Delhi District Court
M/S Technicom Systems (I) Pvt. Ltd vs Union Of India on 21 January, 2017
IN THE COURT OF SH. HARISH KUMAR : ADDL. DISTRICT
JUDGE -13 : CENTRAL DISTRICT ; TIS HAZARI COURTS : DELHI
CS NO. 9852/16
In re :
M/s Technicom Systems (I) Pvt. Ltd.
F-9, MIDC Industrial Area Satpur,
Nasik - 422 007
........ Plaintiff
Versus
1. Union of India
Department of Telecommunication,
Telecom Commission,
Ministry of Communication
Through its Secretary,
20, Ashoka Road,
Sanchar Bhawan, New Delhi - 110 001
(Now Bharat Sanchar Nigam Limted,
substituted vide order dated 16.03.2006)
2. Indus Ind Bank Ltd.
Indian House,
Lamington Road,
Mumbai - 400 004
.......... Defendants
Date of institution of present suit : 13.01.1999
Date of receiving in this court : 02.03.2016
Date of hearing arguments : 22.12.2016
Date of Judgment : 21.01.2017
Suit for Declaration and Injunction
JUDGMENT
Plaintiff has filed the present suit for declaration and injunction against the defendants.
2. Brief fact of the case as set out in the plaint was that CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 1 of 17 plaintiff is a company duly incorporated under the laws of India and plaint was being instituted and verified by Sh. R.S. Tyagi, Senior Manager who was duly authorised by a Resolution of the Board of Directors dated 01.07.1998. The defendant no. 1 invited tenders for supply of 2/34 MBs Optimux and regenerator (PDH) being Tender No. MM(OF)/021997/000095 dated 20.02.1997. The bid documents were prepared entirely by defendant no. 1 and it was not open for the plaintiff to make any suggestion or negotiations with regard to changing any clause thereto or format of the bid security or performance guarantees required thereunder. Plaintiff had no option but to bid on the terms and conditions stated therein or not to participate in the tender at all. The plaintiff's entire business was dependent upon purchase by the defendant no. 1. Pursuant to above said tender, which was opened on 06.05.1997 and on evaluation of the bid, defendant no. 1 issued an advance purchase order (hereinafter referred to as APO) No. CT/APO/069/97-98 dated 01.12.1997, awarded to the plaintiff, which was only an intention to enter into a contract as per Clause 27 of the tender/bid documents, for a total value of Rs.2,27,07,850.91 for supply of 2/34 MBs Optimux to be made by 15.03.1998.
3. It is stated that in the APO, the delivery schedule was specified and plaintiff was required to make supplies on issuance of the detailed purchase order (hereinafter referred to as DPO), which was alone was to constitute the contract (as per Clause 28 of the tender/bid documents) and which necessarily was to have conformed to the requirements of law as to be a valid and binding contract. In terms of the said APO, plaintiff was required to furnish a Performance Bank Guarantee of Rs.11,36,000/- strictly in accordance with the one sided and adhesive format required by the Department of Telecommunication as provided in the tender documents. On receipt of said APO, plaintiff, vide its letter dated 11.12.1997, gave its unequivocal acceptance to the CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 2 of 17 said APO and requested 10 more days for submitting performance bank guarantee. However due to procedural delays on the part of the plaintiff's bankers, the plaintiff, vide letters dated 31.12.1997, 31.12.1997, 08.01.1998, 20.01.1998 and 22.01.1998 sought more time to submit the performance bank guarantee.
4. It is further averred that the delivery period of the goods was of prime importance as any delay in delivery could entail liquidated damages as per the tender documents effectively reducing the price of goods from that agreed by plaintiff. In view of the considerable time period having elapsed, it became impossible for the plaintiff to accept the condition for supply of the goods by 15.03.1998. Thus the performance bank guarantee was got issued being no. GU/TECHNICOM/250966/968/98 dated 20.01.1998 for a sum of sum of Rs.11,36,000/- by plaintiff through the Indus Ind Bank Ltd., Indian House, Lamington Road, Mumbai in the format specified by defendant no. 1 and was furnished to defendant no. 1 under the cover of letter dated 21.01.1998. By the said letter, it was specifically stated that the supply of goods by 15.03.1998 was not practical and the plaintiff therefore requested that the delivery period be made to 6 months from the date of issue of DPO. Further vide letter dated 22.01.1998, plaintiff informed the defendant no. 1 that it would be able to supply 20% of the ordered quantity by the end of 2nd month from the date of DPO, 30% of the ordered quantity by the end of 3rd month of DPO, 30% of the ordered quantity by the end of 4th month from the date of DPO and balance quantity within 6 months from the date of DPO.
