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1991 DIGILAW 812 (ALL)

Prestress India Corporation v. U. P. State Electricity Board, Lucknow

1991-05-17

G.K.MATHUR, N.N.MITHAL

body1991
JUDGMENT G.K. Mathur , J. - By this petition. issuance of writ of mandamus is sought for against the respondents to clear off the bills of the petitioners of the period from May 1989 to September 1989 against the supplies and restraining the respondents from making any preferential treatment to other manufacturers in the matter of clearance of bill. 2. The petitioner-firm is engaged in the manufacture of Prestress Cement Concrete Poles (hereinafter referred to as `the PCC Poles') and entered into a contract on the basis of an order dated 30th October, 1987 placed by the opposite-party No. I for the supply of 25,000 PCC Poles against the petitioners' offer No. 10386/PIC/Steel Cell- 3/PCC Poles/85-86 dated 10-8-86 on the terms and conditions of the Tender Specification Steel Cell-3/PCC Poles/86-87 on the rates and terms detailed in the order dated 30th October, 1987. Subsequently, the quantity of supply was enhanced by opposite-party No. I to 50,000 poles. 3. The petitioners raised bills in question dated 1st May, 1989 for a sum of Rs. 18,94,535.30 and dated 2nd June, 1989 for a sum of Rs. 13,39,429.03 of 4331 and 3062 poles respectively, which, according to the petitioners, had been inspected at the factory premises and that the bills had been processed and passed for payment. The photostat copies of these bills are Annexures 3 and 4 to the writ petition. The petitioners raised three more bills dated 23rd June, 1989, 23rd June, 1989 and 7th September, 1989 for the excise duty claims relating to the material already lifted and the bills were duly processed and passed for payment. According to the petitioners, these five bills of the total sum of Rs. 34,34,443.64 are pending payment. Case of the petitioners is that under the terms of the contract the opposite-party No. 1 is liable to pay hundred per cent amount within one month after receipt of material and checking at site. The petitioners claim that the `site' as defined in Form `B' of the contract would mean the `factory of the petitioners situate at the, Industrial Area, Naini, Allahabad. The petitioners claim that the `site' as defined in Form `B' of the contract would mean the `factory of the petitioners situate at the, Industrial Area, Naini, Allahabad. The petitioners pleaded that in the Writ Petition No. 8229 of 1989, filed in Lucknow Bench, the opposite parties had agreed, by a written agreement dated 5th June, 1990, that the petitioners would be treated at par with other suppliers in all respects and no discrimination would be done with the petitioners on account of any misunderstanding in the past. The petitioners' case has been that in spite of aforesaid agreement the opposite parties have discriminated against the petitioners by not clearing payment for the months of May and June, 1989 and the representations of the petitioners dated 16th June, 1990 and 16th August, 1990, addressed to the Executive Engineer, Electricity Stores Division, U.P. State Electricity Board, Saket Nagar, Kanpur, and the representation dated 28th August, 1990, addressed to the Superintending Engineer, Electricity Steel Cell, U.P. State Electricity Board, Mahanagar, Lucknow, remained unacknowledged. The petitioner No. 2 claims to have personally met the Chief Engineer, Controller of Stores and the Chief Engineer, Material Management on 13th September, 1990 and both these authorities assured him that no discrimination would be made to the petitioners and in spite of it the Chief Engineer, Controller of Stores, informed on 7th October, 1990 that payments would not be made to the petitioners. The petitioners claim that the attitude of the opposite-parties is wholly arbitrary, vindictive and discriminatory against the petitioners because without assigning any reason they stopped payment to the petitioners; whereas they have cleared payment of other suppliers of PCC Poles. A list of members of the Pole Manufacturers Association, Uttar Pradesh and chart, showing the amounts, which have been made to various suppliers of PCC Poles ipso the month of September, 1989, have been annexed to the petition as Annexures 16 and 17 respectively. In order to substantiate the plea of discrimination, the petitioners have annexed copy of communication dated 21st July, 1990 of the Accounts Officer sent to M/s. Mohan Concrete Udyog. Lucknow, enclosing a bank draft towards certain bills of August and September, 1989. 4. The petitioners claim that in these circumstances they have no other equally efficacious and alternative remedy except to invoke the extraordinary jurisdiction of the Court under Article 226 of the Constitution of India. 5. Lucknow, enclosing a bank draft towards certain bills of August and September, 1989. 4. The petitioners claim that in these circumstances they have no other equally efficacious and alternative remedy except to invoke the extraordinary jurisdiction of the Court under Article 226 of the Constitution of India. 5. The petitioners filed an application, along with the writ petition, for issue of interim mandamus for the relief sought for in the writ petition. 