Delhi High Court
Steel Authority Of India Ltd. And Ors. vs Rameshwar Dass Bishan Dayal And Anr. on 1 September, 1995
Equivalent citations: 1995IVAD(DELHI)633, 60(1995)DLT271, 1995(35)DRJ135
Author: M.J. Rao
Bench: M.J. Rao
JUDGMENT Anil Dev Singh, J.
(1) This appeal under Section 10 of the Delhi High Court Act, 1966 read with clause 15 of the Letters Patent arises from the order of the learned single Judge dated March 24, 1995, in Ia No.10561 of 1994 in Suit No. 2538 of 1994 whereby the application of the appellants (defendants in the suit) under Order 7 rule 11 of the Code of Civil Procedure (for short"CPC") has been dismissed. The facts giving rise to the appeal are as follows:
(2) The first appellant, a public sector Government Company invited tenders on July 24,1994 in prescribed form for handling iron and steel materials at its Stockyard at Naini, Allahabad. According to clause 2.1 of the invitation to tender,a tenderer was required to have experience, in its own name and style, of handling at least 20,000 Mt of steel materials in any of the preceding five financial years. Clause 7 of the invitation to tender stipulated that the tender shall be kept valid for a period of 90 days from the date of opening of Part I of the tender and any modification, variation, clarification made thereto by the tenderer during the above period shall be construed as withdrawal of the tender in which event the first appellant shall forfeit the earnest money deposit without any reference to the tenderer.
(3) Pursuant to the tender notice, first respondent (plaintiff in the suit) submitted tender documents on or about August 17,1994 (page 33 of the appeal paper book). Besides, the first respondent there were five others who submitted their tenders. On August 18,1994 Part I of the tenders were opened. Therefore, the validity of the tenders were to expire on November 16,1994 in accordance with the terms of the tender. Since the appellants did not open part Ii of the tenders, the first respondent filed a suit for damages against them claiming that all the conditions of the tender were fulfillled by it including deposit of a sum of Rs. 25,000.00 as earnest money with the first appellant. It is also asserted that the bid of the first respondent was the lowest and the appellants with the intention to benefit M/s.S.K.Sharma, who was handling the work on ad hoc basis w.e.f. May 23, 1993, did not open Part Ii of the bids. In the plaint it is further averred that an undertaking was given by the third appellant to the Allahabad High Court that fresh tenders would be invited and the same would be finalised within six months from May 23, 1993, the date when M/s.S.K.Sharma was allowed to handle the work on adhoc basis. It was pointed out that the undertaking given to the Allahabad High Court was not carried out by the appellants.
(4) The appellants filed the written statement and an application under Order 7 rule 11 CPC. It is claimed by the appellants that the plaint discloses no cause of action and the same should be rejected.
(5) The learned single Judge taking up the aforesaid application of the appellants negatived the contention of the appellants and held that the plaint does disclose a cause of action. The learned single Judge noted that it was the case of the first respondent that Part Ii of the tenders were not opened by the appellants with the ulterior motive to facilitate the grant of extension to M/s.S.K.Sharma to handle the work on ad hoc basis. In the circumstances the learned single Judge rejected the application of the appellants on March 24, 1995. It is this order of the learned single Judge which has been questioned before us.
(6) DR.GHOSH, learned Senior counsel appearing for the appellants, relied on clauses 7.0 and 8.0 of the invitation to tender according to which the first appellant reserved the right to accept or reject any or all the tenders or apportion the work amongst the different tenderers in any manner without assigning any reason whatsoever. He contended that having agreed to the terms of the tender, the first respondent was ill advised in filing the suit for damages. He pointed out that fresh tenders were invited on February 17,1995 and the work has already been awarded to another contractor, namely, M/s.S.K.S.Movers, as a result whereof M/s.S.K.Sharma is no longer handling the work at Naini. He further submitted that the average rates at which handling contract has been awarded to M/s.S.K.S. Movers are much lower than the one quoted by the first respondent in his tender. Learned counsel also argued that the allegations of malice levelled by the first respondent against the appellants in the plaint do not furnish any material details and particulars of the same and the learned single Judge was not right in holding that the averments in the plaint show existence of a cause of action in favor of the first respondent. However, according to him a meaningful reading of the plaint does not at all disclose any cause of action against the appellants.
