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2019 DIGILAW 602 (CAL)

Suparna Chemicals Limited v. Eastern Coalfields Limited

2019-05-17

SUBRATA TALUKDAR

body2019
JUDGMENT : 1. At the heart of the dispute between the parties is the insistence by the Eastern Coalfields Limited (ECL), a subsidiary of Coal India Limited (CIL), requiring the petitioners to keep the Performance Bank Guarantee (PBG) renewed beyond its last renewal up to the 17th of September, 2017. 2. The petitioners/Suparna Chemicals Limited (for short SCL) resist the insistence by ECL to keep the PBG renewed beyond 17th September, 2017, on the ground that in terms of the original Purchase Order (for short PO), the PBG offered by SCL in favour of ECL dated 18th of December, 2006 was valid only for a period of 21 months that is up to 17th of September, 2008. The petitioners therefore demand that ECL be directed to forbear from insisting on further extension of the PBG or, compelling SCL to take any further steps under the original PO dated the 25th of July, 2006. 3. Mr. Jayanta Mitra, Learned Senior Counsel, ably assisted by Snehatosh Majumder, Learned Counsel, submits that the original PO arose out of a tender floated by ECL for supply of Self Generating Oxygen Apparatus, also called Self Contained Self Rescuer (SCSR), popularly styled as Raksha Kavach (RK). According to the petitioners, the petitioner No.1, SCL is a registered company and represented in the writ petition by the petitioner No.2, one of its Directors. The petitioner No.1/SCL is one of the few indigenous manufacturers of SCSR/RKs. 4. By the invitation to tender dated the 13th of January, 2006, ECL invited manufacturers and agents of RKs, both foreign and indigenous, to participate in the tender. It is relevant to mention at this point in the discussion that RKs are useful for underground coal mines at depths where miners suffer from diminishing oxygen content. Accordingly, ECL, which is operating several coal mines in the Eastern Region, invited offers for supply of four thousand (4000) units of RKs. 5. In brief, it is the specific case of the petitioner that upon being selected as the suppliers under the tender, the entire lot of the said 4000 units of RKs was supplied between 30th September, 2006 and 27th of March, 2007. Such supply was executed under the terms of the PO dated 25th of July, 2006. 6. 5. In brief, it is the specific case of the petitioner that upon being selected as the suppliers under the tender, the entire lot of the said 4000 units of RKs was supplied between 30th September, 2006 and 27th of March, 2007. Such supply was executed under the terms of the PO dated 25th of July, 2006. 6. However, issues being raised by ECL connected to the quality of the equipment/RKs, the entire lot of 4000 units was replaced between the 25th of January, 2008 to the 17th of April, 2008. Full payment under the PO was made by ECL in favour of SCL between the 27th of February, 2007 to the 29th of June, 2007. 7. Referring to the terms of the PO, Learned Counsel for the petitioners submits that the following criteria require to be specially mentioned. First, that the delivery of the full quantity of RKs to be made within six months of the receipt of the PO and, the total quantity to be delivered was divided into each of the six months. Second, the terms of payment would be 100% of the contract value to be made within 21 days from the date of receipt and acceptance of the materials (RKs) or, submission of bills, whichever is later. Third, the Warranty covering sub-standard materials, poor workmanship and flawed design of the equipment/RKs shall last for a period of 18 months from the date of receipt and acceptance of the materials. Fourth and, the clause central to the present discussion being Clause 24 of the PO, covers the PBG amounting to 10 per cent of the total order value on landed cost basis and valid for 21 months from the date of its submission. Accordingly, the total PBG amounting to Rs. 32,90,460/- valid up to 17th September, 2008 was placed by SCL in favour of ECL. 8. Learned Counsel for the petitioners points out that after execution of the first supply by the 27th of March, 2007, ECL raised the issue of defective batches of RKs. Since the issue of defective batches was raised by ECL immediately at a point of time following completion of the first supply of the entire materials, SCL restored the alleged defective batches of RKs by supplying the substituted materials between the 25th of January, 2008 and 17th of April, 2008. Since the issue of defective batches was raised by ECL immediately at a point of time following completion of the first supply of the entire materials, SCL restored the alleged defective batches of RKs by supplying the substituted materials between the 25th of January, 2008 and 17th of April, 2008. The petitioners further submit that the Test Report dated the 6th of June, 2008 of the entire equipment as supplied and also replaced, of the Department of Mining Engineering, Indian School of Mines, Dhanbad, concluded as follows:- "The results of various tests conducted as per different clauses of EN 401 reveal the following: The samples are confirming to EN 401 as per the tests carried out in Mine Ventilation and Environment Laboratory, Department of Mining Engineering, Indian School of Mines University, Dhanbad, India." 