- 1 - IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. ::: O R D E R V.D. AGRO TECH. LTD. VS RAJASTHAN STATE COOPERATIVE OIL SEED GROVER'S FEDERATION LTD., & ORS. S.B. CIVIL WRIT PETITION NO.900/2007 UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA. DATE OF ORDER : 27th Sept., 2007 PRESENT HON'BLE MR. JUSTICE PRAKASH TATIA Ms.Rekha Borana, for the petitioner. Mr.Rajesh Joshi, for the respondents. <><><> BY THE COURT: Heard learned counsel for the parties. This writ petition has been preferred by the petitioner a company registered under the Companies Act on the grounds that the non-petitioner no.1 Rajasthan - 2 - State Cooperative Oil Seed Grover's Federation Ltd. issued a notice inviting 'Expression of Interest' (in short EOI) for running a Oil Seed Processing Plants situated at Sri Ganganagar on lease/joint venture basis. The said notice was published in newspaper on 27th Nov., 2006. The petitioner shown its interest and, therefore, petitioner submitted its offer letter dated 29th Dec., 2006 to the non-petitoner no.2 – the Managing Director of the said Federation for allotting the oil mill situated at Sri Ganganagar on job work basis. Copy of the notice inviting tender and the petitioner's letter dated 29th Dec., 2006 have been placed on record as Annexs. 2 and 3 by the petitioner alongwith the writ petition. In response to the petitioner's above said letter, the non-petitioner no.3 – the General Manager of the said Federation informed the petitioner that petitioner's representative may attend the respondent's office at Jaipur for discussion for allotment of job work on its oil mill at Sri Ganganagar. The petitioner was also advised to visit the mill before coming to Jaipur for discussion. This letter is Annex.4. The matter was discussed on 8.1.2007 in the office - 3 - of the non-petitioner no.2. The petitioner was asked by non-petitioner no.2 to submit in written the rates and certain other clarifications on which, the petitioner wanted to take the oil mill of the non-petitioner on job work basis. In response thereto, the petitioner submitted is offer, rates, conditions and terms for the work concerned. This offer letter is dated 10.1.2007 which is on record as Annex.5. Thereafter, the petitioner came to know that another company of Sangariya also invited by the non- petitioner no.2 for the job work for the same oil mill who gave different rates than the petitioner submitted. According to petitioner, the petitioner offered to take the job work of oil mill @ Rs.125/- per quintal and detail analysis of this rate is given at para no.12 of page no.2 of the letter dated 10.1.2007 (Annex.5). According to petitioner, in response to the petitioner's offer dated 10.1.2007, the petitioner received a letter dated 19.1.2007 from the non-petitioner no.2 according approval @ Rs.1240/- per metric tonne for doing job work. This allotment was for a period of one year and - 4 - petitioner was asked to deposit Rs. 5 lacs alongwith an affidavit towards guarantee with the non-petitioner as per condition no.4 of the non-petitioner's letter dated 19.1.2007. The petitioner, thereafter, started making investment on th said deal and by 4.1.2007, invested Rs.2,91,508.91 for over hauling the machinery and other works in the factory. Soon after the letter dated 19.1.2007, the petitioner commenced the work and for the maintenance work, it continuously sent to the labourers. This was done by the petitioner with due information to the non-petitioners in writing and on its request, the labourers of the petitioner – company were alloted entry in the mill and were granted permission to do the work. The petitioner has placed on record the copy of the letters written in between 21.1.2007 to 26.1.2007 collectively as Annex.7. According to petitioner, the petitioner was ready and willing to continue with the work and acted upon the non- petitioners' approval, but on 4.2.2007, the petitioner came to know about publication of fresh notice inviting tender (in short NIT) for allotment of aforesaid oil mill of - 5 - the non-petitioners on lease of joint venture basis. In the said NIT dated 4.2.2007, the oil mills of some other places were also combined in the NIT. By this notice, the last date for submission of tenders was fixed as 22.2.2007. Copy of this notice is placed on record as Annex.8. The petitioner finding above NIT dated 4.2.2007 wrote letter to the non-petitioner no.2 on 7.2.2007 and the petitioner's representative met non-petitioner's Director personally at Jaipur to discuss the all matter with non-petitioner no.2. He also gave letter to him on the same day i.e., on 7.2.2007 and requested that the NIT dated 4.2.2007 may be withdrawn otherwise, the petitioner will have to approach the court of law. When the petitioner company's