M/S Arvind Khanna vs International Airport Authority ...
2012 Latest Caselaw 6993 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                           CS(OS) No.2069/1992

%                                                    December 6, 2012

         M/S ARVIND KHANNA                                  ...... Plaintiff
              Through: Mr. Girish Aggarwal with
                       Ms.Mugdha Pandey, Advs.


                            VERSUS


         INTERNATIONAL AIRPORT AUTHORITY OF INDIA
                                                 ..... Defendant
             Through: Mr. Aruneshwar Gupta with
                      Mr. Manisha Raghav & Mr. Nikhil Singh, Advs.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not?                          Yes.


VALMIKI J. MEHTA, J (ORAL)

1(i).          This is a suit filed by the plaintiff for recovery of

Rs.22,73,930.50/- alongwith interest. The amount as claimed in the suit has

been broken up as per para 33 of the plaint which reads as under:-

               "That as per the terms between the defendant and the
               plaintiff, and on the basis of Rs.1,19,17,936/- cash
               collection on the basis of actual meter reading of the STD
               Pay Phones and deposited by the plaintiff with the
               defendant, the plaintiff is entitled for the sum of
               Rs.18,64,274/- on account of salary and supervision
CS(OS) No.2069/1992                                                Page 1 of 23
             charges, Rs.2,59,656.50 towards profit and 1,50,000/- the
            amount of security and Bank guarantee, totalling
            Rs.22,73,930.50 which the defendant is liable to pay to
            the plaintiff. However, the amount admitted by the
            defendant payable to the plaintiff on account of manning
            charges upto 15.4.1992 is Rs.18,62,800/- and a sum of
            Rs.3,35,075/- on account of profit but the said amount as
            per the statement enclosed with the letter of the defendant
            dated 22.4.1992 under the signature of Shri O.S.Tyagi
            has been deducted from the total amount of the MTNL's
            Bills instead of making payment to the plaintiff, which is
            unconstitutional, against the terms and illegal."

(ii)        The facts of the case are that the plaintiff was appointed to run

nine phone booths by the defendant/International Airport Authority of India.

Six booths were granted with effect from 6.1.1990. Three other booths were

thereafter granted w.e.f. 14.3.1990, 18.4.1990 and 1.5.1990. With respect to

the six booths, the contract between the parties is encompassed in two

documents being the letter dated 5.1.1990/Ex.P1 of the plaintiff to the

defendant and the letter dated 23.2.1990/Ex.P2 of the defendant to the

plaintiff. After the expiry of original term of six months for which the

booths were granted, for all the nine booths the period was extended for two

years in terms of the letter dated 22.11.1990/Ex.P7 of the defendant to the

plaintiff, and which contains more or less the same terms as contained in

Ex.P2.

(iii)       The main aspects of the contract in terms of the documents
CS(OS) No.2069/1992                                            Page 2 of 23
 Ex.P1 and Ex.P2 were that the plaintiff had to employ manpower for

operating the telephone booths at the two terminals of the defendant;

plaintiff had to collect the charges from the customers who utilize the phone

services from the phone booths; the total collection was to be deposited with

the defendant; the defendant was to make payment of the bills of the phones

to MTNL; out of the difference which would still be remaining balance with

the defendant, the plaintiff was first to be paid with respect to the expenses

incurred for the phone booths i.e the salary and supervision charges which

the plaintiff had to incur for manning of the booths, and finally the net

balance which was then available was to be divided in the ratio of half and

half between the plaintiff and the defendant i.e the profit sharing ratio was

50-50.

(iv)         Disputes and differences arose between the parties because the

plaintiff complained to the defendant that the phone booth which was in

Terminal II i.e the Cargo terminal was being misused during the night hours

for making STD/ISD calls leading to bills to be paid to MTNL being

unnecessarily inflated. The plaintiff contends that it is not liable to pay the

extra charges which have been shown in the bills of the MTNL qua the

booth in question, to the extent the same contain charges of illegal calls

CS(OS) No.2069/1992                                              Page 3 of 23
 made through the line in the phone booth in the cargo Terminal/Terminal II.