(7) At this stage it would be convenient to extract some of the allegations of mala fides levelled against the appellants in the plaint:
"3.....THEplaintiff has reasonable apprehension which is supported by the conduct of the defendants that they intend to somehow carry on with the present contractor beyond 31st March,1995 so that tenders advertised beyond that date the plaintiff would be completely outside from quoting as a eligible tenderer".
"5.That the defendant No.3 has engaged one M/s.S.K.Sharma as their handling contractor initially on an adhoc basis w.e.f. 23-5-1993 for a period of 6 months. After such engagement the respondent No.3 in his affidavit to the Allahabad High Court had undertaken to advertise for fresh tenders in order to finalise the contract after an open tender with the successful tenderer within six months from 23.5.1993.
"6.That the defendant No.3 has awarded the ad hoc tender to Sh.S.K.Sharma at very exorbitant rates and accordingly its not in the interest of the defendants to continue that tender for 3 long period of time. Infact the rates at which M/s.S.K.Sharma is working as handling contractor in Allahabad is among the highest in the country when compared to the handling contract rates of other contractors employed by the defendant No.1 at various locations in the country. It will be pertinent to mention here that the rates of M/s.S.K.Sharma per ton for handling of Iron and Steel is aprox. five times the rates at which the handling contractor of Delhi and Ghaziabad are working.
7.That the defendant No.3 for oblique reasons and with mala fide intentions is somehow continuing to engage M/s. S. K. Sharma as handling contractor by extending his period as contractor for 6 months when the contract expires. The said extension is clearly contrary to the affidavit filed by the defendant No.3 before the Allahabad High Court in Wp No. 29337 of 92 and accordingly the name is clearly illegal."
10.The defendant No.3 being highly interested in awarding the contract to the present contractor Sh.S.K.Sharma in collusion with other members of the Tender Committee tried his best to exclude the plaintiff from being considered by making frivolous objections on the file with regard to the tender of the plaintiff. For this purpose the defendant No.3 wanted to open the price bid of the other tenderers by excluding the plaintiff on 23-9-1994. However, till that date the defendants had not sent any intimation informing the plaintiff that his tender has not been found to be acceptable................"
11.That the plaintiff on coming to know about the nefarious design of the defendant No. 2 and 3 to exclude the plaintiff illegally in order to award the contract to M/s.S.K.Sharma, the plaintiff immediately made representations the Director, Commercial and other Senior Officers of the defendants highlighting illegalities being committed by the defendants in excluding the plaintiff while opening the price bid of the other tenderers. The plaintiff has definite knowledge to state that opening of price bid was scheduled to be held on 23-9-94 at 3 P.M. was postponed by the defendants because of the representation of the plaintiff to the higher officers of the defendant No.1.
12.That the defendants upon Realizing that their evil design of awarding the tender to M/s.S.K.Sharma cannot be achieved because of the timely intervention by the plaintiff, the said defendants have successfully stalled the opening of the tenders itself so that they may be able to grant ad hoc tender to the present contractor at the existing rates. Clearly such action on the part of the defendant is causing loss to the defendant No.1 which is a public sector company and accordingly the defendant No. 2 and 3 are in the short run successfully in draining the defendant No.1 of its finances to the tune of a crore of rupees and in the process the defendant No.2 and 3 have deprived the plaintiff of being awarded the tender for handling of iron and steel at Allahabad and have thus thereby caused immense loss to the plaintiff.
