ORDER
Rama Jois, J.
1. The three Writ Appeals are presented against the common order made by Puttaswamy, J., dismissing the three Writ Petitions presented by the appellants. The Writ Petitions have been referred to division Bench for being heard along with the appeals, as they involve similar questions of law and fact.
2. Briefly stated the facts in the three Writ Appeals are these:-- The Writ Petitioners are carrying on the business of export of coffee from India to various foreign countries. As required under the provisions of the Coffee Act, 1942 ('the Act' for short) and the Coffee Rules, 1955 ('the Rules' for short), they have registered themselves as exporters and are called registered exporters. The practice of the Coffee Board has been to conduct auctions of coffee for the purpose of export. The registered exporters are entitled to participate in the auction and purchase coffee for export. The terms and conditions of sale of coffee in the course of export had been fixed by the Board. The relevant condition of the sale on the basis of which dispute was raised by the registered exporters against the Coffee Board reads:--
'10. Tender of Bids :-- The Bid tenderedshall be exclusive of Sales Tax, Central Excise Duty, Customs Duties, Octroi duty and every other imposts and shall be on the basis of delivery of coffee ex-bags, ex-curing works.
However, should there be any change in the rates, taxes, duties and imposts mentioned above between the date of auction al which the exporter purchased the coffee and the expiry of a period of 45 days from the dale of such auction, including the date of the auction, the consequent enhancement of the liability of the exporter for the payment of any or all of such levies in respect of the coffees purchased at such auction and shipped within the abovesaid period shall be to the account of the Board to the extent of 50 per cent, of the increase in the rates of any or all such levies.
Provided, however, the extent of such enhanced liability which will be to the account of the Board shall be 75 per cent, of the increase in the rates of any or all such levies, if the coffees purchased al the auction are shipped within a period of 30 days from the date of the auction.
Any increase in the rates of any or all of such levies on coffee attracting the increased rates and not shipped within a period of 45 days from the date of the auction at which the coffees were purchased shall be entirely to the auction of the exporter.
In case of any reduction of the liability of the exporters on account of any reduction in the rates of any or all the taxes, duties and imposts within a period of 45 days from the date of the auction on coffees attracting such reduced rates of levies such reduction of liability shall accrue to the Board to the extent of:
(a) 50 per cent of the reduction in the rates of any or all of such taxes, duties and imposts on coffees attracting such reduced rates of levies and shipped within a period of 30 days from the date of auction.
(b) 75 per cent, of the reduction in the rates of any or all of such taxes, duties and imposts on coffees attracting such reduced rates of levies and shipped beyond a period of 30 days from the date of auction.
The additional sums that may become payable by the expeller to the Board as a consequence of such reduction in the rates of taxes, duties, and other imposts shall be paid within seven days from the date of shipment.'
As can be seen from the above clause, one of the conditions laid down in the context of auction of coffee was that if there were to be any increase in any rates of tax, duties and imposts on coffee within 45 days from the date of auction, a portion of that burden as specified in the clause had to be borne by the Coffee Board. If, however, during the said period there were to be any reduction in the rale of taxes and duties, the specified portion of- thai benefit accruing to the registered exporter purchaser had to be remitted to the Coffee Board.
3. It so happened that in May 1977, an auction sale of coffee for the purpose of export was held by the Board on 18-5-1977. The rate of export duly prevailing immediately prior to the date of auction, levied under the provisions of Ihe Customs Act. 1962 was Rs. 2,200/- per quintal. The Government of India in exercise of its powers conferred on it by Section 25(1) of the Customs Act reduced the customs duty from Rs. 2,200/- per quintal to Rs. 1,600/- per quintal by a notification issued at Delhi on the same date i.e., 18-5-1977. There is no dispute that at the time of actual conduct of sale, neither of the parties were aware of the reduction of the export duty. It is on record that the contents of the notification was transmitted to the Coffee Board only at 6 p.m. on 18-5-1977. This is evidenced by E.x. 17, which reads :
'Samachar 9, Queens Road,India's National News Bangalore-560 052.Agency August, 25th, 1977. The Chief Coffee
Marketing Officer. Coffee Board.
Bangalore.
Dear Sir,
This has reference to your letter dated 22-8-1977.1977. News about the reduction in export duty on coffee was received here around 1800 hrs. on 18th May, 1977, and the same was retransmitted to you almost immediately.
