{"id":28491,"date":"1998-09-01T00:00:00","date_gmt":"1998-08-31T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/hindustan-trading-corpn-ms-vs-mtnl-others-on-1-september-1998"},"modified":"2019-04-08T18:08:53","modified_gmt":"2019-04-08T12:38:53","slug":"hindustan-trading-corpn-ms-vs-mtnl-others-on-1-september-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/hindustan-trading-corpn-ms-vs-mtnl-others-on-1-september-1998","title":{"rendered":"Hindustan Trading Corpn. & M\/S. … vs Mtnl & Others on 1 September, 1998"},"content":{"rendered":"
Delhi High Court<\/div>\n
Hindustan Trading Corpn. & M\/S. … vs Mtnl & Others on 1 September, 1998<\/div>\n
Equivalent citations: 75 (1998) DLT 399, 1998 (47) DRJ 485<\/div>\n
Author: D Bhandari<\/div>\n
Bench: D Bhandari<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT<\/p>\n
Dalveer Bhandari, J.<\/p>\n
 1.     This  judgment  will dispose of Suit Nos. 2822\/A\/95, 2905\/95  and  CCP 1\/96.  The petitioner Hindustan Trading Corporation and M\/s.  United  Engineers, have filed these petitions under Section 20 read with sections 5 and
\n12 of the Arbitration Act, 1940, in which the petitioners have prayed  that the respondent, Mahanagar Telephone Nigam Limited, (for short,  MTNL),  be directed to file the arbitration agreement dated 21st December, 1995. It is further submitted that the disputes and differences, have  arisen  between the parties and be referred to the arbitration by appointing an arbitrator. The disputes enumerated are set out as under:-\n<\/p>\n
  \"(i) Whether the defendant can terminate the contract and declare the  plaintiff  firm black-listed and their further  business  be     banned  with  MTNL, in view of the said Show Cause  Notice  dated     13.9.1995? \n \n\n      (ii)  Whether defendant No. 2 can terminate the contract  of  the    plaintiff by only giving Show Cause Notice as contained in letter  dated 13.9.1995, without resorting to the Arbitration Clause  XIX  as contained in the terms of contract? \n \n\n      (iii) Whether plaintiff is entitled to claim damages for the loss    of  reputation  and business due to the  issuance\/circulation  of letter dated 29.9.1995? \n \n\n      (iv) Whether the defendant can black-list the plaintiff firm  and    order banning further business, in the garb of alleged Show Cause  Notice dated 13.9.1995? \n \n\n     [v) Whether plaintiff is entitled to claim damages to the tune of  Rs.  10 lakhs for the loss of business, which they have  suffered because  of non-awarding of work by departments of MTNL,  due  to  issuance of letter dated 13.9.1995 and 29.9.1995?\" \n \n\n<\/pre>\n
 2.   According  to the respondents, the Suits filed by the Petitioners  are misconceived  and are liable to be dismissed with exemplary costs.  In  the written statements, many other preliminary objections have been taken.  The main objection which has been taken by the respondents is that according to the  terms and conditions stated in the NIT, the petitioner cannot be  permitted  to tender for the work in MTNL because the petitioner’s near  relative is working in the MTNL.\n<\/p>\n
  The relevant para of NIT reads as under :\n<\/p>\n
   “The  contractor  shall not be permitted to tender for  works  in MTNL (responsible for award and execution of contracts) in  which his  near relative is posted as JAO\/AAO\/AO or an officer  in  any capacity  between the grads of S.E. and A.E. both  inclusive.  He shall  also  intimate the names of the persons, who  are  working with him in any capacity or are subsequently employed by him, and who are near relatives to any officer in MTNL. Any breach of this condition by the Contractor would render him liable to be removed  from the approved list of Contractors of this Department.”\n<\/p>\n
 3. In view of this embargo, the petitioners could not tender for work  in the  MTNL.  It is the further case of the respondent that  the  controversy involved  in this case is no longer res integra because the Division  Bench of this court in the case of the petitioners determined that the  petitioners  have  a close relationship with Dalbir Aggarwal, who is  working  with MTNL,  and the petitioners could not tender for work in the MTNL.  The  respondents  submitted that this matter cannot be referred to  an  arbitrator because  the  arbitrator himself is equally bound by the  findings  of  the judgment of the Division Bench of this Court. The entire exercise of referring the matter to the arbitrator would be futile.\n<\/p>\n
 4.   In the written statement\/reply, the respondents have pointed out that Dalbir  Aggarwal is the son-in-law of J.P. Aggarwal, brother of  the  petitioner  P.  Aggarwal, Proprietor of the petitioner’s firm.  It  is  further submitted  that  this relationship clearly falls within the  definition  of near relative and according to the embargo placed by the respondents in the aforementioned para of NIT, the petitioners are not entitled to participate in  the bid and cannot tender for any work in the MTNL. It is further  mentioned  that  when  the respondents learnt about the  relationship  of  the petitioners  with  Dalbir Aggarwal a Show Cause Notice  dated  13.5.95  was issued. The reply to the said notice was filed on 29.9.95. Relevant portion of the reply reads as under :\n<\/p>\n
      “In  this connection we are to submit that Shri Dalbir  Aggarwal, alleged  to be our relative in your above said letter, is not  our   relative, and the declaration given by us is correct. Hence,  the  above said letter may kindly be withdrawn.”\n<\/p>\n
