Research › Search › Judgment

Gauhati High Court · body

2005 DIGILAW 281 (GAU)

Hind Supply Corporation v. Union of India

2005-04-02

BROJENDRA PRASAD KATAKEY

body2005
JUDGMENT B.P. Katakey, J. 1. These batch of writ petitions are taken up for hearing analogously as agreed to by the learned Counsel for the parties, I disposed of all the writ petitions by a common judgment and order since the relief sought for in the writ petitions are identical. 2. In all the writ petitions, the Petitioners have sought for a direction to the Respondent authorities to accept the substituted items as mentioned in the tender deed and/or to refund the amount which already recovered from the fortnightly Bills of the Petitioners and to direct the Respondent-authorities not to recover any further amount from the Bills of the Petitioners issued in respect of the supply of items under the agreement. 3. I have heard Mr. P. Pathak, learned senior counsel, assisted by Mrs. P. Barman, learned Counsel for the Petitioners and Mrs. R. Bora, learned Central Government Counsel appearing on behalf of all the Respondents. 4. The facts leading to filing of the present writ petitions are that the tender notices were issued by the Respondent authority for supply of various food items including supply of meat (dressed), MOH, (mutton on Hoof) Fowl, (alive) etc., pursuant to which, the Petitioners submitted tenders. The Petitioners submitted tenders for items of meat (dressed), MOH, (mutton of Hoof) Fowl, (alive) etc. and purchase of skin in different points for the period from 01.04.2004 to 31.03.2005. The Respondent authorities pursuant to the said tenders accepted the offer of the Petitioners and issued the letter of acceptance, accepting the said offer submitted by the Petitioner for the said period and for the place to which the supply is to be made. The date of acceptance and the place of supply in respect of each of the writ petition are given below: In WP (C) No. 5729/2004 Date of issuance of the Acceptance Letter Period Supply Place of (i) 3.2.2004 (ii) 1.3.2004 (iii) 17.7.2004 (iv)17.7.2004 1st April, 2004 to 31st March, 2005 1st April, 2004 to 31st March, 2005 24th July, 2004 to 31st March, 2005 24th July, 2004 to 31st March, 2005 Bomdir Bhalukmara Missamari Narangi/ DP Boijhar. In WPfQ No. 5893/2004 Date of issuance of the Acceptance Letter Period Supply Place of (i) 12.3.2004 1st April, 2004 to 31st March, 2005 Shillong DP Umroi Catt/ Happy Vally In WP CO No. 5894/2004 Date of issuance of the Acceptance Letter Period Supply Place of (i) 12.3.2004 1st April, 2004 to 31st March, 2005 Rangia DP Tamulpur In WP (C) No. 5897/2004 Date of issuance of the Acceptance Letter Period Supply Place of (i) 2.4.2004 5th April, 2004 to 31st March, 2005 Dimapur DP Rangapahar In WP (C) No. 5896/2004 Date of issuance of the Acceptance Letter Period Supply Place of (i) 1.3.2004 (ii)3.2.2004 (iii)1.3.2004 1st April, 2004to 31st March, 2005 1st April, 2004 to 31st March, 2005 1st April, 2004 to 31st March, 2005 ASC Sapper Camp to DP Baisaki ASC Dahung ASD Silchar In WP (C) No. 5895/2004 Date of issuance of the Acceptance Letter Period Supply Place of (i) 31.3.2004 (ii) 11.3.2004 1st April, 2004to 31st March, 2005 1st April, 2004 to 31st March, 2005 ASC Chakabama ASC Leimakhong In WPfQ No. 5898/2004 Date of issuance of the Acceptance Letter Period Supply Place of (i) 12.3.2004 1st April, 2004 to 31st March, 2005 Misa/DP Tezpur The authorities, thereafter, entered into a contract with the Petitioners separately, for supply of contracted items for the period mentioned above and thereafter issued various orders for supply of the contracted items. Since the Petitioners on a number of occasion have failed to supply the required quantity of the contracted items, some recovery were made by the Respondent-authorities in terms of the condition contained in the contract entered into between the parties. Further case of the Petitioners is that as the contracted items were not available in the market due to havoc created by the flood during the relevant point of time they offered to supply the substitute items which was not allowed and instead the Respondents recovered certain amount from the Bills submitted by the Petitioner by invoking Clause 7 of the terms and conditions the contract. Hence, the present writ petitions have been filed by the Petitioners seeking direction to the Respondents to allow the Petitioners to supply substituted items, to refund the amount already recovered and also not to make any further deduction from the Bills. 5. Mr. Hence, the present writ petitions have been filed by the Petitioners seeking direction to the Respondents to allow the Petitioners to supply substituted items, to refund the amount already recovered and also not to make any further deduction from the Bills. 