(v)          The contention of the defendant however is that in terms of

Clause 13 of the letter of the defendant to the plaintiff dated

23.2.1990/Ex.P2, if there was a discrepancy between the MTNL bills and the

collection deposited by the plaintiff with the defendant, then it was the

plaintiff which had to absorb the deficiency. What the defendant effectively

pleads is that the plaintiff cannot rake up the issue of inflated charges, and if

there was an issue of inflated charges, it was for the plaintiff to pursue the

matter with MTNL, and defendant had no role in this regard. The defendant

in fact pleaded that not only the plaintiff was not entitled to the amount

claimed, but the fact of the matter was that it was the plaintiff which was

liable to pay to the defendant a sum of ` 38,82,385/-.

2.           The following issues were framed in this suit on 11.4.2001:-

      "(1) Whether the suit is bad for misjoinder of parties especially
           M/s. Omnital and M/s. MTNL and is liable to be
           dismissed? OPD

      (2)    Whether the plaintiff is entitled to an amount of claim of
             Rs.22,73,930.50 from the defendant on account of
             excessive billing of the manning of the STD pay phone
             booth more particularly which the bills were issued by
             MTNL? OPD

      (3)    Whether the plaintiff has not performed his part of
             obligations in accordance with the work order dated
CS(OS) No.2069/1992                                                Page 4 of 23
              23.2.1990? OPD

      (4)    Whether the defendant had assured the plaintiff that the
             defendant shall be entirely responsible for the issues due to
             excessive billing by MTNL and undertook the
             responsibility of dealing with MTNL for refund of
             excessive bills paid by the defendant? OPD

      (5)    Whether clause 13 as contained in the letter dated
             23.2.1990 issued by the defendant is liable to struck down
             as illegal and void being unconscionable and against public
             policy and violative of Section 23 of the Contract Act?
             OPD

      (6)    Whether the defendant is entitled to counter-claim of
             Rs.16.49 lacs with interest from the plaintiff? OPD

      (7)    Whether the plaintiff is entitled to interest, if any on what
             rate? OPD

      (8)    Relief."

Issue No.6

3.           So far as issue No.6 is concerned, I may state that the counter

claim was dismissed on account of the non-payment of Court fees, however,

the defendant has filed a suit claiming the amount of ` 18,58,422/- from the

plaintiff alongwith interest, and which suit being CS(OS) No.701/1995.

This issue therefore does not call for decision in the present suit.

Issue No.1

4.           This issue is with respect to whether the suit is not maintainable

CS(OS) No.2069/1992                                                Page 5 of 23
 on account of non-joinder of M/s. Omnitel (which had supplied the phone

equipments) and M/s. MTNL (whose lines were provided in the phone

booths). Counsel for the defendant does not press this issue and this issue is

therefore decided as not pressed accordingly.

Issue Nos.2 to 4

5.           All these issues can be dealt with together inasmuch as the main

point for consideration is as to whether plaintiff is entitled to the suit amount

of ` 22,73,930.50/- and which has been broken up in different parts as stated

in para 33 of the plaint reproduced above. If the plaintiff has not performed

his part of the obligation in terms of the agreement between the parties, then

the plaintiff will not be entitled to the suit amount.

6(i)         In order to decide these issues, firstly we will have to refer to

the two main documents Ex.P1 and Ex.P2, being the letters dated 5.1.1990

of the plaintiff to the defendant and the letter dated 23.2.1990 of the

defendant to the plaintiff. Since most of the terms of these two documents

are relevant, I reproduce both these documents in entirety as below:-

                                      "Ex.P1
       To

       Dy.General Manager (Elect.)
       I.A.A.I.Hqrs.
       Chanakyapuri
CS(OS) No.2069/1992                                                Page 6 of 23
       New Delhi.

            Sub:- Operation of STD Pay phones at IGI Airport.

