Parag Engineering Works vs Union of India

By – Kirtika Chakraborty

In Gauhati High Court

NAME OF THE CASEParag Engineering Works vs Union of India
CITATIONAIR 1989 Gau 77
DATE OF THE CASE6 June 1988
APPELLANTParag Engineering Works
RESPONDENTUnion of India
BENCH/JUDGEA Raghuvir, S Rajkhowa
STATUTES/CONSTITUTION INVOLVEDThe Specific Relief Act, 1963; The Constitution Of India 1949
IMPORTANT ARTICLES/SECTIONSSection 14 in The Specific Relief Act, 1963; Article 226 in The Constitution Of India 1949; Article 21 in The Constitution Of India 1949

     ABSTRACT

The Specific Relief Act of 1963 is a very special, comprehensive, and practical Act that aims to secure a two-party agreement. It is a procedural law, not a subjective one. The Act’s provisions are promising in nature, with a hint of reality. This Act seeks to ensure justice in its broadest sense. Several judgments issued by our country’s courts have referred to various sections of the Act to determine the relief to be granted to the aggrieved party. The Act aims to promote mutuality between the two parties involved in the contract. Parag Engineering Works vs Union of India is one such landmark case of the Specific Relief Act of 1963.

INTRODUCTION

In the case of Parag Engineering Works vs Union of India, the Gauhati High Court discussed the Section 14 of the Specific Relief Act of 1963 discusses contracts that are not expressly constitutional. The question in this situation focuses on the petitioner company’s subscription to a telephone service.

In this case, the court relied on Section 14 to reach a decision. Section 14(d) of the Specific Relief Act of 1963 expressly states that where there is an efficiency that requires continuous work and the court finds it difficult to coordinate, the court should not issue an order. As a result, the court in the case concluded that the petitioner is not entitled to specific competence on the part of the telephone company since the working mechanism was new for the company.

BACKGROUND

There was a failure on the part of the telephone company to operate properly whenever the petitioner required it. The Telephone Department previously stated that the petitioner’s crisis was caused by a cable fault and that it is a major concern that can be minimized by replacing the apparatus’s indicator with a new one. The petitioner had registered a writ petition in the High Court with several demands centred on the fact that the Telephone Department was negligent.

In this case, the court made its decision based on Section 14. Section 14(d) of the Specific Relief Act of 1963 explicitly states that the court should not issue an order where there is an efficiency that requires continuous work and the court finds it difficult to integrate. As a consequence, the court ruled in the case that the petitioner is not entitled to specific competence on the part of the telephone company because the working mechanism was recent for the company and the claims listed in the writ petition needed continuous supervision by the court, which is practically impossible.

FACTS

The company Parag Engineering Works is a partnership with its headquarters in Tinsukia, Dibrugarh. The company has a branch office in Gauhati, where it has subscribed to a phone with the number 27010 and STD service. The phone is at the centre of the dispute in this case. In this case, the firm will be made reference to as the ‘telephone subscriber.’ The subscriber frequently discovered flaws in the telephone’s performance. The subscriber reported the problems to the Telephone Department. “There was some fault in the earthing,” the subscriber was told. The subscriber voiced concerns of bill inflation in letters dated December 14, 1985, January 6, and April 17, 1987, as well as wrongful discharge of the apparatus for an extended time in letters dated March 17, May 2, June 1, and October 27, 1987, but nothing was done to correct the problems. One of the Telephone Department’s officers apprised the subscriber of the cable fault as a genuine issue at one point. It was suggested that by simply changing the apparatus’s indicator, the apparatus’s performance could be enhanced. Concerning the indicator, on May 30, 1988, the local Chamber of Commerce in Gauhati arranged a meeting with the Telecom District Manager at the request of the subscriber. The District Manager agreed to change the indicator during that meeting, but it has not been changed since. The subscriber contacted the Sub-Divisional Officer several times. The subscriber was always verbally assured, but the promises were never fulfilled. Finally, on March 17, 1988, the Department was served with a legal notice, and the instant writ petition was filed on April 4, 1988.