5. Mr. Pathak, learned senior counsel appearing on behalf of the Petitioners submits that the authorities are bound to comply with the terms and conditions of the contract for supply of the substituted items in case basic contracted item is not available. The authority cannot refuse to accept the substituted items offered by the Petitioners in lieu of the basic contracted items and therefore, consequently the authority also cannot deduct any amount from the Bills of the Petitioners by invoking Clause 7 of the terms and conditions of the Contract. Mr. Pathak has also submitted that during the relevant period of time, there was havoc created by the flood for which the contracted items could not be supplied by the Petitioners to the authorities in spite of the demand made by the authorities for such supply, due to non-availability of such items in the market. The Petitioners accordingly offered to supply the substituted items as mentioned in the contracted agreement but the authorities have failed to pay any heed to such request though the Petitioners under the contract have a right to supply the substituted items mentioned in the contract, in case the contracted items are not available or could not be supplied by contractors. According to Mr. Pathak, for the in action or illegal action on the part of the Respondents or not allowing or not accepting the substituted items, the Petitioner cannot made to suffer and no amount can be recovered from the Bills of the Petitioners for their failure to supply the contracted items by invoking Clause 7 of the terms and conditions of the contract, Mr. Pathak, learned Counsel for the Petitioners further submits that in fact substituted items have been supplied by the Petitioners, which were accepted by the Respondent-authorities and therefore, there cannot be any question of making any recovery from the Bills of the Petitioners for their failure to supply the contracted items. 6. Mrs. Pathak, learned Counsel for the Petitioners further submits that in fact substituted items have been supplied by the Petitioners, which were accepted by the Respondent-authorities and therefore, there cannot be any question of making any recovery from the Bills of the Petitioners for their failure to supply the contracted items. 6. Mrs. Bora, learned Central Government Counsel, appearing on behalf of all the Respondents, relying on the affidavit-in-opposition filed on behalf of the Respondents and also records produced before this Court, has submitted that it is evident from the letters of acceptance as well as the contract agreement entered into between the Petitioners and the Respondent-authorities that the contract was for supply of the basic items i.e. meat (dressed), MOH, (mutton on Hoof) Fowl, (alive), fish, eggs, milk, etc. The Petitioner-contractors cannot claim that they should be allowed to supply the items mentioned as stipulated in the substituted chart attached to the contract as there was no contract between the parties for supply of such substituted items. The further submission of the learned Counsel for the Respondents is that the Petitioners having entered into the contract with the Respondent-authorities for supply of the contracted items, they are bound by the terms and conditions of the contract and in case they fail to supply the contracted items for which the order of supply is placed, they have to a face the consequence for the failure to supply, as contained in the Clause 7 of the terms and conditions of the contract. Mrs. Bora learned Counsel has further submitted that as the Petitioners have failed to supply the contracted items in spite of the demand made by the Respondent-authorities, the provision of Clause 7 was invoked, which stipulates for recovery of certain amount in the event of failure of the contractors/suppliers to supply the contracted items. In any case according to the learned Counsel, there being arbitration clause in Clause 21 of the contract and the facts of the present writ petitions being disputed question of facts, the writ Court cannot decide such disputed question of facts as it require detail examination of evidences and therefore the writ Court is not the appropriate forum. In any case according to the learned Counsel, there being arbitration clause in Clause 21 of the contract and the facts of the present writ petitions being disputed question of facts, the writ Court cannot decide such disputed question of facts as it require detail examination of evidences and therefore the writ Court is not the appropriate forum. According to the learned Counsel there is a clause for arbitration being Clause No. 21 in the contract, which provides that in the event of any dispute, the party may seek conciliation proceeding in accordance with the provisions of the Arbitration of Conciliation Act, 1996 and therefore the present writ petitions may be dismissed. 