Noble
Resources Ltd. Vs. State of Orissa & Anr [2006] Insc 592 (13 September 2006)
S.B.
Sinha & Dalveer Bhandari
[Arising
out of SLP (Civil) No.915 of 2005] S.B. SINHA, J:
Leave
granted.
Whether
a writ petition is maintainable in contractual matter is the core question
involved in this appeal which arises out of a judgment and order dated
14.09.2004 passed by a Division Bench of the Orissa High Court in Civil Writ
Petition No.1463 of 2004 whereby and whereunder the writ petition filed by the
Appellant herein was dismissed.
Admittedly,
the parties entered into a contract in terms whereof the Respondent No.2 herein
was to supply 1,20,000 MT + / -10% each of Grade A, Grade B and Grade C iron
ore fines by September 2003. On or about 28.02.2003, the parties also agreed
that the supply of full tender quantity would be made in the sequence of C, B
and A Grades iron ore fines at the prices offered by the Appellant.
Indisputably, the Appellant disclosed the names of the parties with which it
had entered into agreements to supply iron ore fines procured from the said
Respondent. There is no dispute that supply of C-Grade iron ore fines had been
made by the Respondent No.2.
Indisputably,
again supply of 64,236 MT of Grade-B iron ore fines had also been made. It is furthermore
not in dispute that the Respondent No.2 offered 25,000 MT of Grade-A iron ore
fines to the Appellant herein which was not accepted.
It
appears that in regard to the supplies made from March, 2003 to September, 2003
there had been no complaint on the part of the Appellant about any breach of
contract on the part of the Respondent No.2 On 05.09.2003, a fax was sent by
the Appellant requesting the laycan in the following terms :
"After
the successful completion of mv Susan S, we now look forward to receiving the laycan
for the next shipment of Grade-B Iron Ore Fines in the month of September.
We
look forward to receiving your confirmation at the earliest please, to enable
us to nominate a suitable vessel." Yet again by a fax dated 09.09.2003,
its request was reiterated stating that it had signed the sale contracts with
some of its long term buyers and was looking forward for completing the balance
shipments and honouring its commitment to both Respondent No. 2 and its buyers.
A request was made by the Appellant seeking for personal intervention of the
matter by the Chairman and Managing Director of Respondent No.2.
The
Board Sub-Committee On Sales Policy of Respondent No.2, however, by a
resolution dated 22.09.2003 resolved :
"Out
of the total quantity of A, B & C grade Iron Ore fines, two C-grade and one
B-grade material has been shipped by M/s Noble Resources Ltd., Hong Kong and
another B-grade material is due to be loaded during the current month. It was
informed that there is a stock of 60,000 MT A-grade material, 1 lakh MT B-grade
material and 2.40 lakh MT C-grade material at Daitari.
After
receipt of information from L.C. and confirmed by Company Secretary, it was
decided that 60,000 MT, A-grade material is to be shipped to M/s Noble resources,
Hong Kong even after 30.08.03 and the party should be pursued not to insist for
the balance quantity of A-grade as it is physically not available with OMCV and
hence cannot supply the 2nd shipment of A-grade." "Further as NINL
has agreed that they will be lifting Iron Ore Fines from October, 03 onwards,
the requirement is to be reviewed and for the time being export sale of C-grade
fines may be postponed.
Therefore,
the tender auction taken by OMC Ltd. should be cancelled invited in the News
Paper and Website of OMC Ltd. for information of all concerned. On the basis of
the above decision the tender for export sale of 1,80,000 MT of C-grade Iron Ore fines was
cancelled." The said resolution was evidently taken in view of the
increase of the rates of iron ore fines in the international market, which has
gone up manifold. Yet again the Board Committee On Sales Policy of the Respondent
No.2 decided as follows:
-
"The
validity of the tender will not be extended beyond 30.09.2003 and therefore no
further quantity shall be supplied to M/s Noble Resources Ltd.
