{"id":191412,"date":"2002-09-17T00:00:00","date_gmt":"2002-09-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sardar-singh-anand-sons-joga-vs-m-s-t-c-ltd-and-ors-on-17-september-2002"},"modified":"2018-05-09T20:26:38","modified_gmt":"2018-05-09T14:56:38","slug":"sardar-singh-anand-sons-joga-vs-m-s-t-c-ltd-and-ors-on-17-september-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sardar-singh-anand-sons-joga-vs-m-s-t-c-ltd-and-ors-on-17-september-2002","title":{"rendered":"Sardar Singh Anand & Sons, Joga … vs M.S.T.C. Ltd. And Ors. on 17 September, 2002"},"content":{"rendered":"
Delhi High Court<\/div>\n
Sardar Singh Anand & Sons, Joga … vs M.S.T.C. Ltd. And Ors. on 17 September, 2002<\/div>\n
Author: S Sinha<\/div>\n
Bench: S Sinha, A Sikri<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT<\/p>\n
 S.B. Sinha, C.J. <\/p>\n
 1. These three writ petitions involving common questions of
\nlaw and fact were taken up for hearing together and are
\nbeing disposed of by this common judgment.\n<\/p>\n
 2. A notice inviting tender was floated on 14.06.2000 for sale
\nof various lots of old TMB Engines belonging to respondent
\nNos. 2 and 3 lying at VSD Meerut, U.P. The petitioners
\nherein submitted their tenders, which are said to be the
\nhighest. They allegedly also complied with all tender
\nconditions.\n<\/p>\n
 According to the petitioners, having regard to the fact that
\nnot only did they deposit the earnest amount, i.e., 20% of
\nthe bid amount along with their tender, but also deposited
\nbalance 80 % within one day, namely, 01.07.2000 on
\nacceptance of their offer; but despite the fact that the same
\nwas required to be deposited within one week of the date of
\nacceptance of the tender and they were entitled to obtain the
\ndelivery order, no action in this behalf was taken. The
\npetitioners with their letter dated 21.07.2000 submitted that
\nthey duly deposited MRO No. 1341 showing payment made
\nwith the RBI and also submitted pay order No. 693889 of
\nSyndicate Bank, New Delhi for Rs. 46,000\/- towards Sales
\nTax being @ 8% with respondent No. 1 and requested him to
\nissue the delivery order to enable it to take delivery of the
\npurchased goods.\n<\/p>\n
 The respondent No. 1, however, refused to issue the said
\ndelivery order on the ground that certain instructions have
\nbeen received by respondent No. 3 not to do so.\n<\/p>\n
 According to the petitioner, thereafter various
\nrepresentations were made, but respondent No. 1 herein
\nrefused to deliver the sold goods to the petitioner on the
\nground that an instruction in that regard had been received
\nfrom respondent No. 2.\n<\/p>\n
 3. According to the petitioner, neither terms and conditions of
\nthe contract nor the law permits withdrawal from a contract
\nwhen concluded contract has come into being. The action
\non the part of the respondents, the petitioner would
\ncontend, is highly arbitrary.\n<\/p>\n
 The writ petitioner in C.W.P. No. 6529 of 2000 inter alia
\nclaimed for the following reliefs :-\n<\/p>\n
 “IT IS THEREFORE PRAYED THAT this Hon’ble
\nCourt may kindly be pleased to issue
\nappropriate writ order or direction especially:\n<\/p>\n
 a. In the nature of certiorari quashing the
\nletter dtd. 4th October, 2000, of
\nrespondent No. 1 alleging withdrawal of
\nthe sale order cum acceptance letter dtd.
\n20th July, 2000, with respect to tender
\nNo. MSTC\/T-85\/2000\/OD-SKB dated
\n14.6.2000.\n<\/p>\n
 b. In the nature of mandamus directing the
\nrespondents to issue the delivery order
\nfor lot Nos. T-85\/399, T-85\/400
\nforthwith and give delivery of the said
\nlots to the petitioner and further pay
\ndamages to the petitioner @ Rs. 12,500\/-
\nper day from 21st July, 2000 till the
\ngoods are delivered to the petitioner.”\n<\/p>\n
 The writ petitioners in C.W.P. No. 6530 of 2000 and C.W.P.