The Union Ministry of Finance may please be approached to ascertain the time at which the announcement was made by them in New Delhi,
This is for your information. Yours faithfully, Sd/- Manager.'
There is also no dispute that the auction had been completed before the receipt of the communication about the reduction of customs duty.
4. Relying on the reduction of export duty as aforesaid, the Coffee Board addressed similarly worded letters dated 2-6-1977(Ex.C in the petitions) calling upon each of the respondents to refund the proportionate amount of reduced export duty to the Board in terms of Clause 10 of the terms and conditions of auction. Respondent-writ petitioners, and a few others similarly situated voluntarily repaid the amount. Some of them withheld full or part of the amount on the ground that they were not liable to refund. Thereafter, they presented the petitions questioning the legality of the demand for refund made by the Board and asksing for a direct ion to the Board not to demand the amount in respect of petitioners, who had not yet refunded the amount and to direct the Board to refund the amount to such of the petitioners, who had remitted the amount as demanded by the Board.
5. The contention raised by the writ petitioners in the writ petitions was that according to Clause 10 of the contract they were liable to refund the specified percentage of the benefit accrued to them, as a result of reduction of export duty, if only the rate of export duly had been reduced alter the dale of auction and that as in the present cases the change had taken place with effect from the date of auction, no part of the benefit which the respondents received as a result of reduction of export duly was refundable by them
6. The stand taken by the Coffee Board was that if there was reduction in the rate of tax or export duty within 45 days from the date of auction including the date of auction, the auction purchasers were liable to remit to the Board a pan of such benefit accruing to them as indicated in Clause 10 of the agreement and that in the present cases, the change of rate of export duty had taken place on the date of auction and therefore the refund demanded by the Coffee Board was in accordance with Clause 10 and the plea of the respondents that they were not liable to refund on the ground that the reduction of export duty was effected with effect from the dale of auction was untenable.
7. Before the learned single Judge a preliminary objection was also raised by Ihe Board to the effect that the writ petitions were not maintainable as the right which the respondents desired to enforce was purely contractual in nature and therefore no such right could be enforced by means of a petition under Article 226 of the Constitution.
8. Regarding the question of maintainability raised by the Board, the answer of the writ petitioners was that the contract in question was a statutory contract and consequently any right accruing to the petitioners under the contract, even if it were to be in the form of a money claim could be enforced in a petition under Article 226 of the Constitution and a writ of mandamus will issue if the respondent-writ petitioners were to make out that they were due in a sum of money from the Coffee Board.
9. The learned single Judge held that even according lo Clause 10 of the contract the respondent-petitioners were not entitled to any refund, for the reason that the clause provided for refund was only in the event of reduction of export duty within a period of 45 days from the dale of auction including the date of auction. On the question of maintainability, the learned single Judge held that the right sought to be enforced by the respondcnt-writ petitioners was purely contractual in nature and the contract in question was not statutory in nature and therefore Ihe writ petitions were not maintainable.
10. Aggrieved by the order of the learned single Judge the appellants have preferred these appeals.
11. In support of the preliminary objection that the right sought to be enforced by the respondent-petitioners was contractual in nature and therefore no writ petitions were maintainable, Sri R. J. Babu, learned Counsel for the respondent-Board submitted that none of the terms of auction sale were prescribed either in the Act or in the Rules framed under the Act and all those terms and conditions of sale were laid down by the Board for the purpose of conducting auction for purposes of export of coffee and therefore the view taken by the teamed single Judge that the contracts were not statutory in nature and therefore writ petitions were not maintainable was correct.
12. In support of his preliminary objection, the learned Counsel relied upon the Judgments of the the Supreme Court in Harshankar v. Excise and Taxation Commr., : [1975]3SCR254 , Divisional Forest Officer v. Vishvanath Tea Estate, : [1981]3SCR662 and on Radhakrishna Agarwal v. State of Bihar, AIR 1977 SC 1496 and a Division Bench Judgment of this Court in S.S.K.T. Company v. Food Corporation, ILR (1988) Kant 3054.
