1/36 R IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE18H DAY OF SEPTEMBER2017BEFORE THE HON'BLE Dr.JUSTICE VINEET KOTHARI WRIT PETITION No.8001/2015 (GM-KEB) BETWEEN: M/S.LANDIS+GYR LIMITED J.K.MILLENNIUM CENTRE7H FLOOR, NO.46D JAWAHARLAL NEHRU ROAD KOLKATTA, WEST BENGAL ALOS HAVING ITS OFFICE AT NO.503, 1ST FLOOR, 3RD MAIN50FEET ROAD, SHRINAGAR BANGALORE-560 050 R/BY ITS SENIOR MANAGER SALES(S) SRI.PRAKASH JANGAMANI (BY SRI.DHYAN CHINNAPPA, SENIOR COUNSEL FOR SRI.AJAY SHANKAR RAO, ADV. ) AND:
1. THE GENERAL MANAGER (M & C) BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED, K.R. CIRCLE BANGALORE-560 001. 2.BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED, K.R.CIRCLE BANGALORE-560 001 R/BY ITS MANAGING DIRECTOR. 3.CHAIRMAN BANGALORE ELECTRICITY SUPPLY …PETITIONER Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 2/36 COMPANY LIMITED, K.R.CIRCLE BANGALORE-560 001. 4.ADDITIONAL CHIEF SECRETARY TO THE ENERGY DEPARTMENT GOVERNMENT OF KARNATAKA NO.236, VIKASA SOUDHA BANGALORE-560 001. (BY SRI. S.S.NAGANAND, SENIOR COUNSEL FOR SRI.SRIRANGA, ADV. FOR R1 TO R3 AND SRI.A.M.SURESH REDDY, AGA FOR R4) …RESPONDENTS THIS W.P. IS FILED UNDER ARTICLES226OF THE INDIA, PRAYING TO DIRECT THE CONSTITUTION OF RESPONDENT-COMPANY TO CONFORM TO THE TERMS OF THE STATUTORY CONTRACT AND TO RECEIVE THE METERS BY PLACING PURCHASE
ORDERS AS PER THE TERMS OF THE CONTRACT
ORDEREXTENSION1319A) 2014-15 DATED27-2014 ISSUED BY R-1 VIDE ANNEXURE-X AND ETC. THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR PRONOUNCEMENT OF
JUDGMENT, THIS DAY, DR. VINEET KOTHARI, J, DELIVERED THE FOLLOWING:
12. 09-2017, COMING ON ON
JUDGMENT
Mr.Dhyan Chinnappa, Senior Counsel for Mr. Ajay Shankar Rao, Adv. for Petitioner Mr.S.S.Naganand, Senior Counsel for Mr.Sriranga, Adv. for R1 to R3 Mr.A.M.Suresh Reddy, AGA for R4.
1. The petitioner M/s.LANDIS+GYR LIMITED by this petition under Article 226 of the Constitution of India has sought the relief in a contractual matter Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 3/36 against the respondent-Bangalore Electricity Supply Company Limited (‘BESCOM’ for short) to the effect that the respondent-BESCOM may be directed to conform to the terms of the statutory contract for supply of electro static meters entered into between these two parties and to receive the meters by placing the purchase orders in terms of the contract Annexure-X dated 10th June 2014 and such other reliefs as the Court may consider appropriate.
2. The facts leading to the filing of the present writ petition in a nutshell are as under:- The petitioner-Company is a leading manufacturer of electronic static power meters and by the said contract dated 10th June 2014, entered into with respondent-BESCOM to supply LT Single Phase Two wires Static Energy meters of 5 – 30 Amps to the respondent-Company for the period of contract till 30th June 2015 or till the finalization of new Tender Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 4/36 whichever is earlier. The said meters were guaranteed for satisfactory performance and accuracy for a minimum period of five years from the date of supply and the price for each meter agreed was Rs.905.14 inclusive of all taxes.
