1997 (10) TMI 401 - HC - Companies Law

Court orders delivery of Aluminium, upholds petitioner's rights. Judicial review in contractual obligations allowed.

The court dismissed both writ appeals, upholding the learned single judge's decision. The petitioner was entitled to delivery of 100 M.T. of Aluminium at ... - Issues Involved:1. Maintainability of the writ petition under Article 226 for enforcement of contractual obligations.2. Alleged arbitrary and unreasonable delay in delivery of Aluminium by the first respondent.3. Entitlement to the increased price of Aluminium as per the revised rates.4. Non-joinder of the Aluminium Controller as a necessary party.Issue-wise Detailed Analysis:1. Maintainability of the writ petition under Article 226 for enforcement of contractual obligations:The primary issue was whether the writ petition was maintainable under Article 226 of the Constitution for enforcing contractual obligations. The court observed that while ordinarily, writ petitions are not entertained for specific performance or damages arising from breach of contract, there are exceptional cases where judicial review is permissible. The court cited various Supreme Court judgments, including *Kumari Shrilekha Vidyarthi v. State of U.P.*, which held that Article 14 applies to all actions of the State, including contractual matters. The court concluded that the power of judicial review is not excluded in contractual matters involving the State or its instrumentalities, especially when the actions are arbitrary or unreasonable.2. Alleged arbitrary and unreasonable delay in delivery of Aluminium by the first respondent:The petitioner alleged that the first respondent, M.M.T.C., deliberately delayed the delivery of Aluminium to benefit from an anticipated price increase. The court found that the petitioner had fulfilled all contractual obligations, including opening letters of credit. Despite this, the first respondent withheld delivery without valid reasons, citing 'stock taking' and later demanding the increased price. The court noted that the delivery order was issued on 20.3.1981, and the petitioner's representatives were denied delivery on 21.3.1981 and subsequent dates. The court held that the first respondent's actions were arbitrary and unjustified, as the petitioner was entitled to delivery at the original price.3. Entitlement to the increased price of Aluminium as per the revised rates:The first respondent argued that the increased price, notified on 27.3.1981, applied to deliveries made after that date. The court, however, emphasized that the petitioner was entitled to the original price as the delivery order was issued before the price increase, and the petitioner had made all necessary arrangements for delivery. The court referred to the terms of the sale note and delivery order, which indicated that the petitioner had 15 days to lift the material. The court concluded that the first respondent could not delay delivery to benefit from the price increase.4. Non-joinder of the Aluminium Controller as a necessary party:The first respondent contended that the writ petition was not maintainable due to the non-joinder of the Aluminium Controller, who fixes the price of Aluminium. The court found this argument untenable as the Aluminium Controller was impleaded as the third respondent in the writ petition. The court noted that the first respondent did not raise this issue before the learned single judge or in the grounds of appeal, and therefore, it could not be considered at this stage.Conclusion:The court dismissed both writ appeals, upholding the learned single judge's decision. The petitioner was entitled to delivery of 100 M.T. of Aluminium at the original price, and the first respondent's actions in delaying delivery were arbitrary and unreasonable. The court reaffirmed that judicial review under Article 226 is permissible in exceptional cases involving contractual obligations with the State or its instrumentalities, particularly when there is a violation of Article 14 of the Constitution.