Research › Search › Judgment

J&K High Court · body

2022 DIGILAW 661 (JK)

Food Corporation of India v. Iqbal Motors Transport Service (M/S)

2022-11-25

MOKSHA KHAJURIA KAZMI

body2022
JUDGMENT : Moksha Khajuria Kazmi, J. Caveat No. 1840/2022 1. Heard learned counsel for the caveator. Caveat discharged. 2. The appellants, through the medium of present appeal, seek setting aside of the order dated 08.09.2022, hereinafter for short as impugned order, passed by the learned 2nd Additional District Judge, Srinagar, for short trial court, in an appeal titled M/s Iqbal Motors Transport Service & Anr v. Food Corporation of India and others, on the grounds taken in the memo of appeal. Brief Facts 3. The case of the appellants, precisely, is that pursuant to tender notice, No. Cont./32(3)/JK/Tender/2019-20, dated 10.06.2020, the respondent transport company was allotted the tender, after having been declared as successful bidder, on 24.02.2021. The respondent-transport company was required, in terms of the contract, to supply foodgrains from EX-FSD New Godown Jammu to FSD Budgam. During the currency of such contract, the appellants issued a termination and debarment order no. Cont 32 (3)/ (JK)/Tender/2019-20/NIT:20.11.2020/NG Jammu to PEG Budgam II dated 26.08.2022, by virtue of which the contract with the respondent-transport company was terminated with immediate effect. The operative portion of the termination order is, for facility of reference, taken note of herein, thus: "Therefore, in exercise of the power conferred under MTF clause X(a), XI (b), XI (c), XII (a), XII (b) & 13 of the Road transport contract for the route Ex-FSD New Godown Jammu to PEG Budgam-II, awarded to M/s Iqbal Motor Transport Services vide award letter dated 24.02.2021 for the period 16.03.2021 to 15.03.2023 is hereby terminated with immediate effect and M/s Iqbal Motor Transport Services is hereby debarred for participating in any future tender of FCI for a period of three (3) years from the date of issue of this order besides forfeiture of SD and the Corporation shall proceed for appointment of another contract as per the MTF at the risk and cost of M/s Iqbal Motor Transport Services. Any damages, losses, charges, expenses or cost that may be suffered or incurred by the Corporation due to the contractor's negligence or unworkman like performance of any of the services under the contract would be recovered from M/s Iqbal Motor Transport Services without prejudice to any other rights and remedies available to the corporation under the contract and law of the land. " 4. " 4. Feeling aggrieved of the termination/ debarment order supra, the respondent transport company challenged the same by filing a suit for declaration and mandatory injunction before the trial court. The suit was accompanied by an application for grant of ad-interim relief. 5. The trial court, upon consideration of the matter, stayed the operation of the termination/ debarment order in terms of the impugned order on the ground that the principles of natural justice have not been followed while passing the termination/ debarment order inasmuch as the respondent transport company/ plaintiff before the trial court, was not afforded an opportunity of hearing before the order of termination. The operative portion of the impugned order is reproduced hereinbelow, thus: "For the reasons and the law discussed herein above, it requires determination that whether the defendants have acted in a fair manner and have followed the principles of natural justice before passing the order under challenge and that fact cannot be ascertained at this stage, therefore, I am of the opinion that applicants/ plaintiffs have succeeded in establishing a prima-facie case for grant of interim relief at this stage, however this court is equally conscious of the fact the defendants are yet to file their objections to the application, however the ld Counsel for the non-applicants/ defendants sought time for filing of objections in the application at hand, the time as prayed for is granted to him. Therefore till the objections are filed and same are considered by this court, the operation of the Termination and debarment order No Cont 32 (3)/(JK)/Tender/ 2019- 20/NIT:20.11.2020/NG Jammu to PEG Budgam II dated 26.08.2022 issued by the defendant Corporation is stayed till next date of hearing. Applicant/ plaintiff shall deliver copy of this order along with the copies of the plaint, applications, affidavits and documents to the non-applicant/ defendant at his own cost and file an affidavit before this Court within three days stating therein that the copies aforesaid have been delivered or sent. This application shall come up for further proceedings on 24.09.2022." 6. Applicant/ plaintiff shall deliver copy of this order along with the copies of the plaint, applications, affidavits and documents to the non-applicant/ defendant at his own cost and file an affidavit before this Court within three days stating therein that the copies aforesaid have been delivered or sent. This application shall come up for further proceedings on 24.09.2022." 