-
Fresh tender may
be invited for B-Grade Iron Ore fines for
one shipment and one shipment of C- Grade. However, while doing so it must be
ensured that the quantity is available for export after meeting the requirement
of NINL." However, despite a reminder, no action had been taken and in the
meantime another invitation of tender was published. It is not in dispute that
the Appellant also participated in the subsequent tender.
A writ
petition was filed by the Appellant in the Orissa High Court.
In its
first counter affidavit the Respondent No.2, inter alia, stated :
"That
the Board Sub-Committee on Sales Policy held on 8.5.2993 of OMC Ltd., decided
to review the export of Iron Ore fines on the basis of tender finalized in January-February, 2003.
Basing on the above direction the Board of Directors in their 339th meeting
held on 26.08.03 took the following decisions :
"Regarding
export of A-grade Iron ore fines, it was decided to examine if there is a penal
provision in the agreement/tender for non- fulfillment of obligation on the
part of OMC Ltd.
It
should also examine whether any legal complicacy arises if the A variety ore
will be kept reserved for NINL. For the C-grade, Board approved for inviting
fresh Tender" Accordingly, tender was floated for a quantity of 1,80,000/-
MT +/- 10% of C-grade Iron Ore fines in all editions of ECONOMIC TIMES on 4.9.2003. The Board
Sub-Committee on sale held on 22.09.2003 observed as follows:
-
"Out of the
total quantity of A B & C grade Iron Ore fines, two C-grade and one B-grade
material has been shipped by M/s Noble Resources Ltd., Hong Kong and another
B-grade materials is due to be loaded during the current month. It was informed
that there is a stock of 60,000 MT A-grade materials, 1 lakh MT B-grade
material and 2.40 lakh MT C-grade material at Daitori. After receipt of
information from L.C. and confirmed by Company Secretary, it was decided that
60,000 MT, A-grade material is to be shipped to M/s Noble Resources, Hong Kong
even after 30.08.2003 and the party should be perused not to insist for the
balance quantity of A-grade as it is physically not available with OMC and
hence cannot supply the 2nd shipment of A-grade"
-
"Further as
NINL has agreed that they will be lifting Iron Ore fines from October 03 onwards, the
requirement is to be reviewed and for the time being export sale of C-grade
fines may be postponed.
Therefore,
the tender auction taken by OMC Ltd., should be cancelled invited in the News
Paper and Website of OMC Ltd. for information of all concerned. On the basis of
the above decision the tender for export sale of 1,80,000 MT of C-grade Iron Ore fines was
cancelled.
-
That this matter
was further referred to Board Committee on sales Policy held on 24.10.2003.
The
Committee decided as follows :
-
The validity of
the tender will not be extended beyond 30.09.2003 and therefore no further
quantity shall be supplied to M/s Noble Resources Ltd.
-
Fresh tender may
be invited for B-grade Iron Ore fines for one shipment and one shipment of C-grade.
However,
while doing so it must be ensured that the quantity is available for export
after meeting the requirement of NINL." However, somehow a different stand
was taken by the Respondent No.2 in its additional counter affidavit as it
assigned the following reasons for its ability to supply iron ore fines,
stating:
-
"The
primary crusher at Daitari which was an old plant got break down during the
contractual period and the spares were not available in India for immediate repair. As a result
production of "A" & "B" grade iron ore got affected.
-
The working
permission issued by the Government of India, Ministry of Environment and
Forest expired on 13.03.2003 and the same was issued afresh by Government of
India only on 9.4.2003, during which period there could not be any production.
-
Production of
"A" grade Ore was to be made by Selective Mining
which could not be possible due to restrictions imposed by the Director General
Mines, Safety, Government of India.
-
Railway Rakes
were not available for transportation of Iron Ore Fines from Daitari to Paradip,
despite persuasion of OMC with the Railway Authorities.
