Full Judgment Text
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CASE NO.:
Appeal (civil) 4108 of 2006
PETITIONER:
Noble Resources Ltd.
RESPONDENT:
State of Orissa & Anr.
DATE OF JUDGMENT: 13/09/2006
BENCH:
S.B. Sinha & Dalveer Bhandari
JUDGMENT:
J U D G M E N T
[Arising out of SLP (Civil) No.915 of 2005]
S.B. SINHA, J :
Leave granted.
Whether a writ petition is maintainable in contractual matter is the
core question involved in this appeal which arises out of a judgment and
order dated 14.09.2004 passed by a Division Bench of the Orissa High Court
in Civil Writ Petition No.1463 of 2004 whereby and whereunder the writ
petition filed by the Appellant herein was dismissed.
Admittedly, the parties entered into a contract in terms whereof the
Respondent No.2 herein was to supply 1,20,000 MT + / -10% each of Grade
A, Grade B and Grade C iron ore fines by September 2003. On or about
28.02.2003, the parties also agreed that the supply of full tender quantity
would be made in the sequence of C, B and A Grades iron ore fines at the
prices offered by the Appellant. Indisputably, the Appellant disclosed the
names of the parties with which it had entered into 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 honouring its
commitment to both Respondent No. 2 and its buyers. A request was made
by the Appellant seeking for personal intervention of the matter by the
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Chairman and Managing Director of Respondent No.2.
The Board Sub-Committee On Sales Policy of Respondent No.2,
however, by a resolution dated 22.09.2003 resolved :
"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 material is due to be loaded during
the current month. It was informed that there is a stock
of 60,000 MT A-grade material, 1 lakh MT B-grade
material and 2.40 lakh MT C-grade material at Daitari.
After receipt of information from L.C. and confirmed
by Company Secretary, it was decided that 60,000 MT,
A-grade material is to be shipped to M/s Noble
resources, Hong Kong even after 30.08.03 and the party
should be pursued not to insist for the balance quantity
of A-grade as it is physically not available with OMCV
and hence cannot supply the 2nd shipment of A-grade."
"Further as NINL has agreed that they will be
lifting Iron Ore Fines from October, 03 onwards, the
requirement is to be reviewed and for the time being
export sale of C-grade fines may be postponed.
Therefore, the tender auction taken by OMC Ltd. should
be cancelled invited in the News Paper and Website of
OMC Ltd. for information of all concerned. On the basis
of the above decision the tender for export sale of
1,80,000 MT of C-grade Iron Ore fines was cancelled."
The said resolution was evidently taken in view of the increase of the
rates of iron ore fines in the international market, which has gone up
manifold. Yet again the Board Committee On Sales Policy of the
Respondent No.2 decided as follows :
"i) The validity of the tender will not be extended
beyond 30.09.2003 and therefore no further
quantity shall be supplied to M/s Noble Resources
Ltd.
ii) Fresh tender may be invited for B-Grade Iron Ore
fines for one shipment and one shipment of C-
Grade. However, while doing so it must be
ensured that the quantity is available for export
after meeting the requirement of NINL."
However, despite a reminder, no action had been taken and in the
meantime another invitation of tender was published. It is not in dispute that
the Appellant also participated in the subsequent tender.
A writ petition was filed by the 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.
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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 be loaded
during the current month. It was informed that there
is a stock of 60,000 MT A-grade materials, 1 lakh MT
B-grade material and 2.40 lakh MT C-grade material
at Daitori. After receipt of information from L.C. and
confirmed by Company Secretary, it was decided that
60,000 MT, A-grade material is to be shipped to M/s
Noble Resources, Hong Kong even after 30.08.2003
and the party should be perused not to insist for the
balance quantity of A-grade as it is physically not
available with OMC and hence cannot supply the 2nd
shipment of A-grade"
ii) "Further as NINL has agreed that they will be lifting
Iron Ore fines from October 03 onwards, the
requirement is to be reviewed and for the time being
export sale of C-grade fines may be postponed.
Therefore, the tender auction taken by OMC Ltd.,
should be cancelled invited in the News Paper and
Website of OMC Ltd. for information of all
concerned. On the basis of the above decision the
tender for export sale of 1,80,000 MT of C-grade Iron
Ore fines was cancelled.
11. That this matter was further referred to
Board Committee on sales Policy held on 24.10.2003.