6. The said order is being assailed by the appellants by the medium of present appeal inter alia on the grounds; that in terms of the impugned order an injunction has been issued for a determinable contract which is impermissible in law; the termination and debarment order is issued in accordance with the terms and conditions governing the contract and in terms of the provisions of Section 14 (d) read with Section 41(e) of the Specific Relief Act, 1963, no injunction could have been issued even if the termination/ debarment order was issued wrongly as in that case the respondent transport company would be entitled to seek damages; the principles of natural justice have not been violated; the trial court does not record as to in whose favour the balance of convenience lies and who is going to suffer the irreparable loss, as such, the basic principle for grant of ad-interim relief has not been followed rendering the impugned order bad in law; the order impugned is without jurisdiction as no cause of action has arisen in favour of the respondent within the territorial limits of the trial court. 7. Heard learned counsel for the parties. 8. Learned senior counsel for the appellants reiterated the grounds taken by him in his pleadings to lend support to his case. Additionally, the learned senior counsel submits that the appellants have resorted to forum shopping as they have deliberately avoided invoking the jurisdiction of the courts at Jammu or at Budgam. 9. 7. Heard learned counsel for the parties. 8. Learned senior counsel for the appellants reiterated the grounds taken by him in his pleadings to lend support to his case. Additionally, the learned senior counsel submits that the appellants have resorted to forum shopping as they have deliberately avoided invoking the jurisdiction of the courts at Jammu or at Budgam. 9. The learned senior counsel for the appellants referred to and relied upon the judgments delivered in cases titled A. Venkatasubbiah Naidu v. S. Chellappan & Others, reported as 2000 (7) SCC 695 ; Indian Oil Corporation limited v. Amritsar Gas Service and others, 1991 (1) SCC 533 ; Dalpat Kumar and another v. Prahlad Singh and others (1992) 1 SCC 719 ; M. Gurudas & others v. Rasaranjan & others, 2006 (8) SCC 367 ; National High Authority of India v. Panipat Jalandhar NH-1 Toll Way Pvt. Ltd., 2021 SCC Online Del 2632; Airport Authority of India v. Sh Kanwar Singh Yadav, 1999 (51) DRJ (Delhi HC); Rajasthan Breweries Limited v. The Stroh Brewery Company, 2000 (55) DRJ (DB) (Delhi High Court); Akmal Ali & others v. State of Assam and others, AIR 1984 Gauhati High Court, 86; E. Mangamma v. A. Muniswamy Naidu, AIR 1983 Andhra Pradesh, 128; Zila Parishad, Budaun & others v. Brahma Rishi Sharma, AIR 1970 Allahabad, 376 and Ratna Commercials Enterprises Ltd. & Anr. v. Vasutech Ltd., 2007 (97) DRJ, 304. 10. Learned senior counsel for the respondent-transport corporation submits that the impugned order is quite in conformity with law as the trial court was satisfied that the principles for grant of ad-interim relief were in favour of the plaintiffs/respondents. He further submits that the instant appeal is a miscellaneous appeal and this court cannot adjudicate upon the merits of the case in such appeal and requires remanding the case to the trial court for adjudication. 11. Learned senior counsel further submits that the appellant-Corporation has its sub-office in Srinagar also, therefore, the submission in respect of the alleged forum shopping is unfounded. In support of his case, the learned senior counsel referred to and relied upon case law delivered in cases titled Wander Ltd. & anr. v. Antox India P. Ltd., 1990 (2) ARBLR 399, SC, K.K. Puri & Ors. v. A.K. Puri & Ors.; Astral Traders v. Haji Mohammad Shaban Dar & Ors.: 12. Considered the submissions made. 13. In support of his case, the learned senior counsel referred to and relied upon case law delivered in cases titled Wander Ltd. & anr. v. Antox India P. Ltd., 1990 (2) ARBLR 399, SC, K.K. Puri & Ors. v. A.K. Puri & Ors.; Astral Traders v. Haji Mohammad Shaban Dar & Ors.: 12. Considered the submissions made. 13. It is not denied by the respondent-transport company that the present dispute is arising out of a determinable contract and as such the parties to the dispute are governed by the terms of the contract. Since the dispute relates to the termination of contract, therefore, the clause governing such dispute in the tender document would be desirable to be taken note of, thus: "XX. Law Governing the Contract & Dispute resolution: (a) .... (b) In case of any dispute arising out of and touching upon the contract, the same will be first referred to the Dispute/Grievance Redressal Committee constituted and functioning at the Zonal Office of the Corporation, with a view to settle the disputes. The role of GRC shall cover the period from the date of award of contract. If any dispute remains thereafter, the same will be settled in the Court of Law having competent jurisdiction." 