9. Therefore, even assuming for the sake of argument that the first objection raised by ECL complaining of defects in the equipment originally supplied was sustainable, with the supply of the replaced equipment by the 17th of April, 2008, the subsequent comprehensive Test Report dated the 6th of June, 2008 (supra) vouchsafed for the deployment of the RKs in the mines. Accordingly, ECL continued to use the RKs in its mines without demur to the conclusion drawn by the Test Report dated 6th June, 2008 (supra). 10. The petitioner complains of the fact that notwithstanding the specific terms of the PO limiting the Warranty to 18 months and the validity of the PBG to 21 months, ECL has been exerting pressure on SCL to keep the PBG renewed up to 2019. It is submitted that with the replacement supply completed between January and April 2008, the PBG, which was originally scheduled to expire on 17th of September, 2008 was renewed for a further period of one year up to 17th September 2009. Thereafter, upon being arm twisted by ECL the PBG was last renewed up to the 17th of September, 2017. 11. The petitioners submit that there is no legal basis to the insistence by ECL to keep the PBG renewed thereafter since, the validity of the original PBG was only for a period of a 21 months from the date of its submission (Clause 24 of the PO (supra)). 11. The petitioners submit that there is no legal basis to the insistence by ECL to keep the PBG renewed thereafter since, the validity of the original PBG was only for a period of a 21 months from the date of its submission (Clause 24 of the PO (supra)). The petitioners take the stand that with the replacement supply being tested and certified to be defect-free as on 6th June, 2008, the PBG, at the highest, may be at the highest, computed to be valid between 17th April, 2008, that is the last date of the replacement supply and for a period of 21 months thereafter. However, the PBG, by no stretch of imagination can be compelled to be renewed up to 2019, as impugned in the writ petition. 12. With the equipment being tested and found to be defect-free as on 6th June, 2008, the contract stood discharged by performance. The petitioners argue that it cannot be legally acceptable that the PBG will be coterminous with the shelf-life of the equipment, spanning a total of ten (10) years. The petitioner submits that ECL, using its superior coercive position qua SCL compelled the latter to keep the PBG renewed up to the 17th of September, 2017. ECL has threatened to invoke a general lien, not contemplated under the contract to block and claim from the dues of SCL lying with fraternal coal companies. 13. In support of their stand Learned Counsel for the petitioners, rely on the following authorities for establishing the following propositions. (a) The Writ Court is not precluded from examining facts and interpret a Contract to the extent that on the basis of the undisputed record the terms of the Contract can be constructed (In Re: ABL International, (2004) 3 SCC 553 ) and; (b) Arbitrariness and violation of Article 14 render a contractual dispute vulnerable to intervention by a Writ Court (In Re: Noble Resources, (2006) 10 SCC 236 ). 14. Mr. Pradip Kumar Dutta, Learned Senior Counsel appearing for ECL, submits that this Court sitting it Writ Jurisdiction may not examine the issue whether the Contract was acted upon by the parties and, stood discharged by performance. Referring to several provisions of the Sale of Goods Act, 1930 (for short the 1930 Act), Mr. 14. Mr. Pradip Kumar Dutta, Learned Senior Counsel appearing for ECL, submits that this Court sitting it Writ Jurisdiction may not examine the issue whether the Contract was acted upon by the parties and, stood discharged by performance. Referring to several provisions of the Sale of Goods Act, 1930 (for short the 1930 Act), Mr. Dutta submits by also relying on the Affidavit in Opposition filed on behalf of ECL, that enough materials have been brought on record to demonstrate that the RKs were defective. Referring to the correspondence by and on behalf of the Respondents/ECL commencing from September, 2007 up to 2014, Mr. Dutta submits that under the 1930 Act, ECL had the right to reject the goods. The exercise of such right is a factual situation arising out of the contract between the parties. The Writ Court may not therefore exercise jurisdiction over the issue. 15. Learned Senior Counsel for ECL points out that it is admitted that SCL replaced the defective equipment when called upon to do so by ECL. Further submitting that the shelf-life of RKs is prescribed for a period of 10 years, upon the second batch of replaced equipment being supplied by 2008, ECL had the right to take a call on the defects in the RKs throughout their shelf-life which is also linked to their error-free performance. In other words, the PBG would be considered to be valid for a period of 10 years from the last date of replacement supply in 2008. 