ARUNACHALA IMPEX PRIVATE LIMITED Vs. MANAGING DIRECTOR

JUDGEMENT

(1.) The petitioner is a Private Limited Company engaged in the business of buying and selling edible oil and other essential commodities. The first respondent Corporation issued tender notification dtd. 20/12/2021 for supply of 4 Crore nos. of one litre Fortified RBD Palmolein oil pouches. The petitioner emerged as one of the successful tenderers and its offer for the supply of 1 crore nos. of oil pouches was accepted by the respondent Corporation and this quantity was to be supplied in two spells of 50 lakh each. The petitioner successfully supplied 50 lakh oil pouches under the first spell. On 14/2/2022, the first respondent directed the petitioner to supply 50 lakh oil pouches towards the second spell. The supply under the second spell was to be completed on or before 28/3/2022. The petitioner could however supply only 2,58,950 oil pouches as against the demand for 50 lakh oil pouches under the second spell. Since war broke out between Russia and Ukraine on 24/2/2022, the petitioner could not fulfill their contractual obligations to supply the remaining second spell quantity of oil pouches. They submitted a representation in this regard to the first respondent. The first respondent insisted that the petitioner must fulfill their part of the contract. However, extension of time was granted upto 30/4/2022 for supplying the balance quantity. It was also made clear that penalty will be levied on the petitioner. Communication dtd. 13/4/2022 was issued to this effect. Challenging the same, this writ petition came to be filed.

(2.) The first respondent filed a detailed counter affidavit opposing the writ prayer. A preliminary objection has been taken that the petitioner was very much having the alternative remedy of arbitration under Clause 24 of the agreement. The maintainability of the writ petition was questioned on the ground that this remedy has not been exhausted. It was also contended that the issue is purely contractual in nature and therefore public law remedy cannot be availed. The primary stand of the first respondent appears to be that when other tenderers could successfully effect supplies against the second spell also, nothing prevented the petitioner from fulfilling their part of the contractual obligations. The various allegations made in the writ petition have been specifically denied in the counter affidavit.

(3.) The learned Senior Counsel appearing for the writ petitioner submitted that when the petitioner entered into an agreement with the respondent Corporation in the second week of January 2022, it could not be envisaged that war would break out between Russia and Ukraine resulting in disruption of supply of Palmolein from Indonesia and Malaysia to India. He pointed out that this would constitute a force majeure event, which has rendered the contract impossible of performance. He pointed out that the prices had sky rocketed. This is evident from the fact that the first respondent Corporation had entered into a purchase agreement with one M/s.KTV Health Food Private Limited for buying Fortified RBD Palmolein Oil pouches at the rate of Rs.153.50 per pouch which is Rs.33.25 higher than the rate at which the petitioner had agreed to supply. This agreement between the respondent Corporation and M/s.KTV Health Food Private Limited was entered into on 1/4/2022.