9911796707
TMI Blog2006 (9) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... to agreements to supply iron ore fines procured from the said Respondent. There is no dispute that supply of C-Grade iron ore fines had been made by the Respondent No.2. Indisputably, again supply of 64,236 MT of Grade-B iron ore fines had also been made. It is furthermore not in dispute that the Respondent No.2 offered 25,000 MT of Grade-A iron ore fines to the Appellant herein which was not accepted. It appears that in regard to the supplies made from March, 2003 to September, 2003 there had been no complaint on the part of the Appellant about any breach of contract on the part of the Respondent No.2 On 05.09.2003, a fax was sent by the Appellant requesting the laycan in the following terms : "After the successful completion of mv Susan S, we now look forward to receiving the laycan for the next shipment of Grade-B Iron Ore Fines in the month of September. We look forward to receiving your confirmation at the earliest please, to enable us to nominate a suitable vessel." Yet again by a fax dated 09.09.2003, its request was reiterated stating that it had signed the sale contracts with some of its long term buyers and was looking forward for completing the balance shipments and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant in the Orissa High Court. In its first counter affidavit the Respondent No.2, inter alia, stated : "That the Board Sub-Committee on Sales Policy held on 8.5.2993 of OMC Ltd., decided to review the export of Iron Ore fines on the basis of tender finalized in January-February, 2003. Basing on the above direction the Board of Directors in their 339th meeting held on 26.08.03 took the following decisions : "Regarding export of A-grade Iron ore fines, it was decided to examine if there is a penal provision in the agreement/tender for non-fulfillment of obligation on the part of OMC Ltd. It should also examine whether any legal complicacy arises if the A variety ore will be kept reserved for NINL. For the C-grade, Board approved for inviting fresh Tender" Accordingly, tender was floated for a quantity of 1,80,000/- MT +/- 10% of C-grade Iron Ore fines in all editions of ECONOMIC TIMES on 4.9.2003. The Board Sub-Committee on sale held on 22.09.2003 observed as follows : i) "Out of the total quantity of A B & C grade Iron Ore fines, two C-grade and one B-grade material has been shipped by M/s Noble Resources Ltd., Hong Kong and another B-grade materials is due to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D) Railway Rakes were not available for transportation of Iron Ore Fines from Daitari to Paradip, despite persuasion of OMC with the Railway Authorities. Further, during the said contractual period OMC has not sold iron ore of any grade to any party other than to M/s. Neelachal Ispat Nigam Ltd., which is wholly Government owned undertaking with which Government of Orissa and OMC has a long term understanding for supply of iron Ore to sustain the steel plant of NINL." By reason of the impugned judgment, a Division Bench of the Orissa High Court dismissed the writ petition, inter alia, opining that it involved enforcement of a contract qua contract and thus not maintainable. Mr. Ashok Desai, the learned Senior Counsel appearing on behalf of the Appellant, would submit : (i) When a State-owned monopoly acts unfairly and unjustly, the action being violative of the equality clause contained in Article 14 of the Constitution of India; a writ petition would be maintainable; (ii) A contract of supply should not be terminated on the premise that the price of the commodity has gone up in the international market which cannot be said to be either reasonable or bona fide; (iii) The Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act and a breach of contract; whereas in the former the court's scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution. While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on its part. Indisputably, inherent limitations exist, but it would not be correct to opine that under no circumstances a writ will lie only because it involves a contractual matter. This dicta of law was laid down by this Court as far back in1977, wherein this Court in Radhakrishna Agarwal and Others v. State of Bihar and Others [(1977) 3 SCC 457] accepted the division of types of cases made by the Patna High Court in which breaches of alleged obligation by the State or its agents could be set up. It read as under : "(i) Where a petitioner makes a grievance of breach of promise on the part of the State in cases where on assurance or promise made by the State he has acted to his prejudice and predicament, but the agreement is short of a contract within the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted questions of fact. It was stated that no decision lays down an absolute rule that in all cases involving disputes questions of facts, the party should be relegated to a civil court. In Mahabir Auto Stores & Others v. Indian Oil Corporation and Others [(1990) 3 SCC 752], this