Further,
during the said contractual period OMC has not sold iron ore of any grade to
any party other than to M/s. Neelachal Ispat Nigam Ltd., which is wholly
Government owned undertaking with which Government of Orissa and OMC has a long
term understanding for supply of iron Ore to sustain the steel plant of
NINL." By reason of the impugned judgment, a Division Bench of the Orissa
High Court dismissed the writ petition, inter alia, opining that it involved
enforcement of a contract qua contract and thus not maintainable.
Mr. Ashok
Desai, the learned Senior Counsel appearing on behalf of the Appellant, would
submit:
-
When a State-owned
monopoly acts unfairly and unjustly, the action being violative of the equality
clause contained in Article 14 of the Constitution of India; a writ petition
would be maintainable;
-
A contract of
supply should not be terminated on the premise that the price of the commodity
has gone up in the international market which cannot be said to be either
reasonable or bona fide;
-
The Respondent
No.2 having taken two different stands before the High Court, arbitrariness and
unreasonable on its part was self-evident;
-
The High Court
committed a manifest error insofar as it failed to take into consideration that
a monopoly concern should be directed to honour its contractual obligations in
view of the decision of this Court in ABL International Ltd. and Another v.
Export Credit Guarantee Corporation of India Ltd. and Others [(2004) 3 SCC
553];
-
Remedies
available in a suit per se cannot be a ground to refuse relief under Article
226 of the Constitution of India.
Dr.
Rajeev Dhawan, the learned Senior Counsel appearing on behalf of the
Respondent, on the other hand, would submit that:
-
The Appellant
itself having shown its inability to lift iron ore fines in accordance with the
schedule and there being no complaint in respect of supplies made from March to
September, the writ jurisdiction of the High Court under Article 226 of the
Constitution of India could not be invoked;
-
The writ
petition having been filed only having regard to the escalating prices, the
High Court rightly refused to exercise its discretionary jurisdiction;
-
The main plea
raised by the Appellant being applicability of the doctrine of promissory estoppel
which having no application in contractual matters, the writ petition was not
maintainable;
-
A writ petition
involving disputed questions of fact would not ordinarily lie and in that view
of the mater the High Court rightly refused to exercise its extra ordinary
jurisdiction;
-
When a decision
is taken for business purposes, the courts should not readily infer
arbitrariness on the part of the State; and
-
In any event, a
writ petition for specific performance of contract would not lie when damages
can be awarded for breach of contract.
The
Respondent No.2 is a 'State' within the meaning of Article 12 of the
Constitution of India. Its conduct in all fields including a contract is
expected to be fair and reasonable. It was not supposed to act arbitrarily,
capriciously or whimsically.
It is
trite that if an action on the part of the State is violative the equality
clause contained in Article 14 of the Constitution of India, a writ petition
would be maintainable even in the contractual field. A distinction indisputably
must be made between a matter which is at the threshold of a contract and a
breach of contract; whereas in the former the court's scrutiny would be more
intrusive, in the latter the court may not ordinarily exercise its
discretionary jurisdiction of judicial review, unless it is found to be violative
of Article 14 of the Constitution. While exercising contractual powers also,
the government bodies may be subjected to judicial review in order to prevent
arbitrariness or favouritism on its part. Indisputably, inherent limitations
exist, but it would not be correct to opine that under no circumstances a writ
will lie only because it involves a contractual matter.
This
dicta of law was laid down by this Court as far back in1977, wherein this Court
in Radhakrishna Agarwal and Others v. State of Bihar and Others [(1977) 3 SCC
457] accepted the division of types of cases made by the Patna High Court in
which breaches of alleged obligation by the State or its agents could be set
up. It read as under:
-
" Where a
petitioner makes a grievance of breach of promise on the part of the State in
cases where on assurance or promise made by the State he has acted to his
prejudice and predicament, but the agreement is short of a contract within the
meaning of Article 299 of the Constitution;
-
Where the
contract entered into between the person aggrieved and the State is in exercise
of a statutory power under certain Act or Rules framed thereunder and the
petitioner alleges a breach on the part of the State; and
-
Where the
contract entered into between the State and the person aggrieved is
non-statutory and purely contractual and the rights and liabilities of the parties
are governed by the terms of the contract, and the petitioner complains about
breach of such contract by the State."
