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2019 DIGILAW 476 (CAL)

Delta Limited v. Director, Directorate of Supplies & Disposal

2019-04-10

ARINDAM SINHA

body2019
JUDGMENT : 1. This interlocutory application in suit has been specially assigned to this Bench. 2. Mr. Sarkar, learned senior advocate appears on behalf of applicant-plaintiff. He submits, subsequent to filing of this suit and an earlier interlocutory application made, Jute Commissioner passed order dated 10th December, 2018, in which plaintiff was found to be entitled to issuance in its favour, Production Control cum Supply Order (PCSO) under operative Jute Control Order. On basis of contents in letter dated 26th May, 2015, issued by Assistant Director of Supplies, and going by past experience, this second application for restraint order upon defendants from withholding price of goods to be sold and supplied under PCSOs issued pursuant to said order dated 10th December, 2018. It will appear from letter dated 26th May, 2015 that sum of Rs. 2,57,87,692/- stands already withheld while alleged aggregate of sum in excess of Rs. 4 crores is yet to be recovered from his client, by withholding payment on future supplies. He submits, against withholding price of goods sold and delivered, which is subject matter of this suit, purportedly on the basis of recoveries to be made against earlier contract for supply made and paid for, his client had filed GA No. 747 of 2016 seeking restraint order on such withholding. Co-ordinate Bench by order dated 27th July, 2016 refused interlocutory relief sought. His client preferred appeal, which was dealt with by order dated 11th August, 2016. He relies on following in said appellate order. "So far as interim prayer not to recover the amount from future bills of the appellant, respondents Nos. 1, 2 and 3's counsel categorically submits that question of placing further orders would not arise since the mills of the appellant are closed. However, learned counsel for the appellant and the learned Central Government advocate submit, if the mills are opened, they may have to revive the contract on new terms and conditions. These are all issues of "ifs" and "buts" having no certainty. At this stage since the mill is not yet re-opened for manufacture of the jute bags, we are of the opinion, we need not consider such prayer now. When such a situation arises, the appellant is at liberty to ask the Trial Court for such prayer if the suit is still pending at the relevant point of time or appeal is pending out of the decision of the suit. When such a situation arises, the appellant is at liberty to ask the Trial Court for such prayer if the suit is still pending at the relevant point of time or appeal is pending out of the decision of the suit. With these observations, we are of the opinion that the appeal should be disposed of without any positive interim order as sought by the appellant." He submits, there has been merger of said order of co-ordinate Bench in said appellate order. The order granted liberty to come back to trial Court with similar prayer on changed circumstances. Circumstances have changed since. Mill of his client was re-opened and said order dated 10th December, 2018 obtained for issuance of PCSO. He submits, there be order in terms of prayers in this application. 3. Defendants cannot seek to withhold without obtaining adjudication on entitlement to a sum. For this, he relies on judgment of Supreme Court in Gangotri Enterprises Ltd. vs. Union of India, (2016) 11 SCC 720 , paragraphs 36, 37 and 40. He submits, his client is entitled to a quia timet action. He relies on judgment of Supreme Court in Kuldip Singh vs. Subhash Chander Jain, (2004) 4 SCC 50, paragraph 6 which is reproduced below: "6. A quia timet action is a bill in equity. It is an action preventive in nature and a specie of precautionary justice intended to prevent apprehended wrong or anticipated mischief and not to undo a wrong or mischief when it has already been done. In such an action the court, if convinced, may interfere by appointment of receiver or by directing security to be furnished or by issuing an injunction or any other remedial process. In Fletcher vs. Bealey, Mr. Justice Pearson explained the law as to actions quia timet as follows: "There are at least two necessary ingredients for a quia timet action. There must, if no actual damage is proved, be proof of imminent danger, and there must also be proof that the apprehended damage will, if it comes, be very substantial. In Fletcher vs. Bealey, Mr. Justice Pearson explained the law as to actions quia timet as follows: "There are at least two necessary ingredients for a quia timet action. There must, if no actual damage is proved, be proof of imminent danger, and there must also be proof that the apprehended damage will, if it comes, be very substantial. I should almost say it must be proved that it will be irreparable, because, if the danger is not proved to be so imminent that no one can doubt that, if the remedy is delayed the damage will be suffered, I think it must be shown that, if the damage does occur at any time, it will come in such a way and under such circumstances that it will be impossible for the plaintiff to protect himself against it if relief is denied to him in a quia timet action." Mr. Mitra, learned advocate appears on behalf of defendant no. 4, but Court has not called upon him to argue. 