The Committee decided as follows :
i) The validity of the tender will not be extended beyond
30.09.2003 and therefore no further quantity shall be
supplied to M/s Noble Resources Ltd.
ii) Fresh tender may be invited for B-grade Iron Ore
fines for one shipment and one shipment of C-grade.
However, while doing so it must be ensured that the
quantity is available for export after meeting the
requirement of NINL."
However, somehow a different stand was taken by the Respondent
No.2 in its additional counter affidavit as it assigned the following reasons
for its ability to supply iron ore fines, stating :
"A) The primary crusher at Daitari which was an old
plant got break down during the contractual period
and the spares were not available in India for
immediate repair. As a result production of "A" &
"B" grade iron ore got affected.
B) The working permission issued by the Government
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of India, Ministry of Environment and Forest
expired on 13.03.2003 and the same was issued
afresh by Government of India only on 9.4.2003,
during which period there could not be any
production.
C) Production of "A" grade Ore was to be made by
Selective Mining which could not be possible due
to restrictions imposed by the Director General
Mines, Safety, Government of India.
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 Respondent No.2 having taken two different stands before
the High Court, arbitrariness and unreasonable on its part was self-evident;
(iv) The High Court committed a manifest error insofar as it failed to
take into consideration that a monopoly concern should be directed to
honour its contractual obligations in view of the decision of this Court in
ABL International Ltd. and Another v. Export Credit Guarantee
Corporation of India Ltd. and Others [(2004) 3 SCC 553];
(v) Remedies available in a suit per se cannot be a ground to refuse
relief under Article 226 of the Constitution of India.
Dr. Rajeev Dhawan, the learned Senior Counsel appearing on behalf
of the Respondent, on the other hand, would submit that :
(i) The Appellant itself having shown its inability to lift iron ore fines
in accordance with the schedule and there being no complaint in respect of
supplies made from March to September, the writ jurisdiction of the High
Court under Article 226 of the Constitution of India could not be invoked;
(ii) The writ petition having been filed only having regard to the
escalating prices, the High Court rightly refused to exercise its discretionary
jurisdiction;
(iii) The main plea raised by the Appellant being applicability of the
doctrine of promissory estoppel which having no application in contractual
matters, the writ petition was not maintainable;
(iv) A writ petition involving disputed questions of fact would not
ordinarily lie and in that view of the mater the High Court rightly refused to
exercise its extra ordinary jurisdiction;
(v) When a decision is taken for business purposes, the courts should
not readily infer arbitrariness on the part of the State; and
(vi) In any event, a writ petition for specific performance of contract
would not lie when damages can be awarded for breach of contract.
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The Respondent No.2 is a ’State’ within the meaning of Article 12 of
the Constitution of India. Its conduct in all fields including a contract is
expected to be fair and reasonable. It was not supposed to act arbitrarily,
capriciously or whimsically.
It is trite that if an action on the part of the State is violative the
equality clause contained in Article 14 of the Constitution of India, a writ
petition would be maintainable even in the contractual field. A distinction
indisputably must be made between a matter which is at the threshold of a
contract 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 Article 299 of the
Constitution;
(ii) Where the contract entered into between the
person aggrieved and the State is in exercise of a
statutory power under certain Act or Rules framed
thereunder and the petitioner alleges a breach on the part
of the State; and
(iii) Where the contract entered into between the State
and the person aggrieved is non-statutory and purely
contractual and the rights and liabilities of the parties are
governed by the terms of the contract, and the petitioner
complains about breach of such contract by the State."
It was further observed :
"In the cases before us, allegations on which a
violation of Article 14 could be based are neither
properly made nor established. Before any adjudication
on the question whether Article 14 of the Constitution
could possibly be said to have been violated, as between
persons governed by similar contracts, they must be
properly put in issue and established. Even if the
appellants could be said to have raised any aspect of
Article 14 of the Constitution and this Article could at all
be held to operate within the contractual field whenever
the State enters into such contracts, which we gravely
doubt, such questions of fact do not appear to have been
argued before the High Court. And, in any event, they are
of such a nature that they cannot be satisfactorily decided
without a detailed adduction of evidence, which is only
possible in ordinary civil suits, to establish that the State,
acting in its executive capacity through its officers, has
discriminated between parties identically situated. On the
allegations and affidavit evidence before us we cannot
reach such a conclusion. Moreover, as we have already
indicated earlier, the correct view is that it is the contract
and not the executive power, regulated by the
Constitution, which governs the relations of the parties
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on facts apparent in the cases before us."