ISSUE

  • There is no standard for determining actual damage caused by failure to perform the agreed-upon act.
  • Where monetary compensation for non-performance would not provide adequate relief

ARGUMENTS FROM THE APPELLANT SIDE

“The prayers in the writ petition are far too many. The subscriber seeks to declare R. 443 as ultra vires of the Act. The Telephone Department is sought to be directed to change the indicator. One direction sought is before the telephone is disconnected at least 15 days be added for payment of bills. The Department be directed not to charge rent during the period when telephone remained out of order. That 50% of the rental paid by the subscriber be refunded as complaints made by the subscriber were not properly attended to in time. That the present Sub-Divisional Officer, Telephone Department, Gauhati may be made responsible for the negligent acts of the Department which culminated in the non-performance of the apparatus”

“counsel of the subscriber, argued in earnest terms to order the Telephone Department to see the telephones perform properly. The counsel argued if we should order the department will remedy the situation. One is reminded of King Canute of England in this situation. He was Danish by Birth but ruled England between 1017-42.”

ARGUMENTS FROM THE RESPONDENT

“In response to the writ petition, Shri D.P. Singh, Divisional Engineer, Phones (Maintenance), Pan Bazar concedes that the Junior Supervisor received complaints from the subscriber on February 5, March 11, 14, 15, and April 30, 1985. S.D.O., D.E., CO., and D.M.T. were all contacted by that officer. As a result, the Department has been demonstrated to have responded to the complaints. The subscriber allegedly failed to pay bills of Rs. 664/-, Rs. 764/-, and Rs. 1,540/-. According to the Divisional Engineer, they have not received any complaints of excessive billing, hence the subscriber’s assertions on that point are untrue and incorrect. According to the P. & T. Manual, Vol. XIV, bills were sent out and the subscriber was given a reasonable opportunity to pay even after the payment deadline had passed. The claim that the phone has been out of service since installation is categorically denied.”

“Any telephone or telephones rented by him may be disconnected without notice if the rent or other charges in respect of the telephone service provided are not paid by the subscriber following these rules, or bills for charges in respect of calls (local and trunk) or phonograms or other dues from the subscriber are not duly paid by him.” If the Telegraph Authority believes it is in the public interest, the telephone or telephones may be restored if the defaulting subscriber pays the outstanding dues and the reconnection fee, as well as the rental for the portion of the intervening period (during which the telephone remains disconnected) as the Telegraph Authority, may prescribe from time to time. The subscriber must pay all of the foregoing charges within the time frame that the Telephone Authority may specify from time to time.”

“The instant subscriber’s problems, if not all, are encountered daily by the 2,423,762 subscribers (as per the 1979 census) in India. Courts cannot grant relief to the subscriber because of the numerous grievances raised in the instant writ petition: in this sense, ‘Ubi jus ibi remedium’ has its limitations. In India, telephones have only recently entered our life. The rights to the apparatus and performance have not yet been determined. It is hoped that a better situation would emerge in the future.”

RELATED PROVISIONS

  • Section 14 in The Specific Relief Act, 1963

14.” Contracts not specifically enforceable.—

(1) The following contracts cannot be specifically enforced, namely:—

(a) a contract for the non-performance of which compensation in money is an adequate relief;

(b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms;

(c) a contract which is in its nature determinable;

(d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise.

(2) Save as provided by the Arbitration Act, 1940 (10 of 1940), no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract (other than an arbitration agreement to which the provisions of the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit.

(3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-section (1), the court may enforce specific performance in the following cases:—

(a) where the suit is for the enforcement of a contract,—

(i) to execute a mortgage or furnish any other security for securing the repayment of any loan which the borrower is not willing to repay at once: Provided that where only a part of the loan has been advanced the lender is willing to advance the remaining part of the loan in terms of the contract; or

(ii) to take up and pay for any debentures of a company;

(b) where the suit is for,—

(i) the execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership; or

(ii) the purchase of a share of a partner in a firm;

(c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on the land: Provided that the following conditions are fulfilled, namely:—

(i) the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work;

(ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief; and

(iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed.”

