Madhya Pradesh High Court: In a petition challenging the order of closure of contract awarded to the petitioner for lifting scrap sleepers and forfeited the money deposited by the petitioner towards the cost of the scrap lot, a single-judge bench comprising of G.S. Ahluwalia, J., upheld the respondent’s decision, emphasising on the petitioner’s awareness of the auction terms and the limitations of judicial review in contractual matters. The Court held that the petitioner has participated in the bid with clear facts in its knowledge that then the petitioner cannot make a grievance that it has been asked to do an impossible act by not providing the railway trolley to the petitioner.
Brief Facts
In the instant matter, the petitioner submitted the highest bid for lifting scrap sleepers in response to an advertisement. However, the petitioner encountered difficulties in accessing certain locations where scrap sleepers were stored due to their remote and unapproachable nature. Despite multiple requests, the railway authorities rejected the petitioner’s request for a rail trolley to facilitate the lifting process. The petitioner subsequently sought cancellation of the agreement and refund of the deposited money through several letters and reminders, citing the impracticality of lifting the scrap material without a rail trolley. The petitioner filed a petition under Article 226 of the Constitution of India against an order dated 06-11-2020 passed by respondent 2, which closed the contract awarded to the petitioner on 10-10-2017 for lifting scrap sleepers and forfeited the money deposited by the petitioner.
Moot Point
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Whether the petitioner was justified in seeking cancellation of the contract and refund of the deposited money due to the unavailability of a rail trolley?
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Whether the petitioner’s actions were in accordance with the terms of the auction sale conditions?
Parties’ Contentions
The petitioner argued that the impossibility of lifting the scrap material without a rail trolley rendered the contract void under Section 56 of the Contract Act, 1872. It was contended that their actions were consistent with the terms of the auction sale conditions and relied on Messrs Kamdhenu Trading Co. v. Union of India, S.L.P.No.21175-21176/2022, order dated 01-08-2023 and Messrs Kamdhenu Trading Co. v. Union of India, W.P.C.No.4316/2023, order dated 07-02-2024 for extension of time and permission to lift scrap material. On the other hand, the respondents contended that the auction sale conditions explicitly stated that lots were sold on an “as is where is” basis, and purchasers were advised to inspect the material before bidding. It was argued that the petitioner’s failure to lift the scrap material was solely attributable to their own actions, and therefore, the contract was rightfully closed.
Court’s Observation
The Court observed that the auction sale conditions clearly advised purchasers to inspect the material before bidding and stated that no complaints or claims would be entertained regarding the condition of the lots. The Court noted that the petitioner participated in the bid with knowledge of the scrap material’s location and condition, and therefore, he cannot claim impossibility of performance due to the unavailability of a rail trolley. The Court further stated that if the petitioner believed the scrap material cannot be lifted without the rail trolley, he could have applied for lending railway trolley on rent.
The Court distinguished precedents cited by the petitioners where relief was granted and stated that as the petitioner never sought extension or expressed willingness to perform the contract, they are not entitled to same/similar relief. The Court emphasised on the limited scope of judicial review in contractual matters and cited Uflex Ltd. v. Govt. of T.N., (2022) 1 SCC 165, Caretel Infotech Ltd. v. Hindustan Petroleum Corpn. Ltd., (2019) 14 SCC 81 and Tata Cellular v. Union of India, (1994) 6 SCC 651, highlighting the principle of judicial restraint in administrative actions. Ultimately, the Court found no illegality or infirmity in the respondents’ actions and held that the petitioner’s failure to lift the scrap material was solely attributable to them.
Court’s Decision
The Court held that the petitioner’s petition under Article 226 for enforcement of the contract was not maintainable, and no grounds for interference were found. The Court dismissed the petition, granted no relief to the petitioner and upheld the respondents’ actions.
[Kamdhenu Trading Co. v. Union of India, 2024 SCC OnLine MP 2143, order dated 13-04-2024]
Advocates who appeared in this case :
Shri Rudra Dev Singh, Counsel for the Petitioner
Shri Mahesh Kumar and Shri Harshvardhan Singh, Counsel for the Respondents
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