\nNo. 6531 of 2000 in Clause (b) of the prayer sought
\ndirections to the respondents to issue the delivery orders for
\nlot Nos. T-85\/396, T-85\/397 and T-85\/398; and Nos. T-
\n85\/392, T-85\/393 and T-85\/394 respectively.\n<\/p>\n
 4. The respondents in their counter affidavit, on the other
\nhand, averred that a complaint was received to the effect
\nthat the advertisement did not properly state the location
\nand quota of the engines to be sold and in that view of the
\nmatter several persons could not participate in the auction.\n<\/p>\n
 According to the respondents, the engines were sold at
\nlesser price and the difference in the price for 226 engines
\nwould amount to Rs. 16,03,000.05. It was stated that there
\nwas a mix up of engines as 4 x 6.5 ton engines were mixed
\nwith 3 ton TMB engines in the lots, which were offered for
\nsale. Upon receipt of complaint, verifications were carried
\nout and it was confirmed that 6.5 ton engines were mixed
\nwith 3 ton engines and the location of certain lots were not
\nshown as VSD Meerut in the auction catalogue due to which
\nhealthy competition could not be generated.\n<\/p>\n
 It was contended :-\n<\/p>\n
 (i) For certain lots, location of Engines was not
\nmentioned as VSD Meerut;\n<\/p>\n
 (ii) Number of Engines put up for auction was not
\nmentioned; and  <\/p>\n
 (iii) Engine assemblies were shown lying in OD
\nShakurbasti, whereas they were actually lying in VSD
\nMeerut.\n<\/p>\n
 On verification, it has allegedly further been found :-\n<\/p>\n
 “(d) On receipt of the complaint a physical
\nverification was carried out and it was revealed
\nthat instead of 226 Engine Assys of TMB 3
\nTON as mentioned in the tender form, only 222
\nTMB Engine 3 TON Assys were physically held
\nat VSD Meerut and four 6.5 TON LPT Engine
\nAssys were held instead of 3 TON TMB Engine
\nthereby resulting in the variation in the pricing
\nof these Engine Assys.\n<\/p>\n
 (e) On receipt of complaint, physical
\nchecking was carried out and it was recorded
\nthat 43 Engine Numbers as reflected int he
\nauction catalogue did not tally with Engine
\nNos. on ground which would have caused
\nproblems when the lot lifting was being carried
\nout, annexed as Annexure R-10.\n<\/p>\n
 (f) Central Vehicle Depot forwarded another
\nBoard proceedings duly priced by unit Board of
\noffrs. for the lots held at VSD Meerut Cantt. for
\n222 TMB 3 TON Engines & 4 X 6.5 Ton LPT
\nEngines. The difference in the cost by the unit
\npricing Board for the lots included in Tender T-85
\nopened on 14 June 2000 & the unit pricing
\nBoard received from CVD, vide their letter No.
\n1064\/Eng\/Ex. dt. 21 Sept 2000 is
\nRs. 21,32,000\/-, which is annexed herewith
\nand marked as Annexure R-11.\n<\/p>\n
 (g) That if the Engines had been permitted
\nto be lifted, it would have caused loss to the
\nstate as wrong engines would have got lifted at
\nthe time of lot lifting due to variation in type
\nand Nos of the Engines.”\n<\/p>\n
 5. The administrative grounds for withdrawal of the said
\ntender are said to be as under :-\n<\/p>\n
 “(a) There was a difference in the 43 engine
\nNos. as reflected in the Auction Catalogue and
\non physical checking on ground. (Annexure R-10).\n<\/p>\n
 (b) 4 Engine Assy of 6.5 Ton TMB had not
\nbeen identified properly but were included in
\nthe lots and show as TMB 3 Ton engines.\n<\/p>\n
 (c) There was a flaw in the advertisement
\npublished in the Auction journal for T-85
\nwherein location of the engines was shown as
\nOD Shakurbasti instead of VSD Meerut. The
\ntype of engines and qtys. were not mentioned
\nin the advertisement.\n<\/p>\n
 (d) The respondent No. 1’s Auction
\nCatalogue did not reflect the location of these
\nengines as VSD Meerut for lot No. 392 to 397.\n<\/p>\n
 (e) There is a difference of Rs. 21,32,000\/-
\nin the pricing of the above mentioned engines
\nby the Board of Officers, contained in Auction
\nCatalogue T-85 and the new Board of officers
\nAuction Catalogue. The earlier pricing was
\n22,60,000\/- and the now pricing done by new
\nbd of officer is rupees 43,92,000\/- (Annexure
\nR-11).”\n<\/p>\n
 6. Mr. Lekhi, the learned senior counsel appearing on behalf of
\nthe petitioners, would submit that as from the tender
\ndocument it would appear the goods were to be sold on “as
\nis where is” basis, the respondents were liable to follow the
\nrule of the game. According to the learned counsel, the said
\nrule is analogous to the rule of playing card in blind. He
\nwould submit that once a right in the said goods became
\nvested in the petitioners, they could not has been deprived
\nthere from. In support of the said contention, strong
\nreliance has been placed on   Leigh & Sillavan Ltd. v.