5. It was further averred that the format of the performance bank guarantee as issued by defendant no. 1 was totally defective and led to the issuance of a void and unenforceable guarantee as the guarantee was issued in terms of the APO being stated to be the CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 3 of 17 agreement when in fact in accordance with the tender documents, the APO was only an intention to enter into an agreement/contract and not a contract from which any obligation flow on either party. Therefore the advance purchase order being without consideration the guarantee got issued was also without consideration and void. Without acceding to the plaintiff's contention defendant no. 1 issued a DPO dated 13.02.1998 in which the delivery schedule was specified for 50% of the ordered quantity by 31.03.1998 and the balance within 4 months which was not in accordance with the conditions accepted by the plaintiff in its offer and also contrary to the terms of the APO dated 01.12.1997 and therefore not binding. The said DPO, which was as per the tender documents, alone was to constitute the contract, was neither signed for and on behalf of the President of India not by a person duly authorised to do so on behalf of the President of India and was therefore void and not a valid or binding contract.
6. It is further averred that plaintiff vide letter dated 19 th February 1998 conveyed to defendant No.1 delivery schedule was insufficient as procurement of material i8tself would take 2 to3 months from the date of receive of DPO and requested for amendment in delivery schedule. Plaintiff also sent reminder letter requesting for grant of four clear months. It was furhter averred that DPO was neither signed for and on behalf of President of India nor was by a duly authorised person to do so and therefore same was void. Defendant No.1 illegally and wrongfully purported to change the delivery period in the DPO which did not result into a concluded contract between the parties at the best could be a fresh proposal or counter offer which was not acceptable to plaintiff.
7. It has been further pleaded that prior to issuance of DPO, the quality assurance department of Defendant No.1 had vide letter dt CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 4 of 17 9.01.1998 and 16.01.1998 called upon all the manufacturers of the equipment in question including plaintiff to supply the goods with certain changed specification as compared to the TEC specification which was to be complied as per tender specification. Since the change of specification would imply financial implication, a clarification was sought vide letter dt 23.04.1998 from Defendant No.1 and reminder was sent on 12.06.1998. It has been further averred that despite the fact that there was no valid, binding or concluded contract which had come into effect and that the purported DPO dt 13.02.1998 was not a valid, binding or enforceable contract as it was not in accordance with Article 299(1) of the Constitution of India, defendant No.1 vide letter dt 16.06.1998 threatened to cancel the DPO and invoke the Bank Guarantee with imposition of liquidated damages. Hence the present suit for declaration and injunction.
8. Upon being served, the defendant no. 1 which was earlier department of Tele Communication (hereinafter referred to as DoT) of Union of India had filed written statement whereby it submitted that terms and conditions of the bids were prepared by the defendant no. 1 and suggestions from bidders were not called for. It was further submitted that bidder participated in the tender and accepted the terms and conditions of the tender and therefore, could not question the terms and conditions of the tender. It was further pleaded that format was accepted by all the bidders and it was mentioned in the tender documents that the performance bank guarantee be submitted as per the department of DoT format. It was further pleaded that request made by the plaintiff was against the preview of tender terms and conditions and hence, the request was not considered and plaintiff had admitted that it gave unequivocal/unconditional acceptance to the APO wherein it was indicated that equipment should be supplied by 15.03.1998 and plaintiff was to furnish the acceptance along with performance bank CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 5 of 17 guarantee by 09.12.1997. However, plaintiff took additional one month for submitting the performance bank guarantee.
