ORDER
1. The facts inter alia involved in the instant writ petition are that Steel Authority of India Ltd. (SAIL) is the owner of the Durgapur Steel Plant, (DSP) which is one of its units.
2. SAIL appointed Metal Scrap Trade Corporation Ltd. (MSTC) as its agent. In 1990 MSTC appointed Subhadra Trading Company as its sub-agent to dig, recover, process and load iron scraps from the slag dumps of DSP at Durgapur. These facts have been alleged in paragraphs 4,7 and 10 of the writ petition (at pages 6 to 9 of the paper book) and the facts are admitted (at para 8 of the A/ O of MSTC at page 332 of the paper book).
3. On 29th December, 1991 Subhadra Trading Company filed a writ application against SAIL praying for appropriate directions for reimbursement on account of escalation of labour wages.
4. On 23rd April, 1993 in the said writ application filed by Subhadra Trading Company, an order was passed by me for sale of the processed materials lying at the slag dumps of DSP, by public auction.
5. On 6th July, 1993 an order for quantification to be made of the materials within a fortnight and the Special Officers to submit their report regarding quantification on 14th July, 1993.
6. On 10th July, 1993 quantification was made. Report of the Special Officers to that effect was filed.
7. On 22nd October, 1993 notice was published by the Special Officers in the issue of ‘The Statesman’ dated October 22, 1993 that 28000 M.T. of processed iron scraps kept in the specified area would be sold by public auction by the Special Officers through M/s. India Auction Marl on 1st November, 1993 at Calcutta Hosiery Trades Hall, Free School Street, Calcutta.
8. On 1st November, 1993, auction was held. The petitioner, Saraogi Industrial Corporation, was declared the highest Bidder and the goods were sold to it. In this connection reference may be made to the Bid Sheet.
The document records that the goods were sold on account of Durgapur Steel Plant under instructions from the Special Officers.
9. The Terms and Conditions on which the said auction was held are contained in Annexure ‘D’ to the writ petition. The petitioner deposited a sum of Rs. 20 lakhs as security in accordance with Clause 2(b) of the said Terms and Conditions of Sale.
10. On 5th November, 1993 the first instalment of Rs. 1,08,03,520/- covering the value of 2800 M.T. was paid by the petitioner to the Special Officers in terms of Clause 2(d) of the Terms and Conditions of the sale. The payment of this sum is admitted in the document is SAIL dated 6th November, 1993.
11. On 6th November, 1993 sale order was issued by SAIL in favour of the petitioners. This order is Annexure T to the writ petition.
12. On 7th November, 1993 being Sunday, according to Clause 3(h) of the Terms and Conditions delivered material would be given from 7.30 A.M. to 4.00 P.M. on all working days.
13. On 8th November, 1993 the petitioners sent a number of Trucks to the DSP Slag Bank, but no trucks were loaded as the weigh bridge was out of order.
14. On 9th November, 1993 lifting of materials commenced.
15. On 18th November, 1993 second instalment of Rs. 1,08,03,520/- was paid by the petitioners. A letter was written by the Special Officers to DSP acknowledging receipt of the said sum and giving instructions to DSP to give delivery of 28 hundred M.T. processed iron scraps to the petitioners.-
16. On 25th November, 1993 an order was passed in the application of the petitioners and in the writ petition filed by Subhadra Trading Company, directing SAIL to deliver the balance quantity expeditiously.
17. On 1st December, 1993 third instalment of Rs. 1,08,03,520/- was paid by the petitioners to the Special Officers by pay order.
18. On 4th December, 1993 petitioners wrote a letter to the Special Officers stating that the delivery of the entire quantity of 28,000 M. T. might not be completed within the stipulated date for the reasons explained in its earlier letters and requesting them to extend the time for lifting by 3 months.
19. Materials were delivered to the petitioners up to 10th December, 1993.
20. On 11th December, 1993 trucks were sent by the petitioners, but they were not allowed entry into DSP Area.
21. It has been submitted on behalf of the petitioners that total quantity lifted between 9th November, 1993 and 10th December, 1993 comes to 7719.270 M. T.
22. It has also been submitted that the total payment made, excluding security deposit of Rs. 20,00,000/- is Rs. 3,24,10,560/-and the said payment covers the price of 680 M.T., of materials not delivered by the SAIL.
23. On 14th December, 1993 the writ
petition was filed for a writ of mandamus to be issued directing the respondents to deliver to the petitioners the balance quantity of 20,280 M. T. out of 28000 M.T. of processed iron scrap to the petitioners.