7. It is evident from the statements made the writ petition and also the letters of acceptance and the contract entered into between the parties that the contract was for supply of the basic items i.e. meat (dressed), MOH, (mutton on Hoof) Fowl, (alive), etc. and not the contract for supply of the substituted items. The writ Petitioner in paragraph 5 of the writ petitions has categorically stated that the letters of acceptance were issued directing them to supply the items of meat (dressed), MOH, (mutton on Hoof) Fowl, (alive) etc. at different supply points, for which the contract was entered into. The record produced by the Respondent-authorities also reflects that the contract was entered into between the parties for supply of these food items only and not for supply of any substituted items as mentioned in the substitute chart attached to the agreement. The Respondents also have categorically denied that there was any contract between the parties to the effect that in case the Petitioner failed to supply the contracted items, they will be at liberty to supply the substituted items as mentioned in the substitute chart. The record produced by the Respondents supports such condition. Moreover, it is case of the Petitioners that the contract was for those food items and not for substituted items. They have only filed representation before the authority to allow them to supply the substituted food items by stating therein that the contracted items are not available in the market because of the natural calamities. 8. It is also evident from the contract between the parties that the Petitioners have agreed to the clause that. They have only filed representation before the authority to allow them to supply the substituted food items by stating therein that the contracted items are not available in the market because of the natural calamities. 8. It is also evident from the contract between the parties that the Petitioners have agreed to the clause that. Substitutes for contracted articles here to above provided for may be purchased or to procured or supplies from the existing Government stock or otherwise at my/or our expenses in accordance with the provisions of Article 7(ii) of IAFZ-2120. Clause 7 of the terms and conditions of the contract stipulates as under: 7. pin the event of: i) Rejection of my supplies/services, as described in paragraph 6(i) above, or of (ii) my our failing dealing, neglecting or delaying to comply with any demand or requisition or otherwise not executing the same in accordance with the terms of contract, the Government may have on account of any claim for compensation against loss and in convenience caused by such breach or non performance of the contract to purchase or to procure or to arrange from Government stocks or otherwise at my/our expense such supplies/services as may have been rejected or that I/We may have failed, declined, neglected or delayed to supply or such authorized substitutes, therefore as are specified in the schedule here to and are approved by the officer operating the contract and any excess cost so incurred or arranging for such supplies/services or their authorized substitutes and in cases where issues in replacement are made from Government stock or supplies, the cost of value or such stock or supplies together with all incidental charges or expenses shall be recoverable from me/us on demand. (ii) I/We further agree that extra expenditure on account or risk and expense purchase made by the Government as per Sub-Clause 7(ii) above, may deducted out of my 95 percent payment of the bill ex Supply Depot/5 percent payment ex CDA (100% payment ex CDA) due to me from the security deposits as the case may be pertaining to the said contract. In the event ojany dispute on reasonable rates of the actual amount recovered from me/us it will be received of my/our instance under Clause 21 of this deed (IAFZ-2120). 9. The contract agreement also contains a clause for arbitration and conciliation which runs as follows: Clause 21. In the event ojany dispute on reasonable rates of the actual amount recovered from me/us it will be received of my/our instance under Clause 21 of this deed (IAFZ-2120). 