9. It has been further averred that while submitting bank guarantee plaintiff requested the delivery schedule of six months. It was pleaded that contention of the plaintiff that it varied the conditions of acceptance of the APO was denied as once it accepted the terms and conditions of the tender vide their acceptance, thereafter, requesting delivery schedule of six months could not be considered as conditional acceptance of the terms and conditions of the bid. It was further mentioned that plaintiff had no right under the agreement to claim extension of delivery period. It was further pleaded that format of performance bank guarantee was same for all the bidders and no other bidder including the plaintiff had raised any objection in the matter earlier. It has been further pleaded that as plaintiff failed to commence/complete supplies during the delivery schedule of six months, plaintiff raised baseless issues to hamper the developmental programme of the defendant and to say that no binding contract came into existence was baseless as the plaintiff accepted the APO unconditionally and furnished performance bank guarantee in the format prescribed in the bid. It was further submitted that in the APO the delivery schedule was indicated as 15.03.1998. However, at the time of submission of DPO, the total delivery schedule was given four months i.e. upto 12.06.1998 instead of 15.03.1998 requesting that 50% of the ordered quantity be supplied by 31.03.1999.
10. It has been further pleaded that APO was signed by the Assistant Director General (CE) who was the competent authority to issue orders. With respect to change in specification, it was submitted that considering all factors, delivery schedule was enhanced to 12.06.1998 in the DPO. It was pleaded that DPO was issued only after CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 6 of 17 receiving unequivocal/unconditional acceptance of the APO and performance bank guarantee from the plaintiff. Plaintiff was given an opportunity vide notice dated 16.06.1998 to complete the supplies by extending the delivery schedule upto 14.08.1998 and further action was taken as per the clause 15 of Section III of the bid documents. It was further pleaded that original delivery schedule was common to all eligible vendors in this tender and would not be amended for a particular vendor. It was further pleaded that necessary action for encasement of bank guarantee was taken after following all the departmental procedure as per the terms and conditions of the tender. It was further pleaded that non supply of any equipment within the time framed hamper the departmental program of the defendant which ultimately caused loss to the government.
11. It was further pleaded that APO was issued on 01.12.1997 indicating that supply of goods to be completed by 15.03.1998. However, while placing the DPO dt 13.02.1998 the total delivery period was given as four months with a request that 50% of the ordered quantity be supplied by 31.03.1998 whereas 100% of the quantity was supposed to be supplied by the plaintiff by 15.03.1998 as per the APO. The DPO was signed by Assistant Director General (CE) who was duly authorised to sign the same after acceptance of the APO which was the intention to enter into the contract as per clause 27.1 Section 2 of the bid documents therefore cannot be said that there was no valid contract. It has been further pleaded that after completing of the above mentioned formalities it could not be said that there was no contract between the parties.
12. It was further pleaded that plaintiff was never forced to accept the terms and conditions and option was opened for the plaintiff either to accept or not to accept. It was further pleaded that contract CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 7 of 17 came into existence after giving unequivocal acceptance of APO with the placement of DPO, hence, the allegations that there was no valid contract was wrong and denied. It was further pleaded that request made by the plaintiff to give delivery period of six months was not justified at all as plaintiff had already submitted unconditional acceptance of the advance purchase order. No cause of action occurred in favour of the plaintiff in fact plaintiff is guilty of breach of valid and binding contact and therefore, suit was sought to be dismissed.
13. In replication, Plaintiff denied the averments made in written statement of defendant no. 1 and reiterated the contents of the plaint.
14. Right of defendant No. 2 to file written statement was closed vide order dated 05.05.2006.
15. On the pleadings of the parties following issues were framed vide. order dated 05.05.2006:
1. Whether the plaintiff is entitled to relief claimed? OPP
2. Relief.
16. In support of its case, plaintiff examined Sh. Chet Ram Sharma as PW1 who tendered his affidavit Ex.PW1/A in examination- in-chief and relied upon following documents:-
