Case: Noble Resources Ltd Vs. State Of Orissa

have also noticed hereinbefore that there had been no complaint on the part of the Appellant in regard to the supply of iron ore fines till August, 2003, by which time 1,08,181 MT of iron ore fines was supplied in two installments. In the month of September 60,000 MT of Grade-B iron ore and 1,20,000 MT of Grade-A iron was to be supplied. According to the Respondent No. 2, however, such quantity was not possible in adherence of the schedule. We have noticed hereinbefore that in its additional affidavit before the High Court, the Respondent No.2 has not assigned any reason which can be said to be contrary to its earlier stand. Some more reasons have been assigned in regard to its inability to supply iron ore fines. It its Counter Affidavit, the Respondent No.2 stated: "That to sum up as per tender norms of the tender floated during February, 2003, the price and quantity was valid till end of September 2003 as there was constraint in convergence of ore by rake from Daitari to Pradip, the buyer was intimated by OMC Ltd., to conclude the contract on shipment to shipment basis. OMC would have concluded the contract for the entire tender quantity in one lot with M/s Noble Resources Ltd. Hong Kong had there been no constraint for convergence of cargo to Paradip...if the balance quantity against the tender norms would have been supplied to the petitioner company at the tendered prices of February, 2003 the Corporation would have incurred huge loss as the price of iron ore in the International Market has increased manifold." 38. We may herein notice a statement on tenders floated and accepted in respect of the iron ore fines after 30.09.2003, which is as under : DATE OF TENDER OPENINGQUALITY OF IRON ORE FINES QUANTITYHIGHEST PRICEPRICE QUOTED BY NOBLE USD/D MTSEE PRICE IN TENDER AT P.50 Quoted byPrice in USD/DMT 12.11.03B-Grade-60,000 MT +- 10%M/s. Burwill, Hong Kong47.1031.7514.96 C, Grade-60,000 MT+–10%M/s. Burwill, Hong Kong45.1029.2513.86 3.2.04C-Grade-1.20,000 MT +– 10%Sudamin Metal, London63.3059.8013.86 20.3.04C-Grade-1,20,000 MT +– 10%VISA Comtrade, AG, Switzerland75.0662.6813.86 22.6.04C-Grade-1,20,,000 MT +– 10%Noble Resources, Hong Kong25.7025.7013.86 7.9.04C-Grade-60,000 MT +– 10%IMR Resources, Hong Kong46.3544.6813.86 22.11.04C-Grade-1,20,000 MT +– 10%Noble Resources, Hong Kong40.1840.1813.86 24.1.05C-Grade-60,000 MT +– 10%Noble Resources, Hong Kong53.0853.0813.86 15.3.05C-Grade-60,000 MT +– 10%IMR Metallurgical Resources AG, Switzerland.58.1054.0013.86 39. The Appellant evidently participated in subsequent tenders. It became successful in some of them. It did not raise any protest. It took part in the said process without any demur. 40. We have noticed hereinbefore that the price of iron ore fines in the international market varied from time to time. After September, 2003, a tender was issued. The Appellant took part in the said tender. Its tender was accepted in relation to Grade-C iron ore fines. Its offers on 22.06.2004, 22.11.2004 and 24.01.2005 had also been accepted. 41. The table quoted hereinbefore also points out that the Appellant had also understood the implication of phenomenal rise in price in the international market. 42. We may at this juncture furthermore notice that the contractual terms came to an end in September, 2003. It participated in the bids of prices much higher than the contractual prices during the period 12.11.2003 and 03.02.2004. The stand of the Respondents that only having regard to the fact that there had been increase in the prices, the Appellant filed a writ petition only in February, 2004, cannot be said to be wholly misconceived. 43. The submission of Mr. Desai that rise in international price would not by itself be a relevant consideration to rescind the contract may be correct, but then the same was not the sole ground for the Respondent No.2 to refuse to supply iron ore fines to the Appellants. 44. Moreover, certain serious disputed questions of fact have arisen for determination. Such disputed questions of facts ordinarily could not have been entertained by the High Court in exercise of its power of judicial review. 45. Ordinarily, a specific performance of contract would not be enforced by issuing a writ of or in the nature of mandamus, particularly when keeping in view the provisions of the Specific Relief Act, 1963 damages may be an adequate remedy for breach of contract. 