Mohd.Haroon vs Union Of India And Another
2010 Latest Caselaw 46 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

%                Date of Decision: 8th January, 2010.

+                      W.P.(C).No.10617/2006

Mohd.Haroon                                         ..... PETITIONER
                       Through:Mr.Sanjay Jain, Sr. Advocate with
                               Mr. Navneet Panwar and Ms. Tani
                               Sudan, Advocates.

                                    Versus

Union of India and Another                    ....   RESPONDENTS
                  Through: Mr. R.K. Joshi, Advocate for Respondent
                           no.2

CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR

     1. Whether reporters of Local papers may be               YES
        allowed to see the judgment?

     2. To be referred to the reporter or not ?                YES

     3. Whether the judgment should be reported                YES
        in the Digest?

Anil Kumar, J.

1. The petitioner who is an auction purchaser has sought

quashing of the entire auction for the lot numbers 39 and 59

comprising 5 containers of HMS scrap held on 15.6.2005 and

consequently refund of a sum of Rs.19,17,760/- alongwith interest

and Rs.2,20,814/- along with interest on account of penalty and

ground rent charges till 31st March, 2006 and another amount of

Rs.2,70,000/- paid by petitioner to the transporters whose trucks are

lying at the bonded area since 3rd April, 2006.

2. Brief facts to comprehend the controversies are that the

petitioner is in the business of trading in metal scrap in the name of

M/s. Adil Tin Scrap Store, 462, Shahzada Bagh, Inderlok, Delhi-

110035. On 30.5.2005, respondent No.2 had published the auction

notice dated 15.6.2005 (1/2005-2006) in the leading newspapers

proposing to dispose of different materials including HMS contained in

30 containers by public auction on "As is where is" basis. In the

auction notice neither the reserve price nor weight nor quantity was

mentioned.

3. Pursuant to the auction notice petitioner paid the entry fee of

Rs.250/- and also deposited a refundable security of Rs.20,000/- for

participating in the auction. The dates of inspection of material at

ICD, Tughlakabad were fixed on 10th, 13th and 14th June, 2005.

4. The petitioner contended that during the course of auction while

inviting bids for the lots numbered at serial numbers 39 and 59 it was

declared orally by the officials of the respondent no.2 that lot number

39 contained 4 containers and lot No.59 contained one container

having approximately 19 tones of HMS scrap per container. Assertion

of the petitioner is that relying on the representations and the details

given by the respondent the petitioner formulated his bid and quoted

an amount of Rs.15,10,000/- for lot no.39 and Rs.34,000/- for lot

no.59. The bid of the petitioner was accepted and on acceptance of his

bid petitioner tendered the advance of 30% amounting to

Rs.4,55,000/-.

5. According to the petitioner the respondents failed to complete

the necessary formalities and hand over the goods to the petitioner

entailing repudiation of the agreement and, therefore, a letter dated

11.8.2005 was sent to refund the part consideration already tendered

by the petitioner. However, all the legitimate demands of the petitioner

were thwarted by the officers of the respondent who being aware of the

discrepancies in auction, directed the petitioner to desist from

insisting on cancellation of auction and threatened with forfeiture of

advance amount tendered by him. Consequently in order to salvage

the situation and to minimize the loses the petitioner instead of

seeking repudiation paid the balance payment within the extended

time and also sought waiver of penal interest and ground rent and

sent letter dated 18.10.2005.

6. The petitioner paid the entire amount, however, only 50% waiver

of ground rent and penal interest was granted by the respondent and,

therefore, petitioner approached the respondents on 3rd April, 2006 for

obtaining delivery of goods and placed the trucks for transportation.

When three containers bearing Nos.GATU 0409488, CPSU 1602659

and CPSU 5931249 were de-stuffed and goods were loaded on to the

trucks the weight appeared to be less and on weighing the goods it

transpired that the goods were far short of the quantity represented

to him at the time of auction by the respondent. The three containers

had only about 12,500, 12,500 and 8,500 kgs of HMS scrap which

was cumulatively 40% short of the quantity declared/represented at

the time of auction. The petitioner, therefore, declined de-stuffing of

remaining two containers and to take delivery of de-stuffed goods

loaded in the trucks and by letter dated 7.4.2006 sought permission

to stuff back the goods into the containers to avoid the truck retention

charges and other incidental cost until the settlement of the dispute

which request was summarily rejected and the petitioner was directed

to take the delivery of the goods.

