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TMI Blog2015 (5) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... nt claimed benefit of Section 42 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). Section 42 is a special provision for deductions in the case of business for prospecting, etc. for mineral oil. It provides for certain additional allowances as are specified in the agreement, details thereof would be taken note of hereinafter. We may, however, point out here itself that such allowances, as stipulated in the Section, are to be specifically mentioned in the agreement as well, which is entered into with the Central Government and it is also necessary that such an agreement has been laid on the Table of each House of Parliament. 2) The Income Tax Authorities extended the benefit of granting deductions under the aforesaid provisions from the year 2001-02 (assessment years onwards) when the appellant commenced commercial production in the aforesaid two oil fields. However, while making assessment for the Assessment Year 2005-06, the Assessing Officer observed that there were no such provisions made in the Agreements which were signed between the Central Government and the appellant and in the absence of such stipulation in the agreement, the appellant was not en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stipulations to this effect in the Contracts signed between the parties. This decision is the subject matter of challenge before us in the present appeal. 4) Now, the facts in detail: The Union of India ("UOI"), through the MoPNG, issued a Notice Inviting Tenders in August 1992 ("1992 NIT"), along with a Model Production Sharing Contract ("MPSC"), for "Development of Oil and Gas Fields" from various companies in relation to some selected oil fields in Gujarat and other States. Article 16 of the above-mentioned MPSC contained a specific provision, which provided certain financial benefits and deductions in relation to taxes etc. that would be allowed to contractors/developers, as per the requirements of Section 42 of the Act. 5) The MoF by its Office Memorandum dated 18.06.1992, raised an issue that Section 293-A of the Act would not apply to contracts of the nature mentioned above, and that benefits under the special provisions of Section 42 of the Act would not be available to foreign companies, such as the appellant, which enter into such contracts with the Central Government. The MoPNG by its Office Memorandum, dated 22.06.1992 ("OM") referred the issue to the Ministry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned the basis on which such assesses had claimed deduction/ allowances under Section 42. This move of the Income Tax Authorities prompted the MoPNG to write OM dated 17.06.2005 to the MoF, Department of Revenue to clarify to the relevant Income-Tax Authorities that the provisions of Section 42 of the Income-Tax Act would be applicable to all PSCs, including those thirteen (13) PSCs executed by the Union of India, which did not expressly contain these provisions, for the purpose of computing profits and gains, after allowing the Section 42 deductions. The appellant's two PSCs are among these thirteen (13) PSCs referred to by the MoPNG in this Office Memorandum. The OM noted that it would not be equitable and fair if Section 42 deductions were denied in respect of these 13 PSCs. 11) Since the entire dispute pertains to deductions under Section 42 of the Act, at this stage we reproduce the said provisions hereunder: "42. Special provision for deductions in the case of business for prospecting, etc., for mineral oil.-[(1)] For the purpose of computing the profits or gains of any business consisting of the prospecting for or extraction or production of mineral oils in relation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) exceed the amount of the expenditure incurred remaining unallowed, so much of the excess as does not exceed the difference between the expenditure incurred in connection with the business or to obtain interest therein and the amount of such expenditure remaining unallowed, shall be chargeable to income-tax as profits and gains of the business in the previous year in which the business or interest therein, whether wholly or partly, had been transferred: Provided that in a case where the provisions of this clause do not apply, the deduction to be allowed for expenditure incurred remaining unallowed shall be arrived at by subtracting the proceeds of transfer (so far as they consist of capital sums) from the expenditure remaining unallowed. Explanation.