14. It appears that the respondent chose to file a suit in disregard of the terms of the contract and the trial court also passed an order of injunction on the basis of unfounded assumptions. The impugned order, ex facie appears to be legally bad as the trial court has not satisfied itself as regards the fulfillment of the basic principle governing the grant of ad-interim relief. The trial court has concluded the ad- interim injunction order in the following manner: "For the reasons and the law discussed herein above, it requires determination that whether the defendants have acted in a fair manner and have followed the principles of natural justice before passing the order under challenge and that fact cannot be ascertained at this stage, therefore, I am of the opinion that applicants/ plaintiffs have succeeded in establishing a prima facie case for grant of interim relief at this stage." (Emphasis supplied) 15. Perusal of the impugned order would reveal that the trial court has not adverted to and returned finding on the basic principles governing the grant of ad-interim relief. Perusal of the impugned order would reveal that the trial court has not adverted to and returned finding on the basic principles governing the grant of ad-interim relief. The trial court has very clearly recorded in the impugned order that it requires determination that whether the defendants have acted in a fair manner and have followed the principles of natural justice before passing the order under challenge, thereby indicating that the interim relief has been passed only on the basis of assumptions that principles of natural justice might not have been followed or that the appellants might not have acted in fair manner. The plea that the trial court has satisfied itself only in respect of one of the three principles governing the grant of ad-interim relief, therefore, does not find support. It can, as such, be safely held that the trial court has given a complete good bye to the principles of law governing the grant of ad-interim relief. The law on the point is clear that the court considering the application of grant of ad-interim relief has to satisfy itself on all the three ingredients viz. prima-facie case; balance of convenience; and irreparable loss. The relief cannot be granted even if one of the three supra principles, appears to be tilting in favour of the party seeking such relief. Therefore, even if it is assumed that the trial court satisfied itself in respect of a prima facie case being in favour of the respondent/ plaintiff, yet it was not justified to pass the impugned order. The Hon'ble Supreme Court in case titled Grid Corporation of Orissa Ltd. v. Indian Charge Chrome Ltd., reported as AIR 1998 Ori 101 has held that balance of convenience would be taken into consideration in granting the application for interim measure of protection and where grant of interim measure of protection is opposed to the rule of balance of convenience, it should not be granted. In the instant case, the trial court has not made even a whisper as to in whose favour lies the balance of convenience or who is going to suffer an irreparable loss in the event the ad-interim relief is granted or rejected. 16. In the instant case, the trial court has not made even a whisper as to in whose favour lies the balance of convenience or who is going to suffer an irreparable loss in the event the ad-interim relief is granted or rejected. 16. The Hon'ble Supreme Court in case titledBest Sellers Retail (India) Private Limited v. Aditya Birla Nuvo Limited and others reported as (2012) 6 Supreme Court Cases 792, has held that the settled principle of law is that even where prima facie case is in favour of the plaintiff, the Court will refuse temporary injunction if the injury suffered by the plaintiff on account of refusal of temporary injunction was not irreparable. In the instant case there was no occasion for the respondent to have suffered an irreparable loss if the temporary injunction was refused by the court. The Hon'ble Apex Court had in the Best sellers supra case quoted the words of Alderson, B. in Attorney General v. Hallett (ER p. 1321) in the following terms: "...I take the meaning of irreparable injury to be that which, if not prevented by injunction, cannot be afterwards compensated by any decree which the court can pronounce in the result of the cause." 17. It transpires from the perusal of the final notice bearing No. Cont. 32(3)/JK/Tender/2019-20/NIT:20.11.2020/NG Jammu to PEG Budgam II/545 dated 04.09.2022, that the performance review of the respondent for the period May 2022 to July 2022 had been found unsatisfactory, therefore, besides issuing notices to him, he was heard in person by the General Manager (J&K) on 30th June, 2022. Moreso the said final notice is stated to have been responded to also by the respondent as is recorded in the termination and debarment order. In this view of the matter there was no occasion for the trial court to pass an injunction order on the basis of mere conjectures. 