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The Supreme Court on Monday held that no writ of mandamus can be issued virtually by a High Court granting the writ for Specific performance of the contract/work order in a writ petition under Article 226 of the Constitution of India. 

A bench of Justice MR Shah and Justice BV Nagarathna added that the original writ petitioners, in such a case, should be relegated to file a civil suit for appropriate relief of losses/damage, if any, sustained.

The Municipal Council, Gondia through its Chief Officer approached the top court in appeal challenging an order passed by the Bombay High Court, Nagpur Bench whereby the High Court had quashed and set aside the action on the part of the Municipal Council in cancelling the work order, holding that Divi Works, the respondents were entitled to make the supply in pursuance of the said work order and to receive the payments as per the terms of the work order.

Municipal Council, running educational institutions/schools, had a requirement for benches, almirahs and tables in a school run by it.  almirahs and tables in a school run by it. Accordingly, a tender was issued and Divi Works being a successful bidder was issued a work order.

However, in view of Covid­-19 Pandemic and the lockdown in force, the Government of Maharashtra published a GR by which it provided that owing to Covid-19 restrictions impacting government finances, non-­priority expenditure like in the present case, should not be incurred.

The work order given to Divi was thus suspended till further orders.

Divi works approached the High Court which went on to set aside the action of the Municipal Council and held that Divi was entitled to make the supply in pursuance of the work order.

Before the top court, Divi argued that it had already manufactured the goods which were customized and therefore, if the Municipal Council is not directed to lift the customized manufactured goods it would suffer a huge loss.

Keeping Divi’s submission in mind, the top court on February 7, 2022, ordered thus,

“…. now as the schools have re-started, we direct the official of the petitioner to visit the place where the manufactured goods are kept and identify the goods which are immediately required, at this stage which shall not be less than 25% of the total quantity manufactured and also make a schedule with respect to the balance goods manufactured and when the goods will be lifted and payment shall be made.”

On inspection, the Municipal council informed the court that the goods did not meet the requirement of the work order and that they were not prepared for the Council as claimed by Divi.

Referring to the impugned judgment it was found that the High Court was made to believe that Divi had already manufactured the goods which were customized as per the specifications of the work order.

“Nothing was on record before the High Court that goods were in fact and actually manufactured by the original writ petitioner No.1,…. In absence of any evidence and material on record and there being disputed questions of facts the High Court ought not to have passed the impugned judgment and order directing the Council to continue the work order and accept the goods…”, the bench noted.

It was further held that High Court had not at all appreciated the reasons for suspending/cancelling   the work order i.e., the pandemic.

Thus, while setting aside the impugned order, the bench clarified that this did not preclude Divi Works from initiating appropriate proceedings before the civil court for any damages/losses incurred by it.

Case Title: Municipal Council Gondia v. Divi Works & Suppliers, HUF & Ors.