-Where the business or interest in such business is transferred in a previous year in which such business carried on by the assessee is no longer in existence, the provisions of this clause shall apply as if the business is in existence in that previous year; (c) are not less than the amount of the expenditure incurred remaining unallowed, no deduction for such expenditure shall be allowed in respect of the previous year in which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant clause or not. It is pertinent to note that in this letter, the appellant was listed by the MoPNG as having the provision for Section 42 deductions in its two PSCs, which though factually incorrect, again underscores the bona fide belief of the UOI through the MoPNG that the appellant had been granted the Section 42 deductions in respect of its two PSCs. 14) However, MoF did not issue any such clarification. In the absence of such a clarification from the Ministry of Finance, the ADIT disallowed appellant's claim for deduction under Section 42(1)(b) and Section 42(1)(c) of the Income Tax Act, made in the appellant's Income-Tax Return for the Assessment Year 2005-2006, on the ground that a specific reference to the Section 42 deduction has not been made3 expressly in the two PSCs (hereinafter the "ADIT's Order"). As a result, the ADIT issued a demand notice under Section 156 of the Income Tax Act to the appellant, demanding payment of Rs. 1,24,45,509.00 (rupees one crore twenty four lakhs forty five thousand five hundred and nine only) by way of additional tax, interest and penalty. The appellant preferred an appeal against the ADIT's order before the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Authorities taking preliminary objection pertaining to territorial jurisdiction of the High Court of Delhi and also raising the ground of alternate remedies available in the law in the form of appeal before the ITAT which had already been preferred by the appellant. Rejoinder thereto was filed by the appellant. Thereafter, another counter affidavit on merits was filed by the respondent no. 1. In this counter affidavit, stand was taken by the respondents that MPSC would not apply to appellant's two PSCs. The appellant filed rejoinder to this counter affidavit controverting the stand which was taken by the respondent. Thereafter, the respondent filed another supplementary affidavit stating that MoF had not concurred with the proposal to extend the benefit of deductions under Section 42 of the Act vide MoF O.M. dated 11.11.2009. Short affidavits were also filed by MoF as well as ADIT taking the position that the appellant was not entitled to benefit of Section 42 of the Act. Rejoinder to these short affidavits was filed by the appellant. Rejoinder was also filed to the supplementary affidavit which has been filed by respondent no. 1. The appellant also filed additional affidavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re: "(1) Whether benefit under Section 42 of the Act was envisaged in the 1992 NIT and in the PSCs, but due to oversight or mistake, the same was not included and mentioned in the written contract, and if so, the effect thereof? (2) If the question is decided in favour of the appellant, the second aspect is whether a direction can be issued for grant of benefit under Section 42 of the Act to the appellant, with a further direction that the contract should be laid before the Parliament after incorporating the said clause?" 21) Dealing with the first question, High Court rejected the plea of the appellant that 1992 NIT included and referred to the MPSC as incorrect. It is pointed out that the 1992 NIT did not refer to the MPSC and did not stipulate that MPSC shall form part of the tender documents. It is further stated by the High Court that in 1992 NII, there was no reference to MPSC or that the terms and conditions of the MPSC shall be included in, or be a part of, the PSCs. It is also observed that there is no document or clause in the bid given by the appellant under the 1992 NIT to the effect that the MPSC or clause 16.2 of the same would be applicable and should be a part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examined the original records and found that under the terms and conditions, as well as in the notes, no benefit under Section 42 of the Act was envisaged or was required to be granted. We also recorded the statement of the learned Additional Solicitor General that the three letters mentioned above were factually incorrect and, therefore, no legal right on the basis of the letters accrues/arises. Thus, no statement or promise, that advantage under Section 42 would be available to the successful bidder, was promised or made." 24) Insofar as plea of discrimination between 13 PSCs (which included the appellant), who are not given the benefit of Section 42 of the Act vis-a-vis other PSCs where such a benefit has been extended, the High Court has accepted the explanation put forth by the respondents to the effect that these 13 PSCs formed a different class in as much as their contract was in respect of small oil fields which had already been discovered and, therefore, the risk factor was less. On the other hand, other PSCs were in respect of undiscovered oil fields and for this reason benefit under Section 42 had been granted to them. 25) On the aforesaid reasoning, the High Court co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the MPSC which provided the benefit of Section 42. (c) Respondent no. 1 itself admitted that the contract was entered into, keeping in view the stipulations/terms contained in the MPSC and, therefore, MPSC had to be read into the contract. It was also argued that these facts were specifically confirmed by respondent no. 1 itself in its three letters dated 17-06-2005, 11-04-2007 and 28-04-2008. (d) It was, thus, argued that as held in the case of Godhra Electricity Co. Ltd. And Another v. State of Gujarat (1975) 1 SCC 199, it is the mutual understanding of the parties to a contract which determines the