It was
further observed:
"In
the cases before us, allegations on which a violation of Article 14 could be
based are neither properly made nor established. Before any adjudication on the
question whether Article 14 of the Constitution could possibly be said to have
been violated, as between persons governed by similar contracts, they must be
properly put in issue and established. Even if the appellants could be said to
have raised any aspect of Article 14 of the Constitution and this Article could
at all be held to operate within the contractual field whenever the State
enters into such contracts, which we gravely doubt, such questions of fact do
not appear to have been argued before the High Court. And, in any event, they
are of such a nature that they cannot be satisfactorily decided without a
detailed adduction of evidence, which is only possible in ordinary civil suits,
to establish that the State, acting in its executive capacity through its
officers, has discriminated between parties identically situated. On the
allegations and affidavit evidence before us we cannot reach such a conclusion.
Moreover, as we have already indicated earlier, the correct view is that it is
the contract and not the executive power, regulated by the Constitution, which
governs the relations of the parties on facts apparent in the cases before
us." It may, however, be true that where serious disputed questions of
fact are raised requiring appreciation of evidence, and, thus, for
determination thereof, examination of witnesses would be necessary; it may not
be convenient to decide the dispute in a proceeding under Article 226 of the
Constitution of India.
On a
conspectus of several decisions, a Division Bench of this Court in ABL
International Ltd. (supra) opined that such a writ petition would be
maintainable even if it involves some disputed questions of fact. It was stated
that no decision lays down an absolute rule that in all cases involving
disputes questions of facts, the party should be relegated to a civil court.
In Mahabir
Auto Stores & Others v. Indian Oil Corporation and Others [(1990) 3 SCC
752], this Court observed:
"It
appears to us that rule of reason and rule against arbitrariness and
discrimination, rules of fair play and natural justice are part of the rule of
law applicable in situation or action by State instrumentality in dealing with
citizens in a situation like the present one. Even though the rights of the
citizens are in the nature of contractual rights, the manner, the method and
motive of a decision of entering or not entering into a contract, are subject
to judicial review on the touchstone of relevance and reasonableness, fair play,
natural justice, equality and non-discrimination in the type of the
transactions and nature of the dealing as in the present case." In State
of Uttar Pradesh and Others v. Vijay Bahadur Singh
and Others [(1982) 2 SCC 365], a Division Bench of this Court held that the
Government cannot be denied to exercise its discretionary power provided the
same is not arbitrary.
Interplay
between writ jurisdiction and contractual disputes has given rise to a plethora
of decisions by this Court. See for example M/s Dwarkadas Marfatia & Sons
v. Board of Trustees of the Port of Bombay [(1989) 3 SCC 293] and Mahabir Auto
Stores (supra).
In Jamshed
Hormusji Wadia v. Board of Trustees, Port
of Mumbai and Another [(2004) 3 SCC 214],
this Court stated:
"The
position of law is settled that the State and its authorities including
instrumentalities of States have to be just, fair and reasonable in all their
activities including those in the field of contracts. Even while playing the
role of a landlord or a tenant, the State and its authorities remain so and
cannot be heard or seen causing displeasure or discomfort to Article 14 of the
Constitution of India.
It is
common knowledge that several rent control legislations exist spread around the
country, the emergence whereof was witnessed by the post-World War scarcity of
accommodation. Often these legislations exempt from their applicability the
properties owned by the Government, semi-government or public bodies,
Government-owned corporations, trusts and other instrumentalities of State"
Non statutory contracts have, however, been treated differently. [See Bareilly Development Authority and Another
v. Ajai Pal Singh and Others [(1989) 2 SCC 116].