16. Learned Senior Counsel for ECL points out that no case has been made out by SCL to the effect that ECL did not enjoy the right of rejection of the equipment. It is submitted that no term of the contract has been challenged by SCL. It is also submitted that any damage or defect in the equipment, including its components such as Indicators, make it incumbent upon SCL to replace the damaged/defective equipment. It is therefore asserted by Mr. Dutta that SCL has the absolute liability to replace the damaged equipment at any stage of its shelf-life, as and when such damage/defect is found. It is therefore iterated that during the shelf life of the equipment ECL retains the right of rejection connected to defective equipment. Such right of rejection which inheres in the ECL arising out of the contract, shall stand frustrated sans the renewal of the PBG. It is therefore iterated that during the shelf life of the equipment ECL retains the right of rejection connected to defective equipment. Such right of rejection which inheres in the ECL arising out of the contract, shall stand frustrated sans the renewal of the PBG. 17. Learned Counsel for ECL submits that since terms of the contract are inter se the parties, the issue of invocation of PBG is consequential. The PBG is dependant upon satisfactory fulfilment of the contract. Since the contract itself is yet to be fulfilled or, finally performed, the prayer made in the writ petition connected to the PBG is simply consequential to the performance of the contract. It is submitted that the terms of the contract inter se the parties govern the field. In other words, the acceptance or rejection of the contracted equipment by ECL is central to the issue. Axiomatically therefore, a consequential issue relating to the PBG cannot be incidentally considered through this writ petition without resolving the core contractual issue. 18. Mr. Dutta asserts that SCL has been renewing the PBG without demur from time to time. The PBG stood renewed so far till 2017 and, suddenly by way of this Writ Petition the communication of ECL requesting further renewal is being challenged. In view of the facts and circumstances as made out above, a writ petition to enforce the PBG on the ground of failure of one of the contracting parties to perform the contract, is not maintainable. In support of the above referred proposition, Mr. Dutta relies upon the authorities of 1996 (5) SCC 740 (at Paragraph 21); 2000 (6) SCC 293 (at Paragraph 10, 11); and 2006 (2) SCC 728 (at Paragraphs 9, 10 & 26). 19. Replying to the submissions of Learned Senior Counsel for ECL, Mr. Majumder, Learned Counsel for SCL submits that it is unambiguous that the replaced equipment was accepted by ECL. Such replaced equipment has been in continuous use by ECL for about 8 to 9 years. Therefore, the claim to rejection or non-acceptance of the RKs after extensive and event free use of the equipment for 9 years is not only misconceived but, also mischievous. The shelf life of the equipment, by no stretch of imagination, can be equated with the maximum validity of the PBG stated in the PO. 20. Therefore, the claim to rejection or non-acceptance of the RKs after extensive and event free use of the equipment for 9 years is not only misconceived but, also mischievous. The shelf life of the equipment, by no stretch of imagination, can be equated with the maximum validity of the PBG stated in the PO. 20. Having heard the parties and considering the materials placed, this Court arrives the following findings; (A) Apart from the requirement of RKs as advertised by ECL it is noticed from Enclosure No.4 of the tender as due on 13th of January, 2006, also contains a provision bearing the name and style of Provenness Criteria. Provenness Criteria reads as follows:- "The firm having valid DGMS approval of their offered product (Oxygen type Self Rescuers) and a satisfactory report on trial/demonstration given at CMRI or Mines Rescue Station for Self Rescuers shall be considered a proven source. Firms shall have to furnish necessary documentary evidence as above." (B) Therefore, this Court must consider the fact that any Manufacturer/Agent applying for the tender is presumed to have satisfied the Proneness Criteria (supra). This Court must, therefore, accept the position as uncontested that SCL at the stage of participation in the tender satisfied the Proneness Criteria by possessing valid DGMS approval as well as having satisfactorily reported on the trial/demonstration as required vide Enclosure No.4 (supra). (C) Again from the terms and conditions of the tender specifying the requirements placed by ECL, this Court notices the following statement:- "Only proven suppliers for the tendered items are allowed to bid against this tender. Offers of unproven suppliers shall not be considered. The firms will be considered as proven party as per the 