4. Applicant by its suit claims injunction and decree for Rs. 2,77,29,548/- and consequential reliefs. Decree claimed is on account of price withheld, of goods sold and delivered subsequent to delivery made under earlier performed contract. Hence, applicant's apprehension that pursuant to fresh supplies made under PCSOs to be issued, that which respondent stated as to be recovered, would be recovered by withholding payment on future supplies. 5. By GA No. 747 of 2016 applicant had made, inter alia, following prayer: "(b) Injunction restraining the defendants and each of them whether by themselves or their subordinates, assigns or otherwise howsoever from claiming refund or withholding any money from the future bills of the petitioner or selling the jute bags including the letters dated May 26, 2015 and August 27, 2015 being Annexures "Q" and "R" to the petition, in any manner whatsoever." 6. In this application, applicant has made following prayers:- "(a) Injunction restraining the respondents whether by themselves or their officers, subordinates, agents, assigns or otherwise howsoever, from withholding payments against supplies to be made in terms of PCSO to be issued by the Jute Commissioner pursuant to his order dated December 10, 2018, in any manner whatsoever; (b) The respondents be directed to release a sum of Rs. 2,77,29,548.00 withheld by the respondents and/or any of them to the petitioner on such terms and conditions as to this Hon'ble Court may seem fit and proper in the facts and circumstances of the case." 7. Applicant was unable to secure relief by GA 747 of 2016 on co-ordinate Bench having taken following view by its order dated 27th July, 2016. "In the context of such stands of the parties, the interlocutory reliefs sought do not merit any consideration. Indeed, an injunction of the nature as prayed for in either prayer (a) or prayer (b) would be an indirect mandatory injunction commanding payment. In fact, it is strange that injunctions have at all been sought in respect of a money claim. The plaint is fundamentally flawed on such count, though the money claim can be pursued. GA No. 747 of 2016 is disposed of without any order and by leaving all questions to be decided at the trial." 8. On appeal, Division Bench recorded submissions of parties, which were not directed at the view taken, recorded probabilities and made certain observations, to go on to dispose of the appeal without making any order as will appear from extract of its order dated 11th August, 2016, reproduced above. View taken by co-ordinate Bench and applicant having appealed therefrom, Appellate Court had power to deal with such appeal, to confirm, vary or reverse impugned order or make any order which ought to have been passed or as may be required. This is provided for in Rules 32 and 33 in Order 41, Code of Civil Procedure. It will appear from appellate order, said Court did none of the above. Observations made do not constitute an order made, either as ought to have been made or required to be made. View taken by co-ordinate Bench, thus, was not interfered with. The view binds parties at this stage. 9. Scope of suit as per claims made is restraint on withholding payments against applicant's future bills. Dispute on assertion of right to withhold is to be adjudicated in the suit, on its enforceability. That would mean adjudication on reason for withholding as well as the amount that can be withheld. This claim for restraint may not be a claim for price of goods sold and delivered. Hence, contention of quia timet action or preventive injunction. Dispute on assertion of right to withhold is to be adjudicated in the suit, on its enforceability. That would mean adjudication on reason for withholding as well as the amount that can be withheld. This claim for restraint may not be a claim for price of goods sold and delivered. Hence, contention of quia timet action or preventive injunction. This withholding by defendants and contention of future recoveries, necessarily by withholding from future bills, needs to be adjudicated and in the meantime question arises of applicant-plaintiff's claim to interlocutory relief. However, as aforesaid this same prayer for relief stood rejected on a view taken, which view was not interfered with by the Division Bench in appeal. This being co-ordinate Bench, to that which passed order dated 27th July, 2016, cannot comment on the manner in which earlier co-ordinate Bench dealt with similar application. What is important is, there was a view taken at the first instance and not interfered with, which view binds parties at this stage. 10. For reasons aforesaid, this application is dismissed.