3. The petitioner-Company supplied about 6 lakhs meters to the respondent-BESCOM, who undertook the work of replacing of old electro mechanical power meters provided to the consumers earlier and also to provide such new electronic static meters in the retail outlets to be opened by the petitioner-Company in various sub-divisions of respondent-BESCOM at the said rate.
4. The grievance of the petitioner-Company is that, when the respondent-BESCOM stopped placing the purchase orders for such supplies of electronic static meters from about November 2014 and the present writ petition is filed in this court on 26-02- Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 5/36 2015, and during the pendency of the present writ petition, the respondent-BESCOM invited fresh tenders for discovery of more competitive price from the market vide fresh Tender Notification Annexure-AG dated 06- 04-2015 and Annexure-AH dated 06-04-2015.
5. The petitioner-Company approached this Court inter alia seeking enforcement of the aforesaid contract and for issue of mandamus direction to the respondent-BESCOM to extend the period of contract beyond 30th June 2015 and purchase the remaining quantity of such power meters at the pre-fixed rates of Rs.905.14 per meter. Principles of Promissory Estoppel and fairness on the part of the public authority like BESCOM have been invoked by the petitioner to seek the aforesaid relief in the present writ petition.
6. Mr.Dhyan Chinnappa, Senior Counsel appearing on behalf of Sri.Ajay Shankar Rao, learned Counsel for the petitioner company contended before Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 6/36 this Court that such a relief can be granted by this Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India and the opaqueness or unfair silence on the part of the respondent-BESCOM to fully perform its part of contract and suddenly invite fresh tenders under the guise of discovery of competitive price was nothing but an effort to deprive the petitioner- Company of its right to supply the full quantity of the power meters, as they had manufactured large number of such power meters on the faith and promise of such supplies being taken by the respondent-BESCOM, under the aforesaid contract.
7. He relied upon various judgments in support of his contentions that the above said relief can be granted to the petitioner under Article 226 of the Constitution of India and also referring to the interim order passed by the co-ordinate Bench of this Court and the Notices inviting fresh tenders vide Annexures-AG Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 7/36 and AH both dated 06-04-2015 were stayed by such interim orders. Reliance was placed by the learned counsel for the petitioner on the following judgments which would be briefly discussed hereinafter. (i) ABL International Limited and Another v/s Export Credit Guarantee Corporation of India Limited and others reported in (2004) 3 SCC553 (ii) Gujarat State Financial Corporation v/s M/s. Lotus Hotels Pvt. Ltd. reported in (1983) 3 SCC379 Bridge (iii) Uttar Construction v/s Bangalore Development Authority and others reported in (2005) 5 Kant.L.J.
112 DB). Pradesh Corporation State Limited 8. On the other hand, learned counsel for the respondent-BESCOM Mr.S.S.Naganand, learned Senior Counsel vehemently opposed the aforesaid submissions and urged before the Court that in contractual matters, this Court cannot interfere and cannot issue any mandamus direction to compulsorily purchase all the meters manufactured by petitioner-Company as neither Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 8/36 any quantity of meters to be purchased was fixed in the contract, Annexure-V dated 10th June 2014 which was merely a rate contract and the respondent-BESCOM always reserved its right to discover competitive price of such meters through fresh Tender process and it cannot be prevented by interfering under Article 226 of the Constitution of India.
9. Mr.Naganand, vehemently submitted that the enforcement of contract cannot be mandated by this Court nor it is in public interest to force the respondent- BESCOM to purchase the meters at higher rates from the petitioner whereas through process of fresh tenders, the respondent-BESCOM can secure such meters at much lower rates. He submitted that even for such other supplies of electronic meters under separate contract later on, the petitioner company itself had participated and had agreed to supply same electronic Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 9/36 static power meters at much lower rate of Rs.732/- per meter.
