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Yogendra Kumar Jalan Vs. Union of India and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial; Contract
CourtDelhi High Court
Decided On
Case NumberCivil Writ Petn. No. 592 of 1971
Judge
Reported inAIR1972Delhi234
ActsConstitution of India - Article 226; ;Indian Contract Act, 1872 - Sections 23
AppellantYogendra Kumar Jalan
RespondentUnion of India and anr.
Appellant Advocate P.C. Singhania and; M.K. Garg, Advs
Respondent Advocate D.K. Kapur and ; Rishi Kesh, Advs.
Cases Referred(Tiratha Lal v. State of West Bengal
Excerpt:
.....suffered damages to the tune of rupees 9,080/-,since the said amount was not paid the director of supplies & disposals, kanpur was entitled to recover the same by deducting it from the pending bills, if any or by any other mode. 5. a plea was also taken that if the petitioner had been ready and willing to go to arbitration it would have been referred to arbitration in terms of clause 24, but having failed to take such action the application under section 20 of the arbitration act was not maintainable. it is needless to cite any authorities for this well-established proposition. it was feebly contended by the petitioner that in the letter of acceptance the petitioner had been required without any express agreement to that effect to deliver within a period of three months, namely..........the petitioner was informed, vide the impugned letter dated 10th november, 1970, by the assistant director (supplies) (copy of which is annexure p. 9 to the petition) that a sum of rs. 9,080/- was due from the petitioner in the matter of re-purchasing the stores which the petitioner had undertaken to supply and that the said amount had to be deposited in the treasury by 30.11.1970.4. the petitioner filed a petition under section 30 of the indian arbitration act before the second civil judge, kanpur invoking clause 24 of the agreement which is an arbitration clause. in the reply filed to the petition, it was stated that on account of the failure of the petitioner to perform the contract fresh tenders were invited the risk purchase a/t was placed on messrs jagdish metal works, agra, as a.....
Judgment:
ORDER

1. The petitioner submitted a tender in response to an Invitation to Tender dated 19.10.1968, in respect of the supply of 2,580 Kgs. of rivets brass spear point in inch sizes of 3/4' at the rate of Rs. 13.18 per Kg. and offered to complete the supply by the end of March, 1969. The order had to be placed by the second respondent by 31.12.1968. In other words, the delivery period was to be 3 months from the last date by which the tender could be accepted by the office of the Director of Supplies & Disposals, Kanpur (Ministry of Foreign Trade and Supply). By his letter dated 7.4.1969 (copy of which is R. 8 to the return filed by the respondents) the petitioner had agreed to keep the offer open up to 1.5.1969 as described by the Director of Supplies & Disposals, Kanpur by his Letter dated 1.4.1969. The offer of the petitioner was accepted on 1.5.1969, the tenders having been opened on 30.11.1968. A registered letter containing the said acceptance was duly posted on the same day i.e. on 1.5.1969 to the petitioner. A telegram was sent by the petitioner bearing date 1.5.1969 to the Director of Supplies & Disposals, Kanpur quoting rate of Rs. 14.28 per Kg. instead of Rs. 13.18 per Kg. quoted in the tender. It was mentioned in the telegram, a copy of which was also sent by post, that the petitioner was compelled to increase the rate on account of heavy increase in prices of raw materials and also stating that the validity of their offer expired on 1.5.1969. This telegram was received by the Director of Supplies & Disposals, Kanpur on 2.5.21969.

2. The contract in this case is governed by the conditions of the contract in the Form DGS&D-68; (Revised), Clause 18 of which provides that 'whenever any claim for payment of a sum of money arises out of or under the contract against a contractor, the purchaser shall be entitled to recover such sum by appropriating in whole or in part, the security, if any deposited by the contractor and for the purpose of aforesaid, shall be entitled to sell and / or realise securities forming the whole or part of any such security deposit. In the event of the security being insufficient, the balance and if no security has been taken from the contractor, the entire sum recoverable shall be recovered by appropriating any sum then due or which at any time thereafter may become due to the contractor under the contract or any other contract with the purchaser or the Government or any person contracting through the Secretary, if such sum even be not sufficient to cover the full amount recoverable the contractor shall on demand pay to the purchaser the balance remaining due.'