13.That the tenders submitted by the tenderer was valid for a period of 90 days only and the said 90 days are to expire on 16th November,1994 on which date the defendants would be informing the tenderers that the tender has been cancelled and that fresh tender would be called in due course of time. Uptill now the plaintiff has been waiting in the hope that the defendants would fix up some dates for opening the prices bid in which the price bid of the plaintiff would also be opened and the plaintiff would be awarded contract upon opening of the price bid because the plaintiff is the lowest tenderer. How on the date of filing of this suit there is no time left for the defendant to inform the tenderers about the opening of the price bid and accordingly it is a forgone conclusion that the defendants have decided not to open the tender in order to allow M/s.S.K.Sharma to operate handling contract on an adhoc basis."
(8) As is apparent from the case set up by the first respondent in the plaint,allegations of mala fides have been levelled against the appellants in not opening part Ii of the tender documents thereby allowing the tenders to lapse. The case of the respondent is that this was done to benefit M/s.S.K.Sharma who was handling the work at the stockyard of the first appellant at Naini on ad hoc basis since May 23, 1993 though the tenders were to be invited and contract was to be finalised within six months there from. Mr.Ahmadi, learned counsel for the first respondent, submitted that M/s.S.K.Sharma and M/s.S.K.S.Movers is one and the same party and to buttress his point he showed us a calender purportedly produced by M/s.S.K. Sharma and M/S.S.K.S. Movers which contained the same address for M/s.S.K.Sharma and M/s. S.K.S..Movers. According to him M/S.S.K.Sharma incarnated as M/s.S.K.S.Movers has again been given the contract by the appellants and their assertion that M/s.S.K.Sharma is not working the contract is false.
(9) It is well settled that while considering the application under Order 7 rule 11 Cpc, the court is not required to take into consideration the defense set up by the defendant in his written statement. The question whether the plaint discloses any cause of action is to be decided by looking at the averments contained in the plaint itself and not the defense set up in the written statement. As is noticed above, the plaintiff/first respondent is claiming damages on the ground of alleged mala fides of the appellants in not opening part Ii of the tenders resulting in loss to the former. According to the plaint one of the lethal effects of delay in opening the tenders is that the first respondent would become ineligible to apply for a similar work in future in terms of clause 2.1 of the tender. It is also averred that the appellants did not open part Ii of the tenders in order to allow M/s. S.K.Sharma to continue handling contract on ad hoc basis.
(10) For the purpose of an application under Order 7 rule 11 Civil Procedure Code What has to be seen is whether or not a meaningful reading of the plaint discloses a cause of action. While considering the application the strength or weakness of the case of the plaintiff is not to be seen. In so far as the submission of the learned counsel for the appellants that the suit should be dismissed as the plaint fails to disclose any material particulars of malice alleged against the appellants, it needs to be pointed out that Order 6 rule 10 Civil Procedure Code takes care of this submission of the learned counsel. It will be convenient at this stage to extract Order 6 rule 10 Civil Procedure Code which reads as under: "WHEREVER it is material to allege malice, fraudulent intention, knowledge or other condition of the mind of any person, it shall be sufficient to allege the same as a fact without setting out the circumstances from which the same is to be inferred".
(11) Thus, wherever allegation of malice, fraudulent intention, knowledge or other conditions of the mind of any person is made it is not necessary to set out the circumstances from which the same is to be inferred and it is enough to allege the same as a fact. Reliance by the learned counsel for the appellant on T.Arivandandam Vs. T.V.Satyapal and another Air 1977 Sc 2421 and Patasibai and others Vs. Ratanlal does not further the case of the appellants.All that the Apex Court has held in these two decisions is that a meaningful reading of the plaint should disclose a cause of action. Applying the principles laid down in these two decisions we are of the opinion that meaningful reading of the plaint, as opposed to formal reading thereof, discloses a cause of action in favor of the first respondent and the learned single Judge was right in rejecting the application of the appellant under Order 7 rule 11 CPC.
(12) In view of the above discussion we find no merit in the appeal and the same is hereby dismissed.