'Criteria for Proneness' for ECL of this tender." Therefore, it appeals to reason that only proven suppliers could participate in the tender. It further appeals to reason that the offers of unproven suppliers shall not be considered. Since SCL was considered to be a proven supplier, its tender offer was allowed within the zone of participation by ECL. (D) This Court must further notice from the terms of the tender as crystallized by the PO that Delivery was the Essence of the Contract. The delivery dates were to be clearly indicated by the firm participating in the tender. In the event the delivery dates/period were not followed, consequential provisions for penalty and damages were to follow. (D) This Court must further notice from the terms of the tender as crystallized by the PO that Delivery was the Essence of the Contract. The delivery dates were to be clearly indicated by the firm participating in the tender. In the event the delivery dates/period were not followed, consequential provisions for penalty and damages were to follow. (E) In the above view of the matter this Court must also come to the finding that with Delivery being the Essence of the Contract, the clauses incidental to or associated with the delivery schedule such as the Warranty and the PBG require to be read purposively and, not disassociatively. Since the contract itself is rooted on Delivery, the surrounding rights and obligations of the parties to the contract, viz. ECL and SCL, require to be associatively construed. (F) This Court, at this stage, is required to quote, the authority of In Re: ABL International, 2004 (3) SCC 553 which is apropos to the present facts. Paragraphs 10, 23, 28 and 51 are profitably reproduced below:- "10.It is clear from the above observations of this Court in the said case though a writ was not issued on the facts of that case, this Court has held that on a given set of facts if a State acts in an arbitrary manner even in a matter of contract, an aggrieved party can approach the court by way of writ under Article 226 of the Constitution and the court depending on facts of the said case is empowered to grant the relief. This judgment in K.N. Guruswamy Vs. The State of Mysore and others was followed subsequently by this Court in the case of The D.F.O, South Kheri & Ors. Vs. Ram Sanehi Singh wherein this Court held: By that order he has deprived the respondent of a valuable right. We are unable to hold that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. We are unable to hold that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. In view of the judgment of this Court in K.N. Guruswamy's case (supra), there can be no doubt that the petition was maintainable, even if the right to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power. 23. It is clear from the above observations of this Court, once State or an instrumentality of State is a party to the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if by the impugned repudiation of the claim of the appellants the first respondent as an instrumentality of the State has acted in contravention of the above said requirement of Article 14 then we have no hesitation that a writ court can issue suitable directions to set right the arbitrary actions of the first respondent. In this context, we may note that though the first respondent is a company registered under the Companies Act, it is wholly owned by the Government of India. The total subscribed share capital of this company is 2,50,000 shares out of which 2,49,998 shares are held by the President of India while one each share is held by the Joint Secretary, Ministry of Commerce and Industry and Officer on Special Duty, Ministry of Commerce and Industry respectively. The objects enumerated in the Memorandum of Association of the first respondent at Para 10 states : To undertake such functions as may be entrusted to it by Government from time to time, including grant of credits and guarantees in foreign currency for the purpose of facilitating the import of raw materials and semi-finished goods for manufacture or processing goods for export." Para 11 of the said object reads thus : To act as agent of the Government, or with the sanction of the Government on its own account, to give the guarantees, undertake such responsibilities and discharge such functions as are considered by the Government as necessary in national interest. 28. 28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power (See: Whirlpool Corporation vs. Registrar of Trade Marks). And this plenary right 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 for other valid and legitimate reasons, for which the court thinks it necessary to exercise the said jurisdiction. 