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PETITIONER: C.   K. ACHUTHAN

       Vs.

RESPONDENT: THE STATE OF KERALA AND OTHERS.

DATE OF JUDGMENT: 11/12/1958

BENCH: HIDAYATULLAH, M. BENCH: HIDAYATULLAH, M. DAS, SUDHI RANJAN (CJ) DAS, S.K. GAJENDRAGADKAR, P.B. WANCHOO, K.N.

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)

ACT:        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.

HEADNOTE: 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.

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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.

JUDGMENT: ORIGINAL JURISDICTION: Petition No. 103 of 1958. Petition  under Art. 32 of the Constitution for  enforcement of fundamental rights. M.  T. Paikeday and Ganpat Rai, for the petitioner. 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

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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 period. 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

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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  servant  arose. 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.                         Petition dismissed. 792