Wrong Doers Cannot Be Allowed To Make Profit Out Of Their Own Wrongs : Supreme Court

The Supreme Court has reiterated that no one can be permitted to take undue advantage of his own wrong to gain favourable interpretation of law, and that he who prevents a thing from being done shall not avail himself of the non- performance he has occasioned

The bench of Justices B. R. Gavai and Sandeep Mehta was pronouncing its decision on the Municipal Committee, Katra's appeal against the 2015 judgment of the J & K High Court Division Bench which confirmed the Single Judge's opinion that the respondent-bidder had worked 33 days less than the stipulated contract period of 365 days and thus, was entitled to payment of pro-rata auction amount for these days. The bench of Justices Gavai and Mehta held that by challenging the validity of the terms and conditions of the auction notice, despite having participated in the tender proceedings with open eyes, the respondent himself was responsible for the delay occasioned in issuance of the work order which deprived him of the opportunity to work for the entire period of 365 days.

Factual Background

The appellant-Municipal Committee, Katra issued a Notice Inviting Tender ('NIT') calling for bids for supply of mules and mazdoors involved in transportation of pilgrims from the base camp to holy shrine of Mata Vaishno Devi. The contract came to be offered to the present respondent who accepted the offer so given.

In terms of Clause-8 of the NIT, the successful bidder was required to deposit 40% of the bid amount within 24 hours. It was also enjoined upon the bidder to deposit 5 post dated cheques along with bank guarantee to secure the amount for remaining tenure of the contract period.

The respondent-bidder filed a civil suit seeking a declaration that Clause-8 of the NIT was arbitrary. The Court of District Judge, Reasi allowed the application and granted temporary injunction directing the appellants to issue the order of allotment of contract to the respondent. On a challenge by the Municipal Committee, the High Court also passed an order directing the appellants to issue a work order in favour of the respondent.

After conclusion of the contract period, the respondent filed a writ petition before the High Court contending that his contract was supposed to commence from 1st April, 2010 and was to run for a period of 365 days till 31st March, 2011, but the said period was truncated because the same could be commenced from 10th May, 2010 only and hence, the respondent suffered a loss of collection of earnings for a period of 33 days. The Single Bench of the High Court disposed off the writ petition with a direction to the appellants to consider the claim of the respondent within six weeks.

This claim of the respondent being rejected, the same was subjected to challenge in another writ petition. The Single Judge held that it was the failure of the respondent-bidder, due to which the allotment letter enabling him to start performing under the contract from 1st April, 2010 was not issued; that the respondent had questioned the legality of the Clause-8. However, the Single Judge took upon himself to quantify the damages suffered by the bidder to be equivalent to net revenue collected by the appellant-Municipal Committee during first 32 days of contract period commencing from 1st April, 2010 after deducting expenses such as salaries and allied expenses and proceeded to direct the appellants to make payment thereof to the respondent.

The intra court appeal preferred by the appellants against the said order, and the cross-appeal filed by the respondent seeking modification of the order of the Single Bench and a direction upon the appellant to refund the total amount along with interest at 12% per annum without making any deductions, stand rejected by the judgment of the Division Bench impugned before the bench of Justices Gavai and Mehta

Situation squarely covered by 'Nullus commodum capere potest de injuria sua propria' - SC

“The situation at hand is squarely covered by the latin maxim 'nullus commodum capere potest de injuria sua propria', which means that no man can take advantage of his own wrong. To put it differently, 'a wrong doer ought not to be permitted to make profit out of his own wrong'”, says the judgment penned by Justice Mehta

The bench of Justices Gavai and Mehta notes that the respondent participated in the tender process without raising any issue about Clause-8 of the auction notice; that when the highest bidder did not come forward to execute the contract, the respondent became the highest bidder and was offered the work in question; and that he respondent accepted the same with open eyes.

“However, in order to avoid full compliance of Clause-8 of auction notice, the respondent went on to file a civil suit which stalled the issuance of the work order. We feel that once the respondent-writ petitioner had participated in the tender process being fully conscious of the terms and conditions of the auction notice, he was estopped from taking a U-turn so as to question the legality or validity of the terms and conditions of the auction notice”, rules the bench of Justices Gavai and Mehta

Allowing the appeal, the bench expressed the firm view that the impugned judgments are ex-facie illegal and without jurisdiction, and hence, the same are quashed and set aside.

'Relief of damages cannot be subject matter of extra ordinary writ jurisdiction of High Court'- SC

The bench of Justices Gavai and Mehta also observed that the relief which was sought by the respondent-bidder in the writ petition before the High Court was purely by way of damages. “By no stretch of imagination, such relief could have been subject matter of extra ordinary writ jurisdiction of the High Court under Article 226 of the Constitution of India”, says the top court

The bench of Justices Gavai and Mehta notes that the quantification of the damages would require entering into disputed questions of facts and hence, the High Court ought to have relegated the writ petitioner (present respondent-bidder) to the competent Court for claiming damages. “Law is well settled that disputes arising out of purely contractual obligations cannot be entertained by the High Court in exercise of the extra ordinary writ jurisdiction”, holds the bench

Case :  Municipal Committee Katra v. Ashwani Kumar

Citation : 2024 LiveLaw (SC) 373

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