51. From the terms of the contract, we have noticed in Clause (6) as amended by the addendum, consideration by way of barter of goods is not the sole consideration. The said clause contemplates alternate modes of payment of consideration one of them being by barter of goods and the other by cash payment in US $. The terms of the insurance contract which was agreed between the parties were after the terms of the contract between the exporter and the importer were executed which included the addendum, therefore, without hesitation we must proceed on the basis that the first respondent issued the insurance policy knowing very well that there was more than one mode of payment of consideration and it had insured failure of all the modes of payment of consideration. From the correspondence as well as from the terms of the policy, it is noticed that existence of only two conditions have been made as a condition precedent for making the first respondent Corporation liable to pay for the insured risk, that is, (i) there should be a default on the part of the Kazak Corporation to pay for the goods received; and (ii) there should be a failure on the part of the Kazakhstan Government to fulfill their guarantee. This is clear from the terms of the insurance contract read with the letter of the first respondent dated 8th September, 1993 wherein at Clause 3A, it is stated : "Our liability will arise only after default has been established on the guarantee of the Ministry." From the above, it is clear both the grounds as put forth by the learned counsel for the respondent before us as well as in the two letters of repudiation issued by the first respondent are unsustainable. In our opinion, the first respondent insured the export risk of the appellants in regard to the nonpayment of the consideration for the tea exported whether it arose from the non fulfillment of the barter clause or for the non fulfillment of the cash payment clause. The argument advanced on behalf of the respondent that the appellants refused to accept the barter by goods offered by the first respondent which amounted to a default under the contract on the part of the appellants has no legs to stand in view of the clear language of the amended Clause 6 of the agreement which as noted above states that the obligation of the buyer, namely, Kazak Corporation to pay for the goods received by it in US $ arises when payment by barter fails for "any reason whatever". The use of the words "any reason whatever" in the said amended clause includes the reasons of refusal by the appellants to accept the goods offered in barter. On the face of the said language of amended clause, there could be no room for two opinions at all in regard to the liability of the first respondent to pay for the loss suffered by the appellants even in cases where payment by barter fails at the instance of the appellant. The learned counsel for the respondent contended for a correct interpretation of this amended clause and the other clauses of the contracts i.e. the contract of export and the contract of insurance between the parties there is need for oral evidence being led without which a proper interpretation of this clause is not possible, therefore, it is fit case in which the appellants should be directed to approach the Civil Court to establish its claim. We find no force in this argument. We find no force in this argument. We have come to the conclusion that the amended Clause 6 of the agreement between the exporter and the importer on the face of it does not give room for a second or another construction than the one already accepted by us. We have also noted that reliance placed on sub-clause (d) of the proviso to the insurance contract by the Appellate Bench is also misplaced which is clear from the language of the said clause itself. Therefore, in our opinion, it does not require any external aid much less any oral evidence to interpret the above clause. Merely because the first respondent wants to dispute this fact, in our opinion, it does not become a disputed fact. If such objection as to disputed questions or interpretations are raised in a writ petition, in our opinion, the courts can very well go into the same and decide that objection if facts permit the same as in this case. We have already noted the decisions of this court which in clear terms have laid down that mere existence of disputed questions of fact ipso facto does not prevent a writ court from determining the disputed questions of fact." (G) At this stage, this Court must further notice that the proposition underscored In Re: Kerala State Electricity Board and Another, 2000 (6) SCC 293 and relied upon by Learned Senior Counsel appearing for ECL that normally contractual/commercial matters do not per se acquire a statutory flavour or, raise issues of public law, has been noticed and exceptions apropos the factual scenario carved out In Re: ABL International (supra) underscored. (H) This Court must now notice that the proposition connected to liabilities and exceptions qua unconditional irrevocable bank guarantees as laid down In Re: BSES Ltd. (now Reliance Energy Ltd.), 2006 (2) SCC 728 , do not apply to the present facts. It requires to be mentioned that such issue is not the basis of the communication by ECL impugned in this writ petition. Axiomatically therefore, such issue cannot be developed at the stage of arguments. (I) Now, this Court