construction that the court will place on it and this principle squarely applied in the present case. (e) The accounts of the venture were drawn up on the footing that the deductions under Sect5ion 42 were available and that, accordingly, the Income Tax liability would stand reduced. On this footing, a significantly higher amount was computed as the profit share payable to the Government of India under the PSC, which was received by the Government year after year. (f) The reference made by MoPNG to the Ministry of Law in June/ July 1992 and the written opinion given by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the High Court on certain paras of the counter affidavit of respondent no. 1 was totally erroneous as such a stand taken in the counter affidavit was contrary to the letters which were addressed by the respondent no. 1 itself to the MoF but according to him, the manner in which the plea of discrimination was dealt with by the High Court was also erroneous ignoring the specific plea taken by the appellant in its additional affidavit dated 28-02-2012 giving particulars of a number of small-sized oil fields to which Section 42 benefit was given and the Government had not controverted those averments. He submitted that apart from the plea, 13 oil fields (which included the appellant) all other oil fields, whether large, medium or small sized, and whether discovered or exploratory, were given the benefit of Section 42 of the Act. Therefore, the respondents had acted in a grossly arbitrary and discriminatory manner. 30) Last submission of Mr. Ganesh was that the issue regarding Mandamus to be issued to the respondents for amending the contract and including the clause for granting the benefit of Section 42 of the Act was not even gone into, though, it was specifically argued. He fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iberate decision not to extend such a benefit. He also argued that in any case plea of discrimination could not be taken in the matters of contract in private law field. 34) Reacting to the relief of mandamus sought by the appellant seeking directions against Respondent No. 1 to amend the contract, his plea was that such a prayer, in the realm of contractual relationship between the parties, was inadmissible. He pleaded that PSCs are in the nature of contract agreed to be between two independent contracting parties and each of the PSCs are distinct from the other and is not a copy of MPSC. He also pointed out that before signing the PSC, the approval of the Cabinet is obtained, which reflects that the PSCs as submitted to the Cabinet, has the approval of one of the contracting party, i.e. Government of India. Therefore, the appellant could not claim to be oblivious of the provisions of law or the contents of the contract at the time of signing and was precluded from seeking retrospective amendment as a matter of right when no such right is conferred under the contract. In support of his submission that the doctrine of fairness and reasonableness applies only in the exercise of sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) - First and foremost aspect which has to be kept in mind while answering this issue is that the Income Tax Authorities while making assessment of income of any assessee have to apply the provisions of the Income Tax Act and make assessment accordingly. Translating this as general proposition contextually, what we intend to convey is that the Assessing Officer is supposed to focus on Section 42 of the Act on the basis of which he is to decide as to whether deductions mentioned in the said provision are admissible to the assessee who is claiming those deductions. In other words, the Assessing Officer is supposed to find out as to whether the assessee fulfills the eligibility conditions in the said provision to be entitled to such deductions. We have already reproduced the language of Section 42, which deals with special provisions of deductions in the case of business for prospecting, etc. for mineral oil. Since, the appellant herein, in its income tax returns for the assessment year in question, i.e., Assessment Year 2005-06, had claimed the deductions mentioned in Section 42(1)(b) and (c) of the Act, we should take note of the nature of these deductions. Section 42(1) (b) provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section, it is the PSC which governs the field as without it, such deductions are not permissible under the Act. IF PSC also does not contain any stipulation providing for such allowances, the Assessing Officer would be unable to give the benefit of these deductions to the assesee. 39) We would also like to point out, at this juncture itself, that this Court held in CIT v. Enron Expat Service Inc. (2010) 327 ITR 626 that the mere fact that the assessee had offered to pay tax under Section 44 (BB) of the Act in some of the earlier years will not operate as an estoppel to claim the benefit of Double Taxation Avoidance Agreement (DTAA), where the assessee operates under the same PSC which was before the Court. While holding so, the Court had followed its earlier judgment in the case of Enron Oil and Gas India Limited (Supra). 