Madras High Court
M/S.Bahwan Cybertekpvt. Ltd vs Chennai Port Trust on 27 March, 2023
W.P.Nos.3013, 3014 and 3015 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :27.03.2023
CORAM :
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
Writ Petition Nos.3013, 3014 and 3015 of 2017
and WMP.No.2909 of 2017
M/s.Bahwan CybertekPvt. Ltd.
Rep. by its Chief Operating Officer
Mr.MV.Muralidharan,
No.148, Rajiv Gandhi Salai (OMR)
Okkiyam-Thoraipakkam,
Chennai – 600 097. ... Petitioner in all W.Ps.
-Vs-
1. Chennai Port Trust,
No.1, Rajaji Salai,
Chennai – 600 001.
2. Indian Institute of Foreign Trade,
No.1583, Chowbaga Road,
Anandapur, Chowbaga,
Kolkata, West Bengal- 700 107.
3. Indian Ports Association,
1st Floor, South Tower NBCC Place,
BishmanPitamah Marg, Lodhi Road,
Institutional Area, New Delhi – 110 003.
4. Union of India,
Represented by Ministry of Shipping,
ParivahanBhavan, No.1 Parliament Street,
New Delhi – 110 001. … Respondents in all W.Ps.
https://www.mhc.tn.gov.in/judis
W.P.Nos.3013, 3014 and 3015 of 2017
Prayer in W.P.No.3013 of 2017 : Writ Petition under Article 226 of the
Constitution of India praying for the issuance of a Writ of Certiorari,
calling for the records pertaining to the termination letter dated
24.08.2016 issued by the 1st respondent and quash the same.
Prayer in W.P.No.3014 of 2017 : Writ Petition under Article 226 of the
Constitution of India praying for the issuance of a Writ of Mandamus,
directing the 1st respondent to pay the admitted dues of Rs.43,88,530.02/-
(Rupees forty three lakhs eighty eight thousand five hundred and thirty
only) to the petitioner as per the termination letter dated 24.08.2016
issued by the 1st respondent.
Prayer in W.P.No.3015 of 2017 : Writ Petition under Article 226 of the
Constitution of India praying for the issuance of a Writ of Mandamus,
directing the 1st respondent to refer the present disputes to the
Independent External Monitors as envisaged under Section 8 of the
Integrity Pact of the Annexure M of the Contract dated 05.03.2015 to be
solved within a stipulated period of three months.
For Petitioner : Mr.Aniurdh Krishnan
[in all W.Ps.]
For Respondents : Mr.S.Haja Mohideen Gisthi
[in all W.Ps.] [R1 and R2]
R3 and R4 – No appearance
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W.P.Nos.3013, 3014 and 3015 of 2017
COMMON ORDER
Since the issue raised in these writ petitions is one and the same,
with the consent of learned counsel appearing on both sides, these writ
petitions were heard together and are disposed of by this common order.
2. The petitioner is a company incorporated under the Companies
Act, 1956. The petitioner is a leader in the field of IT and ITES. It offers
business solutions across product development, systems integration,
application development, migration and customization, training and
consulting services.
3. The first respondent floated a tender on 10.09.2014 for supply,
installation, commissioning, design, development integration and testing
for implementation of custom ERP Solution along with five year onsite
comprehensive hardware warranty, system software support and four
year onsite support for customized ERP software for its day to day
operations. The petitioner company was the successful bidder and an
agreement was entered into between the petitioner and the first
respondent, Chennai Port Trust.
4. The grievance of the writ petitioner is that the contract was
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W.P.Nos.3013, 3014 and 3015 of 2017
terminated midway on the ground that the petitioner has not fulfilled the
contractual obligations.
