In contractual disputes, writ courts may interfere if the contract has a statutory flavour and a public element, but not when the contract is purely private in nature, and the remedy sought is specific performance, which is a civil remedy not obtainable through a writ petition.

Arijit Banerjee, J.

1. In the present writ petition, the petitioner seeks a direction commanding the respondents to execute the formal Agreement and issue work order in terms of Clause 11 of the Tender dated 13.01.2014 and also prays for refund of Earnest Money Deposit which according to the petitioner, the respondents have wrongfully withheld.

Case of the Petitioner:-

2. For the purpose of setting up of a Crash Barrier Unit at Kaisergang (UP), the respondent no. 1 (hereinafter referred to as ‘SAIL’) desired to appoint a Conversion Agent. On 13.01.2014 SAIL published notice inviting tender. SAIL had guaranteed that it would utilize 75 per cent of the entire production and that the appointment of Conversion Agent would be initially for five-years and extendable up to a period of eight years. The Conversion Agent was required to pay Rs. 30 lacs as Earnest Money Deposit and Rs. 40 lacs as Security Deposit. SAIL was required to issue a Letter of Intent in favour of the successful tenderer within sixty days and the Conversion Agent was required to procure the land for setting up of the unit within thirty days thereafter. The Conversion Agent had to put up the unit within a period of 18 months. The Agreement was required to be signed and work order was required to be issued by SAIL thereafter. Clause 26 of the Tender document is an arbitration clause for resolution of possible disputes between the parties through the process of arbitration.

3. The petitioner participated in the tender process and became the successful bidder. It deposited earnest money of Rs. 30 lacs and also furnished the Bank guarantee of Rs. 40 lacs towards security deposit as required by SAIL. It also complied with all other requisite formalities.

4. SAIL issued the Letter of Intent dated 06.02.2014 in favour of the petitioner. The Letter of Intent stated, inter-alia, that the petitioner was required to procure the land for the project as per the tender terms within thirty days from the date of Letter of Intent and that the petitioner was required to put up a new unit/plant for production of crash barriers out of input material supplied by SAIL and the unit should be ready within a maximum period of 18 months from the date of Letter of Intent. It also stated that on compliance of the aforesaid within the time prescribed, SAIL shall issue a work order enabling the petitioner to commence conversion work envisaged under the contract awarded to the petitioner.

5. The petitioner procured the requisite land for setting up the unit within the stipulated period of thirty days and submitted the deed of agreement as also the revenue records to SAIL.

6. On 19 July, 2014 SAIL sought some clarification from the petitioner as regards the title and the total land area. This was followed by another letter dated 28 July, 2014 wherein SAIL stated that on receiving the clarification it would complete other formalities. The petitioner furnished the required clarifications on 6 August, 2014.

7. In spite of the petitioner having completed all the formalities and having discharged all its obligations, no work order has been issued by SAIL in favour of the petitioner. The petitioner through its lawyer’s notice dated 28 October, 2014 called upon SAIL to sign the requisite Agreement forthwith and to refund the Earnest Money Deposit. However, there was no response to the said notice nor did SAIL sign the Agreement or issue work order.

8. After fulfilling all its obligations, the petitioner legitimately expected that being a well-known Government of India Enterprises, SAIL would act fairly and execute the Agreement followed by the issuance of work order. After the petitioner furnished the clarifications sought for by SAIL, there was no further query from SAIL. The Letter of Intent was never revoked by SAIL. Since the petitioner was under an obligation to set up the unit within 18 months from the date of the Letter of Intent, it started developing the land, engaged architects, consultants,