Sharping Matshajibi Samabaya Samity Ltd. vs. Bangladesh And Others [1987 7 BLD (AD) 106]

Court

Appellate Division

Case Name

Sharping Matshajibi Samabaya Samity Ltd. vs. Bangladesh And Others

Citation

1987 7 BLD (AD) 106

23.09.1986

Sharping Matshajibi Samabaya Samity Ltd.

Matter

Whether the writ jurisdiction is available to remedy the breach of a contractual obligation.

Factual Background

Sharping Matshajibi Samabaya Samity was granted the lease of the fishery in question for a term of six years at 50% enhanced rate over the existing rent and the lease deed was executed on payment of rent on 22-8-81. Suddenly after three weeks, the Director of Fishery cancelled the lease whereupon Sharping Matshajibi Samabaya Samity challenged the Order by way of Writ. The Rule was made absolute and the High Court Division declared the cancellation Order as void whereupon the appellant was inducted into possession in September, 1982.

In the meantime an error was detected in calculating rent of the fishery and authorities adjusted the excess amount towards the rent of  next year. Then, the authority fixed a time period for paying the rest amount for next year through a letter. However, they have defaulted in payment of rent in time and that was a delay of one year two months. As a result, authority cancelled the lease of Chatla Beel Group Fishery granted by the Fishery Department in favour of Sharping F. C. S. on ground of their default of rent and for not undertaking any development scheme.

Then, they challenged the impugned Order by filing a Writ Petition and the High Court Division while dealing with the case considered number of submissions which would be considered at the appropriate stage, and ultimately came to the conclusion that, a contractual right could not be enforced by invoking the writ jurisdiction under Article 102 of the Constitution and in this view of the matter the Rule was discharged. Then, this appeal by special leave is directed against the judgment and Order of the High Court Division.

... in the case of breach of obligation under a contract between government and a private party, proper remedy lies in a civil suit and not in a writ petition under the extra-ordinary jurisdiction given by the Constitution. But this principle will not apply when the government violates the terms of the contract with a mala fide intention or acts arbitrarily or in a discriminatory manner. Again, when it is alleged, as in the present case, that rent for the lease-hold property has not been paid but the allegation is denied by the lessee who produces undisputed receipts showing that he already paid the rent, then before cancelling the lease on the ground of nonpayment of rent the public functionary must get this dispute settled by giving the lessee an opportunity to show that he actually paid the rent. If any dispute is raised as to interpretation of any term of the contract or lease agreement upon the determination of which the question of alleged breach of the contract depends, then that dispute should be resolved after hearing the lessee. It is true that when a contract specifically provides that breach of any of its terms will render the contract liable to be cancelled, and the government cancels the contract on a finding of such a breach the question of prior notice for cancellation does not arise. But the breach alleged must be established before the action to cancel the contract is taken. Here in this case the dispute was as to the due date for payment of the rent for the Government's lease order supports the lessess's view; or at best, the lease Order is capable of being interpreted in a different way. But when no objection was raised by me government during the first three years of the lease when the rents were paid according to the lessee's calculation the dispute raised after three years should have been resolved upon hearing the lessee. Cancellation of the lease without hearing him is found to be violative of the principle of natural justice. ~ Mr. Justice Shahabuddin Ahmed

Direction

N/A

Decision

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