C. K. Achuthan Vs. The State of Kerala
& Ors  INSC 129 (11 December 1958)
DAS, SUDHI RANJAN (CJ) DAS, S.K.
CITATION: 1959 AIR 490 1959 SCR Supl. (1) 787
CITATOR INFO :
E&R 1974 SC 651 (9) RF 1977 SC1496 (20)
E&R 1978 SC 930 (16) E 1979 SC1628 (23) RF 1986 SC1527 (22)
Fundamental Rights, Infringement of-Contract
for supply of goods to Government-Whether a contract of employment-
Cancellation of contract and grant to another-Whether
discriminatory-Constitution of India, Arts. 14, 16(1), 19(1)(g), 31.
For the supply of milk to the Government
Hospital at Cannanore for the year 1948-49, the petitioner and the third
respondent, the Co-operative Milk Supplies Society, Cannanore, had submitted
tenders, and the Superintendent who scrutinised them accepted that of the
petitioner and communicated to the Director of Public Health the reasons for
the decision. Subsequently, the contract to the petitioner was cancelled after
giving the requisite notice in terms of Cl. 20 Of the tender, and he was
informed that it was the policy of the Government that in the matter of supply
to Government medical institutions in Cannanore District, the Co-operative Milk
Supplies Union was to be given contracts on the basis of prices fixed by the
Revenue Department. The petitioner contended, in a petition filed under Art. 32
Of the Constitution, that there had been discrimination against him vis-a-vis
the third respondent, that he was denied equal opportunity of employment under
the State, and that the fundamental rights under Arts. 14, 16(1), 19(1) (g) and
31 had been infringed.
Held, that none of the fundamental rights
were involved in the present case.
A contract which is held from Government
stands on no different footing from a contract held from a private party and
when one person is chosen rather than another the aggrieved party cannot claim
the protection of Art. 14.
A contract for the supply of goods is not a
contract of employment and the petitioner who was supplying milk to the State
hospital was in no sense a servant and no question of employment qua servant
arose. Article 16 (1) was therefore not attracted to the case.
ORIGINAL JURISDICTION: Petition No. 103 of
Petition under Art. 32 of the Constitution
for enforcement of fundamental rights.
M. T. Paikeday and Ganpat Rai, for the
Sardar Bahadur, for respondent No. 1.
M. R. Krishna Pillai, for respondent No. 3.
788 1958. December 11. The Judgment of the
Court was delivered by HIDAYATULLAH, J.-This is a petition under Art. 32 of the
Constitution by one C. K. Achuthan, who claims to have held a contract for the
supply of milk and other articles of diet for the year 1958-1959 but whose
contract for supply of milk is said to have been cancelled by the District
Medical Officer (second respondent herein). The contract for the.
supply of milk has now been given to the
third respondent, the Co-operative Milk Supplies Society, Cannanore.
From the petition, it appears that the
petitioner held contracts for the supply of milk to the Government Hospital at
Cannanore (Kerala State) ever since 1946, and that previous to this, his
brother in the same business held similar contracts from 1936.
In 1957, a " uniform procedure for
fixing up contracts " was adopted, and by a notification, conditions for
acceptance of tender were laid down. The petitioner as well as the third
respondent submitted their respective tenders, which were to be opened by the
Superintendent of the Hospital in the presence of interested parties. We need
not refer to all the conditions under which tenders were to be accepted, except
those which have a bearing upon this matter. It was stated in the conditions
that no tender marked at " current market rates " would be accepted,
and further that in the supply of milk, preference would be given to approved
Co- operative Milk Supply Unions and Societies, if their tender was within a
margin of 5 per cent. over the market rate or the lowest tendered rate,
whichever was less. All persons making tender for the contract had to produce a
certificate of solvency and tax clearance certificates, and to make a deposit
with the tender.