7. Contention of the petitioner is that he has reasons to believe

that the approximate weight of scrap (HMS) in five containers at the

time of arrival at the inland container depot was approximately 19

metric tones which was reflected in the respective bills of lading and

also the Import General Manifest. The petitioner does not have these

documents and so he approached the custom authorities to know

about the valuation of the goods put up for auction under RTI Act vide

application dated 20.4.2006. However, the information was not

provided as the date of auction was wrongly mentioned as 30.5.2005.

Even custom authorities refused to divulge any information and by

letter dated 6.5.2006 respondents again called the petitioner to take

delivery of the goods and by another letter dated 8.5.2006 the

respondents again demanded the petitioner to take the goods which

were auctioned on "as is where is" basis. The petitioner thereafter

served legal notice. The assertion of the petitioner is that he is losing

Rs.5,000/- per day on account of ground rent and payment to the

transporters besides brokerage and huge amount of capital invested in

the goods. The action of the respondents is challenged inter alia on

the grounds that the action of the respondents should be transparent

in public offices and the respondents are liable to render information

regarding the valuation of the goods. The respondent has knowingly

and willfully given much inflated projection of the quantity of goods

and deliberately failed to specify the quantity in the relevant auction

notice which was though declared orally during the course of the

auction. According to the petitioner the deliberate omission to mention

the weight of the goods auctioned was in order to avoid the exposure

of shortage that had occurred when the goods were in possession of

the respondent.

8. The claim of the petitioner was resisted by the respondent and

the reply was filed on behalf of respondent No.2. It was asserted that

the petitioner has suppressed the material facts. The auction notice

categorically stipulated that the materials shall be sold on "As is

where is basis" and opportunity to inspect the material was given to

the petitioner who had inspected the material and had declared that

he had "inspected the material upto his entire satisfaction". No reserve

price nor the weight nor the quantity were declared and the petitioner

after making the highest bid in the auction also deposited the

consideration in terms of the auction, now wants to wriggle out of the

contract. The respondent relied on the letter dated 6.9.2005 by the

petitioner whereby he sought taking of delivery after one month on

account of huge loss suffered by the petitioner in his absence. The

letter dated 6.9.2005 of the petitioner is as under:-

To,

The G.M.Commercial TKD ICD, Delhi.

Sub: Extension of period of taking delivery of lot No.39 & 59 Auction dated 15.6.2005.

Respected Sir,

Reference to your letter dated 30.8.05 we are now not in a position to take the delivery due to huge loss in my business we want to take the delivery of the above lots after one month.

So, please grant me permission to take the delivery after one month.

Thanking you

Yours Sincerely

Haroon (ADIL TIN STORE)

9. By another letter dated 26.12.2005 the petitioner again sought

waiver of late payment and ground rent charges as the market of HMS

was decreasing day by day. Considering the request of the petitioner

the respondent waived 65% against due TSC and allowed full waiver of

late payment of 2% monthly surcharge. The respondent No.2 was

categorical that for none of the items, the reserve price was mentioned

nor the weight nor the quantities were mentioned, as the goods were

to be auctioned on "As is where is basis". The petitioner after

inspecting the goods on 14.6.2005 had also circulated that he had

read and understood the terms and conditions of sale through auction

which was held as per terms and conditions which were read and

understood by the petitioner. Petitioner had paid full balance payment

of Rs.2,47,160/- inclusive of sales tax against lot No.59 without

payment of applicable late payment surcharge and the ground rent

and no demand was made against lot no.39. An amount of

Rs.7,74,472/- was deposited by the petitioner on 17.2.2006 towards

lot no.39 and the balance amount was paid on 18.2.2006 and an

amount of Rs.2,20,814/- paid towards ground rent and surcharge.