6. The opposite parties have opposed the writ petition as well as the application for interim relief. Counter affidavit has been filed by Shri S. K. Khare, Executive Engineer, Electricity Steel Cell, Uttar Pradesh State Electricity Board, Lucknow, Rejoinder affidavit, supplement counter affidavit and two supplementary rejoinder affidavits have also been exchanged between the parties. 7. With the consent of the parties counsel we proceeded to dispose of the writ petition at the admission stage. 8. As regards the three bills dated 23rd June, 1989, 23rd June, 1989 and 7th September, 1989, relating to the excise duty amount, the stand of the opposite parties is that they were in the process of payment and were going to he cleared off shortly. 9. The learned counsel for petitioners has confined his arguments in respect of the two bills of May and June, 1989 only. These bills were verified and passed for Rs. 18,94,535/and 13,39,429/- respectively and the measurements of the PCC Poles 4331 and 3062 had been recorded in the Measurement Book as unlifted poles on pages 291 and 171/194. However, by office memorandum No. 2124/BSDK/P.I.C. dated 3rd October, 1989 (Annexure-10 to the supplementary counter affidavit) the Executive Engineer, Electricity Store Division, U.P. State Electricity Board, Kanpur, cancelled the recording of the measurement in the Measurement, Book, to be recorded later on as and when those poles would be lifted from the premises of the petitioners and carted to destination. As such the verified and passed bills in question were also cancelled subject to reverification as and when the poles would be allowed to be lifted by the petitioners. 10. As such the verified and passed bills in question were also cancelled subject to reverification as and when the poles would be allowed to be lifted by the petitioners. 10. The case of the opposite parties is that the Executive Engineer, Material Management, finding delay in the lifting of the poles from the suppliers' premises and reaching the poles at the site of the U. P. State Electricity Board, directed the officers to make inspection for physical verification and all the suppliers allowed to inspect their premises for verification of the poles except the petitioners; that the petitioners did not allow Shri B. B. Singh, Superintending Engineer, Electricity Stores Circle, Lucknow, to enter the factory premises to verify the poles in spite of repeated written instructions right from 29th July. 1989 to 28th October, 1989, copies of these communications are Annexures 1 to 9 to the supplementary counter-affidavit. 11. In the supplementary rejoinder affidavit not a word has been said on behalf of the petitioner about the aforesaid written instructions (Annexures 1 to 9 of the supplementary counter-affidavit). Rather, it is admitted that the petitioners had raised objection to re-inspection because the inspection had already been done by the authorities concerned while recording measurement in the measurement Book. The petitioners pleaded ignorance about the office memorandum dated 3rd October, 1989. 12. There is nothing on record to show that the petitioners have paid the excise duty and obtained gate pass et cetera in respect of the poles of the bills in question. 13. The position, therefore, is that the petitioners did not allow the officers to make physical verification and counting of the PCC Poles of the bills in question at its premises and have also not paid the excise duty and obtained gate pass et cetera for taking the poles out from the factory premises. The U.P. State Electricity Board has not cancelled the contract but has simply cancelled the entry made in the Measurement Book to be recorded again as and when the poles would be lifted from the premises of the petitioners and carted to destination. Similarly, the bills in question have been cancelled subject to reverification as and when the poles would be allowed to be lifted by the petitioners. Similarly, the bills in question have been cancelled subject to reverification as and when the poles would be allowed to be lifted by the petitioners. In this view of the matter the letter dated 21st December, 1989 (Annexure-2 to the writ petition) of the Chief Engineer, containing general directions subsequent to the aforesaid office memorandum dated 3rd October, 1989 is of no help to the petitioners. 14. In this writ petition the petitioners have not challenged the authority of the opposite parties of making inspection for the purpose of physical verification and counting. Rather the petitioners had suppressed the facts about it and also the fact that the petitioners did not allow Shri B. B. Singh, Superintending Engineer, Electricity Stores Circle, Lucknow, to enter the factory premises to verify and count the poles by not stating them in the writ petition. The other suppliers got the physical verification done, as stated in para 8 of the supplementary counter-affidavit. In para 18 of the counter-affidavit it has been stated that payments up to September, 1989 have been released to all the suppliers whose material had been received at the site of the Board. In this view of the matter the petitioner's claim of equating itself with other suppliers is factually incorrect and, therefore, the question of discrimination and arbitrariness set-up by the petitioners does not arise at all. 15. We. therefore, do not consider it to be a fit case to invoke extraordinary