5. The learned counsel appearing on behalf of the petitioner mainly
contend that no opportunity was granted to the petitioner to putforth their
case and the unilateral decision taken by the first respondent Chennai
Port Trust is in violation of the principles of natural justice. In this
regard, learned counsel for the petitioner relied on the judgment of the
Supreme Court in the case of Hanbanslal Sahnia and Ors. Vs. Indian
Oil Corporation Limited and Ors. reported in (2003) 2 SCC 107,
wherein the Apex Court has made the following observations:
“6. As already stated, the cancellation is founded
solely on the failure of the appellants' sample. Non-
cooperation and discourteous behavior of the appellants
has been alleged in a very general way without specifying
what was non-cooperation and what was the discourtesy
shown to the officers of the respondent-Corporation. The
deficiency in sales is also generally stated without
particularising he same. So is the case with deficiency in
maintaining the records. Be that as it may, these are the
grounds which formed the subject matter of the earlier
show cause notice which was not persuaded. In all
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W.P.Nos.3013, 3014 and 3015 of 2017
probability, the respondent-Corporation felt satisfied with
the explanation furnished by the appellants. The order of
termination is certainly not founded on these grounds and,
therefore, this aspect need not be pursued further. It may be
stated that the appellants have volunteered to file a
statement made on affidavit during the course of hearing
before this Court, expressing regrets for any incident of
departure from normal behavior and courtesy expected of
the appellants towards the officials of the respondent-
Corporation and submitting that it might have happened
inadvertently but in future the appellants would be more
careful and shall show full regard to the visiting officials of
the respondent-Corporation and extend their full
cooperation in their dealings with the respondent.
7. So far as the view taken by the High Court that the
remedy by way of recourse to arbitration clause was
available to the appellants and therefore the writ petition
filed by the appellants was liable to be dismissed, suffice it
to observe that the rule of exclusion of writ jurisdiction by
availability of an alternative remedy is a rule of discretion
and not one of compulsion. In an appropriate case in spite
of availability of the alternative remedy, the High Court
may still exercise its writ jurisdiction in at least three
contingencies: (i) where the writ petition seeks enforcement
of any of the Fundamental Rights; (ii) where there is failure
of principles of natural justice or, (iii) where the orders or
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W.P.Nos.3013, 3014 and 3015 of 2017
proceedings are wholly without jurisdiction or the vires of
an Act and is challenged [See Whirlpool Corporation v.
Registrar of Trade Marks, Mumbai and Ors., (1998) 8 SCC
11. The present case attracts applicability of first two
contingencies. Moreover, as noted, the petitioners'
dealership, which is their bread and butter came to be
terminated for an irrelevant and non-existent cause. In
such circumstances, we feel that the appellants should have
been allowed relief by the High Court itself instead of
driving them to the need of initiating arbitration
proceedings.”
(emphasis supplied)
6. It is contended that the case of the writ petitioner is falling under
principle No.(ii) laid down by the Apex Court i.e., where there is failure
of principles of natural justice. In the present case, Indian Institute of
Foreign Trade was engaged to find out the violation of the contractual
obligations on the part of the petitioner, who in turn submitted a report
and the said report was not communicated to the writ petitioner, enabling
them to defend their case. Thus, the order of termination of contract is in
violation of principles of natural justice. Learned counsel for the
petitioner drew the attention of this Court that the first respondent has
not only issued the show cause notice, but failed to provide an
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W.P.Nos.3013, 3014 and 3015 of 2017
opportunity in terms of contract to comply with the obligations on the
part of the petitioner. Therefore, in all respect, the first respondent has
violated the principles of natural justice and therefore, the impugned
order of termination is liable to be set aside.
7. Learned Standing Counsel appearing on behalf of the first
respondent Chennai Port Trust disputed the said contention by stating
that several opportunities were provided to the petitioner to fulfill their
obligations as per the terms and conditions of the contract, it is not as if
the first respondent has not given any opportunity to the petitioner,
several letters were issued to the petitioner to comply with the conditions
and complete the works as per the specifications. In spite of the letters
and E-mails, the petitioner has not responded and in order to assess the
non performance of obligations, the IIFT authorities were engaged and
therefore, the report is unconnected to the contractual obligations
between the petitioner and the first respondent and the report is only for
the purpose of ascertaining certain facts and even before the engagement
of IIFT, the first respondent had given sufficient opportunity to the writ
petitioner company to complete the works.
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W.P.Nos.3013, 3014 and 3015 of 2017
8. In this context, it is relevant to consider paragraphs 3, 4 and 5 in
the impugned order, which read as under:
“3. The milestones as per work order/Contract
Agreement for the project are as above:-
• Requirement Phase – Functional Requirement
Specification & Software Requirement Specifications
(FRS & SRS): This milestone was completed on June
2015.