24. On 23rd December, 1993 an interim order was passed by me directing status quo as to the goods would continue and directing the Special Officers to file a report why the delivery of the materials could not be effected to the petitioners in time.
25. On 12th January, 1994 Special Officers filed their report.
26. On 18th January, 1994 a contempt application was moved against the respondents for violation of, inter alia, the order dated 25th November, 1993 passed by me.
27. On 6th May, 1994 the Appeal Court disposed of the appeal by passing the following order:
“Against an order of the learned single Judge dated 23rd December, 1993 passed on an application in the writ petition, the present appeal has been preferred. The learned single
Judge gave directions to the parties with regard to a contract.
Counsel for the appellant, Steel Authority of India Ltd., urged that in the absence of constitutional or statutory rights being, involved, a writ of mandamus could not lie to enforce contractual obligations, even if sought to be imposed against the State. The contention of the appellant was controverted by the concerned respondent by urging that the appellant and its agent Subhadra Trading Company impleaded as respondent No. 4, has caused serious financial loss to it on account of the breach committed by them in not supplying iron scrap to the said respondent. He emphasized that out of 28,000 M. Tons only 8.000 M. Tons had been supplied. His counsel’s assertion was that due to collusion with the appellant the respondent No. 4 failed to load iron scrap which it had undertaken1 to load.
Our attention was invited to the Chart
which is Annexure ‘E’ to the writ petition. The
appellant’s counsel as well as the counsel
appearing for the respondent No. 4 submitted
that loading of iron scrap was dependent
upon the trucks being made available to the
respondent No. 4 and as the trucks had not
been supplied, the fault was that of Messrs.
Saraogi Industrial Corporation, the respondent No. 1.
We have heard learned counsel for the
parties at length. It appears that anything said
about the merits of the case would prejudice
either of the two parties. The controversy that
no writ could be issued to enforce contractual
Obligation is substantial and requires to be
gone into at greater length. The appellant’s
submission that the respondent No. 1 could
get adequate remedy by an ordinary action in
the Civil Court, e.g., to enforce or restrain, the
performance of a contractual obligation or to
remedy a breach of contract requires consideration. Both sides are blaming each other for the breach of contract.
We have examined every pros and cons of the matter as well as attempted to find out the balance of convenience and inconvenience as to whether it lay in rejecting the stay application or in granting the same. In our opinion, the respondent No. 1 would not suffer any irreparable loss if the stay application is allowed, whereas the loss of the appellant would be enormous. It may be difficult to enforce the contract as desired by the Secretary,
To us it appears that interest of justice requires staying the operation of the order of the learned single Judge. We consequently allow the appeal as well as this application and direct that the order appealed against and all consequential orders in pursuance thereof shall remain stayed. Undertakings given by the appellant at the time of admission of this appeal are discharged.”
28. It has been submitted on behalf of the petitioners on the aforesaid facts that Property in the 28000 M.T. Processed Iron Scrap passed to the petitioners at the auction sale held on 1-11-1993. SAIL was in breach of its mutual obligations as seller. Therefore, SAIL is not absolved of its primary obligation to deliver the balance of the entire quantity sold to the buyer on the ground that time for delivery expired on 10-12-1993. Clause 4(c) of the Terms and Conditions of sale, which says that in the event of non-delivery, the buyer’s only remedy is to ask for proportionate refund of the sale value is not applicable to the facts of this instant case. The Court is competent to extend the time of delivery and is competent to pass an order directing SAIL to delivery the balance quantity of goods to the petitioner within such time as it may fix;
29. It has also been submitted that the Court should not decline to entertain application under Article 226 on the grounds:
(a) that the matter arises out of contract and the present claim is for enforcement of contractual rights.
(b) that directing delivery would amount to specific performance of a contract of sale of goods which is not ordinarily permissible under the Specific Relief Act.
(c) that disputed questions of fact or complicated questions of interpretation of the contract are involved.
30. The Terms and Conditions of Auction Sale, inter alia, provide as follows:–
(i) “3(a)– Sale order will be issued by SAIL, DSP on behalf of Special Officers on receipt of written instruction from Special Officers and after deposition of material value sale order shall be issued for a quantity of 2800 M.T. and shall be extended for like quantity as soon as further deposits are made. Delivery order and release order shall be issued by SAIL (DSP) on the basis of sale order quantity for material delivery.
(ii) 3(b)– Lifting of the materials by the Buyers is to be completed within 10-12-1993.
(iii) 3(c)– The Buyers will make his own arrangements for transport and he will not be entitled to claim any facilities or assistance for transport from the Special Officers or from SAIL (DSP), MSTC or STC.