must notice the term in the PO relating to the PBG which, reads as follows:- "Performance Guarantee: you shall have to furnish a Performance Bank Guarantee for 10% of the total order value on landed cost basis valid for 21 months from the date of submission. (I) Now, this Court must notice the term in the PO relating to the PBG which, reads as follows:- "Performance Guarantee: you shall have to furnish a Performance Bank Guarantee for 10% of the total order value on landed cost basis valid for 21 months from the date of submission. The Bank Guarantee must be concluded on a Nationalized Bank/Schedule Bank on a non judicial stamp paper of Rs. 55/- (Rupees fifty five) only or more strictly as per our format. The stamp paper for the purpose of Bank Guarantee must be in the name of the bank." (J) The above term in the PO on PBG must be now read in the light of the delivery schedule at Clause 6 of the PO:- "Delivery: Full quantity to completed within 6 months from the date of receipt of order. Month wise quantity to be supplies as under:- 25 Minute 30 Minute First Month - 100 Nos. 100 Nos. Second Month - 200 Nos. 200 Nos. Third Month - 350 Nos. 350 Nos. Fourth Month - 350 Nos. 650 Nos. Fifth Month - Nil 800 Nos. Sixth Month - Nil 900 Nos._ 1000 Nos. 3000 Nos." (K) Therefore, this Court must notice the PBG validity period of the equipment/ RKs supplied in the context of the delivery schedule at Clause 6 of the PO (supra). It is an admitted position that following the last replacement/substitution of equipment in April 2008 and release of full payment by ECL against such supplies signifying acceptance of the equipment, the requirement of Delivery being the Essence of the Contract stood satisfied. With the last date of delivery, both the Warranty and the PBG kicked in respectively for a period of 18 months and 21 months from the date of delivery. (L) It is relevant to reiterate at this juncture that after the last date of replacement delivery in April 2008, the equipment was tested for defects by the Competent Authority on behalf of the ECL as established through the Test Report dated the 6th of June, 2008. There is no material on record to show that ECL has challenged the Test Report dated the 6th of June, 2008. There is no material on record to show that ECL has challenged the Test Report dated the 6th of June, 2008. Therefore, by its conduct ECL is estopped from taking a stand now, after the lapse of several years during which the RKs were steadily used, turning around in the disguise of defects in equipments and collaterally try to secure one extension after another of the PBG. (M) It is also not disputed that the equipments were put to use by ECL following the positive Test Report of June 2008. It is also on record that SCL extended the PBG for a period of 21 months beyond June 2008 up to September 2009. By holding on to the PBG and by assuming a power of general lien in respect of dues receivable by SCL from other subsidiary Coal Companies of Coal India Limited (CIL), SCL has rightly submitted that it was coerced by ECL to extend the PBG up to the 17th of September, 2017. Such extension of PBG violates the terms of the PO which provides for its validity up to a period of 21 months with Delivery being the Essence of the Contract. (N) This Court therefore, cannot agree with the stand taken by Mr. Dutta Learned Senior Counsel, that the right of rejection inheres perpetually with ECL. This Court must notice that the right of rejection of the equipment cannot be extended at the sweet will of ECL to cover the shelf-life of RKs spanning ten years. The right of rejection could not be exercised by ECL selectively in respect of some of the equipment and putting to profitable use the remaining larger rest of the RKs. In this connection this Court must underscore the mischief behind the communication of the Deputy General Manager (MM) dated 6th of April, 2017 addressed to SCL pointing out to defects in the equipment at the end of 9 years of the substituted supply. The sad communication, which does not behove the responsible office of the DGM (MM), betrays a design on the part of ECL to keep SCL tied down in perpetuity to the equipment threatening powers of forfeiture and rejection. SCL, in the view of this Court, as a matter of survival was therefore compelled to keep the PBG alive till the 17th of September, 2007, without there being a lawful reason to do so far so many years. SCL, in the view of this Court, as a matter of survival was therefore compelled to keep the PBG alive till the 17th of September, 2007, without there being a lawful reason to do so far so many years. (O) Summarizing the discussion as aforesaid, this Court requires to keep its focus on the alleged caprice in the decision-making process and intent of ECL. The legal inspiration based on apposite facts is drawn by this Court from a galaxy of authorities and, to quote a few: In Re: Ramana Dayaram Shetty vs. International Airports Authority of India, (1979) AIR SC 1628; and In Re: Tata Cellular vs. Union of India, (1996) AIR SC 11. (P) This