13. As against this, Sri Shantibhushan, learned Counsel appearing for the appellants, in support of his contention relied on the following decisions: Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd., : AIR1983SC848 , State of Haryana v. Lalchand, : [1984]3SCR715 and Indian Aluminium Co. Ltd. v. State of Karnataka, ILR (1988) Kant 2452.
14. Learned Counsel for the appellants relied on certain provisions of the Act and the rules to make out, that the terms and conditions of auction, were statutory in character. Those provisions are:--
(1) Of Coffee Act
'Sec. 5. The Board shall be a body corporate by the name of the Coffee Board having perpetual succession and a common seal. With power to acquire and hold property, both movable and immovable, and to contract, and shall by the said name sue and be sued.'
xxx xxx xxx '20. No coffee shall be exported from India otherwise than by the Board or under an authorisation granted by the Board in the prescribed manner and in the prescribed cases/and the provisions of the Sea Customs Act, 1878, shall have effect as if the provision made by the Section had been made by notification issued under Section 19 of that Act.'
xxx xxx xxx '25(3). Coffee delivered for inclusion in the surplus pool shall upon delivery to the Board remain under the control of the Board Which shall be responsible for storages, curing where necessary, and marketing of the coffee.'
xxx xxx xxx '26(1). The Board shall take all practical measures to market the coffee included in the surplus pool, and all sales thereof shall be conducted by or through the Board.'
xxx xxx xxx '47. All contracts for the sale of coffee in so far as they are at variance with the provisions of this Act shall be void.'
xxx xxx xxx '48(1). The Central Government may, by notification in the Official Gazette, make rules to carry out the purposes of this Act.
(2) Without prejudice to the generally of the foregoing power, rules may be made providing for all or any of the following matters:--
xxx xxx xxx '48(2)(xiii). the conditions subject to which and the manner in which contracts may be entered into by or on behalf of the Board.'
(2) Of Coffee Rules :
'Rule 36. Contracts :--(1)The Board may enter into contracts for the discharge of the duties entrusted to it under the Act providedthat every contract which extends over a period of more than five years or involves expenditure in excess of one lakh rupees shall require the previous sanction of the Central Government.'
xxx xxx xxx '44. Export of Coffee:-- (1) The Board may authorise the export of coffee under Section 20 under such terms and conditions as it may deem fit in any of the following cases, namely :
(i) coffee sold by the Board in pursuance of its functions under Section 26;
(ii) roasted or prepared coffee.
(2) The Board shall issue orders for the export of coffee and permits for re-importation of exported coffee in Forms C and Drespectively.'
Relying on the above provisions, learned counsel submitted that the terms and conditions of auction were statutory and consequently the contract sought to be enforced was statutory.
15. Sri R. J. Babu, learned counsel for the Board, contended that the very provisions of the Act and Rules on which the appellants rely, show that none of the terms and conditions of auction sale are found incorporated in the provisions of the Act or Rules and the Board was free to enter into contract for purposes of marketing coffee on such terms and conditions as the Board deems fit and therefore the contract sought to be enforced was not statutory in character. Learned Counsel for the appellants was unable to point out to any statutory provision in the Act or the Rules, which laid down any of the terms concerning the auction of coffee for export. The submission of the learned Counsel, however, was Coffee Board being a statutory authority established, inter alia, for the purpose of marketing coffee, every contract entered into by it with any other person relating to sale or auction sale of coffee was a statutory contract.
16; The learned Counsel for the Board also submitted that irrespective of the question as to whether the contract was statutory or non-statutory, a writ of mandamus for payment of money could be issued under Article 226 of the Constitution, only if there were to be a statutory duty for payment or refund of money by the State and that no writ of mandamus for payment of money could be issued to the State in a petition under Article 226 of the Constitution, if the right for such payment is based upon contract. In support of this contention, the learned Counsel relied on the Judgment of the Supreme Court in Burmah Construction Co. v. State of Orissa, : AIR1962SC1320 , the relevant portion of which reads (at p. 1323):--
'The High Court normally does not entertain a petition under Article 226 of the Constitution to enforce a civil liability arising out of a breach of contract or a tort to pay an amount of money due to the claimant and leaves it to the aggrieved party to agitate the question in a civil suit filed for that purpose. But an order for payment of money may sometimes be made in a petition under Article 226 of the Constitution against the State or against an officer of the State to enforce a statutory obligation. The petition in the present case is for enforcement of the liability of the Collector imposed by statute to refund a tax illegally collected and it was maintainable.'
