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TMI Blog2012 (11) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ation issued under memo no.V/M.CW/271.MB dated September 28, 2010. Therefore, the cause of action in part took place within the territorial jurisdiction of this High Court. It is a settled principles of law that if all parties are present before the court in a suit the same is maintainable. By virtue of the communication dated March 13, 2009 issued by the competent authority of the Railway Board the General Manager of All India Railways were informed amongst others, payment to the contracting agency might be made for the work already done till the issue of the notification regarding change a policy. Admittedly, the Railway Board alleged funds to the tune of Rs.6 cores in the final grant of 2010-11 for remittance to dues payable towards fitment of additional longitudinal berths in AC 3-tier and sleeper coaches. Also the Deputy Chief Mechanical Engineer (C & W) issued a communication dated April 28, 2011 directed the Senior DMM/TVC to arrange clearing of the pending bills in connection with the aforesaid fitment of additional longitudinal railway berths. It is revealed from the certificate dated August 31, 2010 issued by the RITES Ltd., Government of India Enterprises that the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o sub-contracts with the petitioner company for manufacturing and supply of additional Berth (Middle Berth) for fitment of the same on longitudinal side of existing AC 3- Tier Railway Coaches and Sleeper Class Rail Coaches running within the jurisdiction of Southern Railway. The petitioner was a company within the meaning of companies Act, 1956 having its registered office at IMECO House , Budge Trunk Road, Dakghar, Maheshtala, Kolkata-700141 with its workshop situated at Kharagpur. The respondent no.1 was a company incorporated under the Companies Act, 1956 as a public sector undertaking for manufacturing Rail Coaches, spare parts and Mining Equipments. The Government of India owned 54% of total equity shares and balance 46% was held by public, financial institutions, foreign institutional investors, bank and employees. The respondent no.1 had been designated as Mini Ratna Category-II and plays a privotal role and the service core sectors like, defence, rail, power, mining and infrastructure. In other words, the respondent no.1 is a state within the meaning of Article 12 of the Constitution of India having deep and pervasive control of the respondent no.2 on it. With the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February 25, 2009 the respondent No.1 submitted, in its turn, raised invoices and submitted the same to the concerned railway authorities on March 6, 2009. The competent authority of the Railway Board informed the General Managers of All India Railways under its communication dated March 13, 2009 that quantification of the work had already done by the contractor(includes the berths and mountings already manufactured but not fitted) till the issue of notification regarding the change in policy might be done by the railways and the contract be foreclosed following the due procedure. It had further been noted by the above communication that based on such quantification, payments to the contracting agency might be released for the work already done till the issue of notification regarding the change in policy. The above communication was issued with concurrence of the Finance Director of Ministry of Railway. The above communication is quoted below: The General Managers All Indian Railways. ICF, Chennal, RCF, Kapurthala The Director General RDSO, Lucknow Sub. : Provision of longitudinal middle berths in coaches policy review Ref. : (i) Board s letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2007/M(C )/137/9/Pt New Delhi, dated 22.06.2010 The Chief Mechanical Engineers, All Indian Railways. Sub. : Payment towards contracts for retrotifment of longitudinal middle berths in GSCN GACCN Coaches. Ref. : Board s letters of even No. dated 18.02.2009 and 30.03.2009 Attention is invited to guidelines issued vide Board s letter dated 30.03.2009 referred to above regarding discontinuance of the scheme of longitudinal middle berths, wherein it was clearly indicated that payments are to be released to the contractors for all such berths which had been fitted on the coaches as also for those which had been manufactured till the date of notification of Board guidelines i.e. 30.03.2009, even if the same were not fitted in the coaches. Reports from various quarters indicate that the comprehensive quantification of the berths manufactured and consequent payments on this account have still not been reconciled/released on many of the Railways. Railways were once again advised vide Board s letter No. 2010/M (C)/142/2 dated 13.05.2010 to communicate the fund requirements to meet this liability. Some of the Railways have communicated that they are still to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment can be made to the contracting agency for the berths and mountings already manufactured but not fitted till the issue of notification. As such the firm was advised to submit the RITES inspection certificate for the finished products manufactured prior to the cancellation of contract i.e. prior to 24.02.2009. Now the firm M/s. BEML has submitted the RITES certificate for the finished products for 425 coach sets for GSCN coaches and 86 ACCN coach sets with indication of manufacturing date prior to the foreclosure date and the material is readily available at the firm s vendor s shop. The financial implication for the settlement of material cost for the balance quantity of material available at the firm s vendor shop is as follows: I. Retro fitment of longitudinal middle berths in SCN coaches. Material cost for 1 coach set Rs. 1,10,070 Material cost for 425 coach sets Rs. 1,10,070 x 425 = Rs. 4,67,79,750 II. Retro fitment of longitudinal middle berths in ACCN coaches . Material cost for 1 coach set Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manimaran) Dy. CME/C7W/HQ. For Chief Mechanical Engineer Copy to