ITC LIMITED Vs. HOLBUD LIMITED

JUDGEMENT

(1.) THE present suit has been filed by the plaintiffs against the defendants claiming a number of reliefs. It is claimed that there is no valid, binding or concluded contract in existence between the plaintiff and the defendants for the sale by the plaintiff to the defendant No. 1 of 13500 metric tonnes of Indian White long grain rice either on the terms and conditions set out in the fax messages dated 14th July, 1995 and/or 15th july, 1995 which are attached to the plaint as exhibits-G, H and I addressed by defendant No. 3 acting for defendant No. 1 and/or in the fax dated 14th July, 1995, Exhibit-DD to the plaint, allegedly sent by defendant No. 2 to defendant No. 1. It is also claimed that the fax allegedly sent by defendant No. 2 to defendant No. 1. Exhibit-DD, is invalid, illegal, and not binding on the plaintiffs. It is further claimed that defendant no. 2 had no authority to issue the same and in any event at the time when defendant No. 2 purportedly sent the said fax message there was no concluded contract. The plaintiff also claims for an order of injunction permanently restraining the defendants from in any manner enforcing or acting pursuant to or in furtherance of any alleged contract with the plaintiff as narrated above. The plaintiff also claims that defendants Nos. 2 and 3 be restrained from participating in the arbitration proceedings which are to be held by defendants Nos. 4, 5 and 6 and further to restrain defendants Nos. 4, 5 and 6 from proceeding with the arbitration. The present Notice of Motion has been taken out against the defendants for restraining defendants Nos. 1, 2 and 3 from acting in pursuance of the alleged contract as narrated above and also for the relief of injunction as has been narrated earlier. Although the facts pleaded in the plaint are voluminous but for the purpose of the decision of the Notice of Motion few of them are relevant. They are as under.

(2.) THE plaintiff is a Public Limited company which has its registered office at Virginia House, 37, Chowringhee, Calcutta-700071. Similarly defendant No. 1 is a company organised and existing under the laws of England which has its registered office at 66 Leman Street, London El 8 eu, United Kingdom. Defendant No. 2 is also a company registered in England having its registered office at Evans House, 78/82 High street, Brentwood, Essex, United Kingdom. Defendant No. 3 is a Private Limited Company registered in India under the Companies Act, 1956 having its registered office at Bombay. Defendant no. 4 is the Grain and Feed Trade Association limited (GAFTA) organised and existing under the laws of England having its registered office at 28, St. Mary Axe London EC3a SEP, United Kingdom. Defendant No. 5 is the Arbitrator appointed by defendant No. 4. Defendant No. 6 is also an arbitrator appointed by Defendant No. 4.

(3.) BY a fax message dated 7th July, 1995 the third defendant invited the plaintiff to make an offer for sale by way of export of 1000 metric tonnes of 25 per cent long grain Indian rice in august/september. The third defendant stated that it had a firm buyer at a price of U. S. $ 244 per metric tonne FOB Kakinada. On 13th July, 1995 the plaintiff replied to defendant No. 3 by way of a fax message offering for export the rice as described by defendant No. 3. A number of conditions were stipulated in the said fax message. One of the conditions related to the mode of payment which was stipulated to be by a confirmed Irrevocable Without Recourse 100 per cent Letter of Credit, hereinafter referred to as the L/c , in favour of the plaintiff issued by a prime International Bank. Defendant No. 3 sought certain clarifications from the plaintiff on behalf of its associate in the United Kingdom, defendant No. 2. It was stated that the details are required to enable the defendant No. 3 to obtain the firm bid of the buyer. These clarifications were furnished immediately by the plaintiff again by a fax message dated 13th July, 1995. By a fax message dated 14th July, 1995 defendant No. 3 forwarded to the plaintiff a firm offer of 1000 metric tonnes of rice which had been received by Defendant No. 3 from its customer in the United Kingdom, Defendant No. 1. The bid contained in the aforesaid fax message agreed upon the price. The said bid set out various terms and conditions which were fundamentally different from those contained in the plaintiff s fax message dated 13th July, 1995. Even the type of rice to be exported had been changed. Response was sought from the plaintiff within an hour on 14th July, 1995. Certain telephonic conversation also took place between the representatives of the plaintiff and one Mr. Arun Shah of defendant No. 3. By a fax message dated 14th July, 1995 the plaintiff sought the agreement for three fundamental terms from the defendant No. 3 as discussed on the telephone viz.