Director was away and was not at Jaipur for submitting representation dated 7.2.2007, the company received letter dated 3.2.2007 from the non-petitioner no.2 conveying cancellation of non- petitioner's letter dated 19.1.2007 and advising the petitioner to take part in the fresh NIT. Copy of this letter dated 3.2.2007 is Annex.10. - 6 - According to learned counsel for the petitioner in view of the fact that there is a concluded contact between the parties as in response to the non-petitioners notice inviting 'Expression of Interest' for running Oil Seed Processing Plants situated at Sri Ganganagar,the petitioner gave its offer and discussed the whole matter with the non-petitioners' officers and acted upon the concluded contract and the non-petitioners themselves allowed over-hauling of the machinery of the factory by the petitioner and, thereafter, allowed to do all necessary works through labouerers by petitioner then the non- petitioner, after investment of more than Rs.2,90,000/- of the petitioner cannot cancel the contract nor could have invited offer from other parties within such a short period of only one month. It is also submitted that issuance of NIT dated 4.2.2007 is absolutely arbitrary and in gross violation of principles of natural justice and is violative of Article 14 of the Constitution of India. It is also submitted that the non-petitioners have no right to arbitrarily cancel the contract entered into between the parties without any reason and allow any other party to - 7 - enter in the factory premises. Learned counsel for the petitioner referred certain provisions of the Contract Act defining the promise and agreement, which cannot be cancelled unilaterally. It is submitted that the Government contracts cannot be dealtwith in such an arbitrary manner and cannot be made available for allotment to other after its award to one party. Learned counsel for the respondents submitted reply to the writ petition and admitted that notice for 'Expression of Interest' Annex.2 was issued by the respondents and petitioner gave letter to the non- petitioner no.3 on 29.12.2006, but according to non- petitioners, the said letter was not in response to the EOI dated 27th Nov., 2006 nor the petitioner participated in pursuance of the said EOI. After saying so, the petitioner in same para mentioned “though he has written a letter showing his interest for doing the work on job basis.” The non-petitioners also admitted letter dated 3.1.2007 inviting petitioner to discuss the matter and again the same stand has been taken by the non-petitioners that this invitation was also not in pursuance of EOI dated - 8 - 27th Nov., 2006 for giving plants of Sri Ganganagar to petitioner. The non-petitioners took a stand that “answering respondents was already in operation and running condition and was processing mustard of NAFED, but the said plant was not utilized its capacity upto mark, as such, the petitioner was called for discussion.” The non-petitioners further admitted that petitioner took part in the discussion on 8.1.2007 with the non- petitioners and, thereafter, petitioner sent its proposal Annex.5. This proposal of the petitioner was never a proposal for job work for mustard processing supplied by NAFED. The non-petitioners further admitted that on offer was given by on Arihant TradingCompany of Sangariya. According to non-petitioners in pursuance of the petitioner's offer dated 10.1.2007 a counter offer was given by the non-petitioners vide communication dated 19.1.2007. The petitioner was to accept all conditions and execute an agreement alngwith cheque of Rs.5 lacs and affidavit in the shape of guarantee and also undertake that he will utilize 2000 ton capacity per - 9 - month @ 1240/- per ton. This job work was an interim arrangement to enhance the crushing capacity of the factory. According to non-petitioners in response to said offer of the non-petitioners, the petitioner gave his counter offer with certain conditions. It is submitted that the petitioner did not submit cheque of Rs. 5 lacs and affidavit in the shape of guarantee nor he has assured that he will utilize the capacity of 2000 ton per month @ 1240/- per ton. However, in reply, the non-petitioners admitted that the petitioner was given some part of the machinery, but that was given to the petitioner in bonafide intention that the petitioner is going to execute the agreement, but the petitioner did not return the parts of the machinery. With these facts, according to non- petitioners there was no concluded contract and in alternative the offer was as temporary arrangement only and, therefore, the NIT dated 4.2.2007 was rightly issued by the non-petitioners and in response of which, two firms submitted their bids but the same has not been processed