\nAliakmon Shipping Co. Ltd. , (1985) 2 All ER 44 ; and   West Bengal State Electricity
\nBoard v. Patel Engineering Co. Ltd. & Ors.,<\/a> 2001 (1) SCLAE 255.\n<\/p>\n
 7. Mr. Maninder Singh, the learned counsel appearing on
\nbehalf of the respondents, on the other  hand, would submit
\nthat the action on the part of the respondents cannot be
\nsaid to be arbitrary, as notice inviting tender was issued on
\na mistaken fact. The learned counsel would contend that in
\na situation of this nature, this Court should not exercise its
\nwrit jurisdiction.\n<\/p>\n
 8. Mr. Shali, the learned counsel appearing on behalf of
\nrespondent No. 1 would submit that these writ petitions are<\/p>\n
not maintainable, as there exists an arbitration clause in
\nthe notice inviting tender.\n<\/p>\n
 The learned counsel wold submit that the money, which is
\nlying with the respondents, would be given back to the
\npetitioners. According to the learned counsel, in the event
\nthe writ petitions are allowed, the same would amount to
\nunjust enrichment to the writ petitioners herein.\n<\/p>\n
 9. The factual matrix of the matter, as noticed hereinbefore,
\nclearly depicts that the cause of action for filing the writ
\npetitions arose out of a contract qua contract and no public
\nlaw character is involved in these writ petitions.\n<\/p>\n
 It may be true, as has been submitted by Mr. Lekhi, that the
\nrespondents are ‘State’ within the meaning of Article 12 of
\nthe Constitution of India, but the same by itself would not
\nmean that this Court in exercise of its jurisdiction under
\nArticle 226 of the Constitution of India would enter into a
\ndisputed question of fact or enforce a contract qua contract.
\nThe law in this regard is not in dispute.\n<\/p>\n
 10. There cannot be any doubt that Article 14 of the
\nConstitution of India applies in case of contract entered into
\nby the between the State and others. However, when the
\nState enters into transactions pursuant to its commercial
\npursuits, its action cannot be said to be a state action
\nunless public law character is attached to it.\n<\/p>\n
 11. The Supreme Court in   Life Insurance Corporation of India v.
\nEscorts Ltd.,<\/a>  held that LIC as a shareholder is required to
\nact as any other shareholder and thus it cannot be
\nrestrained from doing so nor is it bound to disclose its
\nreasons for moving the resolutions.\n<\/p>\n
 12. The Supreme Court further held in    Food Corporation of India
\nv. Jaganath Dutta<\/a>  , .\n<\/p>\n
  “We are of the view that the High Court
\nwas not justified in quashing the impugned
\nnotice especially when the terms and
\nconditions of the contract permitted the
\ntermination of the agreement by either of the
\nparties. The High Court should not have gone
\ninto the question of contractual obligation in
\nits writ jurisdiction under Article 226 of the
\nConstitution. Even otherwise the High Court
\nmisread the documents on the record and
\ngrossly erred in reaching the conclusion that
\nno policy-decision was taken by the FCI to
\nterminate the storage agencies in the State of
\nWest Bengal.”\n<\/p>\n
 13. In    Amarendra Kumar v. State of Bihar  ,  a Division Bench of
\nPatna High Court, wherein one of us, S.B. Sinha, C.J., was
\na member, held :-\n<\/p>\n
 “In the case of  Burmah Construction Co.
\nv. State of Orissa<\/a> ,,  delivering the judgment of
\nthe Constitution Bench, Shah, J. stated thus:\n<\/p>\n
 “The High Court normally does
\nnot entertain a petition under Article
\n226 of the Constitution to enforce a
\ncivil liability arising out of a breach of
\ncontract or a tort  to pay an amount of
\nmoney due to the claimant and leaves
\nit to the aggrieved party to agitate the
\nquestion in a civil suit filed for that
\npurpose. But an order for payment of
\nmoney may sometime be made in a
\npetition under Article 226 of the
\nConstitution against the State or
\n  against an officer of the State to
\nenforce a statutory obligation.’   <\/p>\n
 14. In the case of    Suganmal v. State of Madhya Pradesh<\/a>  ,  the
\nCourt took the view that a petition praying merely for the
\nissue of a writ of mandamus for refund of tax or any money
\ndue from the State cannot be normally maintained. It was
\nheld (at p.1742 of AIR) :-\n<\/p>\n
  ‘Normally petitions solely praying for
\nthe refund of money against the State by a
\nwrit of mandamus are not to be entertained.
