1. On consideration, the petition is admitted to hearing and with the consent of learned counsel for the parties, taken up for final disposal at its threshold. 2. Petitioner is a business concern having its head office at 14/2 Extension Trikuta Nagar, Jammu. It is engaged in supply of Defence equipments to the armed forces. The petitioner responded to Tender Notice NIT No. 29419/SP/SM/08-09/ES-4 dated 15.01.2009 floated by the respondents for purchase of 25 Nos. of Snow Mobiles. Colonel GS (Engrs/Plg) respondent No. 3 in the petition, on 26th July, 2009 asked the petitioner to supply one number Snow Mobile for trial on "No Cost No Commitment" basis. The petitioner placed the order for supply of one number Snow Mobile on Polaris Industries, 2100, Highway-55, Medina, MN 55340, U.S.A. The General Officer Commanding in Chief (GOC-in-C) in the month of November, 2009 issued a Customs Duty Exemption Certificate in terms of Notification No. 39/96 SL No. 10(X), so as to facilitate import of the Snow Mobile without burdening the petitioner with the custom duty payable on the import of the machine. The Colonel GS (Engrs/Plg) -respondent no. 3 vide letter dated December, 2009, further certified that one number Snow Mobile required by the Armed Forces was not meant for sale and requested for release of the consignment. 3. The respondent no. 3 vide letter dated 18th December, 2009 asked petitioner to handover the Snow Mobile at 'N' Area, Chandigarh at the earliest for trials. Though the record does not reveal whether one the Snow Mobile was actually delivered and whether the trials were conducted and its performance found satisfactory by the experts, it appears that the respondents placed supply order with the petitioner on 10th September, 2010 for supply of 21 numbers of Snow Mobiles at the cost of Rs. 8,15,000/- per unit and a total cost of Rs. 1,71,15,000/- excluding the tax payable on the transaction, subject to the conditions laid down in Part I to Part V of the supply order. 4. The Snow Mobiles in terms of the Supply Order were to be delivered within 130 days from the effective date of the Supply Order, i.e. by 23rd January, 2011. The respondents in terms of the Supply Order reserved a right to unilaterally cancel the Supply Order, in the event, the machines were not delivered within the delivery period.
4. The Snow Mobiles in terms of the Supply Order were to be delivered within 130 days from the effective date of the Supply Order, i.e. by 23rd January, 2011. The respondents in terms of the Supply Order reserved a right to unilaterally cancel the Supply Order, in the event, the machines were not delivered within the delivery period. The extension of delivery period was to be at sole discretion of the respondents. 5. The petitioner for one or other reason could not adhere to the time schedule within which the supplies were to be made. The petitioner vide communication dated 19th January, 2011 explained the delay in making the supplies on the ground that because of disruption in power supply in the month of December and because of severe snow storms, the production in the factory was disrupted which was resumed sometime before the date of communication and sought an extension of 60 days. The petitioner vide communication dated 5th May, 2011 sought further extension in the delivery period upto 20th September, 2011 and extended an assurance that 10 Snow Mobiles would be arriving in India by 30th July, 2011 and the balance by 15th September, 2011. It appears that respondent no.2 on 8th August, 2011 issued Custom Duty Exemption Certificate for 14 Nos. of Snow Mobiles and on 19th August, 2011 issued Custom Duty Exemption Certificate for 6 Nos. of Snow Mobiles. However, as Custom Duty Exemption Certificate on 29th October, 2011 issued by the respondent no. 2 relates to 21 "ARCTIC BOGGAN WITH RAILS" and may not be referable to the Snow Mobiles. 6. The 21 number Snow Mobiles ultimately were delivered at 17 Engrs Del at Chandigarh on 07.10.2011 and the respondent No. 3, accordingly, informed on 08.10.2011 The respondent No. 3 vide communication dated 10th January, 2012 requested the petitioner to depute his representative to HQ Northern Command, MGGS (SD&WE) Secretariat on 24th January, 2012, so as to workout the modalities as regards, "Engineer Support Package, spares and Annual Maint Contract" before the equipment was inducted in the field. 7. The respondent no. 2, vide communication No. 21023/Supply Order/110(c) ACFSP dated 15th February, 2012, cancelled the supply order on the ground that the petitioner had failed to make the supplies within the delivery period as prescribed vide paragraph 3, part II (page 5) of the supply order.