  • Article 226 in The Constitution Of India 1949

226.” Power of High Courts to issue certain writs:

(1) Notwithstanding anything in Article 32 every High Court shall have powers, throughout the territories concerning which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders, or writs, including writs like habeas corpus, mandamus, prohibitions, quo warranto, and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose

(2) The power conferred by clause ( 1 ) to issue directions, orders, or writs to any Government, authority, or person may also be exercised by any High Court exercising jurisdiction about the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories

(3) Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause ( 1 ), without

(a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and

(b) giving such party an opportunity of being heard, makes an application to the High Court for the vacation of such order and furnishes a copy of such application to the party in whose favour such order has been made or the counsel of such party, the High Court shall dispose of the application within two weeks from the date on which it is received or from the date on which the copy of such application is so furnished, whichever is later, or where the High Court is closed on the last day of that period, before the expiry of the next day afterwards on which the High Court is open; and if the application is not so disposed of, the interim order shall, on the expiry of that period, or, as the case may be, the expiry of the aid next day, stand vacated

(4) The power conferred on a High Court by this article shall not be in derogation of the power conferred on the Supreme court by clause ( 2 ) of Article 32.”

  • Article 21 in The Constitution Of India 1949

“21. Protection of life and personal liberty No person shall be deprived of his life or personal liberty except according to procedure established by law”

JUDGEMENT

In this regard, the Courts’ restrictions are enumerated in S.14 of the (Specific Relief Act of 1963). (Act 47 of 1963). That Act states that orders should not be issued where the implementation of which involves the performance of a continuous duty that the Court cannot supervise. This is stated in Cl. (d) of S.14 of the Act, which we consider to be relevant when executing the Court’s powers under Art.226 of the Constitution.

“If the authority had meant to deny the Notification only on the ground that the Central Excise Notification applies only for indigenously manufactured goods and, therefore, the question of imposing a countervailing duty on the imported goods has nothing to do with the Central Excise Notification, one can understand the argument of the Petitioner. But on the other hand, the said sentence contains two points. I am more concerned with the latter part which says “subject to the terms/conditions laid down by the Notification”. Therefore, there is some scope for enquiry on the question of whether the imported goods were manufactured as per the exemption notification which I have quoted above. Therefore, I can’t say that the impugned Order is on the face of it illegal or ultra vires. In respect of the import of identical goods, I had passed an order in W.P. No. 17557 of 1990. That decision was approved in W.P. No. 1145 of 1990. Dr Kantawala, appearing for the Petitioner says that the said judgment related to a different adjudication order which was not identical to the remaining given in the present impugned Order. I think that will not alter the situation because/have held that the question has to be gone into by the authorities regarding the conditional grant of exemption. I am therefore not inclined to accept the proposition that the Petitioner is entitled to agitate this matter in this Court without filing an appeal. I, therefore, prefer to follow my earlier judgment in W.P. No. 17557 of 1990 and direct the Petitioner to seek redress in the Appellate Court in respect of the validity of the levy of countervailing duty. However, for the release of the goods, I am passing the present order imposing conditions for the release of the goods. In my judgment dated 19.11.1990, the facts of the case in W.P. No. 17557 of 1990 were slightly different from the facts of the present case and it cannot be disputed that prima facie, the argument of the Petitioner is attractive. This is because the test report of the Assistant Collector of Customs which has now been produced before me shows that the imported goods are made of a particular mode of synthetic resins. But Mr Narasimhan learned Senior Central Government Standing Counsel for the Respondent says that he has to get instructions on the validity of the test report. Because of those rival contentions, I direct the release of the goods on the following conditions:

1. The Petitioner should pay the admitted duty.

2. The Petitioner should pay 1/4th of the countervailing duty in cash.

3. The Petitioner shall also furnish Bank Guarantee.

4. The Petitioner should furnish Bank Guarantee in respect of the remaining portion of the countervailing duty. In respect of the entire balance, the Petitioner shall execute a Personal Bond. In other respects, the Petitioner is directed to seek redress for filing an appeal. On Application, the respondents are directed to issue a detention certificate by the law.

The Writ Petition is ordered in the above terms. No costs.”

CONCLUSION

Private contracts of personal service are not enforceable under the law, as evidenced by a reading of Section 14 (1) (b) of the Specific Relief Act, 1963. The court also ruled that personal service contracts were unenforceable, citing Section 14 (1) (b) of the Specific Relief Act of 1963. According to various judgments and judicial pronouncements, a court will not issue an order specifically enforcing a contract of personal service. When the implementation of personal service under a contract is dependent on the parties’ volition, or when the acts stipulated required specialized expertise, skill, potential, encounter, or the exercise of the verdict, discretion, integrity, and similar personal qualities, in short, whenever a performance following the spirit of the contract is dependent on the contracting party’s will and capacity.