\nThe aggrieved party has the right of going to
\nthe Civil Court for claiming the amount and   it
\nis open to the State to raise all possible
\ndefenses to the claim, defenses which cannot,
\nin most cases, be appropriately raised and
\nconsidered in the exercise of the writ
\njurisdiction.’  <\/p>\n
 See also    D.R. Mills v. Commissioner, Civil Supplies  , .\n<\/p>\n
 15. In    Northern India Seeds Corporation v. The State of
\nBihar  , 1994 (1) BLJR 559 it was noted :-\n<\/p>\n
 “45. In    Radhakrishna Agarwal v. State
\nof Bihar,<\/a>  , the Supreme Court categorized the cases
\narising out of breaches of alleged obligation by
\nthe State or its agents in three types of cases,
\nnamely:\n<\/p>\n
 (i) Where the petitioner
\nmakes a grievance of breach of
\npromise on the part of the State
\nin cases where promise has been
\nmade by State and the promises
\nhas acted to his prejudice.\n<\/p>\n
 (ii) Where the contract entered
\ninto between the Contracting
\nParty of the State is in exercise of<\/p>\n
statutory power under Statutory
\nActs or Rules framed there under.\n<\/p>\n
 (iii) Where the contract entered
\ninto between the State and the
\npersons aggrieved is non-\n<\/p>\n
statutory and purely contractual
\nof the rights and obligation of the
\nparties thereto are governed by
\nthe terms of the contract.\n<\/p>\n
 The Supreme Court held that whereas
\nthe case falling within the categories (i) and (ii)
