NEO METALIKS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE subject matter of the writ petition that resulted in the judgment and order impugned would relate to a sale transaction to the extent of thirty thousand metric ton of LAM coke that the appellants wanted to purchase from the respondent company MMTC Ltd. (hereinafter referred to as 'MMTC'). The practice followed in such type of transaction was as follows :

(2.) THE appellants claimed, they had requirement of LAM Coke for the purpose of manufacture of pig iron. They participated in a live E- auction for LAM Coke that MMTC failed to supply. The appellants would also contend, on December 24, 2009 they received a price circulation through facsimile message quoting a particular price. The price was ex-plant exclusive of excise duty, sales tax, freight and other statutory duties and payment would have to be made within three working days and delay in deposit would attract penalty at the rate of Rs.50.00 per day. The delivery would be made against hundred percent advance payments. The facsimile message they received, came from Delhi office of MMTC and received at Calcutta in the office of the appellants. By the letter of the same date they offered to purchase thirty thousand metric ton when MMTC was requested to confirm supply. They sent such message to the Calcutta office of MMTC as well as Orissa office. The MMTC did not reply to their letter and only when the scheduled date expired they enhanced the price. The appellants sent letters on January 4, 2010 and January 6, 2010 through their Advocates on the issue that the respondent did not reply. Hence, they approached the learned Single Judge by filing a writ petition. The respondent contested the writ proceeding. The respondent claimed, the price was variable depending upon the market. The price offered to the appellants, was for a fixed period. The Terms of Contract was to supply against hundred percent advance payment that the appellants failed to pay. Hence, MMTC did not have any obligation to entertain their claim. The learned Single Judge initially passed an interim order on January 13, 2010, directing MMTC to supply thirty thousand metric ton within a week from the said date. However, the appellants did not deposit the price, as according to them, MMTC demanded much more than the price originally offered. The learned Single Judge heard the writ petition on merits after completion of affidavits. The learned Single Judge dismissed the writ petition inter alia holding, the petitioners were to make hundred percent advance payment within the time stipulated. Their failure in deposit resulted in non-supply. Such action on the part of the MMTC could not be held to be arbitrary or unreasonable or unjust. The writ petitioners did not make advance payment, others made it promptly and got the supply. Such action could not be said to be arbitrary. The learned Judge observed, the decision in the case of ABL International Ltd. & Anr. Vs. Export Credit Guarantee Corporation of India Ltd. & Ors. reported in 2004 Volume-III Supreme Court Cases pagae-553 would have no application at all. His Lordship considered the other decisions cited at the Bar and observed, that did not inspire the confidence of His Lordship to allow the writ petition.

(3.) MR . Jishnu Saha, learned counsel appearing for the appellants would strenuously argue, Section 5 and 11 of the Sale of Goods Act would suggest, how a contract of sale could be made. According to him, stipulation as to time of payment could not be deemed to be the essence of contract. In the present case the sale was subject to availability of stock that the respondent failed to confirm, despite reminders being given. He also relied upon Section 55 of the Contract Act that would pre-suppose, failure to perform a contract within the stipulated time, the contract became voidable at the option of the promisee in case the parties would agree, time would be the essence of contract. In the instant case, since the respondent MMTC failed to confirm the availability of stock the obligation of the appellants to deposit money did not arise at all. Hence, the contract could not be said to be a time-bound one having time, the essence of contract. He would further contend, there was no disputed question of fact that could cause hindrance in the way of admission of the writ petition.