Steel Authority of India Ltd. v. Tirumala Balaji Alloys Pvt. Ltd.
2009-01-02
KALYAN JYOTI SENGUPTA, PRASENJIT MANDAL
body2009
DigiLaw.ai
Judgment :- (1) This application has been taken out for stay of operation of the impugned judgment and order dated 2nd December, 2008 and 22nd December, 2008 respectively against which the instant appeal has been preferred. (2) The learned Single Judge by the first mentioned order has decided to hear out admitting the application, on affidavits. Hearing thereof is fixed on 13th January, 2009. By the first order the Honble First Court has passed an interim order to the effect that the appellant before us, will be at liberty to proceed with the tender notice dated 21st November, 2008 but it has been restrained from issuing any work or purchase order for supply of high carbon ferro chrome, being the subject-matter of the writ petition. Alloys Steel Plant in Durgapur and Bhilai Steel Plant without seeking leave of the Court. (3) Thereafter, during pendency of the said writ application an interim application being CAN 10585 of 2008 was filed by the writ petitioner as it is alleged that during pendency of this writ application, there has been subsequent event that the appellant before us is going to purchase from third parties, the same materials being the subject-matter of the writ petition. On this interlocutory application the Honble Trial Judge passed order on 22nd December, 2008 as an interim measure in terms of prayer (a) of the said application by which appellant before us has been restrained from purchasing the materials from any person or authority other than the writ petitioner/ respondent. (4) Mr. Bachawat, learned Senior Counsel appearing with Mr. Anil Gupta and Mr. Sen, learned Advocates on behalf of the appellants submits that the learned Single Judge without deciding the question of maintainability has in effect granted relief finally although the point has been kept open for adjudication at the time of final hearing. He submits on the question of maintainability, that the writ application should not have been entertained as a contract of a private nature between the writ petitioner/respondent and his client is sought to be enforced by the writ petitioner. Secondly there exists an alternative remedy namely conciliation and arbitration as being mechanism for resolution of dispute and in view of the aforesaid situation the Writ petition should have been dismissed in limine and ought not to have passed any interim order at all.
Secondly there exists an alternative remedy namely conciliation and arbitration as being mechanism for resolution of dispute and in view of the aforesaid situation the Writ petition should have been dismissed in limine and ought not to have passed any interim order at all. Moreover he submits that by the interim order dated 22nd December, 2008 passed by the learned trial Judge has in effect granted final relief keeping the writ petition pending for hearing as a result the production has come to a halt by reason of the fact his client is unable to procure material from outside. He further submits that in terms of the contract his client is entitled to terminate the contract or not to take delivery of any portion of the goods agreement. (5) Even considering the balance of convenience such order should not have been passed because the materials in question are ordinary articles of commerce available in the market. Therefore, there will be no prejudice to the writ petitioner in the event the writ petition succeeds, by reason of the fact that the respondents can be compensated adequately if stay is granted. In support of his submission he has relied on a decision of the Supreme Court in the case of State of U.P. and Ors. v. Bridge and Roof Company (India) Ltd. reported in (1996)6 SCC 22 . Mr. Bachawat further submits that even the judgment of the Honble Supreme Court relied on by the learned Single Judge in support of the interim order is also not helping the writ petitioner, rather helped his client as such it has been misread by the learned Single Judge while relying on the same. (6) Mr. Ghosh, learned senior Advocate appearing on behalf of the respondents/writ petitioners submits that it is an admitted position that there has been a concluded contract between the writ petitioner and the respondent No. 1 and indeed the materials were made ready for delivery and a portion of the same has been supplied and accepted and there has been no dispute whatsoever until the time his client received a communication suspending delivery and supply of the materials for the reasons that there has been no space because of the "stock built up".