\naforementioned, a writ petition under Article
\n226 of the Constitution would be maintainable
\nbut in the cases falling within the category (iii),
\nno writ petition shall lie.\n<\/p>\n
 46. This aspect of the matter has been
\nconsidered by a Full Bench of this Court in
\n   Pancham Singh v. State of Bihar, reported
\nin 1991 (1) PLJR 352  , when this Court upon
\ntaking into consideration various other
\ndecisions of Supreme Court carved out a fourth
\ncategory and held that a writ petition shall also
\nbe maintainable where the contract has been
\nterminated by the ‘State’ on a ground de’ hors
\nany of the terms of the contract, and which is
\nper se violative of Article 14 of the Constitution.\n<\/p>\n
 …..   …..  …..  …..\n<\/p>\n
 50. Reference in this connection may be
\nmade to    BASF India Ltd. v. The State of
\nBihar, 1992 BBCJ 670   . The Division Bench in
\nthat case held:\n<\/p>\n
  “We are of the definite opinion
\nthat in all cases where breach of
\ncontract is alleged, the matter
\nshall have to be decided keeping
\nin view the law laid down by the
\nSupreme Court (i.e. the decision
\nof the Supreme Court in
\n   Radhakrishna Agarwal’s case) .”\n<\/p>\n
 53. In    Bisra Lime Stone Company Ltd.
\nv. Orissa State Electricity Board,<\/a>  , the Supreme Court upon
\ntaking into consideration its earlier decision in
\n   Indian Aluminium Company v. Kerala State
\nElectricity Board,<\/a>  , held that
\na writ petition is not maintainable where the
\nparties can get their disputes resolved by
\ninvoking the adjudicating machinery of the
\narbitration clause.”\n<\/p>\n
 16. Yet again the Supreme Court recently in    Assistant Excise
\nCommissioner v. Issac Peter<\/a>  ,  held :-\n<\/p>\n
  “We are, therefore, of the opinion that
\nin case of contracts freely entered into with
\nthe State, like the present ones, there is no
\nroom for invoking the doctrine of fairness and
\nreasonableness against one party to the
\ncontract (State), for the purpose of altering or
\nadding to the terms and conditions of the
\ncontract, merely because it happens to be the
\nState. In such cases, the mutual rights and
\nliabilities of the parties are governed by the
\nterms of the contracts (which may be
\nstatutory in some cases) and the laws relating
\nto contracts. It must be remembered that
\nthese contracts are entered into pursuant to
\npublic auction, floating of tenders or by
\nnegotiation. There is no compulsion on
\nanyone to enter into these contracts. It is
\nvoluntary on both sides. There can be no
\nquestion of the State power being involved in
\nsuch contracts. It bears repetition to say that
\nthe State does not guarantee profit to the
\nlicensees in such contracts. There is no
\nwarranty against incurring losses. It is a
\nbusiness for the licensees. Whether they
\nmake profit or incur loss is no concern of the
\nState. In law, it entitled to its money under
\nthe contract. It is not as if the licensees are
\ngoing to pay more to the State in case they
\nmake substantial profits. We reiterate that
\nwhat we have said hereinabove is in the
\ncontext of the contracts entered into between
\nthe State and its citizens pursuant to public
\nauction, floating of tenders or by negotiation.”\n<\/p>\n
 17. This aspect of the matter has also been considered in    A.C.
\nRoy Co. and Ors. v. Union of India and Ors.  ,  wherein one of us
\nS.B. Sinha, C.J. was a member.\n<\/p>\n
 18. In    State of U.P. and Ors. v. Bridge & Roof Company (India)
\nLtd.<\/a> ,  the law has been laid down in the following terms :-\n<\/p>\n
 “15. In our opinion, the very remedy adopted
\nby the respondent is misconceived. It is not<\/p>\n
entitled to any relief in these proceedings, i.e.,
\nin the writ petition filed by it. The High Court
\nappears to be right in not pronouncing upon
\nany of the several contentions raised in the writ
\npetition by both the parties and in merely
\nreiterating the effect of the order of the Deputy
\nCommissioner made under the proviso to
\nSection 8-D (1).\n<\/p>\n
 16. Firstly, the contract between the parties
\nis a contract in the realm of private law. It is
\nnot a statutory contract. It is governed by the
\nprovisions of the Contract Act or, maybe, also
\nby certain provisions of the Sale of Goods Act.
\nAny dispute relating to interpretation of the
\nterms and conditions of such a contract cannot
\nbe agitated, and could not have been agitated,
\nin a writ petition. That is a matter either for
\narbitration as provided by the contract or for
\nthe civil court, as the case may be. Whether
\nany amount is due to the respondent from the
\nappellant-Government under the contract and,
\nif so, how much and the further question
\nwhether retention or refusal to pay any amount
\nby the Government is justified, or not, are all
\nmatters which cannot be agitated in or
\nadjudicated upon in a writ petition. The prayer
\nin the writ petition, viz., to restrain the
\nGovernment from deducting a particular
\namount from the writ petitioner’s bill(s) was not
\na prayer which could be granted by the High
\nCourt under Article 226. Indeed, the High
\nCourt has not granted the said prayer.”\n<\/p>\n
 19. We, therefore, are of the opinion that these writ petitions are
\nnot maintainable.\n<\/p>\n
 20. In    Leigh & Sillavan Ltd.’s case (Supra)  , the Court of Appeal
\nwas considering a matter relating to passing of property and
\nsale of goods. The action therein did not arise out of an
\naction in public law remedy and the Court of Appeal was
\nconcerned with interpretation of a contract. It was also
\nconcerned with the case of negligence and liability of the
\nInsurance Company.\n<\/p>\n
 21. In that view of the matter, the decision of the Apex Court in
\n   W.B. Electricity Board v. Patel Engineering Co. Ltd. & Ors.<\/a> , (2001) 2 SCC 451
\nwill have no application in the instant case. Therein the
\nApex Court was concerned with the interpretation of a
\nhighly competitive international tender and held that in a
\ncase of that nature where the bidders were required to take
\nall possible case in submitting their tenders, they cannot
\nlater on be permitted to rectify their mistakes which were
\nimpermissible in terms of the tender documents. In the
\ninstant case, the respondents have pleaded mistake of fact.
\nThey had also pleaded mistake in relation to the location
\nwhere the properties were situated. In the aforementioned
\nsituation, if the authorities had taken a decision to
\nwithdraw the offer, which would amount to recession of
\ncontract, the remedy of the petitioner would be to file a suit
\nfor damages or take recourse to the Arbitration clause.\n<\/p>\n
 22. It is now well known that even a suit for specific
\nperformance of contract would ordinarily not be decreed
\nwhen the plaintiff can be compensated in terms of money by
\nway of damages.\n<\/p>\n
 23. For the reasons aforementioned, there is no merit in these
\nwrit petitions, which are dismissed accordingly but without
\nany order as to costs. However, the petitioners herein can
\ntake refund of the amount deposited by them without<\/p>\n
prejudice to their rights and contentions in any future
\nlitigation.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court Sardar Singh Anand & Sons, Joga … vs M.S.T.C. Ltd. And Ors. on 17 September, 2002 Author: S Sinha Bench: S Sinha, A Sikri JUDGMENT S.B. Sinha, C.J. 1. These three writ petitions involving common questions of law and fact were taken up for hearing together and are being disposed of by […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-191412","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nSardar Singh Anand & Sons, Joga ... vs M.S.T.C. Ltd. 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