It may, however, be true that where serious disputed questions of fact
are raised requiring appreciation of evidence, and, thus, for determination
thereof, examination of witnesses would be necessary; it may not be
convenient to decide the dispute in a proceeding under Article 226 of the
Constitution of India.
On a conspectus of several decisions, a Division Bench of this Court
in ABL International Ltd. (supra) opined that such a writ petition would be
maintainable even if it involves some disputed 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 :
"\005It 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 arbitrary.
Interplay between writ jurisdiction and contractual disputes has given
rise to a plethora of decisions by this Court. See for example M/s
Dwarkadas Marfatia & Sons v. Board of Trustees of the Port of Bombay
[(1989) 3 SCC 293] and Mahabir Auto Stores (supra).
In Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai
and Another [(2004) 3 SCC 214], this Court stated :
"The position of law is settled that the State and its
authorities including instrumentalities of States have to
be just, fair and reasonable in all their activities including
those in the field of contracts. Even while playing the
role of a landlord or a tenant, the State and its authorities
remain so and cannot be heard or seen causing
displeasure or discomfort to Article 14 of the
Constitution of India.
It is common knowledge that several rent control
legislations exist spread around the country, the
emergence whereof was witnessed by the post-World
War scarcity of accommodation. Often these legislations
exempt from their applicability the properties owned by
the Government, semi-government or public bodies,
Government-owned corporations, trusts and other
instrumentalities of State\005"
Non statutory contracts have, however, been treated differently. [See
Bareilly Development Authority and Another v. Ajai Pal Singh and Others
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[(1989) 2 SCC 116].
A distinction is also made between performance of a statutory duty
and/or dealing of a public matter by a State and its commercial activities.
[See Indian Oil Corporation Ltd. v. Amritsar Gas Service and Others
(1991) 1 SCC 533] and L.I.C. of India v. Escort Ltd. [(1986) 1 SCC 264].
In ABL International Ltd. (supra), this Court opined that on a given
set of facts, if a State acts in an arbitrary manner even in a matter of contract,
a writ petition would be maintainable. It was opined :
"It is clear from the above observations of this Court,
once the State or an instrumentality of the State is a party
of 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 abovesaid requirement of
Article 14, then we have no hesitation in holding that a
writ court can issue suitable directions to 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 Council and Others
[(1991) 3 SCC 91].
In State of U.P and Another. v. Johri Mal [(2004) 4 SCC 714], it
was held :
"It is well settled that while exercising the power of
judicial review the court is more concerned with the
decision-making process than the merit of the decision
itself. In doing so, it is often argued by the defender of an
impugned decision that the court is not competent to
exercise its power when there are serious disputed
questions of facts; when the decision of the Tribunal or
the decision of the fact-finding body or the arbitrator is
given finality by the statute which governs a given
situation or which, by nature of the activity the decision-
maker’s opinion on facts is final. But while examining
and scrutinising the decision-making process it becomes
inevitable to also appreciate the facts of a given case as
otherwise the decision cannot be tested under the grounds
of illegality, irrationality or procedural impropriety. How
far the court of judicial review can reappreciate the
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findings of facts depends on the ground of judicial
review. For example, if a decision is challenged as
irrational, it would be well-nigh impossible to record a
finding whether a decision is rational or irrational
without first evaluating the facts of the case and coming
to a plausible conclusion and then testing the decision of
the authority on the touchstone of the tests laid down by
the court with special reference to a given case. This
position is well settled in the Indian administrative law.
Therefore, to a limited extent of scrutinising the decision-
making process, it is always open to the court to review
the evaluation of facts by the decision-maker."
Another field where judicial review is permissible would be when
mala fide or ulterior motives is attributed. In Asia Foundation and
Construction Ltd. v. Trafalgar House Construction India Ltd. and Others
[(1997) 1 SCC 738], this Court held :
"\005We are of the considered opinion that it was not within
the permissible limits of interference for a court of law,
particularly when there has been no allegation of malice or
ulterior motive and particularly when the court has not
found any mala fides or favouritism in the grant of
contract in favour of the appellant\005"
It was further held :
"Therefore, though the principle of judicial review
cannot be denied so far as exercise of contractual powers
of government 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 same
on the ground that a small load would be unacceptable. On 13.05.2003, it
lifted the quantity of 46,280 MT of iron ore fines, although the said quantity
would also be small load. Although the consignment was to be on monthly
basis, it had been rescheduled.