46. The questions as to whether OMC had the available stock of iron ore fines or the only ground to refuse supply thereof was the rise in international prices, are matters which could not have been fully and effectively adjudicated in the writ proceedings. It was difficult for the High to go into the other questions which have been raised before us by the Appellant, namely, the effect of the purported decision of OMC to offer to the Appellant 60,000 MT of A Grade iron ore fines provided the Appellant gave up all other contractual rights which stating the bad faith on the part of OMC. We may, however, notice that although a decision had allegedly been taken by OMC not to supply iron ore fines prior to the expiry of the contractual period, but the same had not been communicated. Its effect has to be determined keeping in view the fact as to whether the Appellant suffered any loss thereby. The reasons for non-supply, we may reiterate, may constitute a breach of contract but having regard to the conduct of the parties, it cannot be said that the same was so arbitrary so as to attract the wrath of Article 14 of the Constitution of India. Before us also what has been emphasized is the purported breaches of contract by the Respondent. A contention has also been raised by Mr. Desai that keeping in view the facts and circumstances of this case, this Court should mould the relief. We do not intend to do so and leave the parties to raise all contentions before an appropriate forum. 47. For the reasons aforementioned, we are of the opinion that although the approach of the High Court was not entirely correct, its ultimate decision to refuse to exercise its discretionary jurisdiction cannot be faulted with.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]15. It is trite that if an action on the part of the State is violative the equality clause contained in Article 14 of the Constitution of India, a writ petition would be maintainable even in the contractual field. A distinction indisputably must be made between a matter which is at the threshold of a contract and a breach of contract; whereas in the former the courts scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution. While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on its part. Indisputably, inherent limitations exist, but it would not be correct to opine that under no circumstances a writ will lie only because it involves a contractual matterIt may, however, be true that where serious disputed questions of fact are raised requiring appreciation of evidence, and, thus, for determination thereof, examination of witnesses would be necessary; it may not be convenient to decide the dispute in a proceeding under Article 226 of the Constitution of India45. Ordinarily, a specific performance of contract would not be enforced by issuing a writ of or in the nature of mandamus, particularly when keeping in view the provisions of the Specific Relief Act, 1963 damages may be an adequate remedy for breach of contract46. The questions as to whether OMC had the available stock of iron ore fines or the only ground to refuse supply thereof was the rise in international prices, are matters which could not have been fully and effectively adjudicated in the writ proceedings. It was difficult for the High to go into the other questions which have been raised before us by the Appellant, namely, the effect of the purported decision of OMC to offer to the Appellant 60,000 MT of A Grade iron ore fines provided the Appellant gave up all other contractual rights which stating the bad faith on the part of OMC. We may, however, notice that although a decision had allegedly been taken by OMC not to supply iron ore fines prior to the expiry of the contractual period, but the same had not been communicated. Its effect has to be determined keeping in view the fact as to whether the Appellant suffered any loss thereby. The reasons for non-supply, we may reiterate, may constitute a breach of contract but having regard to the conduct of the parties, it cannot be said that the same was so arbitrary so as to attract the wrath of Article 14 of the Constitution of India. Before us also what has been emphasized is the purported breaches of contract by the Respondent. A contention has also been raised by Mr. Desai that keeping in view the facts and circumstances of this case, this Court should mould the relief. We do not intend to do so and leave the parties to raise all contentions before an appropriate forum47. For the reasons aforementioned, we are of the opinion that although the approach of the High Court was not entirely correct, its ultimate decision to refuse to exercise its discretionary jurisdiction cannot be faulted with