VINDHYA TELELINKS LIMITED v. MAHANAGAR TELEPHONE NIGAM LIMITED
2001-09-03
M.A.KHAN
body2001
DigiLaw.ai
Mahmood Ali Khan ( 1 ) THE petitioner entered into contract for supply of PIJF telecom cables in 13 different sizes to the respondent/mtnl on 15/2/2000. On the request or the petitioner time for delivery of 7 sizes of cables was extended by 31/3/2000 and the delivery was made. On further request of the petitioner for extension of time for supply of the remaining 6 sizes of cables, the respondent/mtnl extended the time of delivery in respect of only 4 sizes and the petitioner supplied them by the extended date of 31/5/2000. The petitioner again requested the respondent for extending the time for delivery of remaining 2 sizes of the cables [2000/0. 4 (A) and 2000/0. 4 (UA) sizes] but the respondent instead issued a letter dated 26/6/2001 (annexure j to the petition) that the competent authority had conveyed to short closure in respect of outstanding supplies of PIJF cables with liquidated damages charges of Rs. 7,43,907. 00 payable by the petitioner in respect of non-delivery of cables 2000/0. 4 (A)/2000/0. 4 (UA) and outstanding supply of cable of the size of 1200/0. 4 (U) by 0. 099 kms and asked the petitioner to deposit the amount. The petitioner challenged this letter in this writ petition. ( 2 ) THE petitioner filed this application for grant of ad-interim injunction order restraining the respondent from giving effect to or taking any step in pursuance to the impugned letter dated 26/6/2001 and further restraining the respondent from recovering Rs. 7,43,907. 00 as liquidated damages from the petitioner by way of deducting/withholding the amount from the money due and payable by the respondent to the petitioner under the purchase order dated 12/10/1999 etc. . 1. Notice of the application was issued to the respondent. The respondent filed reply to the application and contended that the dispute between the parties is liable to be referred to the arbitration in view of the Arbitration clause 20 contained in the tender and further that the writ petition was not maintainable as the civil liability arising out of contractual obligation would not be enforced by invoking jurisdiction of this court under Article 226 of the constitution of India. It was fur their submitted that the dispute raised in the writ petition constituted disputed question of facts which requires evidence to be led for its proper adjudication and the same cannot be decided in the writ petition.
It was fur their submitted that the dispute raised in the writ petition constituted disputed question of facts which requires evidence to be led for its proper adjudication and the same cannot be decided in the writ petition. There is no breach of any fundamental right of citizen by the State pleaded in this case. There is also no balance of convenience, prima facie case and irreparable loss and injury, therefore, the stay application is not maintainable. ( 3 ) THE main plank of the argument of the counsel for the respondent is that the writ petition is filed for enforcement of a private contract and it could not be entertained by this Court in its writ jurisdiction. No relief can be granted to the petitioner in exercise of the extra ordinary discretionary jurisdiction of this court under article 226 of the Constitution of India. It was further submitted that the petitioner is disputing the imposition of liquidated damages and this question cannot be decided in a writ petition. He also urged that the agreement contained an arbitration clause and the petitioner, if aggrieved by breach of any contract of supply of goods by the respondent, could have invoked that clause. He cited State of U. P. and others vs. Bridge and Roof Company (India) Ltd. (1996) 6 SCC 22 and kerala State Electricity Board and another Vs. Kurien E. Kalathil and others (2000)6 SCC 293 in support of his arguments. ( 4 ) CONVERSELY the argument of the counsel for the petitioner is that the petitioner is enforcing a term of the agreement which has been breached by the respondent by not serving a default notice and giving 30 days time to the petitioner for remedying the failure in terms of clause 18. 1 (c) of the general conditions of contract (page 43 of the petition) and, therefore, the court can exercise its jurisdiction under Article 226 of the Constitution of India to force the respondent/mtnl to carry out the terms of the contract agreement. The counsel has cited the case of M/s style (Dress Land) Vs. Union Territory, Chandigarh AIR 99 SC 3678 to advance his argument. ( 5 ) I have given careful consideration to the submissions made at the bar and the case law cited.