10. The allegation of the petitioner that the weight of the goods was

orally disclosed at the time of auction was refuted by the respondent

contending that no weight or quantity was disclosed nor any claim in

that regard could be entertained. The respondent contended that they

were entitled to fix the terms and conditions of the auction under

section 64 of the Sale of Goods Act which were fixed and the auction

was held on those terms and conditions only. The goods for auctioned

on '"as is where is basis". Neither the reserve price was fixed nor the

weight was disclosed. The bids were submitted by the petitioner after

inspecting the goods and bid of the petitioner was accepted leading to

a concluded contract between the parties. According to respondents,

the petitioner is not entitled to modify, change or vary the terms of the

agreement. Referring to section 48 of Customs Act, it was pleaded that

the goods were not auctioned under the provisions of said section as

the said section has no application in the facts and circumstances of

the case. Regarding notifications relied on by the petitioner, it is

contended that those notifications were not applicable in respect of

goods auctioned by the respondent and purchased by the petitioner.

In the circumstances respondents contended that the petitioner is

liable to remove the goods and the respondents are not liable either to

refund the amount already paid by the petitioner nor are liable to

refund any other amount claimed by him nor the respondents are

liable to pay interest on the amounts claimed. The respondents also

contended that petitioner cannot invoke the writ jurisdiction under

Article 226 of Constitution of India for the purpose of altering the

terms and conditions of the contract or to seek cancellation of the

same and claim punitive damages and the writ petition is wholly

misconceived.

11. The petitioner has relied on Ram Chander Vs Savitri Devi,

(2003) 8 SCC 319; ABL International Ltd. & anr Vs Export Credit

Guarantee Corporation of India & ors, (2004) 3 SCC 553 and

M.K.Shah Engineers & Contractors Vs State of Madhya Prades (1999)

2 SCC 594. Reliance has also been placed on RAdhakrishna Agarwal

& ors. vs State of Bihar & ors, (1977) 3 SCC 457 and Ramchandra

Singh vs Savitri Devi & ors, (2003) 8 SCC 319

12. Per contra the learned counsel for the respondent has referred

to In Orissa Agro Industries Corporation Ltd. v. Bharati Industries

and Ors. (2005) 12 SCC 725; State of Punjab v. Dial Chand Gian

Chand and Company. AIR 1983 SC 743; State of Haryana and Ors. v.

Lal Chand and Ors. AIR 1984 SC 1326; Assistant Excise

Commissioner and Ors. v. Issac Peter and Ors. (1994) 4 SCC 104;

Tata Cellular v. Union of India. (1994) 6 SCC 651; Consolidated Coffee

Ltd. v. Coffee Board, Bangalore. AIR 1980 SC 1468; Hari Shanker Vs

Dy.EE & T Commissioner, AIR 1975 SC 1121, T.N Electricity Board Vs

N Raju Reddiar, AIR 1966 SC 2025;State of Haryana Vs Lal Chand,

AIR 1984 SC 1326; Steel Authority of India Ltd. Vs National Union

Water Front Workers, (2001) 7 SCC 63 and Asst. Excise

Commissioner Vs Issac Peter, (1994) 4 SCC 125 in support of pleas

and contentions on behalf of the respondent.

13 The learned counsel for the parties were heard at length and

writ petition, reply and the documents and the judgments relied on by

the parties have been perused. It may not be necessary to refer to all

the precedents relied on by the parties as the ratio of one case cannot

be mechanically applied to another case without having regard to the

fact situation and circumstances obtaining in two cases as was held

by the Supreme Court in Rafiq VS State, 1980 SCC (Crl.) 946. The

ratio of any decision must be understood in the background of the

facts of that case. What is of the essence in a decision is its ratio and

not every observation found therein nor what logically follows from the

various observations made in it. It must be remembered that a

decision is only an authority for what it actually decides. It is well

settled that a little difference in facts or additional facts may make a

lot of difference in the precedential value of a decision. It is also well

settled that a little difference in facts or additional facts may make a

lot of difference in the precedential value of a decision. The Supreme

Court in Bharat Petroleum Corporation Ltd and Anr. v. N.R.Vairamani

and Anr. (AIR 2004 SC 778) had also held that a decision cannot be

relied on without considering the factual situation. In the same

judgment the Supreme Court also observed:-

" Court should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes.

