1983 Supreme(MP) 427
High Court Of Madhya Pradesh
C. P. Sen and M. D. Bhatt, JJ.
SMITA CONDUCTORS PVT.LTD., BOMBAY - Appellant
Versus
MADHYA PRADESH STATE ELECTRICITY BOARD - Respondents
Misc. Petn. 2014 Of 1983
Decided On : 10/12/1983
Deepak Verma, M.L.JAISWAL, R.P.Verma, S.RANGARAJAN, V.MOHAN, Y.S.DHARMADHIKARI
Headnote:(1) Constitution of India-Arts. 12,226 and 299-statutory Corporation is a State - Contract by such Corporation -is a sort of Contract under Art 299 -High Court has power to ask the Corporation to fulfil its representation.
The respondent, being a statutory corporation it is a state within the meaning of Article 12 of the Constitution. The Court can compel the authority under Article 226 to fulfil its representation within the scope of its authority which raises a promissory estoppel, where the Petitioner; have altered its position on the basis of that representation where the contract is sort of a contract under Article 299 of the Constitution. [Para 6
(2) Constitution of India -Art. 226 -scope of - contract not entered into under statutory powers-obligation can only be enforced by filing civil suit- no relief under Art. 226 can be given.
The contract with the petitioners was not entered into by the respondent in pursuance of its statutory duty no such duty is cast on the respondent to enter into contracts to purchase conductors. One of its duties is laving of transmission lines May be conductors are essential Components for erecting the trans mission lines and at present the respondent is not manufacturing any conductors and has to purchase the Same from other suppliers, Statutory duty is to lay transmission lines and discretion bas been given to the respondent as to how best to carry out the work. The conductors required for laying down of the transmission lines may be manufactured by it self or purchased from the market by the respondent. There is no such statutory obligation to make a purchase or for that matter any particular type of conductor from any particular purchaser in such a case though the Court may compel the respondent for laying a transmission line. it cannot compel it to perform it in a manner directed by the Court so the transaction between the petitioners and the respondent is purely contractual and has to be enforced like any other contract by filing a civil suit. AIR 1975 SC 1121, AIR 1976 SC 2045, AIR 1977 SC 1496. AIR 1980 SC 2078, AIR 1981 SC 1386 and AIR 1983 SC 796 followed. AIR 1983 SC 848, AIR 1973 SC 205 AIR 1979 SC 1626 and 1949 (2) All E. R. 581 distinguished. (Para 8, 9 and 10
( 1 ) THIS is a petition under Article 226 of the Constitution of India amongst others praying for striking down of Clause 4 (b) of the contract entered into by the parties regarding supply of conductors by the petitioner to respondent Madhya Pradesh Electricity Board, for quashing of the letter of the respondent dated 6-11-1980 asking the petitioner to defer the supplies and tor directing the respondent to issue despatch instruction for renewing the supplies as per contract. In pursuance of the notice issued to the respondent to show cause as to why the petition be not admitted, the respondent has raised written preliminary objection regarding inability of the petition. It is contended on behalf of the respondent that this Court under its extraordinary jurisdiction under Article 226 of the Constitution can neither enforce the contract between the parties nor compel the respondent to purchase particular material from a particular party at a particular price as there is no such statutory obligation nor can strike down a term of the contract as unreasonable and arbitrary especially when the petitioner entered into the ron-tract voluntarily with open eyes. The remedy of the petitioners is to rile a civil suit but it is doubtful whether the reliefs claimed can Gven be granted in a civil suit. A rejoinder has been filed by the petitioner refuting the objection.
( 2 ) SHRI S. Rangarajan for the petitioners and Shri Y. S. Dharmadhikari for the respondent were heard at length on the preliminary objection
( 3 ) THE respondent invited tenders for supply of 8,350 Kms. of 6/1/2. 59 mm. greased ACSR Weasel Conductor and 23,050 Kms. of 6/1/2. 11 mm. greased ACSR Squirrel Conductor. The tender of the petitioners at the rate of Rs. 2,700/-per Km. for the Weasel and at the rate of Rs. 1,866/- per Km. for the Squirrel Conductors was accepted by the respondent by letter dated 22-7-1980. It was made clear that the acceptance was subject to the conditions mentioned in the letter, which shall be binding on the petitioners and no condition or stipulation to the contrary or which are inconsistent will be acceptable. Clause 4 is quoted hereinunder:-"4. Delivery:-- (a) The supplies shall commence after 2/2 1/2 months from the date of commercial and technical clear order including Letter of Credit and supply @ 600/700 Mt of Aluminium content per quarter. (b) The Board has the option to defer the scheduled supplies, if considered essential. "
( 4 ) THE value of the total supply to be made was 6,66,75,900/ -. The respondent issued its Letter of Credit dated 22-9-1980 for rupees 2. 2. crores and the petitioners supplied 4000 Km. of Weasel and 4000 Km. of Squirrel Conductors i. e. approximately one third of the total supply. However, by letter dated 6-111980 the respondent asked the petitioners to defer further supply as per Clause 4 (b) of the contract due to 'unavoidable circumstances and informed that suitable programme will be intimated later in due course. The petitioners thereupon sent a series of letters and telegrams to the respondent and the Joint President of the petitioner company met the Technical Member of the respondent. In the meanwhile, the respondent invited fresh tenders to be opened on 12-2-1982 for supply of similar types ol Conductors and the petitioner offered to co-operate by making additional supply of 4350 Kms of Weasel Conductors at Rs. 2,413 per Km and 19,650 Kms of Squirrel Conductor at Rs. 1602/- per Km i. e. at reduced rates, without prejudice to its rights under the earlier contract by its letter dated 12-2-1982 followed by other letters and Telex messages but with no response. So as a final attempt, the representatives of the petitioner company and those of Cable and Conductor Manufacturers Association of India (CACMAI) met the Chief Minister of M. P. and other officers including those of the respondent on 2-7-1983 at Bhopal and they were apprised of the difficulties faced by the petitioner because of sudden defer