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The Delhi High Court has passed a judgment on 01-10-2021 in the case of M/S Sanjay Iron And Steel Ltd. Vs Steel Authority Of India ARB.P. 408/2021. Justice Suresh Kumar Kait disposed of the petition.

FACTS OF THE CASE   

Petitioner – M/s Sanjay Iron & Steel Ltd. claims to be doing business of trading of iron and steel. According to petitioner, respondent – Steel Authority of India Limited is a Government Company, who had invited online tenders for operating as Distributor involving purchasing, transportation, handling and storage, processing and sales to dealers of TMT/ TMT Coils/ at Panchkula Cluster in the State of Haryana. The petitioner claims to have submitted its tender on 08.08.2019, which was accepted by respondent vide letter of intent/acceptance bearing No. Tender No. SAIL/ NR/ Distributor/ 19-20/01A, dated 25.06.2019. Petitioner further claims to have deposited full security amount of Rs.5,00,000/- and bank guarantees to the tune of Rs.1,28,00,000/-, prepared by Union Bank of India in favour of respondent vide letter dated 23.10.2019 and complied with all the terms as per online tender terms vide reference No. CMO/ REC/ BS/CHA/Distributor- Panchkula/ 19-20 dated 30.09.2019. Petitioner had entered into an agreement dated 7.11.2019 with respondent for operating as Distributor.

According to petitioner, respondent in clear breach of terms of the agreement started executing the orders directly below 50 tones to the small consumers/ dealers whereas, it had agreed not to entertain the direct orders from small consumers / dealers below 50 tones and therefore, vide its email dated 26.10.2020, petitioner communicated its unwillingness to extend the bank guarantees and continue with the distributorship. Thereafter, petitioner requested the respondent to release the bank guarantee and credit the balance lying in their account in the form of commission, credit note, discount, EMD and excess amount lying in their account by cancelling petitioner’s orders on 22.10.2020. Besides, petitioner also raised grievance by showing difference in the rates supplied to petitioner and other dealer.

Petitioner has averred that it had invested huge amount of capital in terms of land, building development, purchase of machine as infrastructure for SAIL, employee the area sales officer as distributor and also took loan for the said purpose, consequently it had become difficult to survive, as respondent was directly feeding the customers of small quantities below the prices of petitioner. Further averred that the said respondent did not pay attention to petitioner’s request vide letter dated 03.12.2020 to rectify the breaches and also vide letter dated 19.05.2020 to give relaxation in distribution policy due to covid pandemic but to no avail.

JUDGMENT

In the case in hand, Clause-10 of the Agreement in question makes it manifestly clear that at the first instance parties shall endeavour to resolve such dispute through the SCOPE Forum of Conciliation & Arbitration and if the dispute is not settled by conciliation within 30 days of the conciliation, then the aggrieved party may refer to arbitration, which again shall be governed in accordance with the Rules of Arbitration of the “SCOPE”. In fact, respondent vide its letter dated 08.12.2020 also tendered its consent to invocation of conciliation proceedings through SCOPE. However, despite invocation of conciliation, the proceedings before the Conciliator did not commence due to non-payment of fees.

In view of afore-noted narration, this Court is of the opinion that the very purpose of keeping a conciliation clause in any Agreement is to shorten the path for settlement of disputes between the parties. Therefore, parties in the present petition are directed to first explore possibility of resolution of disputes through Conciliation in terms spelt out in Clause- 10 of the Agreement. Further directed that parties shall strictly adhere to the time line and shall conclude the conciliation proceedings within 30 days of initiation of conciliation proceedings, as agreed in Clause 10.1 of the Agreement and thereafter only disputes, if any, shall be referred to arbitration.

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JUDGMENT REVIEWED  BY ABHINAV CHATURVEDI

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The Delhi High Court has passed a judgment on 23-05-2022 in the case of Union Of India vs M/S Rail Infrastructure Ltd. O.M.P. (COMM) 227/2019. Justice Vibhu Bakhru allowed the petition.