14. In the light of the proposition of the Supreme Court, lets

consider some of the precedents relied on by the parties. The

petitioner has relied on ABL International Ltd and Anr. Vs. Export

Credit Corporation of India Ltd, (2004) 3 SCC 553 holding that

disputed questions of fact can be considered in an appropriate case

and the writ Court has jurisdiction to entertain such a writ petition

and there is no absolute power in regard thereto. The Apex Court had

held that a writ petition involving serious disputed questions of facts

which requires consideration of evidence which is not on record, will

not normally be entertained by a Court in the exercise of its

jurisdiction under Article 226 of the Constitution, but there is no

absolute rule that in all cases involving disputed questions of fact, the

parties should be relegated to a Civil suit. Relying on Gunwant Kaur's

Case, (1969) 3 SCC 769 it was held that if the facts required, oral

evidence can be taken and consequently in an appropriate case the

writ Court will have jurisdiction to entertain a writ petition involving

disputed questions of fact and there is no absolute bar for

entertaining a writ petition even if the same arises out of a contractual

obligation and/or involves some disputed questions of fact. However

in ABL International Ltd (supra) the point involved was the

interpretation of contract without any external aid. In fact no detailed

disputed questions of facts were involved.

15. In State of Bihar Vs. Jain Plastic and Chemicals Ltd, (2002) 1

SCC 216, the Apex Court had held in para 7 as under:

7. In our view, it is apparent that the order passed by the High Court is, on the face of it, illegal and erroneous. It is true that many matters could be decided after referring to the contentions raised in the affidavits and counter- affidavits, but that would hardly be a ground for exercise of extraordinary jurisdiction under Article 226 of the Constitution in case of alleged breach of contract. Whether the alleged non-supply of road permits by the

appellants would justify breach of contract by the respondent would depend upon facts and evidence and is not required to be decided or dealt with in a writ petition. Such seriously disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined on the basis of evidence which may be led by the parties in a properly instituted civil suit rather than by a court exercising prerogative of issuing writs.

16. From the above it is apparent that normally if a writ involves

serious disputed questions of fact which requires consideration of

evidence which is not on record then it will not be entertained by a

Court in the exercise of its jurisdiction under Article 226 of the

Constitution of India, however, this does not lay down an absolute

rule. In a petition under Article 226 of the Constitution of India the

High Court has jurisdiction to try issues both of fact and law and High

Court is not deprived of its jurisdiction as the discretion is with the

High Court, which is to be exercised on sound judicial principles.

When a writ petition raises questions of fact of a complex nature,

which may for their determination require oral evidence to be taken

and on that account if the High Court is of the view that the disputes

may not be appropriately tried in a writ petition, the High Court may

decline to try such petition. The petitioner has also placed reliance on

Manu/SC/0053/1977, Radha Krishna Aggarwal and others Vs. State

of Bihar and others where the division of types of cases in which

breaches of obligation by the State or its agent can be set up as

detailed by the Patna High Court was approved by the Apex Court.

The types of cases of breaches were stated as follows:-

i) Whether the petitioner makes "a grievance of breach of promise on the part of the State in cases where on the assurance or promise made by the State he has acted to his breach or predicament, but the agreement is short of a contract within the meaning of Article 226 of the Constitution;

ii) Where the contract entered into between the person aggrieved and the State is in exercise of a statutory power under certain Act or rules framed thereunder and the petitioner alleges a breach on the part of the State;

iii) Where the contract entered into between the State and the person aggrieved is non-statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract and the petitioner complains about breach of such contract by the State."

17. Relying on (2005) 12 SCC 725, Orissa Agro Industries

Corporation Ltd Vs. Bharat Industries and Others the learned counsel

for the respondents, Mr. Joshi challenged the efficacy of a writ

jurisdiction, as the writ petition involves disputed questions of fact. In

the said case the dispute was about the valuation of articles left by the

petitioner and it was held that the valuation of the goods left will

involve complicated question of fact and the material requires

thorough proof on factual aspects and in the circumstances the High

Court ought not to have entertained the writ petition. The Apex Court

was of the view that whether or not the High Court should exercise

jurisdiction under Article 226 of the Constitution would largely

depend upon the nature of the dispute and if the dispute cannot be

resolved without going into the factual controversy the High Court

should not entertain the writ petition. The question whether the action

of the opposite party in the writ petition amounted to breach of

contractual obligation ultimately depends on the facts and would

require material evidence to be scrutinized and in such a case writ

jurisdiction should not be exercised. The Apex Court had also referred

to the case of Radha Krishna Aggarwal (Supra) holding that where the

contract entered into between the State and the person aggrieved is

non statutory and purely contractual and the rights and liabilities of

the parties are governed by the terms of the contract and in exercise of

executive power of the State, no writ order should be issued under

Article 226 to compel the authorities to remedy a breach of contract

pure and simple especially when factual disputes are involved.