On January 20, 1958, the tenders which were
submitted were scrutinised and the tender of the petitioner for the supply of
milk was accepted and that of the third respondent rejected. It appears that
the Superintendent (respondent No. 2) communicated to the Director of Public
Health, her reasons for accepting the tender of the petitioner and not
accepting that 789 of the third respondent. Certain correspondence then ensued
between the Director of Health Services and the second respondent, as a result
of which the petitioner was informed that the contract for the supply of milk
given to him was cancelled. He was informed that it was the policy of
Government that in the matter of supply to Government medical institutions in
Cannanore District the Co-operative Milk Supplies Union was to be given
contracts on the basis of prices fixed by the Revenue Department. It appears
that some more correspondence between the Director of Health Services and the
second respondent ensued, and it was pointed out to the second respondent that
action should have been taken under Cl. 20 of the conditions of the tender and
the contract only cancelled after giving a month's notice to the petitioner. In
furtherance of these instructions, the second respondent issued a notice in
terms of Cl. 20 of the tender, and cancelled the contract after the notice
The present petition has been filed to
question the several orders referred to above. It may be pointed out that
previous to this, the petitioner had applied under Art. 226 of the Constitution
to the High Court of Kerala, but his petition (O. P. No. 201 of 1958) was
rejected by Raman Nayar, J., on June 6, 1958. A Letters Patent Appeal was also
dismissed by Koshi, C. J., and Vaidialingam, J. (A. S. No. 354 of 1958 decided
on July 7, 1958). The High Court held that the present matter was no more than
a breach, if any, of the contract by the State Government, and that the
appropriate remedy was to file a civil suit and not to proceed under Art. 226.
It appears that -no special leave to appeal
was sought from this Court against the above orders, and the matter has been
brought for adjudication, not by way of appeal but directly under Art. 32 of
the Constitution as an infringement of the fundamental right of the petitioner.
The contention of the petitioner in this behalf is that he is entitled to an
equal treatment in the eye of law, and that there has been discrimination
against him vis-a-vis, the third respondent.
He claims protection under Arts. 14, 16(1),
19(1)(g) and 790 31 of the Constitution. In our opinion, none of these Articles
can be made applicable to the facts of the present case.
No doubt, the petitioner claims to have
succeeded in obtaining the contract from the Government, and the third
respondent failed to do so. But even if he held the contract, the petitioner
did not acquire an absolute right to be continued in that contract, because
power was reserved by the Government under Cl. 20 to terminate the contract
after giving a month's notice. Whether the exercise of that power in the
present case was regular or legal, is not a matter on which we are called upon
to pronounce, because adjudication of such dispute can appropriately take place
only before the ordinary Civil Courts, where evidence can be gone into and
examined at length.
The gist of the present matter is the breach,
if any, of the contract said to have been given to the petitioner which has
been cancelled either for good or for bad reasons. There is no discrimination,
because it is perfectly open to the Government, even as it is to a private
party, to choose a person to their liking, to fulfill contracts which they wish
to be performed. When one person is chosen rather than another, the aggrieved
party cannot claim the protection of Art. 14, because the choice of the person
to fulfill a particular contract must be left to the Government.
Similarly, a contract which is held from
Government stands on no different footing from a contract held from a private
party. The breach of the contract, if any, may entitle the person aggrieved to
sue for damages or in appropriate cases, even specific performance, but he
cannot complain that there has been a deprivation of the right to practise any
profession or to carry on any occupation, trade or business, such as is
contemplated by Art. 19(1)(g). Nor has it been shown how Art. 31 of the
Constitution may be invoked to prevent cancellation of a contract in exercise
of powers conferred by one of the terms of the contract itself.
The main contention of the petitioner before
us was thus under Art. 16(1) of the Constitution, and he claimed equal
opportunity of employment under the 791 State. To begin with, a contract for
the supply of goods is not a contract of employment in the sense in which that
word has been used in the Article. The petitioner wag not to be employed as a
servant to fetch milk on behalf of the institution, but was a contractor for
supplying the articles on payment of price. He claimed to have been given a
contract for supply of milk, and did not claim to be an employee of the State.
Article 16(1) of the Constitution-, both in its terms and in the collocation of
the words, indicates that it is confined to " employment " by the
State, and has reference to employment in service rather than as contractors.
Of course, there may be cases in which the contract may include within itself
an element of service. In the present case, however, such a consideration does
not arise, and it is therefore not necessary for us to examine whether those
cases are covered by the said Article.
But it is clear that every person whose offer
to perform a contract of supply is refused or whose contract for such supply is
breached cannot be said to have been denied equal opportunity of employment,
and it is to this matter that this case is confined.
Looking to the facts of the case, it is
manifest that the petitioner was supplying, or in other words, selling milk and
other articles of diet to the State for the use of hospitals and similar
institutions. He was in no sense a servant, and no question of employment qua
In these circumstances, it is plain that Art.
16(1) of the Constitution is not attracted to the facts.
In our opinion, the petition under Art. 32 of
the Constitution is wholly misconceived. No fundamental right is involved. At
best, it is a right to take the matter to the Civil Court, if so advised, and
to claim damages for breach of contract, if any.
The petition accordingly fails, and is
dismissed with costs.