7. The respondent no. 2, vide communication No. 21023/Supply Order/110(c) ACFSP dated 15th February, 2012, cancelled the supply order on the ground that the petitioner had failed to make the supplies within the delivery period as prescribed vide paragraph 3, part II (page 5) of the supply order. The petitioner was asked to return the Custom Duty Exemption Certificates dated 8th August, 2011, 19th August, 2011 and 29th October, 2011 8. The petitioner questions the Communication No. 21023/Supply Order/110(c) ACFSP dated 15.02.2012 in the writ petition on hand on the grounds set out in the petition. 9. The main plank of the petitioner's case is that the respondent No. 2 having granted Custom Duty Exemption Certificates on 8th August, 2011 and 19th August, 2011 and vide communication dated 24th January 2012 called the representative of petitioner concerned for a meeting as regards AMC spare parts etc after the petitioner made a request for extension in delivery period on 5th May, 2011, is to be presumed to have acceded to the request for extension in the delivery period upto 20th September, 2011. It is pleaded that in the said background, the respondent no.3 lacks power and authority to cancel the contract, after 21 Snow Mobiles were actually delivered by the petitioner at 17 Engrs Det at Chandigarh on 07.10.2011. 10. The respondents have, in their reply, controverted all the factual averments made in the petition. The petitioner is said to have failed to justify the delay or to produce the certificate from Chamber of Commerce, USA certifying that there was a disruption in power supply in the area where the factory manufacturing Snow Mobiles is situated and that the delay on part of the petitioner in execution of the contract was wilful and deliberate. The respondents deny that any assurance for extension of delivery period was ever given or that the Custom Duty Exemption Certificate can be construed as an extension in the delivery period. 11. The issues emerging from the pleadings are factual in character.
The respondents deny that any assurance for extension of delivery period was ever given or that the Custom Duty Exemption Certificate can be construed as an extension in the delivery period. 11. The issues emerging from the pleadings are factual in character. Why and under what circumstances, Custom Duty Exemption Certificate dated 8th August, 2011 and 19th August, 2011 were issued by the respondent no.2, when to his knowledge the delivery period as also the extension given at the request of the petitioner was over and what would be effect of aforementioned certificates/communications its effect on the fate of the contract are questions, that cannot be determined while exercising summary jurisdiction like one under Article 226, Constitution of India. Whether the delay in execution of the contract and delivery of Snow Mobiles within the delivery period was justified and to be condoned is again a question of fact and so are the grounds urged by the petitioner as regards failure in power supply and disruption in manufacturing activity in Snow Mobiles factory. The Court while exercising the writ jurisdiction cannot look into these and like aspects of the case that depend on evidence to be adduced by the parties and interpretation of the clauses of the Supply Order. 12. This Court in case titled "Vethesta Constructions- Good Luck Constructions v. State of J&K & ors." 2011 (1) JKJ 414 (HC), while dealing with the remedies available to a party aggrieved with the breach/cancellations of the contract has observed; "The Court cannot, under disguise of exercising its judicial review jurisdiction, assume the role of an appellate court, decide whether it would have arrived at the same conclusion as arrived at by the respondents, had the Court opportunity to take impugned decision and in the process usurp powers of the decision making authority. It is equally well settled law that the Government must have freedom of contract and extra ordinary writ jurisdiction may not be exercised in the contractual field unless of course the action, complained of on the part of State, is violative of Article 14 of Constitution of India. Again while scrutinizing decisions made by the Government and its functionaries in the realm of contract, a distinction is to be made between a matter which is at the threshold of a contract and a breach of contract.
Again while scrutinizing decisions made by the Government and its functionaries in the realm of contract, a distinction is to be made between a matter which is at the threshold of a contract and a breach of contract. Whereas in the former the Court's scrutiny would be more searching and intrusive, in the latter as is the case in hand the Court may not ordinarily exercise its discretionary jurisdiction of judicial review unless it is found to be violative of equality clause. The Court is to step in and subject the contractual powers of State and its functionaries to judicial review in order to prevent arbitrariness, unfairness or favoritism on their part. In case of breach of contract, the remedy available to aggrieved party falls within the realm of contract law and the party aggrieved of breach ordinarily may bring an action for damages or in case the contract is specifically enforceable, ask for its specific performance. The High Court would be slow in exercising its discretionary and extra writ jurisdiction unless there is a "public law element" involved in the impugned order." Guidance in this regard was sought from law laid down by the Apex Court in "Kerala State Electricity Board and another v. Kurien E. Kalathil and others ( 2000 (6) SCC 293 )" and in "Ramachandra Murarilal Bhattad and ors. v. State of Maharashtra and ors."( 2007(2) SCC 588 ); 13. In Kerala State Electricity Board case, Supreme Court held "A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law." 13. The facts of the present case squarely fall within scope of the above referred Judgments.
Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law." 13. The facts of the present case squarely fall within scope of the above referred Judgments. The controversy lies within realm of contract and remedy is available under the contract law. 14. This apart, the parties are bound by an arbitration Clause appearing in Part Ill-Standard Conditions of Supply Order It reads; "3. Arbitration: All disputes or differences arising out of or in connection with the Supply Order shall be settled by bilateral discussions. Any dispute, disagreement or question arising out of or relating to the Supply Order or relating to construction or performance, which cannot be settled amicable, may be resolved through arbitration. The Arbitration is as per Form DPM-7 (for indigenous trade)/DPM-8 (for foreign supplies)/DPM-9 (for PSUs) enclosed to Part-Ill of this Supply Order." The questions raised in the present petition fall within the ambit and scope of the arbitration clause. The right course for the petitioner, therefore, is to fall back upon the arbitration clause, if so advised, and not to invoke the writ jurisdiction of the Court which in the facts and circumstances of the case is not otherwise available to the petitioner. 15. The petition, for the reasons discussed, is accordingly dismissed as not maintainable.