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TMI Blog2007 (1) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... Document was signed by both parties. Ext.P-2 is the agreement executed. By Ext.P-3 dated 8-3-1998, the site was handed over and the agreement was that project will be completed within fifteen months. According to the petitioner, only on 5-5-1998 drawings were made available by K.S.I.D.C. and even those drawings were not complete. On 20-8-1998, by Ext.P-4, final drawings were supplied to the Petitioner. Only on 22-12-1998, by Ext.P-5, the Respondent forwarded details of footings to be provided for the stub columns supporting the filter box, after closing of part of the work. Various correspondences took place between the parties. According to the petitioner, without fulfilling contractual obligations of the Respondents, by Ext.P-9 dated 13-1-1999, Chief Engineer of first Respondent cancelled the contract at the risk and cost of the Petitioner. Thereafter, by Ext.P-10 dated 10-4-1999 addressed to Managing Director of Respondent Corporation, the Petitioner made claims for ₹ 43 lakhs and requested him for arbitration and settling the issue. The claims were made on six grounds namely: 1. Return of security deposit ₹ 2 Lakhs with interest at 18%. 2. Idle La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 12,19,769 (Rupees Twelve lakhs nineteen thousand seven hundred and sixty nine only), within fifteen days on receipt of this letter. If you fail to adhere to this direction, we will be forced to proceed with R.R. Act. It is the case of the Petitioner that the above demand made by the Chief Engineer is wholly illegal and arbitrary. The Chief Engineer is not authorized to make such a demand and threaten the Petitioner to recover it under Revenue Recovery Act. When the petitioner's claim was rejected by the Managing Director, Petitioner has already approached the civil court and the case is pending in the civil court. It is submitted that without adjudication, the amount of damages even if payable cannot be determined for realising it from him through Revenue Recovery Proceedings. According to the petitioner, Company did not commit any breach, but, breach is on the part of the K.S I.D.C. and hence Respondent is liable to pay damages. 3. Contention of the Respondents is that even though Respondent company is a public sector undertaking, claim is arising out of Ext.P-2 contract, which is purely a contractual matter and a writ Petition under Article 226 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decree and executing it, the bank or the financial institution can new recover the claim under the Kerala Revenue Recovery Act. Since this Act does not create any new right, the person claiming recovery cannot claim recovery of amounts which are not legally recoverable nor can a defence of limitation available to a debtor in a suit or other legal proceeding be taken away under the provisions of the Kerala Revenue Recovery Act. Here, the contention of the Petitioner is that no amount is due to the K.S.I.D.C. from the Petitioner. In fact, amounts are due from the K.S.I.D.C. and a bona fide suit is instituted before the civil court for that. Before settling the question whether 'any amount is due' revenue recovery proceedings cannot be taken. 4. In this connection, we also refer to Clause 3 of the preliminary agreement which is as follows: 3. If the contractor does not come forward to execute the original agreement after the said work is awarded and selection notice issued in his favour or commits breach of any of the conditions of the contract as stipulated in Clause 14 of the Notice inviting tenders as quoted above within the period stipulated, KS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. That 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. It has been repeatedly held by the Apex Court that no Government Company is obliged to make a contract, but, once it makes a contract, it should be fair and reasonable and it should not be arbitrary. If there is patent illegality or wednesbury arbitrariness, the courts have jurisdiction to interfere in the same in a writ proceedings. In Tata Cellular v. Union of India (1994) 6 S.C.C. 651 it was held by the Apex Court that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in exercise of that power of judicial review. Onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermination of contract by KSIDC is illegal and suit for recovering damages is pending. 6. The maxim nemo livi esse judex vel suis jus dicere debet, i.e., no man can judge his own cause is accepted by Indian Courts in various decisions. See for example paragraph 17 of the decision in Bihar State Mineral Development Corporation v. Encon Builders (I)(P) Ltd (2003) 7 S.C.C. 418 and the decision in P.V. Paily v. State of Kerala A.I.R. 2000 Ker 268. We also agree with the contention that settled dues to the notified Government Company can be realised through revenue recovery proceedings as if it is a Government due and the dues should be an agreed or adjudicated amount. Dues cannot be demanded and recovered by revenue recovery proceedings according to whims and fancies of the parties. In this case, already a claim was made by the Petitioner. On its rejection by the Managing Director, the matter is pending in the civil court and claim by the KSIDC is not adjudicated. When the legality of termination itself is a question pending adjudication in a civil court, the Chief Engineer cannot make a demand and threaten the Petitioner with revenue recovery proceedings. Now, we will conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the adjudication should be by an independent person or body and not by the other party to the contract. The position will, however, be different where there is no dispute or there is consensus between the contracting parties regarding the breach of conditions. In such a case the Officer of the State, even though a party to the contract will be well within his rights, in assessing the damages occasioned by the breach in view of the specific terms of Clause 12. A Division Bench of this Court earlier, two decades ago in K.A. Ponnappan v. The D.F.O. Chalakudy and Ors. 1984 K.L.J. 853held that proceedings under the Revenue Recovery Act can be initiated only after determination of the amount even if it is a Government due. The Division Bench held as follows: In case the contract conceives of determination otherwise than through a civil suit such as arbitration, that may be the mode of determination. Normally the civil court will have to determine whether any damages is due and if so what the quantum is. Only on such determination of the amount it could be said to be due and then the Revenue Recovery Act can be put into action. Enforcement by resort to the Revenue Reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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