      Dear Sir,

           With reference to your discussion held in the office of
      Member (F&A) we agree to deploy 21 persons for operations of
      STD Pay phone as per the following terms and conditions:-

      1.

Staff shall be paid as per labour contract act.

2. IAAI shall be paid 50% of profit after deduction of the following expenditure;

Expenditure details:

      21 nos. Staff x Rs.1500           =      Rs. 31,500.00
      25% Supervisory expenditure       =      Rs.    7,875.00
      25% maintenance charges           =      Rs.    7,875.00
                              TOTAL : =        Rs. 47,250.00

In the first year, the expenditure shall be Rs.39,375/- as maintenance charges shall not be considered for equipment being in guarantee period of manufacturers. The maintenance of the equipment shall be responsibility of IAAI.

Profit = 20% of MTNL Bill - Expenditure i.e. Rs.39,375/- for first year. In case of increase in staff expenditure shall be increased correspondingly and additional staff shall be decided mutually.

3. In case of loss, the firm shall bear the loss.

4. No separate rent shall be paid for the space occupied and IAAI shall give free permit to our staff.

5. In case of increase in minimum wages, 50% increase shall be added to the agreed rate of Rs.1,500/- and paid to us as staff wages.

6. We agree to deposit Rs.50,000/- within one week as security deposit.

7. Apart from this, one lakh shall be given as Bank Guarantee to IAAI.

8. All the collection shall be made by us and we shall deposit the bill of IAAI to MTNL directly and pay IAAI profit within one week of receipt of bill from IAAI/.

Thanking you,

Yours faithfully,

:: ARVIND KHANNA ::

Ex.P2

"No.AAD/EINCS/30/419/ Dated: February 23, 1990.

M/s Arvind Khanna A-103 Lok Vihar New Delhi: 110034.

Subject: Operational contract for STD phones at IGI Airport.

Sir,

We are pleased to inform you that the IAAI management has decided to entrust you with the responsibility of manning the STD booths as IGI Airport, as per the following terms and conditions.

1) This operational contract will be for a period of six months from 6.1.90 initially and thereafter the operational contract shall be decided suitably depending upon the observations made during the above period.

2) Your are required to deposit Rs.50000/- in cash and submit a bank guarantee for Rs.1 lac within one week from the date of issue of this order, as security deposit.

3) The firm will not pay any rental for the space occupied.

4) Free permits will be issued to the staff of the contractor who are been employed to man the STD booths.

5) The firm would deploy necessary skilled staff to run the following positions on round the clock basis for issue of coins and necessary assistance to the users.

Locations No. of positions

However, the IAAI reserves the right to increase or decrease the number of position as per the requirement.

6) The firm shall recruit 4.2 person per position. In addition the firm shall recruit necessary supervisory staff. The staff for the purpose will be recruited with the concurrence of the undersigned.

7) The firm has to strictly observe the IAAI contractors labour regulations in force.

8) The firm has to be produce necessary licence to employ personnel from the competent authority.

9) M/s. Omnitel Industrial will provide necessary STD instruments. Any malfunctioning of the same may be rectified in Lisan with the supplier IAAI electronics staff working round the clock will provide necessary assistance

for the smooth functioning of the system.

10) The staff manning the STD booths will be under the overall supervision of the Electronics staff working round the clock at respective terminals.

11) The firm will deposit with IAAI all the collection on completion of every month. The firm has to maintain a register for recording the meter reading daily booth wise, meter reading should be forwarded to the office of the SML.

12) The firm has to clear the MTNL bill after obtaining the cheque from the IAAI.

13) If there is a discrepancy between the MTNL bill and the collection deposited with IAAI, the firm will absorb the deficiency.

14) The payment for the services of the firm will be on a profit sharing basis. The profit sharing will be on 50-50 basis by the form and IAAI on the basis of the following calculations.