Court fails to appreciate the rationale behind seeking an extension of PBG beyond 21 months from the date of delivery and even beyond the date of acceptance of substituted equipment after Test payments whereof were fully made by ECL to SCL. Through all these long years the equipment was under active use by ECL. (Q) The above referred arbitrary action on the part of ECL exercising its by now superior powers under the contractual relationship has been seriously discouraged, not the least having regard to the functions of ECL as a State within the meaning of Article 12 of the Constitution, by the Hon'ble Apex Court In Re: LIC of India vs. Consumer Education and Research Centre. Paragraphs 32 and 49 thereof require to be profitably extracted:- "32.An unfair and untenable or irrational clause in a contract is also unjust and amenable to judicial review. In common law a party was relieved from such contract. In Gillespie Bros. & Co. Ltd. V. Roy Bowles Transport Ltd. Lord Denning for the first time construing the indemnity clause in a contract questioned that are the courts to permit party to enforce his unreasonable clause, even when it is so unreasonable clause, even when it is so unreasonable, or applied so unreasonably, as to be unconscionable, and stated. When it gets to this point, I would say, as I did many years ago, there is the vigilance of the common law which, while allowing freedom of contract, watches to see that it is not abused'. It will not allow a party to exempt himself from his liability at common law when it would be quite unconscionable for him to do so. 49. It will not allow a party to exempt himself from his liability at common law when it would be quite unconscionable for him to do so. 49. The authorities or private persons or industry are bound by the directives contained in part IV, Part III and the Preamble of the Constitution. It would thus be clear that the right to carry on trade is subject to the directives containing the Constitution, the Universal Declaration of Human Rights, European Convention of Social, Economic and Cultural Rights and the Convention on Right to Development for Socio-Economic Justice. Social security is a facet of socio-economic justice to the people and a means to livelihood." (R) This Court is under no illusion that SCL requires to be relieved of the onerous bargain being imposed by ECL from year to year for nine years after the last delivery. To draw a somewhat crude but nonetheless a direct analogy, it is like a customer ordering a one-pound cake from the nearby patisserie and, after consuming nineteenths thereof, charging the patisserie citing defects in the remaining portion. (S) As elucidated by Professor Roy Goode in The Hamlyn Lectures (49th Series) on Commercial Law in the next Millennium, the role of Courts is to ensure that there is an element of certainty in contracts. The switch by ECL from the clear terms of the contract to open-ended action renders the decision-making unpredictable, thereby prompting this Court to ensure predictability in action. (T) In Re: Karnataka State Forest Industries Corporation vs. Indian Rocks, (2009) 1 SCC 150 , the Hon'ble Supreme Court reaffirmed the philosophy behind In Re: ABL International (supra) at Paragraphs 38 and 39 as follows:- "38. Although ordinarily a superior court in exercise of its writ jurisdiction would not enforce the terms of a contract qua contract, it is trite that when an action of the State is arbitrary or discriminatory and, thus, violative of Article 14 of the Constitution of India, a writ petition would be maintainable. (See ABL International Ltd. v. Export Credit Guarantee Corpn. Of India Ltd.) 39. (See ABL International Ltd. v. Export Credit Guarantee Corpn. Of India Ltd.) 39. There cannot be any doubt whatsoever that a writ of mandamus can be issued only when there exists a legal right in the writ petition and a corresponding legal duty on the part of the State, but then if any action on the part of the State is wholly unfair or arbitrary, the superior courts are not powerless. Reliance placed by Mr. Divan on G.J. Rernandez v. State of Mysore is not apposite. In that case itself it was held." 21. In the backdrop of the above discussion this Court directs as follows:- (I) That shall be a Writ in the nature of Mandamus in terms of Prayers (a) and (b) to this Writ Petition. (II) The Respondents Nos.1, 3, 4 and 5 shall pay SCL costs assessed at % (half per cent) per week commencing form the 18th of September, 2017, i.e. the day after the expiry of the PBG last on 17th September, 2017 to be applicable till the day of its actual disbursement preferably not later than eight weeks from the date of communication of this order. 22. Let the Report of the Registry be retained with this record. W.P. No. 23517 (W) of 2017 stands accordingly allowed. 23. Urgent Xerox certified photocopies of this judgment, if applied for, be given to the parties upon compliance of the requisite formalities. 24. Registry to communicate this order to the Respondent No.2, the Chairman-cum-Managing Director, ECL.