18. The impugned order further appears to be bad for the reason that it has been passed in disregard to the mandate of Section 14 (d) and 41 (e) of the Specific Relief Act, 1963, for short as Act. Section 14 (d) and 41 (e) for facility of reference are reproduced herein, thus: "14. Contracts not specifically enforceable.- The following contracts cannot be specifically enforced, namely- (a) (b) (c) (d) a contract which is in its nature determinable. 41. Section 14 (d) and 41 (e) for facility of reference are reproduced herein, thus: "14. Contracts not specifically enforceable.- The following contracts cannot be specifically enforced, namely- (a) (b) (c) (d) a contract which is in its nature determinable. 41. Injunction when refused.- An injunction cannot be granted- (a).... (b).... (c).... (d).... (e) to prevent the breach of a contract the performance of which would not be specifically enforced. " 19. Perusal of Section 14 (d) of the Act makes it abundantly clear that certain contracts cannot be specifically enforced. Such contracts include the contracts where on account of non-performance, monetary compensation is a sufficient relief. Therefore, there was no occasion for the trial court to pass an order of injunction in complete disregard to Section 14 and 41 (e) of the Act. 20. The contention of the learned senior counsel for the appellants that the respondent has resorted to "forum shopping" by choosing a court at Srinagar district when as a matter of fact the supply was required to be made from Jammu to Budgam. He submits that ordinarily the courts at Jammu or at Budgam were competent to consider the matter and choosing a court outside the said two districts is a clear indication of forum shopping, which is inadmissible in the eyes of law. 21. The plea of the learned senior counsel for the appellants cannot be brushed aside completely as there is no reason, not to speak of a plausible reason, having been shown by the other side that constrained them to choose a court in a district other than those figuring in the contract for the purposes of the supply in question i.e. the district from where the supply had to be lifted and the district where the supply was to be provided. The learned senior counsel for the respondent has only made a submission, to refute such contention, that the appellant corporation has its sub-office at Srinagar, therefore, the respondent was not precluded to invoke the jurisdiction of the court at Srinagar. The submission of the learned senior counsel for the respondent is noted to be rejected only as in that case he could choose a court even outside the Union Territory of J&K as the appellant corporation must be having its sub-offices all over the country. 22. The submission of the learned senior counsel for the respondent is noted to be rejected only as in that case he could choose a court even outside the Union Territory of J&K as the appellant corporation must be having its sub-offices all over the country. 22. Hon'ble Supreme Court while dealing with somewhat similar position in case titled M/S Sonic Surgical v. National Insurance Company reported as 2010 (1) SCC135 has held as under: "....If the contention of the learned counsel for the appellant is accepted, it will mean that even if a cause of action has arisen in Ambala, then too the complainant can file a claim petition even in Tamil Nadu or Gauhati or anywhere in India where as branch office of the insurance company is situated. We cannot agree with this contention. It will lead to absurd consequences and lead to bench hunting. In our opinion, the expression 'branch office' in the amended Section 17 (2) would mean the branch office where the cause of action has arisen. No doubt this would be departing from the plaint and literal words of Section 17 (2) (b) of the Act but such departure is sometimes necessary (as it is in this case) to avoid absurdity. In the present case, since the cause of action arose at Ambala, the State Consumer Redressal Commission, Haryana alone will have jurisdiction to entertain the complaint. " Conclusion 23. In view of above discussion, the appeal filed by the appellants succeeds and is allowed as such. The impugned order dated 08.09.2022 passed by the court of 2nd Additional District Judge, Srinagar, is held to be not in consonance with law and set-aside accordingly. The suit filed before the trial court in its present form is barred by the provisions of Section 14(d) and 41(e) of the Act, therefore, is dismissed. The respondent shall however be at liberty to avail the appropriate remedy available under law. 24. Before parting with the file I wish to make it clear that the then presiding officer of the trial court needs to be very careful in future. He is supposed to act very diligently and not to pass orders in haste or in slipshod manner as is manifest from the impugned order.