-20% of the billing amount shall be received from MTNL in the franchise scheme 80-20. Out of this 20% the staff expenditure @ 1500/- per person for the total no. of person employed vide para 6 as skilled personnel will be paid to the firm. Besides firm will be paid 25% of the above for supervisory charges. The balance profit will be shared between the firm and IAAI equally. However, the staff expenditure is more than the income from MTNL under franchise scheme, this loos will be absorbed by the form. IAAI would not therefore share the loss.

15) M/s Arvind Khanna is to execute and sign an agreement in a non-judicial stamp paper of Rs.5/- at their cost within 10 days from the date of this letter.

A confirmation of acceptance of this award may be sent to undersigned."

(ii) As per Ex.P1, the plaintiff referred to the discussions with the

concerned officer of the defendant and agreed to deploy 21 persons for the

phone booths subject to the term of 50% of the profit to be paid to the

plaintiff after deducting the expenditure incurred by the plaintiff towards

salaries and supervision charges. I am not referring to maintenance

expenditure as stated in Ex.P1 because the same is not the subject matter of

the issue in the present case. One another important aspect contained in

letter Ex.P1 is that the defendant was only entitled to share all profits and if

there were losses, it was the plaintiff which was to bear the losses.

(iii) So far as the terms contained in Ex.P2 are concerned, the

important terms are the Clauses 11 to 14 and more particularly Clause 13.

The net effect of Clauses 11 to 14 is that the plaintiff after making

collections from the phone booths would maintain a register/record and

deposit at the end of the month the total collections with the defendant. The

defendant will thereafter issue the cheques with respect to bills raised by the

MTNL for payment to MTNL. It is clearly provided in Clause 13 that in

case there is any discrepancy between the bills raised by the MTNL and the

collections deposited by the plaintiff with the defendant, it will be the

plaintiff firm which will be liable to absorb the deficiency i.e issues as to

inflated billing or wrong billing or other aspects of billing are for the

plaintiff to absorb and the defendant would have no role in the same. After

the entire expenditure was met and as stated above, the profit was to be

shared half and half between the plaintiff and the defendant.

7(i) Though the plaint does not give details as to how the figures of

salaries and supervision charges or the profit amount claimed by the plaintiff

is arrived at by reference to the different months and qua the different heads

of the expenditure, however, it is agreed by the counsel for the parties that

two documents, as stated hereinafter, contain the respective cases of the

defendant and the plaintiff with regard to the bills issued by the MTNL,

collections deposited by the plaintiff with the defendant, the salary and

supervision charges to be incurred, and finally the amount of profits which

have to be divided between the plaintiff and the defendant.

(ii) These two documents are the letters Ex.P14 from the defendant

to the plaintiff dated 22.4.1992 and Ex.P44 from the plaintiff's Advocate to

the defendant dated 30.4.1992. What really is relevant is reference to the

two annexures, one each to the two letters Ex.P14 and Ex.P44. The

annexure to the defendant's letter Ex.P14 is given an exhibit number

Ex.P13, however, there is no exhibit mark to the annexure to the plaintiff's

Advocate's letter Ex.P44. It is however agreed by the counsel for the

defendant that the annexure does exist to Ex.P44 and which is annexed

immediately following the document Ex.P44 in the court file.

(iii) Since the calculations which are stated in the annexures to

Ex.P14 & Ex.P44 are relevant in order to determine the controversy in the

present suit, I am reproducing both the annexures of the defendant and the

plaintiff respectively to Ex.P14 & Ex.P44 below:-

"Ex.P14/(of the defendant)

STATEMENT OF ACCOUTNS FOR MANNING STD/PAY PHONES BY M/S. ARVIND KHANNA, TERMINAL-I

(1) Amount as per MTNL Bills upto Rs. 1,36,56,630-00 15.1.92, TR-I & II (2) Amount as per MTNL Bills from Rs. 2,99,999-00 16-1-92 to 15.2.92 TR-I (3) Amount as per Meter reading at Rs. 4,13,109-00 TR-I from 16-2-92 to 13-8-92 (4) Amount as per meter reading at Rs. 14,26,536-00 TR-II from 16-1-92 to 13.4.92 Total: Rs. 1,57,96,263-00 (5) LESS: Amount deposited by the (-)Rs. 1,17,39,966-00 contractor upto 12.3.92 BALANCE : Rs. 40,56,297-00 (6) LESS: Manning charges upto (-)Rs. 18,62,800-00 15.4.92 (-)Rs. 21,93,497-00 (7) Profit @50% to be paid to (-)Rs. 3,35,075-00 contractor (8) Total amount due from the Rs. 18,58,422-00

contractor till date

N.B. :-Amount shown at Sl.No.3, 4 & 5 is approximate.