1. Board of Resolution dated 01.07.1998 Ex. PW1/1 2. Bid documents Ex. PW1/2
3. Advance Purchase Order awarded to the plaintiff Ex.PW1/3
4. Letter dated 11.12.1997 Ex. PW1/4, Letter dated 31.12.1997 Ex. PW1/5, Letter dated 08.01.1998 Ex.
CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 8 of 17 PW1/6 and Letter dated 20.01.1998 Ex. PW1/7
5. Performance Bank Guarantee under covering letter dated 21.01.1998 Ex. PW1/8
6. Letter dated 22.01.1998 Ex. PW1/9
7. Purchase Order dated 13.02.1998 Ex. PW1/10
8. Letter dated 19.02.1998 Ex. PW1/11
9. Letter dated 02.04.1998 Ex. PW1/12
10. Letter dated 09.01.1998 Ex. PW1/13, Letter dated 16.01.1998 Ex. PW1/14, Letter dated 23.04.1998 Ex. PW1/15 and Letter dated 12.06.1998 Ex. PW1/16
11. Letter dated 16.06.1998 Ex. PW1/17
12. Letter dated 09.12.1998 Ex.PW1/18 and notice dated 17.12.1998 Ex. PW1/19
13. Letter dated 04.01.1999 Ex. PW1/20.
He was cross-examined by the defendant. After which, plaintiff closed his evidence.
17. In its defense, defendant no. 1 examined Sh. Shailraj Sharma as DW1 who tendered his affidavit Ex.DW1/1 in examination- in-chief. He was cross-examined by the plaintiff. Thereafter defendant evidence was closed.
18. Ld. Counsels for the parties have been heard and record perused. In the present case there did not arise any disputed question of fact for which evidence was needed. Facts of the case are not in dispute except little here and there. Entire sequence of events and material are fully mentioned in the documents which is not in dispute. Dispute pertains to interpretation and application of law of contract as to whether in the given facts and circumstance a valid and binding contract came into being or not. After going through the argument, pleading, evidence and material on record, issues wise findings are as CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 9 of 17 under:-
ISSUE NO. 1:- Whether the plaintiff is entitled to relief claimed? OPP
19. Onus to prove this issue is upon the plaintiff. Plaintiff has claimed that Purchase Order dt 13th February 1998 be declared void and unenforceable and that no concluded binding contract under tender No. MM(OF)/021997/000095 dt 20th February 1997 and Advance Purchase Order dt 1st December, 1997 was entered into between the Plaintiff and defendant No.1. Plaintiff has also prayed alternative relief that a decree of declaration that there was no agreed and binding delivery schedule with regard to quantities of goods to be supplied in terms of the Purchase Order dt 13 th February 1998. Plaintiff has also prayed for declaration that the Performance Bank Guarantee No. GU/TECHNICOM/250966/968/98 dt 20th January,1998 issued by defendant No.2 for Rs 11,36,000/- in favour of defendant No be declared null and void and consequently injunct the defendant No.1 from invoking/encashing the said bank guarantee and defendant No.2 from making the payment of under the bank guarantee.
20. It is not in dispute that tender was invited by the defendant No.1, the then DoT (now BSNL) vide Tender No. MM(OF)/ 021997/000095 dt 20th Feb 1997 in accordance with term and condition mentioned in the bid documents Ex PW1/2 and plaintiff was one of the bidder for supply of goods i.e. 2/34 MBs Optimux and regenerators (PDH). It is also not in dispute that plaintiff was successful bidder as on evaluation of the bid, Defendant No.1 issued an Advance Purchase Order (APO) dt 1st December, 1997 Ex PW1/3. It is not in dispute that APO did mention the quantities of units required and price thereof with delivery schedule. The said APO mentioned details terms and condition while calling upon the plaintiff to convey CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 10 of 17 unequivocal/unconditional acceptance and to furnish performance security in the form of bank guarantee. It is not in dispute that as per the general condition of the tender terms or bid document, upon placement of advance purchase order by the defendant No.1, plaintiff was required to furnish performance security by way of bank guarantee in accordance with the format provided in Section 9 of the bid document. It is not in dispute that plaintiff vide its letters dt 11.12.1997 Ex PW1/4, 31.12.1997 Ex PW1/5, 08.01.1998 Ex PW1/6 and letter dt 20.01.1998 Ex PW1/7 conveyed its unequivocal/unconditional acceptance to the APO and vide aforesaid letters only sought extension of time for furnishing performance security by way of bank guarantee.
21. At the time of conveying unequivocal/unconditional acceptance plaintiff did not raise issue about the authority and competence of the person who had issued the APO. It was only while furnishing performance security in the form of bank guarantee vide letter dt. 21.01.1998 Ex PW1/8 that plaintiff requested that detail purchase order (DPO) be placed with period of delivery of 6 months from the date of issue of DPO. On 22.01.1998, plaintiff wrote another letter Ex PW1/9 whereby plaintiff provided month-wise delivery schedule for the supply of subject goods. The language of said letters Ex PW1/8 and 9 by any rule of interpretation cannot be termed as conditional acceptance of APO or was any way a counter offer on the part of plaintiff.