FACTS OF THE CASE

JRIL is, inter alia, engaged in the manufacture of Railway Rolling Stock for the Indian Railways. On 13.01.2015, the Railways issued a ‘Bid Invitation and Schedule of Requirement’ [E-Tender bearing no 2014/RS(I)/954/36 (TC)] followed by the Corrigendum dated 25.03.2015, inviting electronic bids, for the manufacture and supply of the Some wagons along with their quantity. Clause 2 of the Bid Invitation and Schedule of Requirement stipulated that the aforementioned quantity was tentative, and the Railways reserved its right, without assigning any reason, to either decrease the tender quantity or discharge the tender entirely or not order some of the wagon types indicated in the tender quantity.

Pursuant to the said invitation for tenders, JRIL submitted its bid and the same was opened on 20.04.2015. JRIL was accepted as the lowest bidder (L-1 bidder). On 02.06.2015, the Railways issued the Letter of Acceptance (hereafter ‘the LoA’) communicating its decision to place an order on JRIL for supply of the some wagons at the price as quoted by JRIL. Thereafter, on 12.06.2015, the parties entered into the Contract bearing no. 2015/RS(I)/954/44/1777 (hereinafter the ‘Agreement’). In terms of the Agreement, the Railways issued an order for manufacture and supply of 1403 numbers of wagons for a total contract price of ₹151,52,40,000/- without excise duty and VAT, as the first tranche. The order for the balance 468 numbers of wagons was withheld and required to be released in the second tranche.

The Agreement was amended several times. On 31.07.2015, Amendment no. I to the Agreement was issued by the Railways. In terms of Amendment no. I, certain clauses were incorporated in the Agreement. Clause 2.4 of the Agreement, which provided that the Railways could increase/decrease the quantity upto 30%, was renumbered as Clause 2.8 of the Agreement.

On 28.08.2015, the Railways awarded a contract (bearing no. 2015/RS(I)/954/46/1779) for the supply of 1075 numbers of wagons (975 numbers of ‘BOXHNL’ wagons and 100 numbers of ‘BOSTHSM2’ wagons) to the L-2 tenderer (M/s Jupiter Wagons Limited) at the rates quoted by the said tenderer, that is, L-2 rates for BOXHNL wagons, and at L-1 rates for BOSTHSM2 wagons. This was because the said bidder as well as other bidders had declined the counter-offer made by the Railways to supply BOXHNL wagons at the L-1 rate (₹10,80,000/- as quoted by JRIL). Later the contract was amended many times by the railway.

JUDGMENT

This Court is of the view that the decision of the Arbitral Tribunal to seek to interpret Clause 2.4 of the Agreement (renumbered as Clause 2.8 of the Agreement), in a manner so as to curtail the right of the Railways to increase the quantity procured under the Agreement is, ex facie, erroneous. A plain reading of the said clause clearly indicates that the Railways was entitled to increase the quantity of the wagons during the currency of the Agreement by up to 30%. JRIL had voluntarily submitted its bid to supply BOXNHL wagons at a price of ₹10,80,000/-. The allocation of the quantities was made in conformity with the tender conditions. The Railways also had the right to alter the quantities by increasing or decreasing the same up to 30% during the currency of the Agreement. JRIL had agreed to provide additional quantities or to accept reduction in quantities without any change in the price quoted. Merely because the market value of the price of wagons or its cost of production increased, the same cannot be a ground for reading the Agreement contrary to its plain terms.

A commercial contract between the parties cannot be avoided on the ground that one of the parties subsequently finds it commercially unviable to perform the same. The Arbitral Tribunal has, essentially, re-worked the bargain between the parties and re-written the contract. This is, clearly, impermissible.

The Delhi High Court took reference from the case of PSA SICAL Terminals Pvt. Ltd v. Board of Trustees of V.O. Chidambranar Port Trust Tuticorin and Others, Supreme Court observed as – “87….In our view, re-writing a contract for the parties would be breach of fundamental principles of justice entitling a Court to interfere since such case would be one which shocks the conscience of the Court and as such, would fall in the exceptional category.”

In view of the above, the petition is allowed.

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JUDGMENT REVIEWED  BY ABHINAV CHATURVEDI

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The Karnataka High Court recently refused to quash the defamation proceedings pending against the President of Bowring Institute, who allegedly circulated objectionable cartoons defaming the complainant (an expelled member of the institute), in the newsletter to other members of the institute. This was in the case of Anoop Bajaj v. Jayanna (CRIMINAL PETITION NO.6639 OF 2022) and was presided over by a single judge bench of Justice K Natarajan.