10. Drawing the attention of the Court towards the proceedings of meeting held on 24-06-2014 vide Annexure-W, soon after the contract Annexure-V dated 10th June 2014 was awarded in favour of the petitioner and in which meeting of various Authorities of the respondent-BESCOM, the representative of the petitioner-Sri.Prakash Jangamani had also participated, learned counsel, Mr. Naganand submitted that merely because the Managing Director of respondent-BESCOM directed the officers to monitor the revised month wise, percentage wise target of replacement of meters, eg., July 2014 – 4%, August 2014 – 6%, September 2014 – 8%, October 2014 – 10% and 12% for each of the month from November 2014 to April 2015 and in that meeting an estimated requirement of such mechanical meters required to be replaced was given at the figure of 17.37 lakhs meters, it does not mean that the respondent- Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 10/36 BESCOM had agreed to purchase all such 17.37 lakhs meters from the petitioner Company only.
11. Mr. Naganand urged that the respondent- BESCOM should be allowed to explore the possibility of such purchases to be made at much lesser and competitive prices through the fresh Tender process. Mr.Naganand also submitted that at best, the petitioner-Company can claim damages for breach of contract on the part of respondent-BESCOM in a properly instituted Civil suit in the Civil Court, after establishing the loss caused to it by the alleged non- performance of the contract on the part of the respondent-BESCOM, though there is no such breach on the part of the respondent-BESCOM.
12. He submitted that unless the purchase order as per the then existing requirements of various sub- divisions of the BESCOM were placed on the petitioner- Company, the petitioner-Company could not have Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 11/36 forcefully supplied such meters to the respondent- BESCOM and claim the price of the same. He submitted that after the period of contract was over on 30th June 2015, the respondent BESCOM was at liberty and freedom to invite such fresh tenders and place orders on the Companies which would supply such meters at the most competitive prices.
13. He relied upon a recent judgment of the Hon’ble Supreme Court in the case of State of Kerala and others v/s M.K. Jose reported in (2015) 9 SCC433which after considering the judgments relied upon by the learned Counsel for the petitioner in ABL International (supra) and others categorically held that in such cases, writ petitions are not maintainable.
14. I have heard the learned counsels at length and perused the records and judgments cited at the Bar. Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 12/36 15. In the considered opinion of this Court, the present writ petition filed by the petitioner-Company is devoid of merit and the same is liable to be dismissed.
16. First and foremost is the question of entertaining such writ petitions under Articles 226 of the Constitution of India. Such complex business and economic contracts have several factual and legal aspects which require the relevant evidence to prove and determine the respective rights and obligations of the parties to the contract. The writ jurisdiction is absolutely ill-suited for such matters and therefore, the parties to the contract should be normally relegated to the remedy by way of civil suits. It is only rarely when the action of the respondents who are State or State instrumentalities and whose actions even in contractual matters is ex-facie or per se illegal, unfair and arbitrary that the Court may for the limited purposes invoke even the writ jurisdiction in such cases. Neither the writ Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 13/36 petitions can be converted into money recovery suits nor can they be invoked to enforce contracts in the manner in which it is sought to be done in the present case, after the period of contract is over.
17. The prayer made in the present petition that the respondent-BESCOM should be directed to purchase all the meters manufactured by the petitioner at the agreed rate even after the lapse of period of contract is a relief which cannot at all be granted by exercise of writ jurisdiction. The contract in question does not specify the quantity of meters to be purchased from the petitioner; it only stipulates the period and the rate of meters to be supplied by the petitioner. The extension of period of contract also cannot be mandated as a matter of right. There is no illegality or arbitrariness seen in the impugned action of the respondent when they decided to explore the possibility of fresh supplies from other sources at more competitive Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 14/36 prices by issuing fresh Tenders; such right was always reserved by them in the contract entered into with the petitioner itself.
