VITHAYATHIL CEMENTS REP BY ITS PROPRIETOR Vs. PRINCIPAL SECRETARY, MANAGING DIRECTOR, TAMIL NADU CEMENTS CORPORATION LTD

JUDGEMENT

(1.) This in-house appeal has been directed against the judgment and order rendered by our learned brother Justice M.M.Sundresh on 25.05.2017 dismissing the writ petition with liberty to proceed in terms of Clauses 43 and 44 of the agreement between the parties.

(2.) Mr.P.S.Sivashanmugha Sundaram, learned Special Government Pleader accepted notice on behalf of the respondents though the company itself has not been impleaded, which ought to have been.

(3.) The writ petitioner/appellant is a firm solely owned by an individual, who is carrying on business in sale of cement, having effective distribution net work in several Districts of the adjoining State of Kerala. Tamil Nadu Cements Corporation Limited is a Government of Tamil Nadu undertaking (henceforth referred to as 'the company'). There is no doubt that it answers the description of the expression "State" for the purpose of Article 12 and for purposes of Part III of the Constitution of India. It has entered into an agreement with the writ petitioner/appellant on 03.03.2016 accepting the offer of the writ petitioner/appellant to act and function as a 'consignment agent' of the said company. The company has two manufacturing units situated at Alangulam in Virudhunagar District and Ariyalur in Ariyalur district. Hence the cement of various grades manufactured by the company is sought to be marketed through the writ petitioner/appellant- consignment agent. The terms and conditions of the said agreement have been reduced to writing and important amongst them is that liberty has been preserved to the company to despatch certain quantities of various grades of cement manufactured by it from time to time and that it has also right to insist upon the consignment agent to sell around 5000 metric tonnes per month and liberty to fix the target for the sale of such products has been retained by the company. The company has also reserved the right to sell cement to any institution, Government Department, Semi or Quasi Government Department, bulk consumers other than traders either directly or through any of their authorised agents of the company and the consignment agent shall not claim any commission on such sales unless otherwise the consignment agent has made any special efforts/co-ordination to procure such orders. The consignment agent shall submit a Bank Guarantee for a value of Rs.1,50,00,000/- or equivalent amount to be deposited with the company or partly covered by Bank Guarantee and partly by cash deposit. The amount deposited with the company will carry interest at the rate of 6% per annum. It is also agreed that the company shall not supply cement more than the value covered by the Bank Guarantee/cash deposited at any point of time. Clause 38 of the agreement has specified that the consignment agreement shall be in force with effect from 03.03.2016 valid upto 02.03.2017 for a period of one year and that it is renewable subject to the satisfaction of the company and good and proper performance of consignment agent and on mutual terms settled. Clause 39 vested power in the hands of the company to terminate the agreement forthwith without any notice on the happening of any of the events specified in sub clauses a to g thereof. Clause 42 has specified that the agreement can be terminated by ignoring 30 days notice in advance by either side. On 07.09.2016, the company has intimated the consignment agent - writ petitioner/appellant that his account was showing debit balance of more than Rs.4.83 crores and because of these huge arrears, the company is facing critical fund crunch.