Supreme Court - Daily Orders
Eastern Coalfields Ltd. vs International Commerce Ltd. . on 4 August, 2015
Bench: T.S. Thakur, V. Gopala Gowda
1
ITEM NO.24 COURT NO.2 SECTION XVI
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 16665/2015
(Arising out of impugned final judgment and order dated 12/05/2015
in MAT No. 677/2015 passed by the High Court Of Calcutta)
EASTERN COALFIELDS LTD. Petitioner(s)
VERSUS
INTERNATIONAL COMMERCE LTD. AND ORS. Respondent(s)
(with appln. (s) for exemption from filing c/c of the impugned
judgment)
WITH
SLP(C) No. 21168/2015
(With appln.(s) for exemption from filing c/c of the impugned
judgment and Interim Relief and Office Report)
Date : 04/08/2015 These petitions were called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE T.S. THAKUR
HON'BLE MR. JUSTICE V. GOPALA GOWDA
For Petitioner(s) Mr. Anupam Lal Das,Adv.
In SLP 16665/15 Mr. Anirudh Singh, Adv.
SLP 21168/15 Mr. Vivek Tankha, Sr. Adv.
Mr. Harsh Parashar, Adv.
Mr. Mohit Kumar Shah,Adv.
For Respondent(s) Mr. Vivek Tankha, Sr. Adv.
Mr. Harsh Parashar, Adv.
Mr. Mohit Kumar Shah,Adv.
UPON hearing the counsel the Court made the following
O R D E R
Signature Not Verified SLP(C) No. 16665 of 2015:
Digitally signed by Shashi Sareen Date: 2015.08.17 08:48:13 IST Reason:Leave granted.
The appeal is allowed in terms of the signed order. 2 SLP(C) No. 21168 of 2015:
In terms of the order passed in C.A. No. 5920 of 2015 @ SLP(C) No. 16665 of 2015, this special leave petition is disposed of.
(Shashi Sareen) (Veena Khera) Court Master Court Master (Signed order is placed on the file) 3 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 5920 OF 2015 (Arising out of SLP(C) No. 16665 of 2015) EASTERN COALFIELDS LIMITED ... Appellant(s) Versus INTERNATIONAL COMMERCE LTD. ... Respondent(s) O R D E R Leave granted.
This appeal arises out of a judgment and order dated 12.05.2015 passed by the High Court of Calcutta whereby MAT No. 677 of 2015 with C.A. No. 4408 of 2015 filed by the appellant-Eastern Coalfields Limited (ECL for short) has been disposed of with the direction that respondent No.1-company shall furnish to the appellant an additional performance security in a sum of Rs. 38,14,67,000/- (Rupees Thirty Eight crores Fourteen lakhs and Sixty Seven thousand only) in four equal instalments within a period of 18 months from the date of the issue of the work order in its favour whereupon the appellant-company shall issue in favour of the respondent a letter of award of the contract in question.4
MAT 677 of 2015 and C.A. No. 4408 of 2015 arose out of an interim order passed by a Single Judge of the High Court of Calcutta in W.P. No. 6342 of 2015 filed by respondent No. 1-company. In the writ petition, the writ petitioner-respondent herein had prayed for a Mandamus directing the appellant-ECL not to insist upon furnishing of additional performance security in a sum of Rs. 38,14,67,000/- and a Mandamus declaring that respondent No. 1 is not liable to furnish any such additional performance security in general format as desired by the former.
By an interim order dated 10.04.2015 passed in the said writ petition,a Single Judge of the High Court had restrained the appellant-company from entering into any contract with any third party with regard to the contract in question or to re-tender or invite or process any fresh tenders concerning the same. The order further stated that if tenders have been invited, no further steps with regard thereto shall be taken till 30.04.2015 or until further orders whichever is earlier.
The appellant's case is that there was a mismatch between the rates offered by respondent No. 1-company and the estimated costs of the works tendered by it which forced the appellant company to invoke clause 16.3 5 of the general condition of contract through an independent monitor and demand an additional performance security of Rs. 38,14,67,000/- in order to protect its interest. Since the writ petitioner-respondent No. 1-company had not agreed to provide the said additional performance security, the appellant company had cancelled the tender process and invited fresh tenders for award of the contract in question. It was in that background that the writ petition afore-mentioned had been filed by respondent No. 1-company in which the fresh tender process was not assailed although it ought to have been so assailed if the writ petitioner was really aggrieved of the said process. The Single Judge had however passed an interim order restraining the processing of the offers received pursuant to the fresh tender notice. Aggrieved the appellant ECL had filed MAT No. 677 of 2015 before a Division Bench of the High Court at Calcutta in which the grievance primarily was that the appellant was entitled to cancel the tender process on account of the refusal of respondent No. 1-company to furnish the additional performance security demanded from it and that the High Court was in error in interfering with the said process or directing that the tender received pursuant to the fresh notice should not be processed further. The Division Bench did not 6 however confine itself to the question whether the interim order passed by the High Court was justified. It went a step further and not only held that the respondent-company should get the award of the contract but also that the additional performance security demanded by the appellant should be furnished in four equal instalments. It was argued on behalf of the appellant-ECL that the Division Bench fell in error in disposing of the writ petition itself which the appellant was entitled to contest on all such grounds as were available to it.
When this appeal came up before us for hearing initially on 28.07.2015 Mr. Tankha learned senior counsel for the respondent-company sought time to take instructions whether the respondent-company was ready and willing to comply with the requirement of an additional performance security in a sum of Rs. 38,14,67,000/- in the general format as required. Mr. Tankha has accordingly taken instructions and submits that his client had upon reconsideration of the entire issue decided to comply with the requirement of a bank guarantee for the amount demanded by the appellant. He further submitted that since the guarantee is meant to be a performance bank guarantee, the appellant company could be asked to release the same proportionate to the 7 work done by respondent No. 1 on an annual basis. Mr. Anupam Lal Das, learned counsel for the appellant company was unable to respond to that request and had taken time to take instructions on that aspect of the matter. When the matter came up today for further hearing we are informed by learned counsel for the parties that they have instructions to submit that in case respondent No. 1-company furnishes the requisite additional performance security in a sum of Rs. 38,14,67,000/- in the format required by the appellant-company, the offer made by the said company pursuant to the earlier tender notice shall be placed before the tender committee of the management for an appropriate decision in the matter. It was urged that the decision so taken by the tender committee will then be acceptable to both the parties. Mr. Tankha submitted that this appeal could in modification of the order passed by the High Court be disposed of on the above terms. We see no reason to decline that prayer especially when the respondent-company appears to have reconciled to the idea of providing the required bank guarantee for Rs. 38,14,67,000/- in the format demanded by the appellant and invite a final decision on the question of award of the contract from the tender committee concerned.8
We accordingly allow this appeal set aside the order passed by the Single Judge and that passed by the Division Bench of the High Court of Calcutta and dispose of MAT No. 677 of 2015 and Writ Petition No. 6342 of 2015 with the direction that respondent No. 1 company may latest within three weeks from today furnish the additional performance security in the form of a bank guarantee to the appellant in which event the appellant-company shall place the offer made by respondent- 1-company for consideration of the duly constituted tender committee for an appropriate decision on the subject in accordance with law under intimation to respondent No. 1 expeditiously but not later than three weeks from the date the bank guarantee is furnished by respondent No. 1. We make it clear that the decision taken by the tender committee shall be final and binding upon both the parties. No costs.
..................J. (T.S.THAKUR) ...................J. (V.GOPALA GOWDA) New Delhi, 4th August, 2015.