# I 787 C. K. ACHUTHAN v. THE STATE OF KERALA AND OTHERS

- **Citation:** [1959] Supp. 1 S.C.R. 787
- **Court:** Supreme Court of India
- **Decided:** 1958-01-20
- **Bench:** S. R. Das, s. K. DAS, P. B. Gajendragadkar, K. N. W Anchoo, M. Hiday.A.Tullar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/i-787-c-k-achuthan-v-the-state-of-kerala-and-others-1638
- **Pages:** 5

## Headnote

Fundamental Rights, Infringement of-Contract for supp~y of
goods to Government-Whether a contract of employment-Can~clla
tion of contract and grant to another-Whether discriminatory-Constitution of India, Arts. z4, z6(z), z9(z)(g), JI.
For the supply of milk to the Government Hospital at Cannanore for the year 1948-49, the petitioner and the third res~on
dent, the Co-operative Milk Supplies Society, Cannanore, had
submitted tenders, and the Superintendent who scrutinised
them accepted that of the petitioner and communicated to1 the
Director of Public Health the reasons for the decision. Subsequently, the contract to the petitioner was cancelled after giying
the requisite notice in terms of cl. 20 of the tender, and he 'was
informed that it was the policy of the Government that in the
matter of supply to Government medical institutions in Cap.nanore District, the Co-operative Milk Supplies Union was to be
given contracts on the basis of prices fixed by .the Revenue
Department. The petitioner contended, in a petition filed uJllder
Art. 32 of the Constitution, that there had been discrimination
against him vis-a-vis the third respondent, that he was denied
equal opportunity of employment under the State, and that the
fundamental rights under Arts. 14, 16(1), 19(1) (g) and 31 had
been infringed.
Held, that none of the fundamental rights were involved in the
present case.
A contract which is held from Government stands on no
different footing from a contract held from a private party and
when one person is chosen rather than another the aggrieved
paFty cannot claim the protection of Art. 14·
'
A contract for the supply of goods is not a contract of
employment and the petitioner who was supplying milk to the
State hospital was in no sense a servant and no question of
employment qua servant arose. Article 16 (1) was therefore pot
attracted 1;o the case.
ORIGINAL JURISDICTION: Petition No. 103 of 1958.
Petition under Art. 32 of the Constitution for enforcement of fundamental rights.
M. T. Paikeday and Ganpat Rai, for the petitioner.
Sardar Bahadur, for respondent No. I.
M. R. Krishna Pillai, for respondent No. 3.
Dtcember II.
Achuthan
v.
Slate of Kerala
788
SUPREME COURT REPORTS [1959] Supp.
1958. December 11. The Judgment of the Court
was delivered by
HIDAYATULLAH, J.-This is a petition under Art. 32
of the Constitution by one C. K. Achuthan, who claims
to have held a contract for the supply of milk and
Hidayatullah J .. other articles of diet for the year 1958-1959 but whose
contract for supply of milk is said to .have been cancel.-
led by the District Medical Officer (second respondent
herein). The contract for the supply of milk has now
been given to the thi~d respondent, the Co-operative
Milk Supplies Society, Cannanore.
From the petition, it appears that the petitioner
held contracts for the supply of milk to the Government Hospital at Cannanore
(Kerala State) ever
since 1946, and that previous to this, his brother in
the same business held similar contracts from 1936.
In 1957, a "uniform procedure for fixing up contracts " was adopted, and by a notification, conditions
for acceptance of tender were laid down. The petitioner as well as the third respondent submitted their
respective tenders, which were to be opened by the
Superintendent of the Hospital in the presence of
interested parties. We need not refer to all the conditions under which tenders were to be accepted, except
those which have a bearing upon this matter. It was
stated in the conditions that no tender. marked at
" current market rates " would be accepted, and further that in the supply of milk, preference would be
given to approved Co-operative Milk Supply Unions and
Societies, if their tender was within a margin of 5 per
cent. over the market rate or the lowest tendered rate,
whichever was less. All persons making tender for ·
the contract had to produce a certificate of solvency
and tax clearance certificates, and to make a deposit
with the tender.
On January