9. The contract agreement also contains a clause for arbitration and conciliation which runs as follows: Clause 21. a) In the event of any dispute, a party may seek conciliating proceedings. The conciliation Proceedings will be in accordance with the arbitration and conciliation Act 1996 and the rules made there under any statutory modification. (b) The part initiation conciliation shall and do the other party a written invitation to conciliate under the part, briefly identifying the subject or the dispute. (c) Conciliation proceeding shall commerce when the other party accepts in writing the invitation to conciliation. (d) If the other party rejects the invitation, there will be no conciliation proceedings. (e) If any party initiating conciliation does not received a reply within thirty days from the date on which he sends the invitation, or within such other reasonable period of time as specified in the invitation, he may elect to tread this as a rejecter of the invitation to conciliation and if he so elects, he shall inform in writing the other party accordingly. (f) There shall be one conciliator of the rank of Lt. Col and above whole will be appointed by contract sanctioning authority, the contractor will be a serving officer who had dealt with the contract in question. (g) If both the parties reach an agreement on settlement of the dispute. The settlement agreement shall have the same status and effect as if it is arbitral/award on agreed terms on the substance of dispute rendered by an arbitral tribunal under Section 30 of the arbitration and conciliation Act, 1996. 10. The case of the writ Petitioners in the present batch of writ petitions is that the Respondent-authorities are bound to allow them to supply the substituted items, in case of non-availability of the basic items of the contract and there cannot be any recovery from the bills submitted by the Petitioners for their failure to supply the quantity of the contracted items as per demand of the Respondents. The said position, as discussed above, has been seriously disputed by the Respondent-authorities in their affidavit-in-opposition and also by producing relevant records before this Court. The said position, as discussed above, has been seriously disputed by the Respondent-authorities in their affidavit-in-opposition and also by producing relevant records before this Court. The question of facts which are disputed by the Respondents, raised by the Petitioners in the present batch of writ petitions cannot be decided by the writ Court in the summery proceeding without detailed examination of the evidences in an appropriate forum i.e. either in the civil Court or by initiation of the arbitration proceeding in terms of the arbitration clause contained in the contract agreement entered into between the parties. The question whether the Respondents are entitled to recover any amount from the bills of the Petitioners by invoking Clause 7 of the terms of contract, also cannot be decided unless the question of facts are decided in an appropriate forum as mentioned above. 11. The Apex Court in Sumedha Nagpal v. State of Delhi and Ors. reported in (2000) 9 SCC 745 lias held that the disputed facts, unless pleading raised by the parties are examined with reference to the evidence by an appropriate forum, cannot be decided in a summery proceeding such as the writ petitions. 12. The Apex Court in the Life Insurance Corporation and Ors. v. Asha Goel (Smt.) and Ors. reported in (2001) 2 SCC 160 has observed as under: 10. Article 226 of the Constitution confers extraordinary jurisdiction on the High Court to issue high prerogative writs for enforcement of the fundamental rights or for any other purpose. It is wide and expansive. The Constitution does not place any fetter on exercise of the extraordinary jurisdiction. It is left to the discretion of the High Court. Therefore, it cannot be laid down as a general proposition of law that in no case the High Court can entertain a writ petition under Article 226 of the Constitution to enforce a claim under a life insurance policy. It is neither possible nor proper to enumerate exhaustively the circumstances in which such a claim can or cannot be enforced by filing a writ petition. The determination of the question depends on consideration of several factors like, whether a writ Petitioner is merely attempting to enforce his/her contractual rights or the case raises important questions of law and constitutional issued, the nature of the dispute raised; the nature of Inquiry necessary for determination of the dispute etc. The determination of the question depends on consideration of several factors like, whether a writ Petitioner is merely attempting to enforce his/her contractual rights or the case raises important questions of law and constitutional issued, the nature of the dispute raised; the nature of Inquiry necessary for determination of the dispute etc. The matter is to be considered in the facts and circumstances of each case.... 11. The position that emerges from the discussions in the decided cases is that ordinarily the High Court should not entertain a writ petition filed under Article 226 of the