3. The Director of Supplies a Disposals, Kanpur having made re-purchase the petitioner was informed, vide the impugned letter dated 10th November, 1970, by the Assistant Director (Supplies) (Copy of which is Annexure P. 9 to the petition) that a sum of Rs. 9,080/- was due from the petitioner in the matter of re-purchasing the stores which the petitioner had undertaken to supply and that the said amount had to be deposited in the Treasury by 30.11.1970.

4. The petitioner filed a petition under Section 30 of the Indian Arbitration Act before the Second Civil Judge, Kanpur invoking Clause 24 of the agreement which is an arbitration clause. In the reply filed to the petition, it was stated that on account of the failure of the petitioner to perform the contract fresh tenders were invited the risk purchase A/T was placed on Messrs Jagdish Metal Works, Agra, as a result of which the Union of India suffered damages to the tune of Rupees 9,080/-, since the said amount was not paid the Director of Supplies & Disposals, Kanpur was entitled to recover the same by deducting it from the pending bills, if any or by any other mode.

5. A plea was also taken that if the petitioner had been ready and willing to go to arbitration it would have been referred to arbitration in terms of Clause 24, but having failed to take such action the application under Section 20 of the Arbitration Act was not maintainable.

6. The petitioner, however, with drew the application made under Section 20 of the Indian Arbitration Act and has filed the present writ petition contending, among other things, as follows:

(1) that there was no concluded contract between the petitioner and the Director of supplies & Disposals;

(2) that the agreement to supply the stores in inch sizes was against the express provisions of law, namely, Section 13 of the Standards of Weights and Measures Act 1956 read with Section 7 of the U.P. Weights & Measures (Enforcement) Act, 1959;

(3) that the respondents could not claim the right to decide for themselves, without recourse to the process of law and seek to recover the amount of Rs. 9,080/- against pending bills payable to the petitioner.

7. The plea that there was no concluded contract between the petitioner and the Director of Supplies & Disposals, Kanpur is totally opposed to the stand taken by the petitioner while filing a petition under Section 20 of the Indian Arbitration Act. The said petition proceeded on the footing that there was a concluded contract between the petitioner and the respondents and the petitioner was entitled to invoke the arbitration clause in the said agreement. Nowhere was it suggested that there was no contract; there could not have been an application under Section 20 except on the footing that there was a concluded contract. The petitioner's subsequent offer to supply at Re.1/- per Kg., more than what was originally offered was characterised in the said petition (copy of which is Annexure R.1 (A) to the return filed by the respondents) as a 'novation' in 'the rate' necessitated on account of increase of the raw material by lapse of time. The expression 'novation' itself means that there was previously a concluded contract; there were also references, at several places, in the petition to a previous 'contract' and the same being 'repudiated and cancelled'.

The present stand in the Writ Petition that there was no concluded contract because there was no acceptance of the tender is thus totally opposed to the stand taken by the petitioner in the petition under Section 20. A Court exercising writ jurisdiction will not permit a stand to be taken by the petitioner opposed to the one which he had taken earlier, the issuance of a writ being a discretionary relief. It is needless to cite any authorities for this well-established proposition. However, the decision in : AIR1967Mad118 (Mold. Habibullah Sahib v. Special Duty Collector for Land Acquisition, Madras) may be usefully referred to. In that case a person had applied for enhancement of the compensation awarded to him during land acquisition proceedings, but subsequently invoked the writ jurisdiction of the High Court for the purpose of questioning the validity of the land acquisition itself. It was held following a decision in (1962) 66 Cal 115 (Tiratha Lal v. State of West Bengal) that this was not permissible.

