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2002 DIGILAW 604 (JHR)

Chhotanagpur Steel Traders Association v. Steel Authority of India Ltd.

2002-05-14

TAPEN SEN

body2002
Order Heard Mr. Anil Kumar Sinha, learned counsel for the petitioners and Mr. R.K. Merathia, learned counsel for the respondents. 2. The petitioners have prayed for quashing Annexure 5, i.e. the notice which, inter alia, contains details of medium term sales arrangement. During the course of arguments Mr. Anil Kumar Sinha has stated that from a perusal of the same, it would be apparent from the second paragraph thereto that the intending buyers would have to submit their applications along with a “non-refundable" application fee of a sum of Rs.30,000/- (Rupees thirty thousand) separately for each item in favour of SAIL, Bokaro Steel Plant. He argues that if a person is to opt for, say ten items as enlisted at page 32, then he would have to pay a staggering sum of Rs.3,00,000/(Rupees three lakhs) in the shape of the "non-refundable" amount without any guarantee that irrespective thereof, work order would be given to him. 3. Mr. Anil Kumar Sinha has further stated that in the past, the respondents had all along insisted on depositing a lesser amount and as an example he has drawn the attention of this Court to Annexures 1, 2 and 3. The learned counsel submits that in all these annexures (which are earlier sale orders) the relevant portion reads thus:- "Interested parties will have to deposit DD/PO/BC of Rs.10,000/, separately for each item along with the request for offer. This amount shall be forfeited if the party fails to accept the offer and deposit the security deposit and advance within stipulated time." (emphasis added) 4. Suddenly by reason of the impugned Annexure 5, the insistence on the part of the respondents to the effect that a sum of Rs.30,000/- would have to accompany an application and the same would be non-refundable, apparently amounts to an unreasonable restriction as it amounts to creating a class within a class". Only the rich would be able to• apply for as many number of jobs as they desired, they being armed with money while the "not-so-wealthy" would be forced to be content with only one or two jobs, depending upon the availability of finance with them notwithstanding the fact that they may be fully qualified to undertake a greater number of assignments. 5. Mr. 5. Mr. R.K. Merathia, on the other hand states that this is a policy decision and it has been deliberately inserted because in the past the Management had sorry experiences in as much as after having purchased one or two items, the applicants did not complete the job. Therefore, this time they have decided, as a matter of policy, to do away with such risks and in order to overcome such problems of selling secondary steel products arising and to ensure participation of serious and genuine customers/purchasers, and also to ensure competitive price, it was decided to advertise for medium term sales arrangement taking into the fact their commercial interest. Undoubtedly, this is a policy decision and therefore this Court does not wish to interfere with the quantum fixed by reason of the impugned "Details of Medium Term Sale Arrangement" as contained at Annexure 5. 6. However, this Court is of the opinion that the other aspect, viz. the insistence on the part of the respondents to the effect that the sum accompanying an application would be non-refundable, is an unreasonable restriction as it amounts to creating a "class within a class", and therefore this Court proposes to interfere only to a limited extent. Upon perusal of the impugned notice (Annexure 5), this Court feels that if the "non-refundable" criteria is not modified then it would encourage only the rich who, by virtue of their money power would be able to file as many applications for as many• number of jobs as they desire, may be even to the extent of applying for the entire enlisted jobs, they being armed with money while the "not-so-wealthy" would be rendered to a status of "helpless spectators" and would most certainly be forced to be content with only one or two jobs depending upon their own financial limitations notwithstanding the fact some of them may be fully qualified to undertake a greater number of assignments. This therefore would surely create a "class within a class" and therefore such a condition cannot be said to be either fair or reasonable. Similarly, imagine the plight of one such "not-so-wealthy" who opts for, say four items, would have to pay a "nonrefundable" amount of Rs. 1,20,000/and in case the work is not granted to him, he loses this amount for all times to come. Similarly, imagine the plight of one such "not-so-wealthy" who opts for, say four items, would have to pay a "nonrefundable" amount of Rs. 1,20,000/and in case the work is not granted to him, he loses this amount for all times to come. Why should he therefore take the risk of blocking such a huge capital? This Court is of the opinion that this is a case which is an example of unreasonably restricting a person's meaningful choice. Another example of such unreasonable restriction is that while on the one hand, a middle class contractor would never dream of blocking a huge amount of money and consequently his options would be limited to only a few enlisted jobs, the rich contractor on the other hand, and armed with "money power" does not bother at all, he can "afford" to opt for all the twenty one items enlisted at page 32 of the writ petition, by paying the necessary application fee of Rs. 30,000/per job x 21 jobs = a whopping sum of Rs.6,30,000/-, which a middle class contractor can never block forever. This therefore, cannot be a fair proposition. In that view of the matter, the condition only in so far as it relates to making the application fee "non-refundable" is held to be unfair and unreasonable. It is there" fore accordingly, set aside. 7. In that view of the matter, without interfering with the quantum of the amount fixed, i.e. the sum of Rs.30,000/- and without interferring with any of the other terms and conditions of Annexure 5, this Court feels it proper, in the facts and circumstances of this case, to remand .the matter to the respondents with a very limited direction to modify only the nonrefundable criteria in the same term as was done earlier, i.e. by making it liable to forfeiture only if the party fails to accept the offer and also fails to deposit the security deposit and advance within a stipulated time. 8. With the aforementioned observations this writ petition is disposed off status quo ordered earlier is vacated. Parties shall now deal with the matter afresh.