## Text

(l) S.C.R.
SUPREME COURT REPORTS
I 787
C. K. ACHUTHAN
v.
THE STATE OF KERALA AND OTHERS.,
(S. R. DAS, c. J., s. K. DAS, P. B. GAJENDRAGADKAR,
K. N. W ANCHOO and M. HIDAY.A.TULLAR, JJ.)
Fundamental Rights, Infringement of-Contract for supp~y of
goods to Government-Whether a contract of employment-Can~clla
tion of contract and grant to another-Whether discriminatory-Constitution of India, Arts. z4, z6(z), z9(z)(g), JI.
For the supply of milk to the Government Hospital at Cannanore for the year 1948-49, the petitioner and the third res~on
dent, the Co-operative Milk Supplies Society, Cannanore, had
submitted tenders, and the Superintendent who scrutinised
them accepted that of the petitioner and communicated to1 the
Director of Public Health the reasons for the decision. Subsequently, the contract to the petitioner was cancelled after giying
the requisite notice in terms of cl. 20 of the tender, and he 'was
informed that it was the policy of the Government that in the
matter of supply to Government medical institutions in Cap.nanore District, the Co-operative Milk Supplies Union was to be
given contracts on the basis of prices fixed by .the Revenue
Department. The petitioner contended, in a petition filed uJllder
Art. 32 of the Constitution, that there had been discrimination
against him vis-a-vis the third respondent, that he was denied
equal opportunity of employment under the State, and that the
fundamental rights under Arts. 14, 16(1), 19(1) (g) and 31 had
been infringed.
Held, that none of the fundamental rights were involved in the
present case.
A contract which is held from Government stands on no
different footing from a contract held from a private party and
when one person is chosen rather than another the aggrieved
paFty cannot claim the protection of Art. 14·
'
A contract for the supply of goods is not a contract of
employment and the petitioner who was supplying milk to the
State hospital was in no sense a servant and no question of
employment qua servant arose. Article 16 (1) was therefore pot
attracted 1;o the case.
ORIGINAL JURISDICTION: Petition No. 103 of 1958.
Petition under Art. 32 of the Constitution for enforcement of fundamental rights.
M. T. Paikeday and Ganpat Rai, for the petitioner.
Sardar Bahadur, for respondent No. I.
M. R. Krishna Pillai, for respondent No. 3.
Dtcember II.
Achuthan
v.
Slate of Kerala
788
SUPREME COURT REPORTS [1959] Supp.
1958. December 11. The Judgment of the Court
was delivered by
HIDAYATULLAH, J.-This is a petition under Art. 32
of the Constitution by one C. K. Achuthan, who claims
to have held a contract for the supply of milk and
Hidayatullah J .. other articles of diet for the year 1958-1959 but whose
contract for supply of milk is said to .have been cancel.-
led by the District Medical Officer (second respondent
herein). The contract for the supply of milk has now
been given to the thi~d respondent, the Co-operative
Milk Supplies Society, Cannanore.
From the petition, it appears that the petitioner
held contracts for the supply of milk to the Government Hospital at Cannanore
(Kerala State) ever
since 1946, and that previous to this, his brother in
the same business held similar contracts from 1936.
In 1957, a "uniform procedure for fixing up contracts " was adopted, and by a notification, conditions
for acceptance of tender were laid down. The petitioner as well as the third respondent submitted their
respective tenders, which were to be opened by the
Superintendent of the Hospital in the presence of
interested parties. We need not refer to all the conditions under which tenders were to be accepted, except
those which have a bearing upon this matter. It was
stated in the conditions that no tender. marked at
" current market rates " would be accepted, and further that in the supply of milk, preference would be
given to approved Co-operative Milk Supply Unions and
Societies, if their tender was within a margin of 5 per
cent. over the market rate or the lowest tendered rate,
whichever was less. All persons making tender for ·
the contract had to produce a certificate of solvency
and tax clearance certificates, and to make a deposit
with the tender.
On January 20, 1958, the tenders which were submitted were scrutinised and the tender of the petitioner for the supply of milk was accepted and that of
the third respondent rejected. It appears that the
Superintendent (respondent No. 2) communicated to
the Director of Public Health, her reasons for accepting the tender of the petitioner and not &ooopting that
(1) S.C.R. SUPREME COURT REPORTS
,789
of the third respondent. Certain correspondence ~hen
1958
ensued between the Director of Health Services and
d
1 f
h
Achuthan
the second respon ent, as a resu t o w ich the petiv.
tioner was informed that the contract for the supply of State of Kerala
milk given to him was cancelled. He was informed
that it was the policy of Government that in the mat- Hidayatullak J.
ter of supply to Government medical institutions in
Cannanore District the Co-operative Milk Supplies
Union was to be given contracts on the basis of prices
fixed by the Revenue Department. It appears ~hat
some more correspondence between the Director of
Health Services and the second respondent ensued,
and it was pointed out to the second respondent that
action should have been taken under Cl. 20 of the conditions of the tender and the contract only cancelled
after giving a month's notice to the petitioner. In
furtherance of these instructions, the second respondent issued a notice in terms of Cl. 20 of the tender, and