According to him the aforesaid communication dated 27th October, 2008 is not a letter of termination of contract rather preventing his client from supplying the goods in terms of the agreement. Therefore, it is wholly arbitrary and whimsical action by reason of the fact that on the one hand they have floated a tender for procuring the same quantity of materials of same nature from third party and on the other hand, there is plea of stock built up, as such delivery was suspended. The contention and/or submission of the writ petitioner has persuaded the learned Trial Judge to pass the aforesaid two interim orders. (7) Mr. Ghosh further submits that there is a serious dispute whether there exists any arbitration agreement between the parties or not, as the arbitration agreement which is sought to be enforced, rather which contained in the purchase orders, is not signed by his client. Therefore, there is no arbitration agreement between the parties. (8) We have heard the contention of the learned Counsel for both the parties. We have also gone through papers before us. We find there is dispute between the parties as to existence of arbitration agreement. It is also clear from submission of learned Lawyer that there is a dispute between the parties whether there is an arbitration agreement not. Mr. Bachawat has relied on the sasd decision of the Supreme Court reported in (1996)6 SCC 22 . It appears to us that paragraph 21 of the said judgment is relevant for the time being. We note that in that case the Honble Supreme Court found disputes between the parties canvassed therein could be resolved effectively by arbitration not by writ proceedings. Thus it is clear that no proposition of law laid down therein that under no circumstances Writ Court can decide the matter. (9) We are of the prima facie view that the aforesaid judgment nowhere said that the writ Court cannot at all entertain the dispute even if it is covered by arbitration agreement. It is the discretion of the writ Court whether the same will be entertained or not, but to maintain judicial restraint, the Writ Court ordinarily advisedly does not entertain and it cannot be said as a statement of law that the writ Court is denuded of power of exercising such discretion.
It is the discretion of the writ Court whether the same will be entertained or not, but to maintain judicial restraint, the Writ Court ordinarily advisedly does not entertain and it cannot be said as a statement of law that the writ Court is denuded of power of exercising such discretion. We are to take this view drawing support from the decision of Supreme Court in case of ABL International Ltd., [ (2004)3 SCC 553 ]. The Apex Court while taking note of large number of decisions of Supreme Court in paragraph 19 thereof summarized the statement of law relevant portion of which is quoted hereunder: " Therefore, it is clear from the above enunciation of law that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the Court entertaining such petition is not always bound to relegate the parties to a suit. In the above case of Gunwant Kaur, this Court even went to the extent of holding that in a writ petition, if the facts require, even oral evidence can be taken." (10) This clearly shows that in an appropriate case, the Writ Court has the jurisdiction to entertain a writ petition involving disputed question of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation and/or involves some disputed questions of fact. (11) The Division Bench of this Court while relying on the decision of the Honble Supreme Court in the case of Bharat Sanchar Nigam Ltd. and Ors. v. BMW Industries Ltd. and Ors. (APOT No. 140 of 2005) has held that the arbitration agreement is nothing but an alternative remedy and such alternative remedy cannot be an absolute bar in entertaining the writ petitioner. Here the allegations in the writ petition are that there has arbitrary action on the part of the appellant. Therefore, the learned Single Judge in exercise of discretion has entertained the writ petition for hearing and of course the learned Single Judge at the same time has kept this point open for final adjudication. We thus do not see prima facie any reason to substitute our different view.
Therefore, the learned Single Judge in exercise of discretion has entertained the writ petition for hearing and of course the learned Single Judge at the same time has kept this point open for final adjudication. We thus do not see prima facie any reason to substitute our different view. While it is true that the learned Single Judge should have decided question of maintainability with reasons at least at the ad-interim stage, but it has not been done so, just because the learned Single Judge has not done it, the Appellate Court will upset the decision automatically is not the proper approach of the Appeal Court. It can decide what has not been done by the first Court as it has got co-extensive power under Order 41, Rule 33 of the Code of Civil Procedure read with Rule 53 of Writ Rules of this Court. (12) We hold prima facie there are allegation of arbitrary and unreasonable act and action, against appellant hence writ petition is maintainable. However, this observation of this Court is absolutely prima facie and not intended to be made binding upon the Court at the final hearing of this appeal or the writ petition. (13) Under such circumstances, we dp not think it fit that any stay should be granted on the question of maintainability but keeping in view the balance of convenience and inconvenience of the parties, we think that this Court should consider whether impugned two orders on merit should be stayed or not for it is well settled in law with high authorities that balance of convenience and inconvenience is one of the matters, with the question of maintainability for granting interim relief. While examining this aspect, we look at the averments of petition. In paragraph 10 it is alleged that the effect of the two orders has stopped and/or will have the effect of complete stoppage of production in Alloy Steel Plant and Bhilai Steel Plant. (14) However, this statement and/or averment has not been verified as true to the knowledge of the deponent but submission. It is, therefore, unsafe for this Court to rely on this statement without proper verification. (15) Of course, as prayed for, we grant leave to Mr. Bachawats client to take steps in accordance with law to correct the verification by filing supplementary affidavit.
It is, therefore, unsafe for this Court to rely on this statement without proper verification. (15) Of course, as prayed for, we grant leave to Mr. Bachawats client to take steps in accordance with law to correct the verification by filing supplementary affidavit. Hence, for the time being no interim order is passed and the matter be placed before the Regular Bench on Tuesday. This order will not prevent Mr. Bachawats client to pray for appropriate relief on that date only on merit not on maintainability.