A
distinction is also made between performance of a statutory duty and/or dealing
of a public matter by a State and its commercial activities.
[See
Indian Oil Corporation Ltd. v. Amritsar Gas
Service and Others (1991) 1 SCC 533] and L.I.C. of India v. Escort Ltd. [(1986) 1 SCC 264].
In ABL
International Ltd. (supra), this Court opined that on a given set of facts, if
a State acts in an arbitrary manner even in a matter of contract, a writ
petition would be maintainable. It was opined:
"It
is clear from the above observations of this Court, once the State or an
instrumentality of the State is a party of the contract, it has an obligation
in law to act fairly, justly and reasonably which is the requirement of Article
14 of the Constitution of India. Therefore, if by the impugned repudiation of
the claim of the appellants the first respondent as an instrumentality of the
State has acted in contravention of the above said requirement of Article 14,
then we have no hesitation in holding that a writ court can issue suitable
directions to set right the arbitrary actions of the first respondent"
Contractual matters are, thus, not beyond the realm of judicial review.
Its
application may, however, be limited.
Although
terms of the invitation to tender may not be open to judicial scrutiny, but the
courts can scrutinize the award of contract by the Government or its agencies
in exercise of their power of judicial review to prevent arbitrariness or favouritism.
[See Directorate of Education and Others v. Educomp Datamatics Ltd. and Others
(2004) 4 SCC 19].
However,
the court may refuse to exercise its jurisdiction, if it does not involve any
public interest.
Although
the scope of judicial review or the development of law in this field has been
noticed hereinbefore particularly in the light of the decision of this Court in
ABL International Ltd. (supra), each case, however, must be decided on its own
facts. Public interest as noticed hereinbefore, may be one of the factors to
exercise power of judicial review. In a case where a public law element is
involved, judicial review may be permissible.
[See Binny
Ltd. and Another v. V. Sadasivan and Others [(2005) 6 SCC 657] and G.B. Mahajan
and Others v. Jalgaon Municipal Council and Others [(1991) 3 SCC 91].
In
State of U.P and Another. v. Johri Mal [(2004) 4
SCC 714], it was held :
"It
is well settled that while exercising the power of judicial review the court is
more concerned with the decision-making process than the merit of the decision
itself. In doing so, it is often argued by the defender of an impugned decision
that the court is not competent to exercise its power when there are serious
disputed questions of facts; when the decision of the Tribunal or the decision
of the fact-finding body or the arbitrator is given finality by the statute
which governs a given situation or which, by nature of the activity the
decision- maker's opinion on facts is final. But while examining and scrutinising
the decision-making process it becomes inevitable to also appreciate the facts
of a given case as otherwise the decision cannot be tested under the grounds of
illegality, irrationality or procedural impropriety. How far the court of
judicial review can reappreciate the findings of facts depends on the ground of
judicial review. For example, if a decision is challenged as irrational, it
would be well-nigh impossible to record a finding whether a decision is
rational or irrational without first evaluating the facts of the case and
coming to a plausible conclusion and then testing the decision of the authority
on the touchstone of the tests laid down by the court with special reference to
a given case. This position is well settled in the Indian administrative law.
Therefore,
to a limited extent of scrutinising the decision- making process, it is always
open to the court to review the evaluation of facts by the decision-maker."
Another field where judicial review is permissible would be when mala fide or
ulterior motives is attributed. In Asia Foundation and Construction Ltd. v.