Sr. DFM/TVC for necessary action please. Since the invoices raised in respect of AC 3-Tier and Sleeper Rail Coaches were not settled by the Southern Railway, the respondent no.1 submitted a representation dated May 12, 2011 to the Chief Mechanical Engineer Southern Railway for early settlement of their claim drawing the attention of the above authority towards the fact that Chennai Division of Southern Railway had completely settled its claim against the work contract for retrenchment of the above berths in railway coaches. It was followed by reminders dated June 14, 2011, and June 28, 2011. The petitioner company also submitted its representation dated May 3, 2011 to the respondent no.1 for settlement of its above claim the above representation was followed by representation dated June, 20, 2011, February 4, 2012 and February 8, 2012. In the meantime, the Senior Divisional Mechanical Engineer, Southern Railway disclosed under its communication dated October 31, 2011 on the basis of an application under Right to Information Act, 2005 that the payment in connection with retrenchment of longitudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e territorial jurisdiction of this High Court. According to him, the aforesaid incidents were the part of the cause of action involved in this writ application. With regard to the question of maintainability of an application under article 226 of the constitution of India regarding to the contract under reference, it is submitted by Mr. Mukherjee that under the facts and circumstances of this case the claim at the instance of the petitioner company is maintainable on the settled principles of law taking into consideration of the fact of presence of all the parties. The decisions of A. V.D Costa Vs. B. C. Patael, reported in AIR 1955 SC 412, Durga Prasanna Gupta Vs. State of West Bengal, reported in AIR 1972 Cal 378, State of Bihar Vs. Barakar Engineering Foundry Works Ltd., reported in AIR 1972 SC 378, State of Orissa Vs. Goenka Investment Mining Industries Pvt. Ltd., reported in 1983(1) CHN 354, The Chairman Managing Director, Punjab National Bank Ors. Vs. Dilip Kumar De, reported in 1987(1) CLJ 354, N. K. Chakrabarty Vs. Council for the Indian School Certificate Examination Ors., reported in CAL LT 1999(1) HC 42, Kusum Ingots Alloys Ltd. Vs. Union of India, repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration is whether the Andhra Pradesh High Court was justified in holding that as the seizure took place at Chennai(Tamil Nadu), the appellant could not maintain the writ petition before it. The High Court did not examine whether any part of cause of action arose in Andhra Pradesh. Clause(2) of Article 226 makes it clear that the High Court exercising jurisdiction in relation to the territories within which the cause of action arises wholly or in part, will have jurisdiction. This would mean that even if a small fraction of the cause of action (that bundle of facts which gives a petitioner, a right to sue) accrued within the territories of Andhra Pradesh, the High Court of that State will have jurisdiction. In view of the above settled principles of law the first preliminary objection with regard to the territorial jurisdiction cannot be sustained in law. Regarding the second preliminary objection of maintainability of the claim of the petitioner company against the union of India, I find that admittedly, the claim of the petitioner company was against the respondent no.1. Admittedly, the respondent company was an instrumentality of the state. Admittedly, for supply longitudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction was subject matter of scrutiny before the Hon ble Supreme Court. Therefore, the above decision does not help the respondent nos.2 to 4 in the instant case. In the matter of Eastern Coalfields (supra) the Hon ble Supreme court examined that simply because a situs of the company was situated within the territorial limits of a High Court, that would not give jurisdiction to that High Court unless cause of action arise within the territorial jurisdiction of that court. The above facts and circumstances are not available in the present writ application to apply the above decision in this case. In the matter of Musaraf Hossain Khan (supra) it was held by the Hon ble Supreme Court that only such High Court within whose jurisdiction the order of subordinate court has been passed would have the jurisdiction to entertain an application under article 227 of the Constitution of India. Therefore, the above decision does not held the respondent nos.2 to 4 in any way. In the matter of M/s. Kusum Ingots(supra) in the doctrine of forum convenience was the issue for examination. That issue is absent in the instant writ application. With regard to the merits of the present case, admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay Board released the required fund for releasing the same for payment of longitudinal meddle berths. The doctrine of promissory estoppel is squarely applicable with regard to the claim of the petitioner company from the respondent no.1 Reference may be made to the decision of Pawan Alloys Casting Pvt. Ltd. Meerut Vs. U.P. State Electricity Board and Ors., reported in (1997) 7 SCC 251 and the relevant portions of the above decision is quoted below: 10. It is now well settled by the series of decision of this court that the State authorities as well as its limbs like the Board covered by the sweep of Article 12 of the Constitution of India being treated as State within the meaning of the said article, can be made subject to the equitable doctrine of promissory estoppel in cases where because of their representation the party claiming estoppel has changed its position and if such an estoppel does not fly in the face of any statutory prohibition, absence of power and authority of the promisor and is otherwise not opposed to public interest, and also when equity in favour of the promisee does not outweigh equity in favour of the promisor entitling the latter to legally get out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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