18. Clause (3) of Contract at Annexure-V dated 10th June 2016 clearly stipulates that the period of validity of the retail meters as well as outlets up to 30th June 2015 or till finalization of the new tenders, whichever is earlier. Such reservation of their right was in clear departure from such earlier contract entered into between these very parties in the year 2011 vide Annexure-B contract dated 5th August 2011. Therefore, such a right of respondent-BESCOM reserved in the contract itself cannot be curtailed by issue of writ of mandamus contrary to the said clause of the contract.
19. The Hon’ble Supreme Court in a recent judgment in the case of State of Kerala and others v/s M.K.Jose (supra) discussing all the previous case laws Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 15/36 including the cases relied upon by the learned counsel for the petitioner herein, has summarized the legal position about interference in the contractual matters by the High Courts under Article 226 of the Constitution of India in the following manner (reproduced from Head Note of SCC); “The respondent was awarded a road improvement contract. An agreement pertaining thereto was executed between the appellant and the respondent. As per the agreement, the work was to be completed within 12 months. As the respondent could not finish the work within stipulated period of 12 months, the time was extended by another 6 months. Later, it was extended by another 9 months. Even then the respondent failed to complete the work. Therefore, a memorandum of stop work was issued to him. At that point of time, some revised estimation was to be made but the appellant was not sanctioning the same, the respondent Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 16/36 approached the High Court for appropriate direction. The High Court disposed of the petition by directing the appellant to make revised estimation. But as steps were not taken by the officials, contempt petition was filed and later it was dropped. Later, the respondent submitted a representation to the appellant. Then he filed several writ petitions against the appellant. The High Court directed the Principal Secretary, PWD to consider his representation and pass orders as per law. Thereafter, the contract in favour of the respondent was terminated. This action was challenged by the respondent before the High Court. Considering the submissions of the parties, the High Court accepted only one prayer and directed the appellant to measure the work already completed by the respondent before finalizing the next tender. However, it rejected other prayers of the respondent. This order was challenged by the respondent in intra-court appeal. The Division Bench first appointed a Commission to examine the work site and Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 17/36 submit a report. It empowered the Commission to seek assistance from any official and also that it could call for any records from the appellant and as well as from the respondent. Based on the report submitted by the Commission, the Division Bench concluded that the order passed by the authority was based on erroneous facts. The Division Bench set aside the order of termination of contract and also ordered to pay expenses incurred for work conducted by the Commissioner. Hence this appeal. Allowing the appeal, the Supreme Court Held: It is to be reiterated that writ petition under Article 226 is not the proper proceedings for adjudication of such disputes relating to contractual disputes. It is settled law that when an alternative and equally efficacious remedy is open to the litigant, he should be required to pursue that remedy and not invoke the Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 18/36 writ jurisdiction of the High Court. Equally, the existence of alternative remedy does not affect the jurisdiction of the court to issue writ, but ordinarily that would be a good ground in refusing to exercise the discretion under Article 226. It is true that many matters could be decided after referring to the contentions raised in the affidavits and counter- affidavits, but that would hardly be a ground for exercise of extraordinary jurisdiction under Article 226 of the Constitution in case of alleged breach of contract. Such seriously disputed question or rival claims of the parties with regard to breach of contract are to be investigated an determined on the basis of evidence which may be led by the parties in a properly instituted civil suit rather than by a court exercising prerogative of issuing writs. State of Bihar v. Jain Plastics and Chemicals Ltd., (2002) 1 SCC216 National Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 19/36 Highways Authority of India v. Ganga Enterprises, (2003) 7 SCC410 followed Kerala SEB v. Kurien E.Kalathil, (2000) 6 SCC293 State of U.P. v. Bridge & Roof Co. (India) Ltd., (1996) 6 SCC22 Barielly Development Authority v. Ajai Pal Singh, (1989) 2 SCC116 Verigamto Naveen v. State of A.P., (2001) 8 SCC344 Hariminder Singh Arora v. Union of India, (1986) 3 SCC247 cited The High Court is not deprived of its jurisdiction to entertain a petition under Article 226 merely because in considering the petitioner’s right to relief questions of fact may fall to be determined. In a petition under Article 226 the High Court has jurisdiction to try issues both of fact and law. Exercise of the jurisdiction is, it is true, discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account the High Court Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 20/36 is of the view that the dispute may not appropriately be tried in a writ petition, the High Court may decline to try a petition. Rejection of a petition in limine will normally be justified, where the High Court is of the view that the petition is frivolous or because of the nature of the claim made dispute sought to be agitated, or that the petition against the party against whom relief is claimed is not maintainable or that the dispute raised thereby is such that it would be inappropriate to try it in the writ jurisdiction, or for analogous reasons. Gunwant Kaur v. Municipal Committee, Bhatinda, (1969) 3 SCC769 relied on the following legal principles emerge as to the maintainability of a writ petition: (a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable. Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 21/36 (b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule. (c) A writ petition involving a consequential relief of monetary claim is also maintainable. ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd., (2004) 3 SCC553 relied on Century SPG. and Mfg. Co. Ltd. v. Ulhasnagar Municipal Council, (1970) 1 SCC582 referred to However, while entertaining an objection as to the maintainability of a writ petition under Article 26 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 22/36 case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction. ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd., (2004) 3 SCC553 relied on Noble Resources Ltd. v. State of Orissa, (2006) 10 SCC236 Dwarakadas Marfatia & Sons v. Port of Bombay, (1969) 3 SCC293 Mahabir Auto Stores v. Indian Oil Corpn., (1990) 3 SCC752 Jamshed Hormusji Wadia v. Port of Mumbai, (2004) 3 SCC214 Binny Ltd., v. V. Sadasivan, Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 23/36 (2005) 6 SCC657 2005 SCC (L&S) 881; G.B. Mahajan v. Jalgaon Municipal Council, (1991) 3 SCC91 referred to Whirlpool Corpn., v. Registrar of Trade Marks, (1998) 8 SCC1 cited A writ court should ordinarily not entertain a writ petition, if there is a breach of contract involving disputed questions of fact. The present case clearly indicates that the factual disputes are involved. As the factual narration would reveal, the respondent has been invoking the jurisdiction of the High Court under Article 226 of the Constitution on various occasions challenging very action which pertain to extension of time, denial of revised estimated by the appellant and many other facets of that nature and the High Court, it must be said, has been generously passing orders for consideration by the appropriate authority, for grant of opportunity of being heard to the respondent and to consider his representation in accordance with law. Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 24/36 This kind of orders in a contractual matter, in considered view of the Supreme Court, was ill-conceived. They not only convert the controversy to a disturbing labyrinth, but encourage frivolous litigation. The competent authority might have mentioned that more than 50% work remained to be done but that should not have prompted the Appellate Bench hearing the intra-court appeal to appoint a Commission of two advocates and granting them liberty to take assistance of a competent Engineer. As the report would show, the Commission of two advocates have taken assistance of a retired Assistant Executive Engineer and submitted the report. Though, the counsel for the State had not objected to the same, yet the Supreme Court really fail to fathom how a writ jurisdiction can be extended to cause a roving enquiry through a Commission and rely on the facts collected without granting opportunity to the State to file objections to the same and in the ultimate eventuate, cancel the order of termination of contract. Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 25/36 What precisely was the quantum of work done and whether there had been a breach by the owner or the contractor, are required to be gone into by the appropriate legal forum. The procedure adopted by the High Court, if it is permissible to say so, is quite unknown to exercise of power under Article 226 in a contractual matter. It could well be appreciated a Committee being appointed in a public interest litigation to assist the Court or to find out certain facts. Such an exercise is meant for public good and in public interest. For example, when an issue arises whether in a particular State there are toilets for school children and there is an assertion by the State that there are good toilets, definitely the Court can appoint a Committee to verify the same. It is because the lis is not adversarial in nature. The same principle cannot be take recourse to in respect of a contractual controversy. It is also surprising that the High Court has been entertaining series of writ petitions at Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 26/36 the instance of the respondent, which is nothing but abuse of the process of extraordinary jurisdiction of the High Court. The Appellate Bench should have applied more restraint and proceeded in accordance with law instead of making a roving enquiry. Such a step is impermissible and by no stretch of imagination subserves any public interest. M.K.Jose vs. State of Kerala, Writ Appeal No.1912 of 2013, order dated 24-2-2014 (Ker); reversed. The said legal position is respectfully followed being binding on this Court and therefore, the present writ petition deserves to be dismissed.
