1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 18.10.2011 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.(MD)Nos.8529 and 8864 to 8867 of 2011 and M.P.(MD)Nos.1,2,1,2,1,2,1,2,1 and 2 of 2011 M/s.Sapphire Spinners India P Ltd., Rep. by its Managing Director, Mr.K.R.Karthikau Raja : Petitioner in all W.Ps. vs. 1.The Cotton Corporation of India Limited, (A Government of India Undertaking, Ministry of Textiles) No.80, G.S.T.Road, 1st Floor, Thirunagar, Madurai-625 006. 2.The Cotton Corporation of India Ltd., (A Government of India Undertaking, Ministry of Textiles), Chandar Mouli Building, Plot No.27, Samrat Nagar, Veer Savarkar Chowk, Shahnoorwadi, Aurangabad-431 005. 3.The Government of India, Ministry of Textiles, Rep. by its Secretary, Udyog Bhavan, New Delhi-110 011. : Respondents in W.P.(MD)Nos.8529, 8865, 8866 and 8867/2011 1.The Cotton Corporation of India Limited, (A Government of India Undertaking, Ministry of Textiles) No.80, G.S.T.Road, 1st Floor, Thirunagar, Madurai-625 006. 2.The Cotton Corporation of India Ltd., (A Government of India Undertaking, Ministry of Textiles), 3rd Floor W.B.Plaza, New Cotton Market, Hubli-580 029. 3.The Government of India, Ministry of Textiles, Rep. by its Secretary, Udyog Bhavan, New Delhi-110 011. : Respondents in W.P.(MD)No.8864/2011 https://hcservices.ecourts.gov.in/hcservices/ 2 COMMON PRAYER: Writ Petitions are filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Mandamus, forbearing the respondents from invoking the provisions of Contract Nos.148, 21, 137, 114 and 111, dated 28.01.2011 [W.P.(MD)Nos.8529 & 8864/2011], 20.01.2011 [W.P.(MD)No.8865/2011], 06.01.2011 [W.P.(MD) No.8866/2011] and 05.01.2011 [W.P.(MD)No.8867/2011], respectively and consequently, refrain the respondents from demanding any difference in price for the balance unlifted quantity of candy under the contract besides directing the respondents herein to refund the Earnest Money Deposit of the petitioners lying with the first respondent. W.P.(MD)No.8529/2011: For Petitioner : Mr.S.Suresh For M/s.Aiyar and Dolia For Respondent No.1 : Mr.G.R.Swaminathan For Respondent No.2 : Mr.K.K.Senthilvelan W.P.(MD)Nos.8864 to 8867/2011: For Petitioners : Mr.S.Suresh For M/s.Aiyar and Dolia For Respondents 1&2 : Mr.G.R.Swaminathan For Respondent No.3 : M.K.K.Senthilvelan in W.P(MD)No.8864/2011 For Respondent No.3 : Mr.V.S.Kumaraguru in W.P.(MD)Nos.8865 to 8867/2011] COMMON ORDER In all these cases, the petitioner-Textile Spinning Mills sought for a direction to forbear the respondents, Cotton Corporation of India, a Government of India Undertaking coming under the Ministry of Textiles, from invoking the provisions of Contract Nos.148, 21, 137, 114 and 111, issued on various dates. 2. The contention raised by the petitioner was that as many as 800 dyeing mills have been closed in Tirupur and, therefore, since there was a ban on the export of cotton yarn and the local market was shrunk, they are unable to lift the quantity, for which, contract was entered into with the Corporation and due to unprecedented power cut, they were forced to run the industry with diesel generator. The entire contract entered into between the petitioner and the Cotton Corporation has become null and void, due to mutuality and in respect of a contract, both the parties, viz., the buyer and seller must be bound by the terms of the same. The contract do not take into account the unforeseen circumstances and hence, it is one sided and there is no equal bargaining power in entering into the contract. In the present case, the doctrine of Force Majeure will have to be applied and impossibility of performance is void of contract and a reference was made to Section 56 of the Indian Contracts Act. If the respondent-Cotton Corporation of India enforces the terms of contract, the petitioner will have to shut down the industry and they will never be in a position to fulfill the one sided contract and the industry is able to survive by purchasing cotton from open market and also able to fulfill their statutory obligation. https://hcservices.ecourts.gov.in/hcservices/ 3 3. In all the Writ Petitions, notices were ordered on different dates. Pending the Writ Petitions, interim orders were also granted restraining the first respondent from taking any coercive action, pursuant to the contract. 