in view of the interim order passed by this Court. - 10 - Learned counsel for the petitioner vehemently submitted that in view of the facts mentioned in the writ petition and virtually admitted by the non-petitioners it is clear case of arbitrary exercise of powers by the non- petitioners by issuing the subsequent NIT dated 4.2.2007 during the currency of the work undertaken by the petitioner in response to a concluded contract between the parties. It is submitted that contention of non- petitioners that petitioner's offer dated 29th Dec., 2006 and discussion dated 8.1.2007 and petitioner's letter dated 10.1.2007 and non-petitioners' letter dated 19.1.2007 were not in furtherance to the non-petitioners notice inviting 'Expression of Interest' dated 22nd Nov., 2006, is totally false. According to petitioner, now the non-petitioners could not have taken this plea when they themselves decided to give the work on joint venture basis for running oil mill by issuing the notice to the public only on 27th Nov., 2006. The non-petitioners admitted that in continuation of the proceedings only, the petitioner was allowed to inspect the factory itself and, thereafter, after 19.1.2007, - 11 - allowed to complete the over hauling the machinery and allowed maintenance work in the factory and allowed the petitioner's labourers to entere into the factory premises and do the job then the non-petitioners had no right to cancel the petitioner's contract. It is submitted that even the non-petitioners have not stated that they ever found any deficiency in the working of the petitioner in furtherance to the work undertaken by the petitioner. It is submitted that the start of work is a decisive and rest of work of execution of agreement and giving cheque of Rs. 5 lacs etc were the paper formalities, which could have been completed at any time afterwards. It is also submitted that non-petitioners never insisted for submitting affidavit and cheque forthwith nor the contract has been cancelled on this count. It is submitted that the condition imposed by the non-petitioners even have been accepted by the petitioner with certain modifications and, thereafter, the petitioner started the work. I considered the submissions of learned counsel for the parties and perused the record. - 12 - There is force in the preliminary objection raised by learned counsel for the respondent inasmuch as that the petitioner in the writ petition has only prayed for quashing of the Annex.8 dated 4.2.2007 by which fresh notice was issued inviting tender by the respondent and neither the petitioner has claimed consequential relief of award of contract to the petitioner nor the petitioner could have claimed such relief on the basis of his alleged offer submitted in pursuance of the earlier notice inviting tender of interested persons vide notice inviting tender dated 27th Nov., 2006 and, therefore, when no consequential relief can be granted to the petitioner then more relief of declaration cannot be granted. It is also true that in case any declaration made in favour of the petitioner quashing the notice inviting tender dated 4.2.2007 then also petitioner will have to seek relief of specific performance of the alleged contract, which according to petitioner stands concluded in view of the facts pleaded by the petitioner and because of acting upon the contract by both the parties in furtherance to the contract. The may seek damages for breach of - 13 - contract and for loss of its earning because of breach of contract, which according to the petitioner has been committed by the respondent then that issue will be the issue of fact which can be decided after evidence of parties. That relief also cannot be granted by this Court while exercising jurisdiction under Article 226 of the Constitution of India. However, there may be some force in the submission of learned counsel for the petitioner that the events clearly suggest that the petitioner gave his offer in pursuance of the notice inviting tender Annex.1 dated 27th Nov., 2006 and, thereafter, all the negotiations were held in furtherance to that offer and petitioner was permitted to employ its employee for doing certain work and the petitioner may have invested some amount and acted upon the said contract, but because of the fact that writ petition involves disputed questions of facts and no consequential relief has been claimed nor can be granted to the petitioner, therefore, the writ petition of the petitioner deserves to be dismissed as not maintainable. However, the petitioner is at liberty to take appropriate - 14 - steps by filing civil suit for redressal of its grievance. In view of the above, the writ petition of the petitioner is dismissed. There shall be no order as to costs. (PRAKASH TATIA), J. c.p.goyal/-