powers of the Court under Article 226 of the Constitution of India, Moreover, in this commercial concluded contract besides the arbitration CI. 31, contained in Form B, there is S. 10 in the order dated 30th October, 1987 to the effect that in case of any dispute the decision of the Chief Engineer (Material Management) will be final and binding on both the parties.' The petitioners have taken recourse to establish its case to the terms of the contract by asserting that the `site' as defined in Form B of the contract would mean the `factory of the petitioners situate at D-8, Industrial Area, Naini, Allahabad' and not the site where the work is to be executed by the Board. Hence, it is a dispute under or arising out of the contract and, thus, within the jurisdiction of the arbitrator and outside the province of the Court to enter into the merits of the case. Hence, it is a dispute under or arising out of the contract and, thus, within the jurisdiction of the arbitrator and outside the province of the Court to enter into the merits of the case. Only a bald statement in the writ petition has been made that the petitioners have no other equally efficacious and alternative remedy except to invoke the extraordinary jurisdiction of the Court under Article 226 of the Constitution of India. The petitioners have not furnished material facts and particulars to sustain their aforesaid plea. It is not pleaded and proved how the alternative remedy is inadequate or inefficacious. In the course of arguments the learned counsel for the petitioners urged that huge amount of more than thirty lacs of rupees is held up and delay is adversely affecting the petitioners' business. The petition has been filed on 16th October. 1990; while the bills in question are of May and June, 1989. Moreover, in such commercial contract huge sums are generally involved and it cannot be a ground to avoid the remedy provided in the contract itself. The hurdle of alternative remedy cannot be skipped over lightly on such a casual and bald statement. The Hon'ble Supreme Court has held in the case of K.K. Srivastava v. Bhupendra Kumar Jain, AIR 1977 SC 1703 that at page 1704 - "It is well settled law that while Article 226 of the Constitution confers a wide power on the High Court there are equally well settled limitations which this Court has repeatedly pointed out on the exercise of such power. One of them which is relevant for the present case is that where there is an appropriate or equally efficacious remedy the Court should keep its hand off......" 16. The case of M/s. Hyderabad Commercials v. Indian Bank, AIR 1991 SC 247 and Mahabir Auto Stores v. Indian Oil Corporation, AIR 1990 SC 1031 cited by the learned counsel for the petitioners are no answer to the principle laid down in the case of K.K. Srivastava (supra) and also reiterated in Bareilly Development Authority v. Ajay Pal Singh, AIR 1989 SC 1076 . In the Bareilly Development Authority the Hon'ble Supreme Court has held that - "..........where the contract entered into between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple." 17. In the cases of M/s. Hyderabad Commercials & Mahabir Auto Stores, referred to above, there existed no concluded contract. The Hon'ble Supreme Court remedied the wrong in the case of M/s. Hyderabad Commercials by observing as under at page SC 248 : of AIR 1991 : "Since the basic facts regarding the unauthorised transfer of the disputed amount from the appellant's account as well as the Bank's liability was admitted, there was no justification for the High Court to direct the appellant to file suit on ground of disputed questions of fact. The respondent bank is an instrumentality of the State and it must function honestly to serve its customers." 18. In the case of Mahabir Auto Stores (supra) the executive power, under Article 298 of the Constitution of India, in entering or not entering in contract with individual parties was under judicial review and was impeached on the ground that the decision was arbitrary or violative of Article 14 of the Constitution of India. 19. The next case relied upon by the learned counsel for the petitioners of M/s. Dwarkadas Marfatia & Sons v. Board of Trustees of the Port of Bombay, (1989) 3 SCC 293 : AIR 1989 SC 1642 , is of no help to the petitioners because we have already held that there has been no element of discrimination and arbitrariness against the petitioners. In that case it has been held that- "Any authority covered under Article 12 of the Constitution cannot act arbitrarily even in contractual matters and must act only to further public interest." 20. It has also been held in that case as under tat page 1649) : ............that there is always a presumption that a governmental action is reasonable and in public interest. It is for the party challenging its validity to show that the action is unreasonable, arbitrary or contrary to the professed norms or not informed by public interest, and the burden is a heavy one." 21. It is for the party challenging its validity to show that the action is unreasonable, arbitrary or contrary to the professed norms or not informed by public interest, and the burden is a heavy one." 21. For the reasons given above and keeping in view the entire circumstances of the case, we dismiss the writ petition with costs. We assess the costs at Rs. 5,000/-.