40) In the present case, it is an admitted fact that conditions mentioned in Section 42 of the Act are not fulfilled. In the two PSCs, no provision is made for making admissible the aforesaid allowances to the assessee. It is obvious that the Assessing Officer could not have granted these allowances/deductions to the assessee in the absence of such stipulations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e crystal clear in the agreement that this agreement is the sole repository of the terms on which it is signed and nothing else would be looked into for this purpose. It is so reflected in the following clauses in the agreement: "(5) The Government has agreed to enter into this Contract with the Companies with respect to the area referred to in Appendices A & B of this Contract on the terms and conditions herein set forth." Article 1 - In this Contract, unless the context requires otherwise, the following terms shall have the meaning ascribed to the then hereunder: xxx xxx xxx Article 1.18 "Contract" means this agreement and the Appendices mentioned herein and attached hereto and made an integral part hereof and any amendments made thereto pursuant to the terms hereof. Article 32 - ENTIRE AGREEMENT, AMENDMENTS, WAIVER AND MISCELLANEOUS 32.1 This Contract supersedes and replaces any previous agreement of understanding between the Parties, whether oral or written, on the subject matter hereof, prior to the Effective Date of this Contract. 32.2 This Contract shall not be amended, modified, varied or supplemented in any respect except by an instrument in writing signed by all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effective date of this contract. 46) The matter is, however, compounded by certain acts of respondent no. 1 and made complex to some extent by the Income Tax Authorities in giving benefit of these allowances/deductions under Section 42 of the Act to the appellant under these very PSCs in respect of earlier assessment years. Further, this very state of affairs continued for few years insofar as giving such a benefit by the Income Tax Authorities is concerned it may not pose a serious problem. We have already held above that on proper construction of the provisions of Section 42 of the Act and application of these provisions to the instant case, the appellant was not entitled to any such deductions under the PSCs. Thus, when in law no such deduction was permissible as per the PSCs in the present form, even if such deduction was given wrongly in the earlier years that would not amount to a wrong act on the part of the Income Tax Authorities and, therefore, would not enure to the benefit of the appellant in the Assessment Year in question as well. The appellant cannot say that merely because this benefit is extended in the previous years; albeit wrongly, this wrong act should continu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court for giving the copies of such records, the High Court had observed that those records would not be seen nut ultimately relied upon these records. We do not know whether the High Court is correct in its conclusion as to whether the contents of the three letters are contrary to records and the averments made in para 4 of the counter affidavit are in conformity with the records, in as much as these records have not been produced for our perusal. However, on going through the terms of the PSCs it becomes apparent that such an exercise is not even required. 49) It is stated at the cost of repetition that Article 32 of the contract supersedes any understanding between the parties. Thus, even if it is presumed that there was an understanding between the parties before entering into an agreement to the effect that benefit of Section 42 deduction shall be extended to the appellant, that understanding vanished into thin air with the execution of the two PSCs. Now, for all intent and purpose, it is only the PSCs signed between the parties, which can be looked into. We answer this question accordingly. 50) Undoubtedly, the appellant is also conscious of such a limitation and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court without any objections from the respondent to the contrary. Therefore, we are inclined to examine the plea on merits, though reluctantly. 54) Let us presume that there was such an intention. In fact, it is so stated in the three letters dated 17-06-2005, 11-04-2007 and 28-04-2008 which are written by MoPNG and not disowned by it. Still such an intention would not make any difference and for this purpose we again revert back to Article 32 which has already been reproduced above. Not only prior understanding between the parties stood superseded as mentioned in Article 32.1, Article 32.2 which is crucial to answer this question, bars any amendment, modification etc. to the said contract except by an instrument in writing signed by all the parties. Thus, unless respondents agree to amend, modify or varied/supplemented the terms of the contract, no right accrues to the appellant in this behalf. 55) We have to keep in mind that the contract in question is governed by the provisions of Article 299 of the Constitution. These are formal contracts made in the exercise of the Executive power of the Union (or of a State, as the case may be) and are made on behalf of the Presid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle 32 of the Constitution cannot be invoked. However, in a limited sphere such remedies are available only when the non-Government contracting party is able to demonstrate that its a public law remedy which such party seeks to invoke, in contradistinction to the private law remedy simplicitor under the contract. Some of the case law to bring home this cardinal principle is taken note of hereinafter. 