20. Similarly in Pimpri Chinchwad Municipal Corporation and others v/s M/S.Gayatri Construction Company and another reported in (2008) 8 SCC172again the Hon’ble Supreme Court quoted from its earlier decision in the case of State of U.P. And others v/s Bridge and Roof Company (India) (India) Limited Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 27/36 reported in (1996) 6 SCC22 Paragraphs 16 to 18 of the said judgment, which is relevant are quoted below for ready reference:
16. Firstly, the contract between the parties is a contract in the realm of private law. It is not a statutory contract. It is governed by the provisions of the Contract Act or, maybe, also by certain provisions of the Sale of Goods Act. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. That is a matter either for arbitration as provided by the contract or for the civil court, as the case may be. Whether any amount is due to the respondent from the appellant-Government under the contract and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not, are all matters which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition, viz., to restrain the Government from deducting a Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 28/36 particular amount from the writ petitioner's bill(s) was not a prayer which could be granted by the High Court under Article 226. Indeed, the High Court has not granted the said prayer."
16. At para 11 of INDIA THERMAL POWER LTD. v/s STATE OF M.P it was observed as follows:(SCC pp.386-87, para
11) 11. It was contended by Mr. Cooper, learned Senior Counsel appearing for appellant GBL and also by some counsel appearing for other appellants that the appellant/IPPs had entered into PPAs under Sections 43 and 43-A of the Electricity Supply Act and as such they are statutory contracts and, therefore, MPEB had no power or authority to alter their terms and conditions. This contention has been upheld by the High Court. In our opinion the said contention is not correct and the High Court was wrong in accepting the same. Section 43 empowers the Electricity Board to Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 29/36 enter into an arrangement for purchase of electricity on such terms as may be agreed. Section 43-A(1) provides that a generating company may enter into a contract for the sale of electricity generated by it with the Electricity Board. As regards the determination of tariff for the sale of electricity by a generating company to the Board, Section 43(1)(2) provides that the tariff shall be determined in accordance with the norms regarding operation and plant-load factor as may be laid down by the authority and in accordance with the rates of depreciation and reasonable return and such other factors as may be determined from time to time by the Central Government by a notification in the Official Gazette. These provisions clearly indicate that the agreement can be on such terms as may be agreed by the parties except that the tariff is to be determined in accordance with the provision contained in Section 43- A(2) and notifications issued Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 30/36 thereunder. Merely because a contract is entered into in exercise of an enabling power conferred by a statute that by itself cannot render the contract a statutory contract. If entering into a contract containing the prescribed terms and conditions is a must under the statute then that contract becomes a statutory contract. If a contract incorporates certain terms and conditions in it which are statutory then the said contract to that extent is statutory. A contract may contain certain other terms and conditions which may not be of a statutory character and which have been incorporated therein as a result of mutual agreement between the parties. Therefore, the PPAs can be regarded as statutory only to the extent that they contain provisions regarding determination of tariff and other statutory requirements of Section 43- A(2). Opening and maintaining of an escrow account or an escrow agreement Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 31/36 are not the statutory requirements and, therefore, merely because PPAs contemplate maintaining escrow accounts that obligation cannot be regarded as statutory".