8. The present contention of the petitioner is that the petitioner received the registered letter, dated 30-4-1969 conveying the acceptance by the Dgs only on 6-5-1969, that before the receipt of the letter of acceptance the petitioner had withdrawn the offer to supply at Rs.13.18 per Kg., and that he demanded one rupee per Kg., extra. The time of accepting the tender having been extended by the petitioner, without any condition, until 1-5-1969 it was open to the Director of Supplies & Disposals, Kanpur to accept the tender before the expiry of the extended period, namely, 1-5-1969. According to Section 4 of the Indian Contract Act the communication of an acceptance is complete as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor. The telegram sent by the petitioner did not reach the Director of Supplies & Disposals, Kanpur before the acceptance was communicated by the above-said registered letter. There is, thereforee, no substance in the plea, which is now put forward that there was no concluded contract. It was feebly contended by the petitioner that in the letter of acceptance the petitioner had been required without any express agreement to that effect to deliver within a period of three months, namely 31-7-1969. It is worth recalling that the delivery period originally was end of March 1969, when the offer was open for acceptance till 30-1-1969. The period of delivery mentioned in the above said registered letter was not more than the period stipulated for delivery earlier. In any even the petitioner had made no complaint about the period fixed for delivery in any of his communications to the Director of Supplies & Disposals, Kanpur not even in the present Writ Petition.

Point (2).

9. I am unable to see any force in the contention of the petitioner that merely because the size had been mentioned in inches, namely, 3/4' and not in terms of metric measures, the whole contract was opposed to law and thereforee invalid. The petitioner had not even complained about this. He had himself agreed to supply in inches. If he had required it there would have been the least objection in the matter of converting inches into centimetres. It is stated in the return filed by the respondents that if the petitioner had raised any objection to the supply being described in inches the same could have been got amended according to the metric system. None of the cases decided under Section 23 of the Indian Contract Act, which have been relied upon by the petitioner, pertaining to illegal contracts and the application of the doctrine of in pari delicto have any application. The petitioner, in the language of Dening, L.J., is scanning the contract to find some meaningless clause on which to ride free (vide Nicolene Ltd., v. Simmonds 1953 1 Qb 543.

point (3)

10. In the face of clause 18 quoted above, enabling the Director of Supplies and Disposal, Kanpur, whenever any claim for payment of a sum of money arises out of or under the contract against the contractor to recover such sum by appropriating in whole or in part, the security deposited by the contractor and in the event of the security being insufficient out of any sum that may thereafter become due to the contractor under the said contract or any other contract, the petitioner cannot agitate any grievance against the government seeking to appropriate the above-said loss incurred on account of the risk repurchase from out of other bills. There is no question of any determination involved here for it is a case of appropriating the said amount of actual loss incurred in the above-said manner on foot of the said agreement. The petitioner has not even challenged the legality of the said clause 18 in the present Writ Petition. All that he has claimed is that the respondents could not be a judge in their own cause and decide what amount they should recover in respect of the breach of the said contract from the petitioner. There is no question of any determination involved in this process because, as it has been explained in the return, the said amount of Rs.9,080/- represents the loss incurred in the repurchase of stores at the petitioner's risk, a course expressly made available under the said contract to the Director of Supplies and Disposals. It being stated, as a fact, that the said sum was the loss so incurred it is not possible in this Writ Petition to go into any disputed question of fact. The scope of the contract is plain; clause 18 provides for the above kind of recovery of any sum which the Government claims against contractor, and clause 24 provides for the arbitration in case of dispute in this regard. Any dispute in this regard may legitimately form the subject-matter of a reference to arbitration. In this view the contention that clause 18 is illegal does not seem possible; even if it is possible the point not having been expressly taken in the writ Petition that the said clause 18 is illegal and void, the said question does not fall for decision in this Writ Petition.

11. It is only necessary to advent to the point concerning jurisdiction of the Court, which was taken. Since I have found against the petitioner on the merits this question is not of any real importance. Since the Union of India has been made a party and as it is noticed from para 6 of the reply which was filed to the petition under Section 20 of the Arbitration Act by the Director of Supplies and Disposals, Kanpur (copy of which is Annexure R.3 to the return) that the Union of India suffered damages to the tune of Rupees 9,080/-. I am unable to see any substance in the point of jurisdiction which has been raised.

12. The Writ Petition, which is seen to be without merit, is dismissed with costs. Counsel fee Rs.250/-.

13. Petition dismissed.


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