58) Significantly, in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust & Ors. v. R. Rudani & Ors. (1989) 2 SCC 691 as well, this Court made it clear that if the rights are purely of private character, no mandamus can be issued. Thus, even if the respondent is a 'State', other condition which has to be satisfied for issuance of a writ of mandamus is the public duty. In a matter of private character or purely contractual field, no such public duty element is involved and, thus, mandamus will not lie. 59) First case which needs to be referred is Bareilly Development Authority Vs. Ajai Pal Singh and others [1989] 1 SCR 743. That was the case where Appellate Authority had undertaken construction of dwelling units for people belonging to differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aram Shetty case were not correct. Thus observed the Court, speaking through Ratnavel Pandian. J.: "The finding in our view, is not correct in the light of the facts and circumstances of this case because in Ramana Daya Shetty case, there was no concluded contract as in this case. Even conceding that the BDA has the trappings of a state or would be comprehended in 'other authority' for the purpose of Article 12 of the constitution, while determining price of the houses/flats constructed by it and the rate of monthly installments to be paid, the Authority or its agent after entering into the field of ordinary contract acts purely in its executive capacity. Thereafter the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter se. In this sphere they can only claim rights conferred upon them by the contract in the absence of any statutory obligations on the part of the authority (i.e. BDA in this case) in the said contractual field. 22. There is a line of decisions where the contract entered into between the state and the persons aggrieved is non-statutory and purely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of law. The Corporation can also file a writ petition for enforcement of a right under a statute. As pointed out earlier, the respondent company was merely trying to enforce a contractual obligation. To clear the ground let it be stated that obligation to pay royalty for timber cut and felled and removed is prescribed by the relevant regulations, the validity of regulations is not challenged. Therefore, the demand for royalty is supported by law. What the respondent claims is an exception that in view of a certain term in the indenture of lease, to writ, Clause 2, the appellant is not entitled to demand and collect royalty from the respondent. This is nothing but enforcement of a term of a contract of lease. Hence, the question whether such contractual obligation can be enforced by the High Court in its writ jurisdiction. 9. Ordinarily, where a breach of contract is complained of, a party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed, or the party may sue for damages. Such a suit would ordinarily be cognizable by the Civil Court. The High Court in its extraordinary jurisdiction would entert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct Government Counsel by the State Government is only a professional engagement like that between a private client and his lawyer, or that it is purely contractual with no public element attaching to it, which may be terminated at any time at the sweet will of the Government excluding judicial review. We have already indicated the presence of public element attached to the 'office' or post of District Government Counsel of every category covered by the impugned circular. This is sufficient to attract Article 14 of the Constitution and bring the question of validity of the impugned circular within the scope of judicial review. 18. The scope of judicial review permissible in the present case, does not require any elaborate consideration since even the minimum permitted scope of judicial review on the ground of arbitrariness or unreasonableness or irrationality, once Art. 14 is attracted, is sufficient to invalidate the impugned circular as indicated later. We need not, Therefore, deal at length with the scope of judicial review permissible in such cases since several nuances of that ticklish question do not arise for consideration in the present case. 19. Even otherwise and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is basic to rule of law from State actions is contractual field when all actions of the State are meant fore public good and expected to be fair and just ? we have no doubt that the Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the preamble. In our opinion, it would be alien to the Constitutional scheme to accept the argument of exclusion of Art. 14 in contractual matters. The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion. This is more so when the modern t rend is also to examine the unreasonableness of a term in such contractual where the bargaining power is unequal so that these are not negotiated contracts but standard from contracts between unequal. 