22. It is not in dispute that vide DPO dated 13.02.1998 Ex. PW-1/10, plaintiff was required to supply 50% of the ordered quantity by 31.03.1998 and balanced quantity was to be supplied within four months from the date of issuance of purchase order. After receipt of DPO Ex PW1/10, plaintiff wrote another letter dated 19.02.1998 Ex CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 11 of 17 PW1/11 requesting for amendment in the delivery schedule thereby giving plaintiff clear four months delivery period from the date of issue of purchase order. Plaintiff again wrote letter dated 02.04.1998 Ex PW1/12 to the same effect.
23. At this stage starts the dispute between the plaintiff and defendant No.1. Till this stage plaintiff had no grievance that it had no say in the negotiation/drafting of terms and condition of bid documents or that APO/DPO was not in accordance with Article 299(1) of the Constitution of India or that APO/DPO was not issue/signed by competent authority.
24. The first grievance of the plaintiff was that bid documents were prepared entirely by Defendant No.1 and it was not open for the plaintiff to make any suggestion or negotiation with regard to changing any clause thereto or format of the bid security or performance guarantees required thereunder. But grievance of the plaintiff is misplaced as there was no compulsion from the defendant No.1 to participate in the tender process if the terms and condition of bid document were not acceptable to it. Contention of the plaintiff that business of the plaintiff was dependent upon purchase by the defendant No.1 was also of no help to the plaintiff for the reason that plaintiff was not compelled to be in the business whose purchaser was only defendant No.1. Plaintiff in its wisdom opted to be in the field where there was no other purchaser to purchase the goods manufactured by it. Therefore, plaintiff knew very well that since there were no other purchaser then it would have to comply with the requirement of single purchaser, in case it wants to grow in the field of its business. Therefore, its decision to be in the field of such business was its own decision and nobody forced it and as such, plaintiff cannot make complaint that it had no say in the finalisation of terms and CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 12 of 17 conditions of bid documents. Therefore, a plaintiff's grievance with respect to having no say in matter is not sustainable and therefore, hereby rejected.
25. Next is the question as to whether and when binding contract came into existence between plaintiff and defendant No.1.? It was a settled law that when bid of bidder is accepted then it becomes a standing and continuous offer from the bidder and the moment purchase or work order is placed it results into binding contract.
26. It is the contention of the plaintiff that before any DPO was placed upon it, vide letter dt 21.01.1998 Ex PW1/8 it had requested the defendant No. 1 to grant it delivery schedule of six months but despite that defendant did not concede to the request of the plaintiff and placed DPO whereby plaintiff was required to supply 50% of the equipment by 15th March, 1998 and remaining within four months from the date of purchase order. It is contended that by requesting for six months plaintiff had revised its terms of tender or offer and if the same was not acceptable to the plaintiff then the contract did not come into existence between the plaintiff and the defendant and therefore defendant no. 1 cannot invoke the bank guarantee for non performance of its obligation. Question is whether once bid has been accepted, is it permissible for bidder to revise its terms of the tender? The answer is no, because the terms on which tender were invited became part of the offer and there was no obligation on the defendant No. 1 to accept the revised tender. Explaining why such proposition is justified, the Hon'ble Bombay High Court in Hasmukh Lal & Co. v. Municipal Corporation of Greater Mumbai, (2005) 3 Mah. LJ. 149, said:-
"Municipal Corporation invites bids involving large financial implication and involving the interest of the community. Withdrawal of offers by bidders result in the escalation of costs of projects and also delays to the deteriment of public interest. Hence, by demanding CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 13 of 17 appropriate undertaking from bidders it protects itself and also public interest. It is observed that petitioner before it who withdrew part of his offer on the ground that quarry owner with whom he had contacted had declined to effect supply could not make grievance about forfeiture of tender deposit."