Court observed : "It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case." In State of Uttar Pradesh and Others v. Vijay Bahadur Singh and Others [(1982) 2 SCC 365], a Division Bench of this Court held that the Government cannot be denied to exercise its discretionary power provided the same is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set right the arbitrary actions of the first respondent\005" Contractual matters are, thus, not beyond the realm of judicial review. Its application may, however, be limited. Although terms of the invitation to tender may not be open to judicial scrutiny, but the courts can scrutinize the award of contract by the Government or its agencies in exercise of their power of judicial review to prevent arbitrariness or favouritism. [See Directorate of Education and Others v. Educomp Datamatics Ltd. and Others (2004) 4 SCC 19]. However, the court may refuse to exercise its jurisdiction, if it does not involve any public interest. Although the scope of judicial review or the development of law in this field has been noticed hereinbefore particularly in the light of the decision of this Court in ABL International Ltd. (supra), each case, however, must be decided on its own facts. Public interest as noticed hereinbefore, may be one of the factors to exercise power of judicial review. In a case where a public law element is involved, judicial review may be permissible. [See Binny Ltd. and Another v. V. Sadasivan and Others [(2005) 6 SCC 657] and G.B. Mahajan and Others v. Jalgaon Municipal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any collateral purpose. But on examining the facts and circumstances of the present case and on going through the records we are of the considered opinion that none of the criteria has been satisfied justifying Court's interference in the grant of contract in favour of the appellant\005" We, however, having regard to ABL International Ltd (supra), do not accept Dr. Dhawan's contention that only because there exists a disputed question of fact or an alternative remedy is available, the same by itself would be sufficient for the High Court to decline its jurisdiction. The case at hand may be considered having regard to the aforementioned legal principles in mind. The parties indisputably were bound by the terms of the contract. For determining the dispute; conduct of the Appellant was also relevant. Indisputably, the Respondent No.2 in its letter dated 28.02.2003 offered consignment of 25,000 MT of iron ore fines. It did not lift the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creased manifold." We may herein notice a statement on tenders floated and accepted in respect of the iron ore fines after 30.09.2003, which is as under : " DATE OF TENDER OPENING QUALITY OF IRON ORE FINES QUANTITY HIGHEST PRICE Quoted Price in by USD/DMT PRICE QUOTED BY NOBLE USD/D MT SEE PRICE IN TENDER AT P.50 12.11.03 http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12 B-Grade-60,000 MT +- 10% C, Grade- 60,000 MT+- 10% M/s Burwill Hong Kong M/s Burwill Hong Kong 47.10 45.10 31.75 29.25 14.96 13.86 03.02.04 C-Grade- 1.20,000 MT +- 10% Sudamin Metal, London 63.30 59.80 13.86 20.03.04 C-Grade- 1,20,000 MT +- 10% VISA Comtrade, AG, Switzerland 75.06 62.68 13.86 22.06.04 C-Grade- 1,20,,000 MT +- 10% Noble Resources, Hong Kong 25.70 25.70 13.86 07.09.04 C-Grade-60,000 MT +- 10% IMR Resources, Hong Kong 46.35 44.68 13.86 22.11.04 http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12 C-Grade- 1,20,000 MT +- 10% Noble Resources, Hong Kong 40.18 40.18 13.86 24.01.05 C-Grade-60,000 MT +- 10% Noble Resources, Hong Kong 53.08 53.08 13.86 15.03.05 C-Grade-60,000 MT +- 10% IMR Metallurgical Resources AG, Switzerland 58.10 54.00 13.86" The Appellant evidently participated in subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of OMC. We may, however, notice that although a decision had allegedly been taken by OMC not to supply iron ore fines prior to the expiry of the contractual period, but the same had not been communicated. Its effect has to be determined keeping in view the fact as to whether the Appellant suffered any loss thereby. The reasons for non-supply, we may reiterate, may constitute a breach of contract but having regard to the conduct of the parties, it cannot be said that the same was so arbitrary so as to attract the wrath of Article 14 of the Constitution of India. Before us also what has been emphasized is the purported breaches of contract by the Respondent. A contention has also been raised by Mr. Desai that keeping in view the facts and circumstances of this case, this Court should mould the relief. We do not intend to do so and leave the parties to raise all contentions before an appropriate forum. For the reasons aforementioned, we are of the opinion that although the approach of the High Court was not entirely correct, its ultimate decision to refuse to exercise its discretionary jurisdiction cannot be faulted with. The appeal is, therefore, dismissed. We, however ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