(iv) 3(d)– All documents should be collected in person by the buyer or his authorized representative. Should there be any delay for collection of these documents, the Special Officers will not be responsible for the same whatsoever.
(v) 3(h)– Delivery of the materials sold will be given from 7.30 a.m. to 4.00 p.m. only, on all working days.
(vi) 3(i)– The buyer has to get himself acquainted with the necessary rules, regulation, statutes, etc. necessary for taking delivery of materials from Durgapur Steel Plant which is a protected place and agree to abide by these rules, regulations, statutes etc.
(vii) 3(1)– Buyer trucks/trailers after due weighment will report to Materials Recovery Department of DSP from there the truck/ trailer shall proceed to the Slag Bank for loading as per the delivery programme to be issued by Special Officers or their authorised representatives, loading will be done accordingly by Subhadra Trading Company. After materials are loaded it will report back to MRD for issue of necessary D.A. and Gate Passes and leave after final weighment.
(viii) 4(a)– For non-delivery of the whole or any portion of the materials sold, the buyer
shall not be entitled to claim any damage or loss of interest or compensation or any other amount or of delivery of materials or balance thereof but shall be entitled to proportionate refund of the sale value only.
(ix) 5(a)– The materials after payment must be removed within the specified period by engaging trucks/trailers in regular manner (for delivery not exceeding 1500 M.T. a day). If not, the Special Officers shall have the right to resale as also to forfeit all money paid by the defaulting buyer. No relief can be granted to the buyer on his failure to take delivery.
(x) 7. Inspection:
Inspection of the materials can be had on 27th, 28th and 29th October, 1993 at DSP Dumps. The time for inspection would be 7.30 a.m. to 4.00 p.m. daily i.e. on 27/28/29-10-1993-
(xi) 8. Force Majure Clause:
The Special Officers shall not be liable in case delivery of materials cannot be given to the buyer, either wholly or in part as a result of any fire, strike, go slow, lock out, pestilence, closure, war, riot, civil commotion, epidemics, floods, accidents, damages, shortage of trucks/wagons, shortage of fuel or other materials, shortage of labour, acts, demands or requirements of Government and/ or statutory bodies break-down of plants or machinery or any other circumstances or conditions beyond the reasonable control of the Special Officers. Should the Special Officers so determine, they shall be entitled at any time upon notice to the purchaser to cancel any sale or part thereof the performance of which is likely to be delayed or hindered or be rendered impossible by any of the causes aforesaid and in such case the buyer shall have no claim against the Special Officers of any kind except that the purchaser shall be entitled to the refund of such money that may be lying unadjusted with the Special Officers, without any interest. The provision of this clause shall not be limited or abrogated by any other terms of contract whether printed or written.
31. It appears that in the notice of auction as well as in the terms of the auction sale, it
was expressly provided that whoever be the highest bidder, he was to take delivery of the materials sold by 10th December, 1993 in view of the fact that the tenure of the contract awarded to Subhadra was to expire on 10th December, 1993 and only the materials recovered and processed by Subhadra could be sold and as its remuneration could be paid only upon its completion of the three works, namely, recovery, processing and loading, the function of loading could not be done by Subhadra on the expiry of 10th December, 1993.
32. It was also expressly provided in (clause 4(a)) that in the event of the purchaser not being able to take delivery of the materials by 10th December, 1993, the purchaser would be entitled to refund of any amount paid in excess of the value of the materials already taken delivery of and the purchaser would not be entitled to any interest thereon.
33. Before the expiry of 10th December, 1993 the writ petitioner herein made an application in the writ petition of Subhadra, then pending, praying therein for extension of time for taking delivery of the materials beyond 10th December, 1993. The said application was made in December, 1993.
34. No order was, however, passed before the expiry of the said date. After expiry of 10th December, 1993 the writ petitioners filed the instant writ petition basically and principally asking for the same relief as the writ petitioners sought for in its application made in the pending writ petition of Subhadra. On perusal of the prayers, it appears to me that the relief claimed in the writ petition is in the nature of specific performance of an agreement to sell or of sale of moveable property.
35. In suits for specific performance also such prayers are not always granted. It has also been specifically urged on behalf of the respondent (SAIL) that time is of the essence of the contract and when time is of the essence of the contract relief in the nature of specific performance is not permissible. The question if the time is of the essence of contract requires serious consideration of the facts. It has also
been argued on behalf of the respondent (SAIL) that in view of Clauses 2(d), (f), 3(a), (b) and 4(a) the contract was not only determinate but also an instalment contract up to a maximum limit of 28,000 M.T. Each requisition of deposit of value of 2800 M.T. followed by individual act of acceptance created separate contract. The writ petitioners’ offer to buy at the rate of Rs. 3210 per metric tonne up to a maximum approximate quantity of 28,000 M.T. was accepted by the Special Officers on express terms and conditions including the terms mentioned in Clauses 3(b) and 4(a). Moreover, iron scrap is only an ordinary article of commerce.
