No Profit From One’s Own Wrong: Supreme Court Denies Damages to Contractor.

On May 09^th 2024. our Hon’ble Supreme Court allowed the appeals filed by the Municipal Committee Katra against the judgments of the Jammu and Kashmir High Court, which had awarded damages to the respondent contractor for 33 days as he could not work during the contract period.

Keywords.

Writ Jurisdiction cannot be invoked for contract disputes, No one can take advantage of their own wrong, Tender conditions/Auction notice terms

Case Name- Municipal Committee Katra versus Ashwini Kumar in CIVIL APPEAL NO(S).  14970-71 OF 2017.

Brief Summary

In connection to this judgment, the Court invoked the legal maxim “nullus commodum capere potest de injuria sua propria” – no one can take advantage of their own wrong. Further, the Court held that the respondent contractor himself was responsible for the delay in issuance of the work order, as he did not comply with the tender conditions (Clause 8) requiring deposit of post-dated cheques and bank guarantee. The hon’ble Supreme Court had emphassised that the court should not invoke writ jurisdiction on the disputes involving quantification of damages based on disputed questions of fact should be adjudicated by the agreed forum (courts/arbitration).

Facts of the Case:

1. The Municipal Committee Katra issued a tender notice inviting bids for supply of mules and porters for transporting pilgrims to the Vaishno Devi shrine for the period 1st April 2010 to 31st March 2011. The respondent Ashwani Kumar was the second highest bidder, who became the highest bidder after the original highest bidder did not come forward.
2. As per Clause 8 of the tender conditions, the successful bidder had to deposit 40% of the bid amount within 24 hours of acceptance and provide post-dated cheques and bank guarantee for the remaining 60%. The respondent did not comply with the requirements of depositing post-dated cheques and bank guarantee for the remaining amount. Instead, he challenged Clause 8 by filing a civil suit.
3. Due to respondent’s non-compliance, the work order was not issued to him on 1st April 2010. After court intervention, the work order was finally issued on 10th May 2010.
4. The respondent worked from 10th May 2010 to 7th April 2011, which was 33 days less than the originally envisaged 365-day contract period.
5. Respondnt filed a writ petition claiming pro-rata damages of Rs. 71 lakh for the 33 days he could not work, which was initially allowed by the Single Judge of the High Court.
6. The Division Bench of the High Court upheld the single judge’s order, leading to the present appeals before the Supreme Court by the Municipal Committee.

Findings of the Supreme Court:

The Supreme Court invoked the legal maxim “nullus commodum capere potest de injuria sua propria” which means no one can take advantage of their own wrong.

The Court found that the respondent contractor respondent was solely responsible for the delay in issuance of the work order, as he failed to comply with the requirement of depositing post-dated cheques and bank guarantee as per Clause 8 of the tender conditions.

Despite participating in the tender process with open eyes, the respondent challenged Clause 8 by filing a civil suit, which stalled the issuance of the work order.

The Court held that once the respondent participated in the tender, he was estopped (prevented) from questioning the validity of the tender conditions.

The Court ruled that the High Court should not have entertained the claim for damages arising out of contractual obligations through a writ petition under Article 226 of the Constitution.

Such disputes involving quantification of damages based on disputed questions of fact should be adjudicated by the agreed forum (courts/arbitration) and not through extraordinary writ jurisdiction.

Consequently, the Supreme Court set aside the High Court judgments awarding damages to the respondent contractor, terming them as illegal and without jurisdiction.

In essence, this judgment had highlighted the importance of the maxims “nullus commodum capere potest de injuria sua propria” which means no one can take advantage of their own wrong.

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