cancelled the contract after the notice period.
The present petition has been filed to question the
several orders referred to above. It may be pointed
out that previous to this, the petitioner had applied
under Art. 226 of the Constitution to the High Coutt
of Kera.la, but his petition (0. P. No. 201 of 1958) was
rejected by Raman Nayar, J., on June 6, 1958. A
Letters Patent Appeal was also dismissed by Koshi,
C. J., and Vaidialingam, J. (A. S. No. 354 of 1958
decided on July 7, 1958). The High Court held that
the present matter was no more than a. breach, if any,
of the contract by the State Government, and that ~he
appropriate remedy was to file a civil suit and not to
proceed under Art. 226.
It appears that· no special leave to appeal was
sought from this Court against the above orders, ahd
the matter has been brought for adjudication, not by
way-of appeal but directly under Art. 32 of the Constitution as an infringement of the fundamental right
of the petitioner. The contention of the petitioner in
·this behalf is that he is entitled to an equal treatment
in the eye of law, and that there has been discrimin11tion against him vis-a-vis, the third respondent. IJe
claims protection under Arts. 14, 16(1), 19(l)(g) aijd
AeAuthan
v.
Stale of K11ala
Ilidayatullah ] .
790
SUPREME COURT REPORTS [1959] Supp.
31 of the Constitution. In our opinion, none of these
Articles can be made applicable to the facts of the
present case.
No doubt, the petitioner claims to have succeeded
in obtaining the contract from the Government, and
the third respondent failed to do so. But even if he
held the contract, the petitioner did not acquire an
absolute right to be continued in that contract, because power was reserved by the Government under
CL 20 to terminate the contract after giving a month's
notice.
Whether the exercise of that power in the
present case was regular or legal, is not a matter on
which we are called upon to pronounce, because
adjudication of such dispute can appropriately take
place only before the ordinary Civil Courts, where
evidence can be gone into and eJ<amined at length.
The gist of the present matter is the breach, if any,
of the contract said to have been given to the petitioner which has been cancelled either for good or for
bad reasons. There is no discrimination, because it is
perfectly open to the Government, even as it is to a
private party, to choose a person to their liking, to
fulfil contracts which they wish to be performed.
When one person is chosen rather than another, the
aggrieved party cannot claim the protection of Art.
14, because the choice of the person to fulfil a particular contract must be left;to the Government. Similarly,
a contract which is held from Government stands on
no different footing from a contract held from a private party. The breach of the contract, if any, may
entitle the person aggrieved to sue for damages or in
appropriate cases, even specific performance, but he
cannot complain that there has been a deprivation of
the right to practise any profession or to carry on
any occupation, trade or business, such as is contemplated by Art. 19(l)(g). Nor has it been shown how
Art. 31 of the Constitution may be invoked to prevent
cancellation of a. contra.ct in exercise of powers conferred by one of the terms of the contract itself.
The main contention of the petitioner before us was
thus under Art. 16(1) of the Constitution, and he
claimed equal opportunity of employment under the
(1) S.C.R. SUPREME COURT REPORTS
791
State. To begin with, a contract for the supply of
z95B
goods is not a contract of employment in the sense in
Achuthan
which that word has been used in the Article. i The
v.
petitioner was not to be employed as a servf!,nt to
State of Rerala
fetch milk on behalf of the institution, but was a contractor for supplying the articles on payment of' price. Hidayatullah J.
He claimed to have been given a contract for supply
of milk, and did not claim to be an employee of the
State. Article 16(1) of the Constitution, both in its
terms and in the collocation of the words, indicates
that it is confined to "employment" by the St11.te,
and has reference to employment in service rather
than as contractors. Of course, there may be cases in
which the contract may include within itself an element of service. In the present case, however; such
a consideration does not arise, and it is therefore not
necessary for us to examine whether those cases are
covered by the said Article. But it is clear that 1every
person whose offer to perform a contract of supply is
refused or whose contract for such supply is breached
cannot be said to have been denied equal opportunity
of employment., and it is to this matter that th~s case
is confined.
Looking to the facts of the case, it is manifest that
the petitioner was supplying, or in other words, filelling
milk and other articles of diet to the State for the use
of hospitals and similar institutions. He was in no
sense a servant, and no question of employmeQt qua
servant arose.
In these circumstances, it is plain
that Art. 16(1) of the Constitution is not attracted to
the facts.
In our opinion, the petition under Art. 32 of the
Constitution is wholly misconceived. No fundannental
right is involved. At best, it is a right to take the
matter to the Civil Court, if so advised, and to claim
damages for breach of contract, if any.
The petition accordingly fails, and is dismissed with
costs.
I
Petition dismissed.