4. Aggrieved by the grant of interim order, the respondents- Cotton Corporation of India have filed the applications for vacating the interim injunction together with the supporting counter-affidavits, dated 19.08.2011. It is stated that apart from refuting the stand taken by the petitioner, despite agreement between the parties, the petitioner lifted the lesser quantity of stock agreed to by them and there were several reminders sent by the Corporation. Merely because cotton price has suffered a downward trend, it will not be open to them to wriggle out of the same. It is also stated that none of the circumstances projected by the petitioner will amount to Force Majeure and the doctrine of Force Majeure found in clause No.13 has no application to the case on hand and the contract entered into between the petitioner and the respondents- Corporation is only a private contract and it cannot be attacked and no Writ Petition will lie in such contractual matters. The respondents have ample power under the terms of contract to forfeit any advance payment and the Court cannot issue any order preventing them from encashing those advance payments. 5. However, when the matter came up for hearing today, Mr.G.R.Swaminathan, learned counsel for the respondents-Corporation brought to the notice of this Court that similar Writ Petitions were filed before the Principal Bench by various Textiles Limited and those 124 Writ Petitions were heard by a learned Single Judge of this Court and disposed of by a common order dated 30.09.2011. The first is being W.P.No.19447 of 2011 filed by M/s.Sangeeth Textiles Limited against the very same Corporation. The learned Judge, after dealing with all the submissions made by the parties, in paragraph Nos.13 to 15, had observed as follows: "13. From the above referred decisions, it is evident that even though there is no absolute bar to entertain the writ petition if there is an arbitration clause, if the facts are in dispute, the High Court shall not entertain writ petition. 14. In these cases, petitioners are contending that the price of cotton bales is lesser than the agreed amount payable by the petitioners to the respondent and the ban order imposed was lifted by the Government of India and when the petitioners entered into contract, then also there was frequent power cut. It is also contended by the learned Senior Counsel for the respondent Corporation that till May, 2011, cotton price was higher than the agreed amount payable by the petitioners and the petitioners have earned profit and now also the cotton price has increased and therefore there is fluctuation of price, which cannot be a reason to contend frustration of contract. All the above factual aspects can be raised only before the Arbitrator in an arbitration proceeding, which is also provided under Clause 12 of the terms and conditions of the contract entered into between the respective petitioner and respondent Corporation. 15. In view of the above findings, I am of the firm view that these writ petitions are not maintainable and the petitioners have to go for arbitration in terms of clause 12 of the contract, if they have any grievance. Since the writ https://hcservices.ecourts.gov.in/hcservices/ 4 petitions are dismissed only on the ground of maintainability, the observations made herein or the contentions raised as stated in this order shall not be construed as giving any finding in favour of either party. The writ petitions are dismissed with liberty to move for arbitration." 6. In view of the above, all the Writ Petitions are dismissed with similar liberty given as per the order dated 30.09.2011, referred to above. Consequently, the connected miscellaneous petitions are closed. No costs. Sd/- Assistant Registrar (RTI) /True copy/ Sub Assistant Registrar(C.S) To 1.The Cotton Corporation of India Limited, (A Government of India Undertaking, Ministry of Textiles) No.80, G.S.T.Road, 1st Floor, Thirunagar, Madurai-625 006. 2.The Cotton Corporation of India Ltd., (A Government of India Undertaking, Ministry of Textiles), Chandar Mouli Building, Plot No.27, Samrat Nagar, Veer Savarkar Chowk, Shahnoorwadi, Aurangabad-431 005. 3.The Secretary, The Government of India, Ministry of Textiles, Udyog Bhavan, New Delhi-110 011. 4.The Cotton Corporation of India Ltd., (A Government of India Undertaking, Ministry of Textiles), 3rd Floor W.B.Plaza, New Cotton Market, Hubli-580 029. +5. CCs to Mr.Aiyar Dolia, Advocate, SR.No. 36065 to 36069 SML Common Order made in W.P.(MD)Nos.8529 and 8864 to 8867 of 2011 Dated:- 18.10.2011 TR :01.11.2011: 4p/10c https://hcservices.ecourts.gov.in/hcservices/