Constitution for mere enforcement of a claim under a contract of insurance. Where an insurer has repudiated the claim, in case such a writ petition is filed, the High Court has to consider the facts and circumstances of the case, the nature of the dispute raised and the nature of the inquiry necessary to be made for determination of the questions raised and other relevant factors before taking a decision whether it should entertain the writ petition or reject it as not maintainable. It has also to be kept in mind that in case an insured or nominee of the deceased insured is refused relief merely on the ground that the claim relates to contractual rights and obligations and he/she is driven to a long drawn litigation in the civil Court it will cause serious prejudice to the claimant/other beneficiaries of the policy. The pros and cons of the matter in the context of the fact-situation of the case should be clearly weighed and appropriate decision should be taken. In a case where claim by an insured or a nominee is repudiated raising a serious dispute and the Court finds the dispute to be bona fide one which requires oral and documentary evidence for its determination than the appropriate remedy is a civil suit and not a writ petition under Article 226 of the Constitution. Similarly, where a plea of fraud is pleaded by the insurer and on examination is found prima-facie to have merit and oral and documentary evidence may become necessary for determination of the issue raised, then a writ petition is not an appropriate remedy. 13. In the State of Bihar and Ors. Similarly, where a plea of fraud is pleaded by the insurer and on examination is found prima-facie to have merit and oral and documentary evidence may become necessary for determination of the issue raised, then a writ petition is not an appropriate remedy. 13. In the State of Bihar and Ors. v. Jain Plastics and Chemicals Ltd. reported in (2002) 1 SCC 216 , the Apex Court has observed that though many matters can be decided after referring to the contentions raised in the affidavits and counter affidavits but that would hardly be a ground for exercise of extra ordinary jurisdiction under Article 226 of the Constitution of India in case of alleged breach of contract. 14. In U.P. State Bridge Corporation Ltd. and Ors. v. U.P. Rajya Setu Nigam S. Karamcari Sangh reported in (2004) 4 SCC 268 , the Apex Court has held as under: 17. The only reason given by the High Court to finally dispose of the issued in its writ jurisdiction which appears to be sustainable, is the factor of delay, on the part of the High Court in disposing of the dispute. Doubtless the issue of alternative remedy should be raised and decided at the earliest opportunity so that a litigant is knot prejudiced by the action of the Court since the object is one in the nature of a demurrer. Nevertheless even when has been such a delay where the issue raised requires the resolution of factual controversies, the High Court, should not, even when there is a delay, short-circuit the process for effectively determining the facts. Indeed the factual controversies, which have arisen in this case remain unresolved. They must be resolved in a manner, which is just and fair to both the parties. The High Court was not the appropriate forum for the enforcement of the right and the learned Single Judge in Anand Prakash case had correctly refused to entertain the writ petition for such relief. 15. In the instant case the facts are seriously in dispute as discussed above, the Petitioners have claimed that the terms of the contract has been violated by the Respondents and on the other hand Respondents are claiming that as because the Petitioners have failed to supply the contracted items, they invoked the provisions contained in Clause 7 of the contract agreement and recovered the amount. Such disputed question of facts cannot be decided in the present proceeding, as it requires examination of detailed evidence, which can only be done in an appropriate forum. Apart from that if any condition of the contract agreement, entered into between the parties, is violated as contended by the Petitioners, they have a remedy for seeking arbitration and conciliation proceeding in terms of the contract. 16. That being the position, the writ Court cannot grant any relief as prayed for by the Petitioners in the present writ petitions, the claim for which arises out of the rights and obligations the contract entered into between the parties. That being the position, I do not find any merit in the writ petition and hence dismissed. 17. It is open to the Petitioners to approach the appropriate forum including invocation of Clause 21 of the terms of the contract for conciliation aibitration. 18. No costs. Petition dismissed.