18. With these guiding principles let us consider the disputes

involved in the present writ petition. The case of the petitioner is that

under the statutory provisions of the Customs Act and the

notifications issued the weight of the consignment which was

auctioned on " As is where is" basis ought to have been declared and

in fact as per the petitioner before the auction the weight was

disclosed orally to be 19 metric tones. According to Sh. Jain, Learned

counsel for the petitioner in the valuation got done by the respondent,

which is also based on the bill of entry, the weight is about 20.1. The

weight of four containers is about 20.574 metric tons whereas the

weight of one container bearing No.GATU 0409488 is about 20.10

metric tones. His plea is that the various documents including

valuation reports containing the weight of the containers which were

auctioned were not made public and consequently there was no way

for the petitioner to know the weight of the container. Since the

petitioner was given the weight as 19 metric tons which was disclosed

to him before the auction which is quite approximately near to the

weight mentioned in the documents, the natural inference is that the

weight was disclosed to the petitioner before the auction and he

participated in the auction on the promise that the container holds

about 19 metric tons of scrap on "As is Where is" basis.

19. According to the petitioners the imported goods lying unclear

are classified into two categories viz, a) goods confiscated under the

Customs Act, 1962 and (b) goods not confiscated but lying

uncleared/unclaimed. Goods of category (a) are disposed of by the

Customs Department through the disposal units of the department

and it is their responsibility. However, the goods in category (b) are

disposed of by the custodian who has to make a list of the imported

goods which lay uncleared/unclaimed for more than 45 days and then

has to send the list of such goods to the customs on monthly basis.

Relying on the circulars of the customs it was contended that the list

which is sent of the uncleared imported goods should contain

complete particulars such as airways bill number, description of

goods, weight, name of the consignee/consignor etc and the valuation

of the goods should be done by a committee consisting of a

representative of the custodian, Government approved valuers and a

representative of the customs for working out the reserve prices of the

consignment to be auctioned.

20. The Assistant Commissioner on the receipt of the list of such

goods which have not been cleared for more than 45 days has to

scrutinize the list and withdraw certain categories of goods for the

proposes of sales. Reliance has been placed by the petitioner on the

board's circular No.7/2004-CUS dated 28.1.2004 which prescribes

the procedure for disposal of uncleared/unclaimed cargo landed upto

31st March, 2003. The said circular was further extended for disposal

of the goods upto 30th April, 2004 by circular No.35/2004-CUS dated

20th May, 2004. By such circular the time was extended from 30th

April, 2004 to 31st December, 2004.

21. According to the petitioner the root cause of the problem is

compulsion by Concor, respondent No.2 to lift the containers despite

the quantity of scrap being 40 to 50% less than the

projected/representative weight. Assertion of the petitioner is that the

respondent No.2 knew and ought to have known the weight of the

scrap in the containers as the procedure for selling the goods had

been crystallized in circular No.7/2004 dated 28th January, 2004

brought out by the Ministry of Finance, Department of Revenue,

Central Board of Excise and Custom. Referring to circular No.7/2004

it is also asserted by the petitioner that the said circular shall prevail

in case of inconsistency between the said circular or any other

circulars. The alleged finality to the procedure stipulated in Circular

No.7/2004 is further augmented relying on circular No.50/2005

which according to the petitioner makes clear that the procedure

detailed in Circular No.7/2004 is a permanent measure without any

modification and consequently the auction of the material could not

based on the whims and fancies of the public warehouses holding the

auction.