The counsel has cited the case of M/s style (Dress Land) Vs. Union Territory, Chandigarh AIR 99 SC 3678 to advance his argument. ( 5 ) I have given careful consideration to the submissions made at the bar and the case law cited. Article 226 of the Constitution of India gives extraordinary and discretionary jurisdiction to this court to give relief to the persons who are aggrieved by the infringement of any fundamental right and on account of acts of omission and commission of the instrumentality of the state. The writ jurisdiction of the court being extraordinary remedies are intended to be applicable to exceptional cases in which ordinary remedies are not adequate. The grievance under private contract will not fall within the purview of this Article. The contract for the supply of cables to the respondent/mtnl, statutory body, is a private contract. The breach of the terms of the agreement by the respondent for instance failure to serve 30 days notice for remedying the default by the petitioner would not make out a case for this court to exercise its extraordinary and discretionary jurisdiction under Article 226 of the Constitution of India when other adequate and efficacious remedies are available to the petitioner. Though the contention of the petitioner is that the writ jurisdiction of this court is invoked for enforcing the terms of the contract of supply with the respondent but apparently the petitioner is disputing the short closure of outstanding supply of two sizes of cables and short supply of a third size cable and imposition of liquidated damages of Rs. 7,43,907. 00. The contention of the counsel is that the cable of size of 1200/0. 4 (A), which is alleged to have been supplied short, has in fact been delivered in full as is evident from the documents which has been placed on the record. However, he does not deny that the quantum of liquidated damages has also been disputed by the respondent. All these question which involve evidence for adjudication cannot be considered in the writ petition filed by the petitioner. The petitioner has other remedies open to him for challenging the action of the respondent and the demand of liquidated damages from it. ( 6 ) IN the State of U. P. and Others Vs.
All these question which involve evidence for adjudication cannot be considered in the writ petition filed by the petitioner. The petitioner has other remedies open to him for challenging the action of the respondent and the demand of liquidated damages from it. ( 6 ) IN the State of U. P. and Others Vs. Bridge and roof Company (India) Ltd. (supra), a public sector corporation, entered into a work contract with the Government of U. P. for rehabilitation and improvement of certain stretch of road in the State. A dispute circle between them about certain terms and conditions of the contract and about the State Government s retaining the benefit of reduction in the rate of sales tax and not passing it on to the corporation. The Supreme Court made the following observations which aptly apply to the facts of the case in hand also:- "in our opinion, the very remedy adopted by the respondent is misconceived. It is not entitled to any relief in these proceedings, i. e. in the writ petition filed by it. The High Court appears to be right in not pronouncing upon any of the several contentions raised in the writ petition by both the parties and in merely reiterating the effect of the order of the deputy Commissioner made under the proviso to Section 8-D (1 ). Firstly, the contract between the parties is a contract in the realm of private law. It is not a statutory contract. It is governed by the provisions of the Contract Act or, maybe, also by certain provisions of the Sale of Goods act. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. That is a matter either for arbitration as provided by the contract or for the civil court, as the case may be. Whether any amount is due to the respondent from the appellant-Government under the contract and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not, are all matters which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition, viz.
Whether any amount is due to the respondent from the appellant-Government under the contract and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not, are all matters which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition, viz. , to restrain the Government from deducting a particular amount from the writ petitioner s bill (s) was not a prayer which could be granted by the High Court under Article 226. Indeed, the High Court has not granted the said prayer. Secondly, whether there has been a reduction in the statutory liability on account of a change in law within the meaning of sub-clause (4) of clause 70 of the contract is again not a matter to be agitated in the writ petition. That is again a matter relating to interpretation of a term of the contract and should be agitated before the arbitrator or the civil court, as the case may be If any amount is wrongly withheld by the Government, the remedy of the respondent is raise a dispute as provided by the contract or to approach the civil court, as the case may be, according to law. Similarly if the government says that any overpayment has been made to the respondent, its remedy also is the same. Accordingly, it must be held that the writ petition filed by the respondent for the issuance of a writ of mandamus restraining the Government from deducting or withholding a particular sum, which according to the respondent is payable to it under the contract, was wholly misconceived and was not maintainable in law. The writ petition ought to have been dismissed on this ground alone".( 7 ) IN the case of Kerala State Electricity Board vs. Kurien E. Kalathil (supra) there was an agreement between the parties for construction of a dam. The Government enhanced the minimum wages payable to the employees employed in the works but later on clarified that it will not be applicable to the labourers employed for construction of the dam. In the meantime, labour escalation charges for a certain period were paid by the Kerala State Electricity Board which on receipt of subsequent notification were discontinued.