Learned Counsel for the Board submitted that the claim made in the writ petitions arises out of breach of contract, and in the guise of writ petitions what the writ petitioners have done is, they are seeking a money decree against the Board and therefore the writ petitions could not be entertained and are liable to be dismissed in limine.
17. We shall in the first instance consider as to whether the refund claimed by respondent-writ petitioners under Clause 10 of the agreement is well-founded. Clause 10 of the terms and conditions can be divided into two parts. The first part provides for liability of the Board, in the case of increase of tax or duty within a period of 45 days from the date of auction including the date of auction to compensate the auction purchaser to the extent indicated in the clause. The second part provides for passing on the specified portion of the benefit by the auction purchaser in the case of reduction of tax or export duty within 45 days from the date of auction. The provision made in Clause 10 in this behalf is to the following effect :
(1) In the caseof increase in the rate of export duty from the date of auction including the date of auction, within 45 days.
(a) 50% of theenhanced liability to be borne by the Board if the coffee purchased at anauction is exported within 45 days.
(b)75% of theenhanced liability to be borne by the Board if the coffee purchased at anauction is shipped within 30 days from the date of auction.
(c) If the coffeepurchased at the auction is not at all shipped within 45 days. 100% of the liability has to be borne by the exporter.
(2) in the caseof reduction of tax or export duly within 45 days front the date ofauction.
(a) 50% of thereduction should be paid to the Board by the auction purchaser if the coffeepurchased were to be shipped within 30 days from the date of auction
(b) 75% of thedifference in reduction should be paid to the Board if the coffee purchasedat an auction is shipped beyond 30 daysfrom the date of purchase.
18. The contention of the petitioner is, that as in the present case the auction of coffee took place on 18-5-1977, if the reduction of export duty had taken place on 19-5-1977 or on any subsequent day within 45 days from 18-5-1977 the demand made by the Coffee Board for refund would have been unexceptionable. But, as in these cases, the reduction of export duly took place on 18-5-1977 itself the second part of Clause 10 of the terms and conditions was not attracted and therefore the Coffee Board was not entitled to ask for refund.
19. As against the above contention, Sri R. J. Babu, learned Counsel for the Board submitted as follows : As can be seen from the first part of Clause 10, which specifically provided that if there were to be increase of taxes or export duly within 45 days from the dale of auction including the date of auction the Board was required to make payment to the exporter as indicated in the said part of the clause, It is no doubt true that the words 'including the date of auction' had been omitted in the second part of Clause 10 relating to the requirement to pass on the benefit arising out of reduction of export duty, by the auction purchaser, to the Board but that being a clause converse to the first, must also be understood in the same manner and the omission of the words 'including the date of auction' in the second part is only a drafting defect and therefore in a case in which the reduction of taxes or export duty was effected within 45 days from the date of auction including the date of auction the liability on the part of the auction purchasers to remit a part of the benefit accruing therein to the extent indicated in the second pan of Clause 10 would arise and that has actually happened in the present cases and therefore, the demand made by the Coffee Board and the payment made by the petitioners and others was correct and that their subsequent stand that they were not liable to pay, was clearly an after-thought and patently untenable.
20. The learned Counsel for the Board also submitted as to the real intention of the parties in incorporating Clause 10 as follows: At the time of auction it has been the practice of the Board to fix what is called the 'Reserve Price' below which the coffee cannot be sold at the auction. For the purpose of fixing reserve price, the Board takes into account, inter alia, the existing rales of duties. Consequently, the rates of taxes and export duty as existed on 17-5-1987, the day prior to Ihe date of auction had been reflected in the Reserve Price fixed at the auction held on 18-5-1987. Reserve price would always be lower if exporl duty is higher and vice versa. First part of Clause 10 of the terms and conditions of auction was to give relief to the auction purchasers if there were to he any increase of taxes or export duty over and above the rate taken into account while fixing the reserve price. Similarly, second part of Clause 10 was intended to give benefit of reduction of export duty in cases where Ihe rale of export duty which was taken into account at the time of fixing the reserve price got reduced within a period of 45 days from the date of auction. In the present case in fixing the reserve price below which the coffee could not be sold at the auction held on 18-5-1977, the Coffee Board had taken into account that the export duty prevailing was at Rs. 2,200/- per quintal. Though the notification reducing the export duty from Rs. 2,200/- per quintal to Rs. 1,600/- per quintal was issued on the same date at Delhi, there had been no communication of it to the Board and consequently the reserve price fixed by the Coffee Board could not be altered in the light of the reduction of export duty. If that had been known the reserve price would have been fixed at a higher level. Therefore, this was a clear case of reduction of export duty from Rs. 2,200/- per quintal to Rs. 1,600/ - per quintal within a period of 45 days from the date o0f auction and therefore the claim made by respondent-writ petitioners was totally unjustified.