 5.   It  is further mentioned that according to the terms of  the  contract each  approved  contractor was to be given the work of Rs. 50  lakhs  in  a year,  whereas in a period of 7 months from 1.2.1995 to 30.9.95, the  petitioners  were given a total payment of Rs. 3,60,04,540. Much more work  has been  awarded to the petitioners than what could normally be  allocated  to the approved contractors according to the norms. It is also mentioned  that there  are various firms on the approved list of contractors who  have  not been  awarded any work like Telecommunication Consultants India  Pvt.  Ltd. and Star Construction. It is also mentioned that a few other approved firms have been given marginal work and those firms have also raised the  dispute about non award of adequate work to them.\n<\/p>\n
 6. Mr. Sikri, learned Senior Counsel appearing, for this respondents  has placed  reliance on the said judgment of the Division Bench of  this  Court delivered on April 12, 1996, in C.WP No. 4686\/95. The Division Bench  examined the case of these petitioners and other connected firms. In para  7.3,it  is mentioned that B.C. Aggarwal, L.R. Aggarwal, Murlidhar Aggarwal  and J.P.  Aggarwal  are all brothers. In para 7.4, it is  mentioned  that  J.P.Aggarwal’s son-in-law Dalbir Aggarwal is a Construction Officer (South)  in MTNL.  It  is also mentioned that as per the terms of  the  contract,  each approved contractor was to be given work of Rs. 50 lakhs in a year, whereas the  work secured by the petitioner and other related concerns was  running in  several crores, and there are number of other approved contractors  who were  not given any work or given very marginal work, and there has been  a clear violation of the principles of equality, in distribution of the  work by MTNL.\n<\/p>\n
 7.   The  Division  Bench  framed four questions.  The  questions  read  as under:-\n<\/p>\n
  “(1)  Whether total exclusion of such persons as  have  relations employed  in  MTNL  without regard to the place  where  they  are   working  and the capacity in which they are posted amounts to  an unreasonable  restriction on the fundamental right to trade  guaranteed by Article 19(1) of the Constitution?\n<\/p>\n
      (2)  Whether such a restriction can be said to be  arbitrary  and     unreasonable and offensive of Article 14 of the Constitution? \n \n\n      (3)  Whether brother's son-in-law can be said to be a near relative? \n \n\n      (4)  What  is the effect of the petitioners in  CWP  4686\/95  and    4687\/95  having  made a disclosure of relationship  while  filing their tender?\" \n \n\n<\/pre>\n
 8.   The Division Bench of this Court examined a catena of judgments delivered by the Supreme Court. Regarding the issue, whether the brother’s  son-in-law  is close relation or not, the Division Bench held that a  brother’s son-in-law would also be included within the meaning of near relatives. The Division Bench also observed that the petitioners were not entitled to  bid
\ntenders with the MTNL.\n<\/p>\n
 9.   The  Division Bench also mentioned that the test of eligibility is  to be applied on the date of bidding the tender and maintained throughout  the execution of the work under the contract. The court also observed that  the question  whether  such relation in the MTNL has  actually  influenced  the tender or work is immaterial. What is sought to be achieved is avoiding the possibility of such influence being exercised and maintaining fairness  and neatness  in the dealings of the MTNL. The court’s conclusion in  the  said judgment  was that restriction can be imposed by an execution fiat  and  is neither  arbitrary  nor unreasonable. The Court observed that it  does  not offend  Article 14 of the Constitution. It satisfies the test laid down  by the  Supreme Court in the case of State of Madras Vs. V.G. Row,  .\n<\/p>\n
 10.  Mr.  Sikri, learned Senior Counsel for the respondents submitted  that in  view of the finding of the Division Bench of this Court in the case  of the petitioners, no useful purpose would be served by referring the  matter to the arbitrator.\n<\/p>\n
 11.  The  learned counsel for the petitioners made an unsuccessful  attempt to  wriggle out of the said judgment. The Division Bench of this Court  had examined  this  very  controversy involved in this case and  arrived  at  a categoric finding that the petitioner’s brother’s son-in-law is included in the terms near relative”, and this submission whether the MTNL was actually influenced  in  giving  the work to the petitioner is  immaterial  and  the restriction imposed by the MTNL does not offend Article 14 in any manner.\n<\/p>\n
 12.  The  entire exercise of referring the matter to arbitration  would  be totally  a  futile one because the arbitrator is bound by the  decision  of this Court.\n<\/p>\n
 13.  In  view of my aforesaid conclusion. I find no merit in  these  suits. These  suits being totally devoid of any merit are  accordingly  dismissed. However, in the facts and circumstances of this case, I direct the  parties to  bear their own costs. The suits and all surviving IAs  are  accordingly dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court Hindustan Trading Corpn. & M\/S. … vs Mtnl & Others on 1 September, 1998 Equivalent citations: 75 (1998) DLT 399, 1998 (47) DRJ 485 Author: D Bhandari Bench: D Bhandari JUDGMENT Dalveer Bhandari, J. 1. This judgment will dispose of Suit Nos. 2822\/A\/95, 2905\/95 and CCP 1\/96. The petitioner Hindustan Trading Corporation […]<\/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-28491","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nHindustan Trading Corpn. & M\/S. ... vs Mtnl & Others on 1 September, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/hindustan-trading-corpn-ms-vs-mtnl-others-on-1-september-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hindustan Trading Corpn. & M\/S. ... vs Mtnl & Others on 1 September, 1998 - 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