon disputed questions of fact. 
Relief undei-Resort to the A1ticle in order to wriggle out of the contract 
entered into-Held, not pennissible, except where there is statutory violation. 
Duty of the Court-Jn passing interim orderS-Cases pertaining to excise 
contract-Held, the Court should not take up the responsibility of staying the 
recovery of amounts due to the State unless a clear case of illegality is made 
out and the balance of convenience is duly considered. 
Irreparable loss to the state because of interim order passed by 
Court-Held; No one should be allowed to suffer account of the act (s) of 
the Court. It is duty of the Court to repair damages to the extent possible. 
Respondent firm who was highest bidder in public auction for 
A 
B 
c 
D 
E 
F 
grant of licences for country liquor and Indian made foreign liquor, G 
failed to fulfil certain conditions and therefore notice was given to it for 
cancellation of the licences and for re-auction. 
Respondent filed writ petition under Article 226 of the Constitution 
in High Court seeking directions not to withhold the permit, to issue forms 
and to ensure the supply of liquor as per the terms and conditions of the H 
321 
322 
SUPREME COURT REPORTS [1996] SUPP. 9 S.C.R. 
A licence. At the inception of the writ petition itself, it was brought to the 
notice of the Court that the case involved disputed questions of fact. The 
High Court passed repeated interim orders permitting the supply of liquor 
,to the writ petitioner under the supervision of the authorities, partial 
deposits of the amounts with the authorities and release of the balance to 
B the writ petitioners, on the basis of undertaking that he would meet all the 
financial commitments which he would ultimately be found liable for. 
The High Court also appointed a Commissioner to act as a conduit 
between both the parties and another commission was appointed to decide 
the disputes between the parties. Due to the interim orders, the State 
C incurred heavy loss. 
D 
In appeal against the above mentioned interim orders, the respon· 
dent firm did not appear before the Court. 
Allowing the appeal, this Court 
HELD : 1.1. All the impugned orders are the outcome of total 
disregard of the norms governing the writ jurisdiction. Such orders could 
never have been passed by the High Court-at any rate, without safeguard· 
ing the interests of the State. The proper course for the High Court was 
E to dismiss the writ petition at the very inception when it was brought to 
their notice that it involved disputed questions of fact. The orders of the 
High Court have resulted in substantial loss of revenue to the State • to 
the people. [330-E-H] 
1.2. The power of the High Court under Article 226 of the Constitu-
F tion is not akin to appellate power. It is supervisory power. While exercis· 
ing this power, the court does not go into the merits of the decision taken 
by the authorities concerned but only ensures that decision is arrived at 
in accordance with the procedure prescribed by law and in accordance with 
the principles of Natural Justice wherever applicable. Further, where there 
G are disputed questions of fact, the High Court does not normally go and 
adjudicate upon the disputed questions of fact. [328-H; 329-A-B] 
Chief Constable of the North Wales Police v. Evans, (1983) 3 All. 
Eng. Reports 141, relied on. 
H 
1.3. A person who solemnly enters into a contract cannot be 
.. 
STATEv. M.V. VYAVSAYAANDCO.[B.P.JEEVANREDDY,J.] 
323 
allowed to wriggle out of it by resorting to Article 226 of the Constitution. A 
Where there is statutory violation, interference would be permissible 
. even in the case of a contract hut not where the relevant facts are 
disputed which dispute calls for an elaborate enquiry which cannot be 
conveniently done by the High Court in a writ petition. [330-A-B] 
Har Shankar & Others v. 77ie Deputy Excise 

Excerpt shown. Read the full judgment & AI analysis in Lexace.