21. Sri Shanlibhushan, learned Counsel for the appellants, however, submitted thai the words 'including the date of auction' had no relevance at all to the question arising for consideration. He submitted that those words were used only to indicate that in order to attract Clause 10, the change i.e. increase in the rate of tax or duty or decrease in the rate of tax or duty should take place within 45 days from the date of auction including the date of auction, but Clause 10 would be attracted only if there were to be any change in the rate of export duty, from the rate that was prevailing on the date of auction after the date of auction and that as in the present cases, reduced rate of exporl duly bad come into force on 18-5-1977 i.e. the date of auction itself, there was no change of export duty at all, to attract the second part of Clause 10.
22. After giving our careful consideration to the rival contentions, we are clearly of the view that the argument, though sounds attractive is devoid of any merit, It is not disputed that in fixing the reserve price for coffee below which it could not be sold at the auction held on 18-5-1977 the Coffee Board had computed it taking the rate of export duty which was prevailing till Ihe previous day which was Rs. 2,200/- per quintal. Naturally Ihe reserve price had been fixed correspondingly at a lower rate. Every auction purchaser including the respondent-writ petitioners had participated at the auction and offered their bid for the purchase of coffee bearing in mind their liability to pay export duly at the rate of Rs. 2,200/- per quintal. With the reduction of export duty from Rs. 2,200/- per quintal to Rs. 1,600/- per quintal by notification dated 18-5-1977 which came to the knowledge of both the Board and the auction purchasers subsequent to the completion of the auction on 18-5-1977. every registered owner was benefitted to the extent of Rs. 600/- per quintal and therefore in terms of Clause 10 he was bound to refund 50% of the benefit secured if he were to ship the coffee so secured within 30 days or to refund 75% of | the difference if the coffee so purchased at the auction was shipped beyond 30 days.
23. Apart from this, in our opinion the words including the date of auction used in the first part of Clause 10 relating to increase clearly meant that in ihe case of increase of exporl duly within 45 days from the date of auction including the date of auction the Coffee Board was liable to reimburse the purchasers to the extent indicated therein. There could not be any different intention in respect of the second part of Clause 10. In that case also, in the case of reduction of tax or export duty within 45 days from the date of auction including the date of auction, the auction purchaser was bound to pass on the prescribed percentage of the benefit accruing on such reduction to the Board. We are in respectful agreement with the interpretation of the clause by Puttaswamy, J., at paragraphs 35 and 36 of his Order. In the present cases, undisputedly the reduction had taken place on the date of auction i.e. within 45 days from the date of auction including the date of auction and therefore the Board was fully justified in demanding the auction purchasers to make payment in terms of second part of Clause 10. The claim of the petitioners that the Board was not entitled to ask for refund or was liable to refund the amount already remitted by such of the auction purchasers, who had participated on 18-5-1977, is clearly untenable and an afterthought.
24. We also uphold the contention of the Board, that a writ of mandamus for payment of money can be granted in a petition under Article 226 of the Constitution if only an obligation to make payment flows from a statutory provision and not when it is a contractual liability -- as held by the Supreme Court in Burmah Construction Co., : AIR1962SC1320 . Therefore, irrespective of the fact that the contract concerned is statutory or non-statutory, a writ petition praying for issue of writ of mandamus for payment of money could not be entertained by this Court, for, in the present cases there is no statutory provision which makes it obligatory for the Board to pay any money to them, on which the appellants have based their claim for the issue of a writ of mandamus for payment of money.