Exact calculations shall be done after receipt of Bills from MTNL.

(2) Amount shown against Sl.No.3 & 4 are based on Meter readings provided by M.T.N.L."

Ex.P44 (of the plaintiff)

"Statement showing the amounts due to M/s Arvind Khanna from I.A.A.I. on account of services rendered for manning & supervising STD/ISD Pay Phones at IGI Airport w.e.f. 6.1.1990 to 15.4.1992______________

1. On the basis of cash deposited from collections of S.T.D. Pay Phones based on the actual meter reading. (Total amount deposited with I.A.A.I. w.e.f. 6.1.1990 to 15.4.1992) Rs.1,19,17,936/-

2. On account of salaries to the skilled workers numbering 38 for manning 17 STD Pay Phones round the clock, plus supervision charges. Rs.18,64,274/-

3. Profit Rs.2,59,656.50

4. Cash security deposited with the Rs.50,000.00 IAAI.

5. Bank Guarantee in favour of IAAI. Rs.1,00,000.00 Total Rs.22,73,930.50 For M/s Arvind Khanna

8(i) A reference to the aforesaid two annexures shows that the

defendant claims that the total bills which were raised by the MTNL for total

period of contract for the phone booths add to ` 1,57,96,263/- A reference

to the response of the plaintiff Ex.P44 with its annexures shows that there is

no comment or response or refusal by the plaintiff with respect to this

amount of ` 1,57,96,263/-. Therefore, this figure of ` 1,57,96,263/- can and

is being taken as the total amount of bills raised by the MTNL with respect

to the phone lines which were provided in nine booths contracted out to the

plaintiff for the entire contract period.

(ii) In terms of the contract, the plaintiff had to deposit the total

collections with respect to phone booths with the defendant at the end of the

month. Out of the balance available after the deposit of the bills of MTNL,

the salary and supervision charges had to be deducted and thereafter the net

balance was to be divided in the profit sharing ratio of half and half between

the plaintiff and the defendant.

(iii) On the aspect of the amount deposited with the defendant by

the plaintiff, whereas plaintiff states the figure to be ` 1,19,17,936/-, the

defendant states this figure at ` 1,17,39,966/-. The issue is as to which of

these two figures has to be taken. In my opinion, considering the fact that

the defendant did not give a further response to the annexure contained in

Ex.P44 by disputing the same, I would prefer to take the figure as stated by

the plaintiff being ` 1,19,17,936 instead of the figure of ` 1,17,39,966 of the

defendant.

(iv) The next aspect is what should be taken as the figure of salary

and supervision charges to be paid by the defendant to the plaintiff.

Defendant has argued that this should be an amount of ` 18,62,800/-,

whereas the plaintiff states that it should be ` 18,64,274/-. There is

difference just about `1500/- odd in two figures and therefore I once again

would accept the figure of the plaintiff being ` 18,64,274/-.

(v) It is also undisputed that a security of ` 50,000/- is lying with

the defendant and for which amount credit will have to be given to the

plaintiff.

(vi) Plaintiff has also given the bank guarantee of Rs.1,00,000/- to

the defendant and this original bank guarantee continues to remain with the

defendant. Considering the judgment of the Supreme Court in the case of

Bank of India Vs. Nangia Constructions (I) Pvt. Ltd. & Ors. (2008) 7 SCC

290, the plaintiff should also be given the benefit of the figure of ` 1 lakh

leaving the defendant at liberty to invoke and encash the bank guarantee in

terms of the judgment of the Supreme Court in the case of Bank of India

(supra) or also any other legal basis which the defendant is entitled to.