17. Therefore, the High Court ought not to have entertained the writ petition. Additionally, it appears that by order dated 17.1.2007 interim stay of the impugned order was granted and was continued by order dated 12.2.2007. It is pointed out by learned counsel for the appellants that since the order of the High Court was stayed and there was urgency in the matter fresh tenders were called for. Three persons submitted the bids and the work has already been allotted and a considerable portion of the work has already been completed. In view of aforesaid, we set aside the impugned order of the High Court and direct dismissal of the writ petition. It is however open to the respondents-writ petitioners to seek such remedy, if so advised, as is available in law. We do not express any opinion in that regard. Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 32/36 18. The appeal is allowed. There shall be no order as to costs.
21. In view of the aforesaid judgments relied upon by the learned Counsel for the petitioner in ABL International wherein it was held that merely because the disputed question of fact is raised, the writ petition does not become not maintainable, is not applicable to the facts of the present case. Paragraph 54 of the said judgment is quoted below for ready reference: “54. Apart from the above reasons given by us to interfere with the judgment of the Appellate Bench of the High Court, we have one other good reason why we should not drive the appellants to a suit. The claim petition appellants was rejected by the respondent in the year 1994. The respondent challenged the basis of rejection by way of a writ petition in the year 1996. The objection as to the maintainability of the petition was rejected by the High Court by its judgment dated 15-5-1997. We are now at the end of Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 33/36 the year 2003. We at this distance of time and stage of litigation, do not think it proper to relegate the parties to a suit. To direct the appellants to approach a civil court at this stage would be doing injustice to the appellants. In this view of ours, we are supported by a number of decisions of this Court like in Shambhu Prasad Agarwal Vs. Bhola Ram Agarwal wherein this Court though noticed the fact that the appellants had an alternate remedy for issuance of a letter of administration, it refused to dismiss the appeal on the grounds: (SCC p 715, para
5) Since considerable time has elapsed, the interest of justice demands that the proceedings should come to an end as early as possible and that the appeal should not be dismissed merely on highly technical ground.” The aforesaid fact of long lapse of time which dissuaded the Court not to relegate the parties to the Civil suit is not available in the facts of the present case. Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 34/36 22. Similarly the judgment in the case of Gujarat State Financial Corporation v/s M/S Lotus Hotels Pvt.Ltd., by which, the Hon’ble Court directed Gujarat State Financial Corporation to release the balance amount of sanctioned loan in favour of the respondent- Hotel is also a fact situation, altogether different from the facts of the present case. Paragraph 13 of the said judgment is also quoted below for ready reference:
13. Now if appellant entered into a solemn contract in discharge and performance of its statutory duty and the respondent acted upon it, the statutory corporation cannot be allowed to act arbitrarily so as to cause harm and injury, flowing from its unreasonable conduct, to the respondent. In such a situation, the Court is not powerless from holding the appellant to its promise and it can be enforced by a writ of mandamus directing it to perform its statutory duty. A petition under Article 226 of the Constitution would certainly lie to direct performance of statutory Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 35/36 duty by 'other authority' as envisaged by Article 12.
23. Similarly, the Division Bench of this Court in Uttar Pradesh State Bridge Construction Corporation Limited, Lucknow Vs. Bangalore Development Authority, wherein the question of legality of termination of the contract entered into by the BDA with the petitioner-U.P. State Bridge Construction Company was involved it held that the BDA could not cancel that contract in the midst of its performance. This is also quite different from the given facts in the present case.
24. Therefore, none of the judgments cited at the Bar by the learned counsel for the petitioner are of any help to the petitioner and this Court is of the considered opinion that there is no justification to interfere in the present case at the instance of the petitioner and the petitioner is not entitled to the relief as claimed or Date of Judgment:18-09-2017 W.P.No.8001/2015 M/s.LANDIS+GYR LIMITED.Vs. The General Manager (M & C) and others. 36/36 otherwise. Thus, the petition being devoid of merit is liable to be dismissed and the same is accordingly dismissed. No costs. mpk/-* Sd/- JUDGE