25. Though we also see that there is considerable force in the contention of the Board, that the view taken by the learned single Judge that the contracts in question were not statutory in nature, it is unnecessary for us to consider the elaborate arguments addressed by the learned counsel, in view of our conclusion on the merits of the cases, and on the question of the entertainability of a writ petition seeking a direction to the Board for payment of money claimed on the basis of an alleged breach of contract, in the absence of a statutory obligation on the part of the Board to pay.
26. The facts and circumstances of the writ petitions referred to Division Bench are similar, the only difference being that they relate to coffee auctions held subsequent to 18-5-1977. There is only a slight variation in Clause 10 of the terms and conditions of auction. Therefore, our decision on the points in the Writ Appeals fully covers these petitions also to that extent. Therefore, it is unnecessary to set out the facts of these petitions.
27. However, two additional points are raised in some of these petitions. The first is that within the period of 45 days from the date of auction concerned in these cases, there was total exemption of export duty on coffee and therefore the auction purchasers were not liable to refund any amount to the Coffee Board as it was not a case of reduction of export duty. (2) Even in cases where reduction of export duty was after 45 days, the Coffee Board had demanded refund which was contrary to Clause 10 of the agreement concerned in these cases.
28. On the first point, the contention of the petitioners is that Clause 10 would be attracted if only the rate was reduced to any extent and not to a case of total exemption. According to the learned Counsel for the Board the clear intention of the second part of Clause 10 was that to whatever extent the export duty is reduced, compared to the rate which was prevailing at the time of auction within 45 days, the specified percentage of the said benefit should be passed on to the Board. The learned Counsel for the Board pointed out with reference to the contents of the Notification issued by the Central Government under Section 25 of the Customs Act that during the 45 days period from the date of auction concerned, in some of these writ petitions export duty on coffee was exempted. The contention of the petitioners is that the second part of clause 10 of the terms and conditions of auction would have been attracted if there was reduction in the rate of export duty only and not when exemption was granted. We see no merit in the contention. In our opinion, exemption means reduction of the rate of export duty prevailing on the date of auction to nil, and therefore it was obligatory for the exporter to refund to the Board to the extent specified in clause 10 of the agreement. Hence, this contention is liable to be and is rejected.
29. As regards the second point urged in some of the petitions is concerned, the Coffee Board has filed a memo. It reads:--
'1. Out of the sixteen writ petitions which have been referred to the Hon'ble Division Bench, in 14 of the petitions, reduction in the rate of export duty that took place 45 days after the date of auction, have not been taken into account while making demands for payment of the difference in duty. In these fourteen petitions, only reduction that occurred within the 45 days period have been taken into account.
2. In the other two petitions W.P. 1398/ 1980 and W.P. 15231/1982, according to the statements given by the petitioners in Court in respect of 4 out of the 27 shipments listed bv the petitioners in W.P. No. 1398/1980, and 2 out of the 14 shipments listed by the petitioner in W. P. 15231/1982, in addition to a reduction which occurred within the 45 days period, a further reduction which occurred thereafter, has been taken into account.
3. On the basis of the information set out by the petitioners in these statement the amount demanded in excess from the petitioner in W.P. 1398/1980 works out to Rs. 1,52,200/-and in the case of petitioner in W.P. 15231/ 1982 the amount comes to Rs. 38,830/-. If on verification of the actual demands made with reference to the date of purchase and date of actual shipment which will take some time as the records maintained in different offices have to be traced -- these figures are found to be correct, due credit will be given to them in case the petitioners have made payments and the amounts adjusted against the outstanding demands, in accordance with clause 35 of theTerms of the sale. If payment has not been made, the same will not be pressed to this extent.'
In view of the memo the said point does not survive for consideration.
30. In the result, we make the following order:--
(a) Writ Appeals are dismissed with costs. Advocate's fee quantified at Rs. 1,000/-payable by each of the appellants to the respondent Board;
(b) Writ Petitions are dismissed, subject to the memo dated 1st September, 1989 filed by the Board which is incorporated in para 29 of this judgment, without any order as to costs.
Immediately after we pronounced the order the learned counsel for the appellant in W.A. No. 1917 of 1984, made an oral application under Article 134-A of the Constitution of India, for granting Certificate of Fitness to appeal to the Supreme Court.
In our opinion, no substantial question of law which is required to be decided by the Supreme Court arises out of our order. The application is rejected.
31. Order accordingly.