9. Therefore, a conclusion of the above is that the plaintiff claims

adjustment of ` 1,41,91,866/- but it was liable to account for ` 1,57,96,263/-

i.e the plaintiff has not accounted and paid to the defendant an amount of `

16,04,397/-. The question is that whether it is the plaintiff who is liable to

pay this amount to the defendant or whether the claim of the plaintiff must

succeed on account of the fact that this difference essentially arises from the

claim of the plaintiff that the bills of the MTNL were inflated on account of

illegal user of the phone lines at Terminal II/Cargo Terminal of the

defendant.

10. So far as the aspect that misuser of the telephone lines did take

place, could not be disputed on behalf of the defendant inasmuch as the

defendant itself had filed an arbitration claim with MTNL making detailed

references to the misuser of the telephone lines. The plaintiff has filed in this

regard the claims and averments made by the defendant in this Court in Suit

No.249/1993, whereby the present defendant (plaintiff in the Suit

No.249/1993) had asked for reference of the disputes between the defendant

herein and MTNL to arbitration in terms of Section 7B of the Indian

Telegraph Act, 1863 read with Section 20 of the Arbitration Act, 1940. This

document/petition has been exhibited as Ex.DW1/P1. I may note that the

petition was allowed and the disputes were referred to arbitration vide order

dated 13.5.1996/Ex.DW1/P2 passed in the said petition. I am informed on

behalf of the defendant that the claim petition which was filed before the

Arbitrator was rejected and the claim dismissed. The Award in this regard

has been filed in other suit CS(OS) No.701/1995 of the defendant and it has

been exhibited as Ex.PW1/D2 in the said suit.

11. Learned counsel for the plaintiff very vehemently argued that

once the defendant admits that there was misuser of telephones, and it had

filed a claim in arbitration against MTNL, the plaintiff being a bonafide

person must be exempted from the excessive billing which has been caused

on account of misuse of telephone lines. Though in equity I did find a lot of

strength in the argument which was raised on behalf of the plaintiff,

however, equity can have no role to play once the law comes in. Parties are

bound by Clause 13 of the terms agreed upon and which specifically states

that in case of any issues of billing i.e. difference between the actual

collections and the higher bills of MTNL, it would be the plaintiff which

would have to absorb the excess. The plaintiff entered into this contract

with open eyes. Plaintiff was aware that in the relevant days, there was a

possibility of phone lines being misused, however, the plaintiff in terms of

Clause 13 did take upon himself the liability to absorb the difference. After

having taken over the phone booths and working out the contract, it is not

permissible for the plaintiff to renege from his commitment merely because

the plaintiff has written certain letters to the defendant that the plaintiff is not

bound by Clause 13. The plaintiff cannot take up such a stand, inasmuch as,

whereas the contract with respect to the first six phone booths commenced

from 6.1.1990 and the first period of six months ended on 6.7.1990, the first

letter which is written by the plaintiff to the defendant in this regard is much

later on 22.11.1990/Ex.P17. Therefore, having worked out the contract and

having taken benefit thereupon the plaintiff cannot be allowed to backtrack.

Acting upon the terms of the contract amounts to acceptance of the terms of

the contract as contained in the document/Ex.P2. In fact, there cannot be

any doubt in this regard inasmuch as when the contract for all the phone

lines was again extended for two years vide Ex.P7 dated 22.11.1990 with its

annexures, once again vide Clause 13 of the said annexure to Ex.P7 dated

22.11.1990 the contract was extended only subject to this term that the

plaintiff was to absorb the deficiency/any issue with respect to billing of

MTNL. In my opinion, it is not permissible for the plaintiff to blow hot and

cold inasmuch as the plaintiff need not have continued with or taken

extension of the contract for a period of two years if Clause 13 was not

acceptable to the plaintiff, and the plaintiff should have forthwith

surrendered all the phone booths. The plaintiff on the contrary continued

with the contract, acted upon the same, and therefore, by mere writing of

letters plaintiff cannot be allowed to run away from its contractual

commitments. I therefore hold that in terms of Clause 13, it was the plaintiff

who had to absorb any deficiency with respect to the bills, and if the plaintiff

had any issue of inflated bills, it was the plaintiff who was bound to pursue

the matter with MTNL. The defendant cannot be fastened with any liability

in this regard in view of the categorical language of Clause 13 reproduced

above.