FACTS OF THE CASE:

The case of petitioner is that the respondent filed a private complaint under section 200 of Cr.P.C. which was registered in PCR No.13515/2014 for the offences punishable under Sections 500, 501, 504, 505(2) read with Section 120-B of IPC. The learned Magistrate, after recording the sworn statement of the complainant, took cognizance against the petitioner 3 for the offence punishable under Section 500 of IPC, which is under challenge. The learned Senior Counsel appearing for the petitioner has contended that the petitioner is the President of Bowring Institute (for short ‘Institute’). The respondent, an expelled member of the Institute, committed ruckus in the premises by trespassing into the Institute along with 150 people. Therefore, a complaint was filed against the respondent by the petitioner which was registered as FIR against him for the offences punishable under sections 506, 504, 120B, 143, 147, 119, 448, 323 of IPC. Charge sheet also was filed against the respondent-complainant and others. On the special general body meeting called for by the petitioner, the petitioner sent a letter showing some pictures, cartoons and the defamatory pictures against the respondent which insulted the respondent intentionally. Therefore, the complaint came to be 4 filed against respondent-complainant, which is under challenge

JUDGEMENT:

The Court held that, “Sending the defamatory statement and the cartoons directly insulting the respondent by way of such statement, attracts Section 499 of IPC and it is not sent in good faith by the public authority in order to attract Exception 8 to Section 499 of IPC. As per Section 200 Cr.P.C., the Magistrate has received the complaint, examined the complainant by taking cognizance and postponed the issuance of process and thereafter, he has issued the process under Section 204 of Cr.P.C. Therefore, there is no flaw in the order passed by the Magistrate in taking cognizance of the offence against the petitioner.”

It further added, “it is well settled that, even in the Code of Criminal Procedure, there is no definition for the word ‘cognizance’. It is only an application of mind by a Judge. Therefore, merely not mentioning the word ‘cognizance’, cannot be said that there is no cognizance taken by the Magistrate.”

 

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JUDGEMENT REVIEWED BY PRATIKSHYA P. BEURA

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The Karnataka High Court has held that under Section 216 of Criminal Procedure Code, a trial court can only alter the charge or add to the charge which is already framed. It cannot delete a charge which has been already framed by it, said the court. This was in the case of KM And KC & ANR (CRL.R.P. NO. 919 OF 2022) and was presided over a single judge bench of Justice S Vishwajith Shetty.

FACTS OF THE CASE:
On the complaint of petitioner, a case was registered against the respondent no.1, who is her husband, in Crime no.47/2021 by Bommanahalli Police Station, Bengaluru for the offences punishable under Sections 498(A), 354(A), 354(C), 376(2)(f) of IPC and under Section 4 & 6(N) of the Protection of Children from Sexual Offences Act, 2012. The police after investigation had filed a charge sheet against the respondent no.1 for the aforesaid offences and the case was numbered as Spl.C.C.No.649/2021 before the Special Court. In the said case an application was filed by the respondent no.1 – accused under Section 227 of Cr.P.C seeking discharge. The said application was dismissed by the Trial Court by order dated 14.02.2022. Thereafter, charges were framed against the respondent no.1 for the aforesaid offences. After framing of charges, the respondent filed an application under Section 216 of Cr.P.C, for altering the charges and a prayer was made to delete the charges framed by the Trial Court for the offences punishable under Sections 376(2)(f) of IPC and Section 4 & 6(N) of the POCSO Act. The prosecution had not seriously opposed the said application before the Trial Court and the Trial Court by the order impugned dated 16.06.2022 had allowed the said application and being aggrieved by the same, the defacto complainant who is the mother of victim girl has approached this Court in this revision petition.

JUDGEMENT:

The Court held that, “Merely for the reason that the Trial Court while passing an order on the application filed by the respondent under Section 227 of Cr.P.C had made an observation that there was no sufficient material to proceed against the accused persons for certain offences, the Trial Court in exercise of its powers under Section 216 of Cr.P.C cannot delete the charges framed by it for the said offences as the criminal procedure code does not confer such a power on the Court. Under the circumstances, I am of the considered view that the Trial Court has erred in allowing the application filed by the accused under Section 216 of Cr.P.C.”

 

 

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JUDGEMENT REVIEWED BY PRATIKSHYA P. BEURA

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