• Design & Customization Phase: This milestone was
to be completed by you on 07.07.2015. However, you
have not completed the same till date which has gone
beyond the period of the contract. Thus it is seen
there is an inordinate delay your part in reaching
this milestone itself. Even when several requests were
made to you to rectify the errors vide mails and oral
communications over phone and with on-site
development personnel etc., viz., mails dated
22.01.2016, 27.01.2016, 30.01.2016, 02.02.2016,
03.02.2016, 06.02.2016, 19.03.2016, 29.03.2016,
13.04.2016, 16.04.2016, 19.04.2016, 20.04.2016,
25.04.2016, 26.04.2016, 28.04.2016, 30.04.2016,
05.05.2016, 07.05.2016, 10.05.2016, 12.05.2016,
17.05.2016, 18.05.2016, 25.05.2016, 26.05.2016,
04.06.2016, 06.06.2016, 07.06.2016, 09.06.2016,
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W.P.Nos.3013, 3014 and 3015 of 2017
20.06.2016, 28.06.2016, 29.06.2016, 30.06.2016 etc., the
same have not been completed and thus it could be seen
that the work has not satisfactorily proceeded.
• The remaining 6 milestones have not yet been
commenced till date.
4) The Port has suffered damages as your team were
unable to complete the work as per the Work
order/Contract Agreement.
• The AMC for the existing Hardware and Software
has been extended and a total expenditure of about
Rs.40 Lakhs has been incurred.
• The AMC would further have to be extended for a
further period of 2 years an approximate amount of
Rs.90 Lakhs would have to be incurred by the Trust.
• Chennai Port has invested a huge sum for
Geographical Information System(GIS) and this
application need to be integrated with ERP for
dynamic uploading of allotment, vacant and other
details in the GIS Application. Due to non-
integration with ERP, the ultimate requirement is not
being fulfilled and additional effort needs to be taken
to develop intermediate software.
5) Thus it could be seen that there is non-fulfillment of
Contractual Obligations and you have failed to deliver
what you are contracted to do.”
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W.P.Nos.3013, 3014 and 3015 of 2017
9. The above observations made in the impugned order would
reveal that several communications were issued to the writ petitioner and
thus, the contentions raised on behalf of the petitioner that the impugned
order of termination of contract was issued in violation of principles of
natural justice deserves no merit consideration. Opportunities were
granted, thus, the issues are to be decided on merits.
10. Disputed issues cannot be adjudicated in a writ proceedings
under Article 226 of the Constitution of India. Such disputes which are
based on agreement/contracts are to be decided based on the documents
and evidences including oral evidences. Thus, the High Court cannot
adjudicate such issues for the purpose of form an final opinion.
11. Power of Judicial review under Article 226 of the Constitution
of India is to ensure that the process through which a decision is taken by
the competent authority is in consonance with the statutes and rules in
force but not the decision itself. Thus, the scope of judicial review under
Article 226 cannot be expanded for the purpose of adjudication of
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W.P.Nos.3013, 3014 and 3015 of 2017
disputed issues, more so in contractual obligations. Thus, the petitioner
has to approach the competent civil forum for the purpose of resolving
the issues on merits and in accordance with law and based on documents
and evidences.
12. In respect of W.P.No.3014 of 2017, the relief sought for is to
direct the first respondent to pay the admitted dues of Rs.43,88,530.02/-
(Rupees forty three lakhs eighty eight thousand five hundred and thirty
only) to the petitioner as per the termination letter dated 24.08.2016
issued by the 1st respondent. In respect of W.P.No.3015 of 2017, the relief
sought for is to direct the first respondent to refer the disputes to the
Independent External Monitors as envisaged under Section 8 of the
Integrity Pact of the Annexure M of the Contract dated 05.03.2015. Thus,
in all these writ petitions, the issues raised are relating to the contractual
obligations between the petitioner and the respondents. Thus, the
petitioner has to resolve these issues only by approaching the competent
civil forum.
13. In view of the facts and circumstances, the petitioner is at
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W.P.Nos.3013, 3014 and 3015 of 2017
liberty to approach the competent Civil Court for effective adjudication
of issues. In the event of such approach, the Court concerned shall take
into consideration the period during which the writ petition was pending
before this Court for the purpose of condoning the delay.
Accordingly, all the three writ petitions stand disposed of. No
costs. Connected miscellaneous petition is closed.
27.03.2023
Index : Yes
Speaking order: Yes
Neutral Citation:Yes
mp
https://www.mhc.tn.gov.in/judis
W.P.Nos.3013, 3014 and 3015 of 2017
S.M.SUBRAMANIAM, J.
mp
Writ Petition Nos.3013, 3014 and 3015 of 2017
and WMP.No.2909 of 2017
27.03.2023
https://www.mhc.tn.gov.in/judis