22. In the circumstances, the learned counsel very vociferously

contended that the respondents ought to have followed the procedure

established by law which is in terms of Circular No.7/2004 and if one

has to follow that, the inferential answer or deductive answer would

be that the weight of the scrap in the containers could not be less

than 19-20 metric tons per container which the respondent No.2

knew since the IGM must have duly disclosed the weight. Though the

weight of each container disclosed in IGM is subject to reasonable

limits of approximation, however, this deviation will also have to be

within the limit of the weight indicated in IGM under Section 116 of

the Act because, if the quantity unloaded is short, the carrier of the

goods is liable for penalty for mis-declaration and under Section 45(3)

of the Act, the respondent No.2 himself is liable to pay duties, if the

goods are pilfered after unloading from its custody. In the

circumstances, it has been emphatically contended on behalf of the

learned counsel for the petitioner that the respondent No.2 could not

be unaware of the quantify of goods as indicated in IGM nor

respondent No.2 could allow the goods to be pilfered from its custody

and before working out the reserve price the weight ought to have

been taken into consideration by respondent No.2.

23. The plea of the respondent that the weight was not disclosed

and was not required to be disclosed is countered by the petitioner by

relying on some other tender notice documents where the respondents

did disclose the weight of the material to be auctioned at the time of

the tender notice itself. One of the plea for adjudication in the

circumstances will be that if the respondent had disclosed the weight

of the goods in other tender notices, were they liable to disclose even

in this case of the petitioner also where tenders were filed by the

petitioner. What would be the ramification of not disclosing the weight

in the facts and circumstances would also require adjudication which

will depend on various disputed question of facts. The petitioner has

also allegedly raised a presumption that in case the weight was not

disclosed by the respondent, then it is to be presumed that it was

known to the respondent and the plea of the petitioner that the weight

was orally communicated to the petitioner should be accepted. This

plea of the petitioner is countered by the respondents by specifically

contending that the auction on June 15, 2005 was conducted by SMG

B.T. Pvt. Ltd and in the circumstances the plea of the petitioner that

the officials of the respondents had disclosed the weight of containers

orally to the petitioner is not justified and is factually incorrect. In the

circumstances only during trial of these disputed facts an inference

can be drawn whether the weight of consignment was communicated

orally to the petitioner or not. Though the auction was conducted by

SMG B.T. Pvt. Ltd, however, the presence of the official cannot be

ruled out merely on account of the auction done by another agency.

But this cannot be established merely on the basis of the documents

produced along with the writ petition and the averments made

therein.

24. The petitioner has also asserted that since the respondent No.2

has filed selective documents of tender not containing the disclosure

about the weight and since the respondent is not in a position to deny

some of the documents of other tenders filed by the petitioner which

cannot be denied by the respondent No.2, therefore, in such

circumstances if there are gaps in the explanation given by the

respondent, the same are to be filled by applying the principles of

presumptions in ordinary course.

25. This plea of the petitioner seems to be without any rationale. If

an explanation has not been given by the respondent and if some

presumption has to be drawn, such a presumption shall be rebuttable

and the respondent shall be entitled to rebut the same. Merely on the

basis of such gaps as has been projected by the petitioner, it will not

be appropriate to cancel the agreement between the parties and to

award damages to the petitioner and to absolve petitioner of his

liability under the agreement. For the reasons as has been expounded

by the petitioner as to why the weight should have been disclosed to

the bidders for a commodity like scrap where weight is the essence

and where the respondent knows the approximate weight on the basis

of IGM and if in the auction actual weight is found to be 40 to 50%

less than the weight indicated in the IGM, then why the auction be not

quashed, are such disputes which cannot be adjudicated without

recording cogent evidence in respect of pleas and counter pleas.