Trafalgar House Construction India Ltd. and Others [(1997) 1 SCC 738], this
Court held :
"We
are of the considered opinion that it was not within the permissible limits of
interference for a court of law, particularly when there has been no allegation
of malice or ulterior motive and particularly when the court has not found any mala
fides or favouritism in the grant of contract in favour of the appellant"
It was further held :
"Therefore,
though the principle of judicial review cannot be denied so far as exercise of
contractual powers of government bodies are concerned, but it is intended to
prevent arbitrariness or favouritism and it is exercised in the larger public
interest or if it is brought to the notice of the court that in the matter of
award of a contract power has been exercised for any collateral purpose. But on
examining the facts and circumstances of the present case and on going through
the records we are of the considered opinion that none of the criteria has been
satisfied justifying Court's interference in the grant of contract in favour of
the appellant" We, however, having regard to ABL International Ltd
(supra), do not accept Dr. Dhawan's contention that only because there exists a
disputed question of fact or an alternative remedy is available, the same by
itself would be sufficient for the High Court to decline its jurisdiction.
The
case at hand may be considered having regard to the aforementioned legal
principles in mind. The parties indisputably were bound by the terms of the
contract.
For
determining the dispute; conduct of the Appellant was also relevant. Indisputably,
the Respondent No.2 in its letter dated 28.02.2003 offered consignment of
25,000 MT of iron ore fines. It did not lift the same on the ground that a
small load would be unacceptable. On 13.05.2003, it lifted the quantity of
46,280 MT of iron ore fines, although the said quantity would also be small
load. Although the consignment was to be on monthly basis, it had been
rescheduled.
In the
writ petition it was averred :
"Referring
to the present stock of 25,000 MT of A Grade iron ore referred to in the letter
of acceptance of Opposite Party No.2, the Petitioner stated it was not viable
to ship a parcel of 25,000/- MT of iron ore on its own and that it would need a
minimum parcel of 60,000 MT. Given the tight vessel situation on the east coast
and especially in the Halia/Paradip area, the Petitioner stated that it would
be advisable for both the Opposite Party No.2 and the Petitioner to plan the
first ship in early April" The monthly schedule of shipment evidently was
altered. We have also noticed hereinbefore that there had been no complaint on
the part of the Appellant in regard to the supply of iron ore fines till
August, 2003, by which time 1,08,181 MT of iron ore fines was supplied in two
installments.
In the
month of September 60,000 MT of Grade-B iron ore and 1,20,000 MT of Grade-A
iron was to be supplied. According to the Respondent No. 2, however, such
quantity was not possible in adherence of the schedule. We have noticed
hereinbefore that in its additional affidavit before the High Court, the Respondent
No.2 has not assigned any reason which can be said to be contrary to its
earlier stand. Some more reasons have been assigned in regard to its inability
to supply iron ore fines. It its Counter Affidavit, the Respondent No.2 stated:
"That
to sum up as per tender norms of the tender floated during February, 2003, the
price and quantity was valid till end of September 2003 as there was constraint
in convergence of ore by rake from Daitari to Pradip, the buyer was intimated
by OMC Ltd., to conclude the contract on shipment to shipment basis. OMC would
have concluded the contract for the entire tender quantity in one lot with M/s
Noble Resources Ltd. Hong Kong had there been no constraint for convergence of
cargo to Paradipif the balance quantity against the tender norms would have
been supplied to the petitioner company at the tendered prices of February,
2003 the Corporation would have incurred huge loss as the price of iron ore in
the International Market has increased manifold." We may herein notice a
statement on tenders floated and accepted in respect of the iron ore fines
after 30.09.2003, which is as under :
"
DATE OF TENDER OPENING QUALITY OF IRON ORE FINES QUANTITY HIGHEST PRICE Quoted
Price in by USD/DMT PRICE QUOTED BY NOBLE USD/D MT SEE PRICE IN TENDER AT P.50
12.11.03 B-Grade-60,000 MT +- 10% C, Grade- 60,000 MT+- 10% M/s Burwill Hong
Kong M/s Burwill Hong Kong 47.10 45.10 31.75 29.25 14.96 13.86 03.02.04
C-Grade- 1.20,000 MT +- 10% Sudamin Metal, London 63.30 59.80 13.86 20.03.04
C-Grade- 1,20,000 MT +- 10% VISA Comtrade, AG, Switzerland 75.06 62.68 13.86
22.06.04 C-Grade- 1,20,,000 MT +- 10% Noble Resources, Hong Kong 25.70 25.70
13.86 07.09.04 C-Grade-60,000 MT +- 10% IMR Resources, Hong Kong 46.35 44.68
13.86 22.11.04 C-Grade- 1,20,000 MT +- 10% Noble Resources, Hong Kong 40.18 40.18
13.86 24.01.05 C-Grade-60,000 MT +- 10% Noble Resources, Hong Kong 53.08 53.08
13.86 15.03.05 C-Grade-60,000 MT +- 10% IMR Metallurgical Resources AG,
Switzerland 58.10 54.00 13.86 " The Appellant evidently participated in
subsequent tenders. It became successful in some of them. It did not raise any
protest. It took part in the said process without any demur.