In the writ petition it was averred :
"Referring to the present stock of 25,000 MT of A Grade
iron ore referred to in the letter of acceptance of Opposite
Party No.2, the Petitioner stated it was not viable to ship
a parcel of 25,000/- MT of iron ore on its own and that it
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would need a minimum parcel of 60,000 MT. Given the
tight vessel situation on the east coast and especially in
the Halia/Paradip area, the Petitioner stated that it would
be advisable for both the Opposite Party No.2 and the
Petitioner to plan the first ship in early April\005"
The monthly schedule of shipment evidently was altered. We have
also noticed hereinbefore that there had been no complaint on the part of the
Appellant in regard to the supply of iron ore fines till August, 2003, by
which time 1,08,181 MT of iron ore fines was supplied in two installments.
In the month of September 60,000 MT of Grade-B iron ore and 1,20,000 MT
of Grade-A iron was to be supplied. According to the Respondent No. 2,
however, such quantity was not possible in adherence of the schedule. We
have noticed hereinbefore that in its additional affidavit before the High
Court, the Respondent No.2 has not assigned any reason which can be said
to be contrary to its earlier stand. Some more reasons have been assigned in
regard to its inability to supply iron ore fines. It its Counter Affidavit, the
Respondent No.2 stated :
"That to sum up as per tender norms of the tender floated
during February, 2003, the price and quantity was valid
till end of September 2003 as there was constraint in
convergence of ore by rake from Daitari to Pradip, the
buyer was intimated by OMC Ltd., to conclude the
contract on shipment to shipment basis. OMC would
have concluded the contract for the entire tender quantity
in one lot with M/s Noble Resources Ltd. Hong Kong
had there been no constraint for convergence of cargo to
Paradip\005if the balance quantity against the tender norms
would have been supplied to the petitioner company at
the tendered prices of February, 2003 the Corporation
would have incurred huge loss as the price of iron ore in
the International Market has increased 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
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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
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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 subsequent tenders. It became
successful in some of them. It did not raise any protest. It took part in the
said process without any demur.
We have noticed hereinbefore that the price of iron ore fines in the
international market varied from time to time. After September, 2003, a tender
was issued. The Appellant took part in the said tender. Its tender was accepted in
relation to Grade-C iron ore fines. Its offers on 22.06.2004, 22.11.2004 and
24.01.2005 had also been accepted.
The table quoted hereinbefore also points out that the Appellant had
also understood the implication of phenomenal rise in price in the
international market.
We may at this juncture furthermore notice that the contractual terms
came to an end in September, 2003. It participated in the bids of prices
much higher than the contractual prices during the period 12.11.2003 and
03.02.2004. The stand of the Respondents that only having regard to the
fact that there had been increase in the prices, the Appellant filed a writ
petition only in February, 2004, cannot be said to be wholly misconceived.
The submission of Mr. Desai that rise in international price would not
by itself be a relevant consideration to rescind the contract may be correct,
but then the same was not the sole ground for the Respondent No.2 to refuse
to supply iron ore fines to the Appellants.
Moreover, certain serious disputed questions of fact have arisen for
determination. Such disputed questions of facts ordinarily could not have
been entertained by the High Court in exercise of its power of judicial
review.
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Ordinarily, a specific performance of contract would not be enforced
by issuing a writ of or in the nature of mandamus, particularly when
keeping in view the provisions of the Specific Relief Act, 1963 damages
may be an adequate remedy for breach of contract.
The questions as to whether OMC had the available stock of iron ore
fines or the only ground to refuse supply thereof was the rise in international
prices, are matters which could not have been fully and effectively
adjudicated in the writ proceedings. It was difficult for the High to go into
the other questions which have been raised before us by the Appellant,
namely, the effect of the purported decision of OMC to offer to the
Appellant 60,000 MT of ’A’ Grade iron ore fines provided the Appellant
gave up all other contractual rights which stating the bad faith 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, leave it open to the
Appellant to take recourse to the other remedy which is available in law. In
the facts and circumstances of the case, there shall be no order as to costs.