Though there is no presumption in favor of the petitioner and against

the respondent as has been drawn by the petitioner, however even

such presumption as are sought to be drawn by the petitioner, cannot

be conclusive. The presumption as has been sought to be drawn by

the petitioner shall be rebuttable and the respondent shall be entitled

to rebut the same. On the basis of the probability that in the

circumstances the version propounded by the petitioner should be

believed that the weight was disclosed and later on the weight was

found to be less, it will not be justifiable and appropriate to cancel the

contract or to award damages to the petitioner against the respondent

and absolve petitioner completely of his liability under the agreement,

especially in view of the plea taken by the respondent that in the letter

of 7th April, 2006 it was stated that the goods are half in containers

and half loaded in truck but the quantity of goods found in the

containers was not given and it was only later on the plea was raised

that goods were less than what was disclosed orally. It has been

categorically pleaded that the plea of the weight of the goods being

less was not taken contemporaneously. The version of the respondent

is also being justified that the goods were received by the shipping line

on the basis of weight disclosed by the shipper and not the weight

given after actual weighing and in the circumstances there is a

possibility of goods being short shipped by the exporter. The

respondents have also contended that out of 113 containers auctioned

on June 15, 2005 out of which 30 were for HMS, the shortage is

complained only in case of petitioner and by no one else. In the

circumstances, the respondents have also relied on the letter dated 6th

September, 2005 of the petitioner categorically stipulating that the

petitioner is not in a position to take the delivery due to huge loss

suffered by him in the business as the price of scrap had fallen. In the

circumstances, merely on the basis of the averments made in the

petition and considering the replies given by the respondent it will not

be safe to adjudicate the pleas and contentions of the parties in

exercise of its jurisdiction under Article 226 of the Constitution of

India by this Court.

26. Though in case of ABL International Ltd and Anr v. Export

Credit Corporation of India Ltd (Supra) it was held that questions of

fact can be considered in exercise of jurisdiction under Article 226 of

the Constitution of India, however, what is to be seen is that in ABL

International Ltd and anr. as already referred to hereinabove, the only

question was about examining the terms of the contract without

having to take recourse to any external aid. The dispute in the said

case was whether ABL International Ltd should have adhered only to

receive consideration by barter of goods or was also entitled to

demand the consideration by cash in US dollars and whether non

payment of such consideration was governed by the contract of

insurance or not. In these circumstances the Court had interpreted

the terms of the contract without any external aid and had exercised

the jurisdiction in the writ petition. In contradistinction the present

writ petition raises substantial disputes of facts. The petitioner has

rather raised presumptions some of which do not arise in law,

however, the presumptions as has been raised by the petitioner shall

also be rebuttable and it is not the mere interpretation of a policy or

circulars of customs or of contract without any external aid.

27. The petitioner is not only seeking interpretation of the contract

but is also invoking variation of the terms of the contract which is

resisted by the respondent invoking Sections 91 and 92 of the

Evidence Act. The respondent has relied on Tamil Nadu Electricity

Board v. N.Raju Reddiar, AIR 1996 SC 2025 holding that once a

contract is reduced to writing, by operation of Section 91 of the

Evidence Act, it is not open to any of the parties to seek to prove the

terms of the contract with reference to some oral or other

documentary evidence to find out the intention of the parties. Under

Section 92 of the Evidence Act where a written instrument appears to

contain the whole terms of the contract then the parties to the

contract are not entitled to lead oral evidence to ascertain the terms of

the contract.

28. It is now well established that to qualify for an order or decree

which concludes one or another issue, the averments and the pleas

should be unconditional and unambiguous. Such admissions cannot

be and should not be allowed to be inferential admission as it may be

possible to have different inferences and the Court should not deduce

an admission as a result of interpretive exercise. The substantial plea

of the petitioner is based on the submission relying on the circulars

and other facts pleaded that the weight ought to have been disclosed

by the respondent and in fact the weight of the containers was

disclosed by its officials orally. This plea has been consistently denied

by the respondent by contending that weight was not disclosed in the

tender notice nor it was obligatory on the respondent to declare the

weight of the goods to be auctioned as per Section 48 of the Customs

Act. The dispute on the basis of the pleas and contentions of the

parties is also whether the auction of the goods was covered by

Section 48 of the Customs Act or not as the respondent is very

categorical in contending that Section 48 has no application to the

facts and circumstances of the case. The respondent has countered to

the extent by contending that even if it is assumed that in case

Section 48 of the Customs Act was applicable, that section does not

mandates that the respondent was obligated to mention the weight of

the cargos to the auctioneer. According to the respondent goods in lot

No.39 arrived during July, 2004 whereas goods in lot No.59 had

arrived on 20th September, 2004 and none of the notifications relied

on and referred to by the petitioners had applied to the goods arrived

during the said period. Referring to circulars dated 17th October, 1997

and 13th January, 2000, it has been rather contended that it was not

mandatory pursuant to such notification to declare the weight of the

goods.

