Delhi High Court
M/S Prosafe International ... vs M/S Oil And Natural Gas ... on 6 February, 2019
$~29
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 33/2019
M/S PROSAFE INTERNATIONAL PRIVATE
LIMITED ..... Petitioner
Through: Mr. Shreeyash Uday Lalit, Adv
versus
M/S OIL AND NATURAL GAS CORPORATION
LIMITED ..... Respondent
Through: Mr. Ajay Jain with Mr. Pranay Jain,
Advs
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
ORDER
% 06.02.2019
I.A. No. 1876/2019 (Exemption)
1. Allowed, subject to just exceptions.
O.M.P.(I) (COMM.) 33/2019
2. Issue notice.
3. Mr. Ajay Jain accepts notice on behalf of the respondent.
4. It is the case of the petitioner that pursuant to a tender being floated,
a Letter of Award (LOA) dated 11.10.2016, was issued in its favour.
5. In terms of the tender, according to counsel for the petitioner, the
respondent was required to buy the industrial safety shoes.
O.M.P.(I) (COMM.) 33/2019 page 1 of 6
6. The total number of pairs that the respondent was required to buy
with a +/- 20% variation, according to counsel for the petitioner, is
reflected in Clause 18 and Note 1 of the Rate Contract dated 3.11.2016
which followed the issuance of the LOA.
7. According to the counsel for the petitioner, uptil now, various work
centres of the respondent, which are referred to in the Rate Contract, have
purchased 38,095 pairs of industrial safety shoes.
8. It is the petitioner‟s case that the respondent in order to favour third
parties is taking recourse to "Board Purchases".
9. Learned counsel for the petitioner says that this mode of purchase
can be taken recourse to by the respondent only in cases of exigencies,
delay or non-compliance by the contractor i.e. the petitioner in this case.
10. Counsel for the petitioner says that the Rate Contract provides for
inspection before delivery; the quality standard for which are high.
11. Learned counsel says that the respondent has not uptil now raised
any issue with regard to the quality of the industrial safety shoes supplied
by the petitioner.
12. It is also the case of the petitioner that there is no grievance
whatsoever qua the petitioner with regard to delay in supplies made as
well.
13. Mr. Ajay Jain, who appears on advance notice on behalf of the
respondent, contends otherwise.
14. Learned counsel has brought to the Court a reply dated 05.02.2019
issued in response to the legal notice dated 26.12.2018 served upon the
respondent by the petitioner.
O.M.P.(I) (COMM.) 33/2019 page 2 of 6
14.1 Mr. Shreeyash Uday Lalit, who, appears for the petitioner, does not
dispute the fact that the reply has been served on the petitioner.
15. A perusal of the same would show that the respondent had raised
concerns with regard to quality of the shoes supplied by the petitioner.
16. The respondent it appears had sought feedback from its employees.
The feedback received was indicative of the fact that the shoes supplied by
the petitioner could compromise employee safety.
17. Learned counsel for the respondent says that the employees of the
respondent are required to handle highly explosive hydrocarbons,
chemicals and oils etc. and, therefore, it is incumbent upon the respondent
to ensure that the Personal Protective Equipment (PPE) which includes
industrial shoes supplied to the employees are of the highest quality.
18. A perusal of the legal notice dated 26.12.2018 served by the
petitioner on the respondent does indicate as well that a meeting was held
between representatives of the parties to discuss the quality parameters of
Design „C‟ industrial shoes supplied by the petitioner.
19. The negotiations it seems veered around scaling down the price of
design „C‟ shoes as provided in the Rate Contract.
20. I may indicate that in the reply dated 05.02.2019, to which I have
made reference above, the respondent has adverted to the defects in the
industrial shoes supplied by the petitioner.