12. At one stage, I was inclined on account of equities in the

present case to read down Clause 13 in entitling the plaintiff to its claims

and disentitling the defendant of the defence based on Clause 13, inasmuch

as, the defendant would not have been entitled to benefit of Clause 13 if the

officers of the defendant were guilty in misusing the phone lines or taking

undue benefit by making STD calls or other calls from the phone lines. I

may however note that it is not the case of the plaintiff at any stage during

the present suit, or during the correspondence with the defendant, that the

misuse in the telephone lines was on account of the misuse by the officers of

the defendant. On the contrary, what the plaintiff alleged was that it was the

staff of MTNL, which was responsible for misuse of the phone lines, and

this aspect is confirmed by the letter of the defendant to the MTNL which is

filed by the plaintiff itself and which is the letter dated 9.1.1991/Ex.P18.

Therefore, once the officers of the defendant are not guilty, and misuse of

the lines is by the staff of MTNL, I do not find any equity in favour of the

plaintiff and against the defendant for the plaintiff to be exempted from the

categorical language of Clause 13.

13. Accordingly, issue Nos. 2 to 4 are decided in favour of the

defendant and against the plaintiff and it is held that the plaintiff is not

entitled to any amount, much less the suit amount from the defendant.

Issue No.5

14. This issue is that the plaintiff contends that Clause 13 is illegal

and void being hit by Section 23 of the Contract Act.

15. While dealing with issue Nos. 2 to 4 I have partly dealt with

this issue in that, if the phone lines were misused by the officers or

employees of the defendant then possibly Clause 13 would be hit by Section

23 of the Contract Act, 1872 inasmuch as no clause can permit a person to

be exempted from liability, although, such person himself causes

deliberately losses to the opposite side. Also, in my opinion, in a case where

the officers or staff of the defendant may have misused the phone lines then

really it would be a case of non-application of Clause 13 and not that the

Clause 13 was void by virtue of Section 23 of the Contract Act, 1872. I thus

do not find any illegality in Clause 13 to hold the same to be violative of

Section 23 of the Contract Act, 1872. I may note that it is not the case of the

plaintiff that the plaintiff was forced to sign on dotted lines with the

defendant which is a huge organization, so that the case would come under

the ratio of Central Inland Water Transport Corporation Ltd. vs. Brojo

Nath Ganguly, AIR 1986 SC 1571. Also, I may note that the Supreme

Court in various other judgments including S.K.Jain vs. State of Haryana,

2009 (4) SCC 357 and Assistant Excise Commissioner & Ors. vs. Issac

Peter & Ors., 1994 (4) SCC 104 has held that when there is a commercial

contract, and a person has an option whether or not to enter into a contract

with the Government/State, after having entered into the contract, it cannot

take up the defence of unreasonableness of the terms of the contract or that

the contract is unconscionable.

16. Accordingly, this issue is decided in favour of the defendant

and against the plaintiff and it is held that Clause 13 of the contract is not

liable to be struck down as violative of Section 23 of the Contract Act, 1872.

Issue No.7

17. Since the plaintiff is not entitled to the suit amount there is no

question of granting any interest to the plaintiff. This issue is therefore also

decided in favour of the defendant and against the plaintiff.

Relief.

18. In view of the above discussion, the suit of the plaintiff has no

merit and is accordingly dismissed, leaving the parties to bear their own

costs. Decree sheet be prepared.

VALMIKI J. MEHTA, J DECEMBER 06, 2012 ak/Ne