36. The writ petitioners up to 10th December, 1993 paid for three instalment delivery of 2800 M.T. each i.e. for obtaining delivery of a total quantity of 8400 M.T. being a sum of Rs. 3,24,10,500.00. The writ petitioners could take delivery only of 7721 M.T. Thus, the writ petitioners did not take delivery of 679 M.T. of goods out of third instalment for which the writ petitioners deposited money. At the most the writ petitioners are entitled to receive the value of 679 M.T. Clause 5(a) of the auction, however, stands in the way.
37. In the writ petition, the writ petitioners have made allegations against MSTC. and Subhadra including allegation of collusion and conspiracy. Nowhere in the writ petition it has been alleged that DSP as such was at fault. DSP had no other role than to issue sale order on the instructions of the Special Officers. All other works were to be carried out and co-ordinated amongst the Special Officers, MSTC and Subhadra.
38. Allegations made in the writ petition have been denied and disputed in the affidavit-in-opposition. The questions of disputed facts arise in the writ petition which, in my view, cannot be gone into in the writ petition. Moreover, it appears that the questions relating to interpretation of contract is involved in the instant writ petition, which is impermissible.
39. Allegations have been made by the writ petitioners against Subhadra Trading Co.,
and MSTC Ltd., but the writ petitioners chose not to proceed against them. The allegations against Subhadra Trading Co. and MSTC were all questions of facts which were denied by them in their respective affidavits. Those questions of disputed facts cannot, therefore, in any event be adjudicated upon in their absence. Saraogi has chosen not to press those allegations. In view of Saraogi’s not pressing those allegations against them it must be deemed that those allegations are not relevant in spite of the fact that the entire case of the writ petitioners is based on the allegation that in the matter of loading and transporting the materials the default was not that of the writ petitioners but that of Subhadra and MSTC. In a writ petition in any event those disputed questions of facts cannot be decided.
40. The learned Advocate for the respondent (SAIL) has relied upon the judgment and decision in the case of Laxmi Narain v. State of U.P., .
41. It has been held in the aforesaid decision that the Court would not issue a writ or an order of mandamus where contractual obligations are in dispute. In this connection, the Division Bench of Allahabad High Court in paragraph 38 of the said judgment at page 248 of the said report inter alia held and observed as follows:
“Thus the right which the appellants want to enforce by means of a writ is founded purely on a contract. It is a well recognised rule of law that the Court would not issue a writ or an order of mandamus in cases where contractual obligations are in dispute.”
42. In the instant case it appears that the
question involved in the writ petition relates to the interpretation of particular Clause/ Clauses in the contract which is in dispute.
43. It is well settled that the writ Court
will not interfere where such questions of interpretations relating to clauses in contract are involved. In this connection I may refer to the judgment and decision in the case of Steel
Authority of India v. Steel Crackers Ltd., reported in (1994) 2 Cal Law Times (HC) 222, wherein it was held by the Division Bench of this Court to which I was a party, where questions relating to interpretation is involved in contract the writ Court should not exercise jurisdiction. Speaking for the Court in the said decision I observed as follows:
“It is quite true that the writ Court can interfere in contractual matters if Government agency acts arbitrarily or in unreasonable manner as held by the learned Judge. However, it is well settled that writ Court will not scrutinise in details the facts of disputed nature and will not enter into question of interpretation of contracts involving close scrutiny.”
44. Since in the instant case, in my view, serious disputed question of facts and also interpretation of Clauses of the terms and conditions of the contract are involved, I do not consider it fit and proper to interfere with the actions complained of in the writ jurisdiction. This, however, will not prevent the writ petitioners to avail of any other remedy if the petitioners are so advised in accordance with’ law. It is, however, made clear that I have not adjudicated on the merits of the controversy relating to the facts and other questions relating to contract.
45. Accordingly the writ petition fails and is dismissed.
46. There will be no order as to costs.
47. Mr. Lala, learned Advocate prays for stay of operation of the judgment and order. Since at the moment there is no interim order pending, the question of stay does not arise and accordingly the prayer of Mr. Lala is refused.
48. In view of the judgment in the instant writ petition, application of M/s. Vikrant Steel Industries also stands dismissed.
49. Petition dismissed.
