MAHARASHTRA STATE ELECTRICITY BOARD Vs. NATIONAL TRANSPORT COMPANY

JUDGEMENT

(1.) THIS jugment will govern disposal of First Appeal No. 170 of 1983 and 172 of 1983. Maharashtra State Electricity Board and its Senior Power Station Superintendent, Paras, (original defendant Nos. 1 and 2 respectively,) have filed First Appeal No. 170 of 1983 against the judgment and decree for recovery of a sum of R. 5,78,250/- alongwith interest @ 6% P. A. as damages on account of breach of contract passed in favour of M/s. National Transport company, a registered partnership firm (Original plaintiff ). First Appeal No. 172/1983 is plaintiffs appeal against reduction of claim for damages.

(2.) THE substance of the case of the plaintiff is: the plaintiff is a dealer in coal as and had dealings in the said goods with the defendants in 1975. In pursuance if invitation of tenders on behalf of the defendants for purchase of wet coal ash for the subsequent period between 29-5-1976 and 28-5-1977, the plaintiff and 16 others submitted tenders which were opened on 25-3-1976. The plaintiffs tender at the rate of Rs. 4. 95 per Cmt. was accepted and work order was issued on 26-5-1976, according to which the plaintiff lifted 151 trucks of coal on 29-5-1976 and paid the price thereof. By letter dated 30-5-1976 the defendant No. 2 suspended the work order dated 26-5-1976; asked the plaintiff to continue to lift the goods on the basis of the 1975 work order and informed it that final decision about continuation or cancellation of the 1976 work order would be taken at the higher level. By letter dated 2-7-1976 the defendant No. 2 extended the period of work under the 1975 work order by one month or till the finalisation of the fresh contract. On 30-7-1976 the plaintiff had filed a Regular Civil Suit No. 344 of 1976 in the Court of Civil Judge, Senior Division, Akola, for permanent injunction, restraining the defendants from cancelling the work order and for other ancillary reliefs. The defendants filed written statement taking inter alia a stand that M. S. E. B. had taken a decision to revoke the agreement since it was obtained by fraud incollusion with the M. S. E. B. s employees and the cancellation was orally communicated by the Chairman of the M. S. E. B. in a meeting on 27-7-1976 and by defendant No. 2 on 28-7-1976 in writing. On 15-7-1977 issues were framed in that suit and on 29-9-1978 it was allowed to be dismissed in default. In the said civil suit, for sometime temporary injunction operated against the defendant and after vacation of the said order, the defendants invited fresh tenders by a public notice dated 19-8-1976 which were opened on 15-9-1976. Tender was awarded to M/s. Ambica Sales Corporation at the highest rate of Rs. 11. 91 per Cmt. for the period commencing from 8-11-1976 to 7-11-1977. In the present suit the plaintiff had claimed damages to the tune of Rs. 8,02,000/- for breach of contract in wrongfully the contract and cancelling the 1976 work order.

(3.) SUBSTANCE of the stand of the defendants is : when M. S. E. B. learnt about wrongful acceptance by defendant No. 2 of conditional tender of the plaintiff (which was contrary to tender notice) and that too at a very low rate of Rs. 4. 95 per cent. as against the other higher offers ranging from Rs. 7. 891 per Cmt, it suspended the work order and after examining all the papers took the final decision of revocation since it came to the conclusion that a fraud was practised upon the M. S. E. B. by the plaintiff in collusion with the members of supervisory and other staff. The plaintiffs managing partner had seen the Chairman M. S. E. B. at Bombay on 27-7-1976 when the final decision was communicated followed by a letter dated 28-7-1976 by defendant No. 2 which the plaintiff avoided to receive. Enquiry revealed that in all 18 tenders were received out of which 9 were of higher rates ranging between Rs. 7. 68 and Rs. 5. 82. Only unconditional tenders were eligible for consideration and no official had authority to waive the eligibility. The plaintiff was allowed to withdraw the condition surreptitiously after two days of the opening of the tenders without letting others tender know about the same or without giving similar opportunity to them. The staff of M. S. E. B. practised discrimination illegally and mala fide. The agreement, which put the M. S. E. B. to heavy loss, was void being fraudulently obtained and opposed to public policy. The suit was not maintainable also because (i) there was no completed contract between the parties as no written agreement as contemplated under the work order was executed, (ii) it was barred under Order 2, Rule 2 C. P. C. and/or Order 9, Rule 9 C. P. C. in view of Civil Suit No. 344 of 1976 and its dismissal in default; (iii) damages were not proved.