20.1. For the sake of convenience, the relevant part is extracted hereafter:-
"3. After the issuance of Rate Contract, Purchase Orders
for Industrial Safety Shoes were issued by the various Work
Centres from time to time an same was delivered by your
O.M.P.(I) (COMM.) 33/2019 page 3 of 6
Client. Subsequently, we started receiving grievances from
various work centres while using the items supplied by your
Client against the referred rate contract, which includes-
Size fitting
Hurting in shin, heel and toe while in use
Shoe uncomfortable, slippery and heavy
Uncomfortable while climbing the ladders
Uncomfortable and difficulties while walking
long distances
Unfit in humid climate and created skin
irritation
Not suitable for running, shoes have no grip
over the ankle"
22. As alluded to above, these defects are based on the feedback of the
employees which form part of a joint field report generated by the
respondent.
23. It is, however, the petitioner‟s case that it was not made part of the
joint exercise and, therefore, had no occasion to rebut the allegations.
24. Having heard the counsel for the parties and perused the record, in
my view, prayer clauses "A" and "B(i)" made in the petition cannot be
granted, as it would tantamount to issuance of a mandatory injunction qua
the respondent.
25. The reason for the same is that even if I were to prima facie come to
the conclusion that the respondent is in breach of its obligations provided
O.M.P.(I) (COMM.) 33/2019 page 4 of 6
for in the Rate Contract, the balance of convenience appears to be in favour
of the respondent. The respondent cannot take the risk of accepting the
industrial safety shoes which could compromise the life and limb of its
employees. In such like purchases, it would do good to be as the adage
goes "better safe than sorry".
26. On the other hand, if the petitioner is able to establish breach of the
contractual obligations, albeit, after the trial, it would be in a position to
obtain compensation, perhaps, qua various aspects, including on account of
failure on the part of the respondent to purchase the balance quantity of
industrial safety shoes.
26.1 Since, the rate is fixed and the balance quantity is known, it would
not be difficult to ascertain the pecuniary damage that the petitioner may
possibly suffer on this count. Therefore, insofar as the reliefs sought for in
prayer clauses "A" and "B(i)" are concerned, as indicated above, the same
are rejected.
27. At this juncture, Mr. Shreeyash Uday Lalit says that since supplies
have to be made within a period of 60 days from the date of a Purchase
Order being raised by the respondent‟s work centre, the petitioner has had
to purchase raw material in advance and, therefore, this Court could
consider granting relief in terms of prayer clause "B(ii)".
28. This prayer, in effect, requires the Court to issue a direction to the
respondent to set aside an amount equivalent to Rs.6.15 crores being the
value of the subject matter, which, in effect, is the value of raw material or
in the alternative, furnish a bank guarantee of an equivalent amount.
O.M.P.(I) (COMM.) 33/2019 page 5 of 6
29. Counsel for the petitioner also says that, in fact, he has instructions
to convey to this Court that the petitioner would want a modulation of the
prayer on account of illiquidity faced by it. In other words, the petitioner
seeks release of Rs. 1 crore against a bank guarantee of an equivalent
amount, in case the Court is not inclined to grant relief in terms of prayer
clause B(ii).
30. Learned counsel further states that the petitioner would be willing to
furnish an undertaking in the form of an affidavit that if the respondent
were to succeed ultimately in the main matter, the petitioner would return
the money to the respondent with interest at the rate of 9% (simple) per
annum.
31. Since, the respondent via its reply dated 05.02.2019 has, in any
event, called the petitioner for a meeting on 12.02.2019, this aspect of the
matter could be explored by the parties at the said meeting.
32. Counsel for the parties will revert with instructions qua this aspect of
the matter on the next date of hearing.
33. The respondent will file its reply before the next date of hearing, if
there is no resolution of disputes between the parties either in terms of
what is indicated above or otherwise.
34. Renotify the matter on 28.02.2019.
RAJIV SHAKDHER, J.
FEBRUARY 06, 2019
c/VKR
O.M.P.(I) (COMM.) 33/2019 page 6 of 6
