E. C. Bose & Co. Pvt. Ltd. v. Board of Trustees for the Port of Kolkata
2016-03-07
ARIJIT BANERJEE, MANJULA CHELLUR
body2016
DigiLaw.ai
JUDGMENT : The controversy which gives rise to the present appeal is an order dated 10.02.2016 issued by the Senior Deputy Manager (SH & CH), Kolkata Port Trust (hereinafter referred to as "KoPT"). The gist of the order is terminating the contract in favour of the appellant that was executed by and between the writ petitioner and the KoPT on the alleged ground of failure on the part of the appellant to commence shore handling operation at Berth Nos.2 and 8 of Haldia Dock Complex in spite of repeated reminders and opportunities. 2. Learned Judge referred to relevant material for the purpose of placing on record the dispute between the parties and also referred to Clause 7 and Clause 9 which were relied upon by the parties and ultimately opined that the writ petition cannot be entertained under Article 226 of the Constitution of India since there has to be factual investigation with reference to the terms of contract and also conduct of the parties. Accordingly he dismissed the writ petition. Aggrieved by the same, the present appeal is filed. 3. Mr. Hirak Kumar Mitra, learned Senior Counsel appearing for the appellant, brought to our notice the earlier litigation with regard to the tender of the very same two berths and also the fact that the present appellant/writ petitioner was the successful tenderer who got the tender and consequently a contract came to be executed by and between the parties. He also tried to impress upon us right from the beginning that there was step-motherly treatment towards this appellant/writ petitioner at the hands of KoPT. Therefore, they were finding one reason or the other to terminate the contract at the drop of a hat. In spite of several opportunities being given to the appellant extending time limit as indicated at Clause 7.3, overnight the contract was terminated after fixing the last date of compliance as 10.02.2016 and KoPT proceeded to issue another tender invitation on 11.02.2016. 4. As against this, Mr. Anindya Mitra, learned senior counsel appearing for the Kolkata Port Trust, submitted that all allegations against the respondent authority have to be investigated into and then ultimately it has to be decided whose lapses and laches resulted in termination of the contract.
4. As against this, Mr. Anindya Mitra, learned senior counsel appearing for the Kolkata Port Trust, submitted that all allegations against the respondent authority have to be investigated into and then ultimately it has to be decided whose lapses and laches resulted in termination of the contract. He also pointed out an arbitration clause in the agreement and sought exclusion of the jurisdiction of this Court which was accordingly done by the learned Single Judge. 5. As against this, Mr. Hirak Kumar Mitra submitted that it is normal and usual format of contract where arbitration reference is agreed as per the terms of contract but the fact remains this dispute could not be entertained on account of the unfair treatment meted out to the appellant/writ petitioner by the respondent authorities. 6. He also referred to the judgment in the case of State of Kerala and others v. M. K. Jose reported in (2015) 9 SCC 433 and distinguished the judgment in the case of Joshi Technologies International Inc. v. Union of India and others reported in (2015) 7 SCC 728 . 7. We have gone through the contents of both the citations and we have taken into consideration the material placed on record. So also the background in which the present litigation has come up before us. 8. Depending upon the facts and circumstances of each case, no doubt time and again Apex Court has said even in a matter where some factual material has to be taken into consideration, Article 226 of the Constitution of India can be invoked. Again we emphasise that this depends upon the facts and circumstances of each case and there is no generality so far as such applicability when a litigation is brought under Article 226 of the Constitution of India. 9. The case reported in State of Kerala and others v. M. K. Jose is where on several occasions the concerned High Court gave several directions and ultimately a commission was allowed to measure the completion of ready work that was the subject matter of contract. Ultimately, Their Lordships at the end of the judgment in para 20 and 21 have analysed under what circumstances and why in that particular case they found the action or the directions of the Division Bench of the concerned High Court was wrong.
Ultimately, Their Lordships at the end of the judgment in para 20 and 21 have analysed under what circumstances and why in that particular case they found the action or the directions of the Division Bench of the concerned High Court was wrong. While coming to the conclusions at para 20 and 21 which are referred to above, they analysed several earlier judgments of the Apex Court and ultimately opined that the plenary jurisdiction of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or further for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction. 10. In the present case, the dispute is with regard to extension of another 90 days after exhausting the remedies available to the respondent authorities after completion of the first 90 days as indicated at Clause 7.3 and 7.4. So far as the facts of the case on record and as per the terms of contract on 06.01.2016 the first 90 days for commencement is indicated and thereafter if the work is not commenced as per 7.3, then 7.4 refers to payment of compensation and then termination of contract has to be, according to appellant/writ petitioner, after another 90 days as indicated at Clause 9.1 of the terms of contract. Whether there was concession shown on the part of the respondent authorities suo motu or at the request of the appellant/writ petitioner or under what circumstances beyond the control of the parties to the litigation is definitely a question of fact which has to be ascertained only after referring to the terms of contract, the correspondence between the parties and the stand of the parties in the oral evidence with reference to not only the terms of contract but also conduct of the parties. 11. That apart, an arbitration reference is also envisaged as adjudication process as per the terms of contract. Mr. Hirak Kumar Mitra, Learned senior counsel, referred to the Clause that no compensation is payable if the contract is terminated. As rightly pointed out by Mr. Anindya Mitra, learned senior counsel, that the termination of contract contemplated under Clause 9.2.C is lawful termination of contract.
Mr. Hirak Kumar Mitra, Learned senior counsel, referred to the Clause that no compensation is payable if the contract is terminated. As rightly pointed out by Mr. Anindya Mitra, learned senior counsel, that the termination of contract contemplated under Clause 9.2.C is lawful termination of contract. According to us, illegality of termination of contract also has to be analysed with reference to the very same facts which we referred to in the above paragraphs. 12. Under these circumstances, we are of the opinion that this is not a fit case where extraordinary jurisdiction by issuing prerogative writ could be exercised since such adjudication has to be done by leading evidence, etc. 13. Having regard to the development of the course of action taken by the respondent authorities subsequent to 10.02.2016 since the bank guarantee amount is already received after invoking the bank guarantee, the said amount has to be kept separately in an interest earning no lien account by the respondent authorities. Since the Letter of Intent is already issued on March 4, 2016, we direct the respondent authorities not to take any further course of action in terms of the Letter of Intent dated March 4, 2016. 14. Mr. Abhrajit Mitra, learned senior counsel, placed on record an intimation received from the Government of India, Ministry of Shipping dated January 28, 2016 and we have taken note of the contents of the same. In the light of the concern of the Ministry so far as delay in operationalising the project of berth handling at Berth Nos. 2 and 8 at Haldia Dock Complex, the above directions or restraint will be in force for a period of 21 days from today within which time the appellant/writ petitioner can take suitable course of action according to their wisdom. 15. It is made clear neither the trial Court nor any other forum shall dispose of the controversy raised before them without being influenced by any of our observations herein or in the order of the learned Single Judge. 16. With these observations, the appeal is disposed of along with application.