29. Another plea raised by the respondent is that at the time of

seeking the permission from the custom authorities vide letters dated

14th January, 2005 and 27th January, 2005 it was not obligated on

the respondent to disclose the weight at the time of auction.

30. Though in some cases even in a writ petition the Court can

exercise the jurisdiction in exercise of its writ jurisdiction, however,

the Apex Court in Hari Shankar (supra) had held at paras 21 and 22

as under:-

21. Analysing the situation here, a concluded contract must be held to have come into existence between the parties. The appellants have displayed ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching contractual obligations.

22 The writ jurisdiction of High Courts under Article 226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred.

31. In AIR 1983 SC 743, State of Punjab v. Dayal Gian Chander in

para 9 the Supreme Court had held as under:-

9. The High Court also did not appreciate that writ petition was filed by a licensee who participated in the auction with wide eyes open and on untenable plea wanted to wriggle out of the bargain. In this connection, one can advantageously refer to decision of the Constitution Bench of this Court in Har Shankar & Ors. etc. v. The Dy. Excise & Taxation Commissioner & Ors.: [1975] 3 SCR 254 at p. 266(AIR 1975 SC 1121 at p. 1126) wherein it has been held that the writ jurisdiction of the High Courts under Article 226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred.

The High Court could not have converted writ petition into a suit for recovery of damages and that too without recording a finding that there was any breach of contract. We are satisfied that the High Court was in error in granting the relief.(para 10 page 747)

32. Similarly, in Orissa Agro Industries Corporation Ltd v. Bharti

Industries, (2005) 12 SCC 725 it was held that no writ, order can be

issued under Article 226 to compel the authorities to provide a remedy

for breach of contract. In the instant case the disputes related to the

disputed questions of fact and were not dealt with in the writ petition.

In State of Haryana & Ors v. Lal Chand and Ors, AIR 1984 SC 1326 it

was held that persons who offer their bids at an auction to vent

country liquor with full knowledge of the terms and conditions

attached thereto, cannot be permitted to wriggle out of the contractual

obligations arising out of the acceptance of their bids by a petition

under Article 226 of the Constitution. Regarding the contracts entered

into pursuant to public auction by floating of tenders or by

negotiations, in Assistant Excise Commissioner and Ors v. Issac Peter

and Ors, (1994) 4 SCC 104 the Supreme Court had held that there is

no compulsion on anyone to enter into these contracts. It is voluntary

on both sides and there can be no question of the said bar being

involved in such contracts and the moral rights and liabilities of the

parties are covered by the terms of the contracts which may be

statutory in some cases, however, the law relating to the contracts

should prevail.

33. In the case of the petitioner the disputes raised by the petitioner

are not restricted to decision making process as according to the

petitioner the weight ought to have also been disclosed. In Tata

Cellulars v. Union of India, (1994) 6 SCC 651 it was held that the

principle of judicial review would apply only to the decision making

process and not the merits of the decision itself as the Court does not

sit as an appellate authority while exercising power of review. In

Consolidated Coffee Ltd v. Coffee Board, Bangalore, AIR 1980 SC 1468

it was held that only when a clear intention is non deducible from the

terms and conditions that other factors such as the course of dealings

and conduct of the parties assume relevance. The Courts approach

while considering whether any averment or omission to traverse any

material allegation amounts to an admission, it cannot be myopic. It is

off necessity, taken into consideration the implication which may arise

from a party urging one contention or the other, on the basis of

existing materials.

34. In the totality of facts and circumstances and for the foregoing

reasons this Court is not inclined to exercise its jurisdiction to

adjudicate the questions of fact, of course disputed question of law as

well raised by the parties as they also depend on the disputed

question of facts. Consequently, the reliefs as claimed by the

petitioner are declined in the present writ petition. The writ petition is

disposed of with these observations, however, the parties shall be free

to raise and to get their disputes adjudicated in the appropriate

forums. Considering the facts and circumstances the parties are also

left to bear their own cost.

JANUARY 8th, 2010                              ANIL KUMAR, J.
'k'