1996 Supreme(Cal) 141

High Court Of Calcutta
S. B. SINHA
D.WREN INTERNATIONAL LTD. - Appellant
Versus
ENGINEERS INDIA LTD. - Respondent
W. P.  1876  Of  1995
Decided On : 03/28/1996

Headnote:

SATYA BRATA SINHA, J. ( 1 ) A letter dated 8-10-1995 cancelling acceptance of an offer made by the petitioners as regards supply of loading arms to the respondents Nos. 1 and 2 pursuant to a request for quotation for supply of loading arms as contained in Annexure 'l' to the writ application as also issuance of a global tender notice issued by the first respondent in terms of its letter dated 10th October, 1995 in Annexure 'm' thereto are the subject matter of the present writ application.

Fact of the Case:

The fact of the matter shortly stated is as follows :-A request for quotation for supply of loading arms was made by the petitioner on or about 14-9-1994 in relation where two bids were required to be submitted in two parts; (i) the unpriced bid complete with technical and commercial details and (ii) price bid complete with all technical details and commercial details as also with full price details. ( 3 ) TECHNICAL specification were required to be given in terms of the requisition attached thereto and in case of revision the same were required to be spelt out. The petitioners submitted their technical commercial bid and price bid on 24-10-1994. Various letters were exchanged and discussions were held for a period of over nine months. By a fax dated 5-8-1995 the offer of the petitioner was accepted by the respondent No. 1 as contained in Annexure-I to the writ application; one of the clauses whereof required joint signature and acceptance of purchase orders by the petitioners as also its American collaborator O. P. W. Engineering System, USA (hereinafter referred to as the 'collaborator' ). On the same date the said offer was accepted by the petitioner but by a fax dated 10th August, 1995 the respondent No. 1 requested the petitioners to hold action on fax of acceptance, which the petitioner agreed in terms of its fax message dated 14th August, 1995 without prejudice to its rights and contentions. However, on 8-10-1995 the respondent No. 1 intimated to the petitioner by a fax message that the earlier fax of acceptance of offer dated 5-8-1995 was cancelled and a decision to reissue tender was intimated to it whereafter on 10th October, 1995 a global notice was issued inviting tenders for supply of loading arms.

Finding of the Court:

The said respondent also contend that the writ petition is not maintainable as :- (a) It involves various disputed questions of fact; (b) The writ petitioners had no enforceable right as no concluded contract had been arrived at nor any firm commitment against the general principles as well as the terms and conditions of the tender was made; (c) No purchase order has been issued having regard to the terms of the tender as well as the agreed minutes dated 31st July, 1995.

Issues: The question which, therefore, arise for consideration in this application are :- (i) Whether this Court has territorial jurisdiction to entertain the writ application and in any event whether this Court should exercise its jurisdiction in the facts and circumstances of the case. (ii) Whether the impugned order terminating the alleged contract and issuing the global tender notice suffers from illegality, irrationality or procedural irregularity. (iii) Whether the petitioner had a legitimate expectation to be awarded the contract in question.

Ratio Decidendi: The core question which arises for consideration in this application is as to whether there had been a concluded contract and such contract was concluded in Calcutta as also the fact as to whether the action on the part of the First Respondent to repudiate contract was communicated to the petitioner at Calcutta. ( 24 ) THE petitioner has stated that the petitioner's corporate Head Quarters is at Calcutta. Of course it has its office as also carries its manufacturing and operation at 344 GIDC Waghadia in the district of Baroda in the State of Gujarat. By a fax dated 5th August, 1995 the petitioner were allegedly offered the contract. The said fax of acceptance being 3412/163 as contained in Annexure-I to the writ application although was dispatched at its Calcutta address, admittedly the same was issued from Delhi and had been accepted by the petitioner in its entirety on the same date namely 5th August 1995 at Delhi. The petitioners agreed to furnish performance guarantee on the proforma of the respondent No. 1 within 10 days. The contract, if any, was, therefore, concluded at Delhi and not at Calcutta where a copy of the said fax was sent for information. ( 25 ) THE question as to whether the parties have arrived at a concluded contract or not would depend upon the intention of the parties which has to be found out from the correspondences passed between the parties. ( 26 ) CLAUSES 9 and 13 of the said fax of acceptance read thus :-"9. Purchase order will be jointly signed and accepted by OPW collaborator and D. Wren. 13. Our general purchase conditions and other conditions attached with our enquiry documents are totally acceptable to you without any deviation whatsoever. " ( 27 ) IT is, therefore, also necessary to consider the relevant provisions of the general purchase conditions which is contained in Annexure-A to the writ application. In the said general conditions the words 'owner, vendor, contractual delivery date and project' have been defined as follows :-"the 'owner' means Indian Oil Corporation Limited, a company incorporated in India having its registered office at G. 9 Ali Yavar Jung Marg, Bandra (East) Bombay acting through Panipath Marketing Terminal and shall include its successors and assignees. 'vendor' shall mean the Person, Firm or Corporation to whom this purchase order is issued. 'contractual Delivery Date' is the date on which goods shall be delivered F. O. P. despatching point/destination in accordance with the terms of the Purchase Order. This contractual delivery date/period is inclusive of all the lead time for engineering, procurement of raw materials, manufacturing, inspection, testing, packing and any other activity whatsoever required to be accomplished for effecting the delivery at the agreed delivery point. Panipath Marketing Terminal of Indian Oil Corporation Limited (Marketing Divn.)" ( 28 ) THUS, it may be true that issuance of a purchase order plays an important role as would be evident from clause 27 of the said contract in terms whereof the right of the owner to cancel the purchase order arises only thereunder. Clause 39 of the said agreement contains arbitration clause in respect of all disputes arising out of the purchase order. Clause 40 of the said general agreement states:"the vendor hereby agree that the court situated at Bombay alone shall have the jurisdiction to hear and determine all actions and proceedings arising out of this contract. " ( 29 ) HOWEVER, in my opinion, the said clause has no application to the fact of the present case as the same does not and cannot override a constitutional provision contained in Art. 226 (2) of the Constitution of India.

Final Decision: In view of the foregoing reasons this writ application is allowed to the extent mentioned hereinbefore. The impugned orders dated 8-10-1995 and 10-10-1995 are quashed. Let a writ of mandamus issue accordingly. However, it goes without saying that it would be open to the respondent to pass an appropriate order after giving an opportunity of being heard to the petitioner but in the facts and circumstances of this case there will be no order as to costs. Petition allowed.