22. There is an obvious difference in the contracts between private parties and contracts to which the State is a party. Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case" 64) Similarly, in State of Gujarat v. M.P. Shah Charitable Trust (194) 3 SCC 552, this Court reiterated the principles that if the matter is governed by a contract, the writ petition is not maintainable since it is a public law remedy and is not available in private law field, for example, where the matter is governed by a non-statutory contract. 65) At this stage, we would like to discuss at length the judgment of this Court in ABL International Ltd. (supra), on which strong reliance is placed upon by the counsel for both the parties. In that case, various earlier judgments right from the year 1954 were taken note of. One such judgment which the Department in support of their case had referred to was the decision of Apex Court in case LIC of India v. Escorts Ltd. (1986) 1 SCC 264 wherein the Court had held that ordinarily in matter relating to contractual obligations, the Court would not examine it unless the action has some public law character attached to it. The following passage from the said judgment was relied upon by the respondents: "If the action of the State is related to contractual obligations or obligations arising out of the tort, the court ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) supports the argument of the learned counsel on the question of maintainability of the present writ petition. It is to be noted that VST Industries Ltd. against whom the writ petition was filed was not a State or an instrumentality of a State as contemplated under Article 12 of the Constitution, hence, in the normal course, no writ could have been issued against the said industry. But it was the contention of the writ petitioner in that case that the said industry was obligated under the concerned statute to perform certain public functions, failure to do so would give rise to a complaint under Article 226 against a private body. While considering such argument, this Court held that when an authority has to perform a public function or a public duty if there is a failure a writ petition under Article 226 of the Constitution is maintainable. In the instant case, as to the fact that the respondent is an instrumentality of a State, there is no dispute but the question is: was first respondent discharging a public duty or a public function while repudiating the claim of the appellants arising out of a contract ? Answer to this question, in our opinion, is found in the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon itself certain restrictions in the exercise of this power [See: Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai & Ors. [1998 (8) SCC 1]. And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the court thinks it necessary to exercise the said jurisdiction." 68) The position thus summarized in the aforesaid principles has to be understood in the context of discussion that preceded which we have pointed out above. As per this, no doubt, there is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when monetary claim is raised. At the same time, discretion lies with the High Court which under certain circumstances, can refuse to exercise. It also follows that under the following circumstances, 'normally', the Court would not exercise such a discretion: (a) the Court may not exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofitable to do so: and he can challenge the conditions under which he agreed to take the license, if he finds it commercially inexpedient to conduct his business. (vi) Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages. (vii) Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice. (viii) If the contract between private party and the State/instrumentality and/or agency of State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitutional of India and invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no clause pertaining to Section 42 of the Act. The appellant is presumed to have knowledge of the legal provision, namely, in the absence of such a clause, special allowances under Section 42 would impermissible. Still it signed the contract without such a clause, with open eyes. No doubt, the appellant claimed these deductions in its income tax returns and it was even allowed these deductions by the Income Tax Authorities. Further, no doubt, on this premise, it shared the profits with the Government as well. However, this conduct of the appellant or even the respondents, was outside the scope of the contract and that by itself may not give any right to the appellant to claim a relief in the nature of Mandamus to direct the Government to incorporate such a clause in the contract, in the face of the specific provisions in the contract to the contrary as noted above, particularly, Article 32 thereof. It was purely a contractual matter with no element of public law involved thereunder. 72) Having considered the matter in the aforesaid prospective, we come to the irresistible conclusion that the appellant is not entitled to the relief claimed. Though it may be somewhat harsh on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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