We
have noticed hereinbefore that the price of iron ore fines in the international
market varied from time to time. After September, 2003, a tender was issued.
The Appellant took part in the said tender. Its tender was accepted in relation
to Grade-C iron ore fines. Its offers on 22.06.2004, 22.11.2004 and 24.01.2005
had also been accepted.
The
table quoted hereinbefore also points out that the Appellant had also
understood the implication of phenomenal rise in price in the international
market.
We may
at this juncture furthermore notice that the contractual terms came to an end
in September, 2003. It participated in the bids of prices much higher than the
contractual prices during the period 12.11.2003 and 03.02.2004. The stand of
the Respondents that only having regard to the fact that there had been
increase in the prices, the Appellant filed a writ petition only in February,
2004, cannot be said to be wholly misconceived.
The
submission of Mr. Desai that rise in international price would not by itself be
a relevant consideration to rescind the contract may be correct, but then the
same was not the sole ground for the Respondent No.2 to refuse to supply iron
ore fines to the Appellants.
Moreover,
certain serious disputed questions of fact have arisen for determination. Such
disputed questions of facts ordinarily could not have been entertained by the
High Court in exercise of its power of judicial review.
Ordinarily,
a specific performance of contract would not be enforced by issuing a writ of
or in the nature of mandamus, particularly when keeping in view the provisions
of the Specific Relief Act, 1963 damages may be an adequate remedy for breach
of contract.
The
questions as to whether OMC had the available stock of iron ore fines or the
only ground to refuse supply thereof was the rise in international prices, are
matters which could not have been fully and effectively adjudicated in the writ
proceedings. It was difficult for the High to go into the other questions which
have been raised before us by the Appellant, namely, the effect of the
purported decision of OMC to offer to the Appellant 60,000 MT of 'A' Grade iron
ore fines provided the Appellant gave up all other contractual rights which
stating the bad faith on the part of OMC. We may, however, notice that although
a decision had allegedly been taken by OMC not to supply iron ore fines prior to
the expiry of the contractual period, but the same had not been communicated.
Its effect has to be determined keeping in view the fact as to whether the
Appellant suffered any loss thereby. The reasons for non-supply, we may
reiterate, may constitute a breach of contract but having regard to the conduct
of the parties, it cannot be said that the same was so arbitrary so as to
attract the wrath of Article 14 of the Constitution of India. Before us also
what has been emphasized is the purported breaches of contract by the
Respondent. A contention has also been raised by Mr. Desai that keeping in view
the facts and circumstances of this case, this Court should mould the relief.
We do not intend to do so and leave the parties to raise all contentions before
an appropriate forum.
For
the reasons aforementioned, we are of the opinion that although the approach of
the High Court was not entirely correct, its ultimate decision to refuse to
exercise its discretionary jurisdiction cannot be faulted with.
The
appeal is, therefore, dismissed. We, however, leave it open to the Appellant to
take recourse to the other remedy which is available in law. In the facts and
circumstances of the case, there shall be no order as to costs.
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