Municipal Council Gondia vs. Divi Works & Suppliers, HUF & Ors.
Background
The Municipal Council, Gondia (which runs schools) issued a tender for benches, almirahs and tables, and awarded a work order to the respondent supplier in February 2020. Because of the Covid-19 lockdown and a state government directive to halt non-priority spending, the Council suspended and then cancelled the work order. The supplier challenged this before the Bombay High Court (Nagpur Bench), which ruled in its favour and directed the Council to accept the goods and make payment, treating this effectively as an order for specific performance of the contract.
Decision Breakdown
The Supreme Court held that the High Court erred on two counts. First, procedurally, a writ court exercising jurisdiction under Article 226 cannot grant what is effectively specific performance of a contract, especially where there are disputed questions of fact (here, whether the goods had actually been manufactured as claimed): such disputes belong in a civil suit. Second, on the merits, the Council's decision to cancel the order was a reasonable response to the pandemic-driven government directive restricting non-essential expenditure, taken after obtaining a report from the Education Officer, and the High Court had not properly appreciated these reasons. The Court also noted that a court-ordered on-site inspection during the appeal found the supplier had not actually kept ready-made goods matching the specifications. The High Court's judgment was set aside and the writ petition dismissed, though the supplier was left free to sue for damages in a civil court.
Lesson Learnt
Writ courts cannot be used as a shortcut to force a government body to perform a commercial contract or accept disputed factual claims: a party alleging breach of a government contract, especially one involving factual disputes, must pursue an ordinary civil suit for damages rather than a writ petition.