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RADHAKRISHNA AGARWAL & ORS. vs. STATE OF BIHAR & ORS.

SCR Citation: [1977] 3 S.C.R. 249
Year/Volume: 1977/ Volume 3
Date of Judgment: 17 March 1977
Petitioner: RADHAKRISHNA AGARWAL & ORS.
Disposal Nature: Appeal Dismissed
Neutral Citation: 1977 INSC 90
Judgment Delivered by: Hon'ble Mr. Justice M. Hameedullah Beg
Respondent: STATE OF BIHAR & ORS.
Case Type: CIVIL APPEAL /227 and 228/1976
Order/Judgment: Judgment
1. Headnote

Constitution of India, 1950 -  Article 226 cannot be invoked for alleged breaches of contract - Remedy lies through ordinary civil suit for damages.

Constitution of India, 1950 - Article 14 - Discrimination should be alleged at the stage of entry into the contractual area to attract the application of Art. 14.

Constitution of India, 1950 - Articles 298 and 299 - Scope of - Whether the State has any special obligations and privileges attached to it even when it acts within the contractual field.

Plea for adjournment of the hearing of the case until after the emergency is lifted - Stay orders presumably obtained earlier on representation made that no aspect of enforcement of Art. 14 of the Constitution was involved - Propriety of the continuance of stay.

A contract called a "lease" to collect and exploit sal-seeds from forest area was entered into in 1970, between the respondent State and the appellants in 1970. Clause (3) in the written contract executed in accordance with the provisions of Art. 299 of the Constitution provided for the revision of the rate of royalty at the expiry of every three years in consultation with the lessee and was to be binding on the lessee. Under clause (4) of the lease, the lessee had to establish a factory within the State of Bihar for processing of sal-seeds and extraction of oil therefrom within a period of five years from the date of the agreement, failing which the agreement itself was to terminate. In 1974, the respondent State revised the rate of royalty payable by the appellants and after that, cancelled the lease by a letter dated 15th March 1975. The writ petitions challenging the said orders were dismissed by the Patna High Court. On appeals by certificates, the appellants contended: (1) the State acting in its executive capacity through its Government or its officers even in the contractual field can- not escape the obligation imposed upon it by Part III of the Constitution; (ii) Article 14 of the Constitution has been infringed and (iii) Principles of natural justice have been violated as no opportunity to show cause against the cancellation of lease was given.

Dismissing the appeals the Court.

2. Case referred
3. Act
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4. Keyword
  • Constitution of India
  • Article 226
  • breach of contract
  • article 14