The Government enhanced the minimum wages payable to the employees employed in the works but later on clarified that it will not be applicable to the labourers employed for construction of the dam. In the meantime, labour escalation charges for a certain period were paid by the Kerala State Electricity Board which on receipt of subsequent notification were discontinued. The dispute arose between the parties relating to the interpretation of a clause in the contract and implementation of such clause. It was argued on behalf of the petitioner that such dispute was,not a subject matter of writ petition and the remedy of the aggrieved person lies in approaching the civil court or some other appropriate forum. The Supreme court held as under:- "we find that there is a merit in the first, contention or Mr. Raval. Learned counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petit ion. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226". ( 8 ) THE law enunciated by the Supreme Court in the above two judgments is fully applicable to the present case as well. The contract between the petitioner and the respondent/mtnl is not a statutory contract but is a private contract. The dispute relating to the interpretation of the terms and conditions whether it is term 15. 1c of the agreement of the terms and conditions of the contract or wrong demand of damages on account of alleged short supply of a particular size of cable or regarding the short closure of the outstanding supplies, the controversy about the amount of liquidated damages/charges, if any, payable by the petitioner arise cannot be agitated in a writ petition. It is a matter, either for arbitration as provided by the contract or for the civil court or any other appropriate forum to adjudicate upon. ( 9 ) RELIANCE on M/s Style (Dress Iand) Vs. Union territory, Chandigarh (supra) by the petitioner is misplaced. The facts are quite distinguishable. In the case cited the commercial premises were leased out by the Government to the shopkeepers in Sector-17 of Chandigarh on rent which the government enhanced from Rs. 2,671. 00 to Rs. 14,000.
( 9 ) RELIANCE on M/s Style (Dress Iand) Vs. Union territory, Chandigarh (supra) by the petitioner is misplaced. The facts are quite distinguishable. In the case cited the commercial premises were leased out by the Government to the shopkeepers in Sector-17 of Chandigarh on rent which the government enhanced from Rs. 2,671. 00 to Rs. 14,000. 00 per month. ( 10 ) IT was challenged in the writ petition. The Supreme Court in para-11 which has been relied upon on behalf of the respondent, made the following observation:- "even the administrative orders and not quasi judicial are required to be made in a manner in consonance with the rules of natural justice, when they affect the rights of the citizens to the property or the attributes of the property. While exercising the powers of judicial review the Court can look into the reasons given by the Government in support of its action but cannot substitute its own reasons. The court can strike down an executive order, if it finds the reasons assigned were irrelevant and extraneous The Courts are more concerned with the decision making process than the decision itself". ( 11 ) IN the above mentioned case large number or shopkeepers who were let out the commorcial premised in a market were affected by the enhancement of the rent. It was not a case where the dispute arose between single individual shopkeeper and the State under a private contract. ( 12 ) ALL the shopkeepers of that market were affected and aggrieved and, therefore, the writ jurisdiction of the court under Article 226 of the Constitution of India was invoked by the petitioner and was exercised by the court. ( 13 ) FOR the reasons stated above I am of the view that the petitioner is not entitled to invoke the jurisdiction of this court under Article 226 of the Constitution of India in this petition. It is not entitled to the grant of ad-interim injunction as prayed for in this application. Therefore, the application is dismissed. In view of the view which this court has taken above the writ petition is also not maintainable. It is dismissed as not maintainable.