27. It is also settled preposition of law that a tenderer can withdraw his tender before its final acceptance by a work or supply order even if there is a clause in the tender restricting his right to withdraw but once an order is placed that will have to be complied with. The order converts the tender into contract. A tender will be irrevocable where the tenderer has, on some consideration promised not to withdraw it or where there is a statutory prohibition against withdrawal. It has already been held herein before that letters Ex PW- 1/8 and PW- 1/9 by any rule of interpretation cannot be termed as conditional acceptance of APO or was any way a counter offer on the part of plaintiff. Admittedly plaintiff had not withdrawn its tender not did it put any condition in that letters that if delivery schedule of 6 months could not be granted by defendant No. 1 then its offer be deemed withdrawn or no order be placed. After accepting APO unconditionally/unequivocally and furnishing performance bank guarantee, plaintiff was not within its right to seek change in the terms and conditions of its offer nor was defendant No.1 under compulsion to consider the request of the plaintiff in this regard. Hence, the moment DPO dt 13.02.1998 Ex PW1/10 was placed binding contract between plaintiff and defendant No.1 came into existence.
28. The delivery term i.e. Clause 6 of the bid documents mentions that supplier has to deliver goods in accordance with the terms specified by the purchaser in its schedule of requirement and special condition of contract. It has been further mentioned that delivery of the equipment shall commence immediately on placement CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 14 of 17 of purchase order on vendor and be completed within 2 to 6 months thereafter. It is not in dispute that plaintiff made bid after going through the entire bid documents wherein it was specifically mentioned that delivery of equipment has to be commenced immediately and be completed within 02 to 06 months. Plaintiff by bidding to the defendant had offered itself as capable of delivery equipments immediately and completing the supply of equipments within 02 to 06 months. Said delivery clause goes to show that entire equipment could be required to be delivered within 2 months or at best upto 6 months. Plaintiff by offering its bid must have been aware of the fact that entire equipment for the supply of which it was offering could require to bu supplied within 2 months as well. Vide DPO dt 13.02.1998 Ex PW1/10 plaintiff was required to supply only 50% of ordered equipment by 31.03.1998 whereas as per terms of bid documents defendant would not have been at fault if it had asked the delivery of entire material within two months.
29. Plaintiff in one of its letter has expressed that it could not supply the goods as the procurement of material itself takes two to three months. This excuse appears to be an afterthought for the reason when plaintiff had bid for tender, he knew very well that in case the bid is accepted and purchase order is placed upon it he would be required to deliver the equipments in accordance with the schedule i.e. within two to six months. Therefore, if it despite knowing that procurement of material would take two to three months participated in the tender process then it cannot blame defendant. Once, it has been held above that plaintiff was not within its right to amend the offer and therefore, the moment defendant placed the detailed purchase order there arose binding contract between the plaintiff and the defendant.
30. As far as change in specification is concerned, the tender CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 15 of 17 term itself prescribes for such eventuality and Clause 13 itself makes space for suitable adjustment in the delivery schedule. The tender was for 2/34 MBS Optimux (PDH) and the purchase order was also for the same and the technical specification was also as mentioned in T. E. No. MM/OF/021997/000095 dated 20.05.1997. Plaintiff has not led any evidence to the effect that what was the implication on delivery schedule of change in specification of the equipment. It did not lead any evidence to show that how much time was required to make the change in specification. In any case since defendant No.1 has admitted that considering the changes in specification, delivery schedule was enhanced to 12.06.1998 and finally 14.08.1998 vide its letter dt 16.06.1998 Ex PW1/17, plaintiff was left with no right to have any grievance over the change in specification. It is not in dispute and admitted fact that pursuant to DPO dt 13.02.1998 Ex PW1/10 plaintiff did not supply single equipment between the aforesaid period which goes on to show that plaintiff was not capable of performing the contracted delivery and thereafter it started looking for an excuse to come out of the binding effect of the contract. In all these circumstances, it is the plaintiff who is at fault and has committed breach of contract, therefore, plaintiff is not entitled for the relief claimed in the plaint and therefore, plaintiff is not entitled for the relief.
31. Before parting it must be necessary to deal with contention of the plaintiff that APO/DPO was not in accordance with requirement of Article 299(1) of the Constitution of India. Article 299(1) requires that all contracts made in exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be. Contention of the plaintiff is not sustainable mere on the perusal of the APO/DPO. In APO it has been mentioned that APO was being placed on behalf of President of India. Similarly in DPO purchaser has been described as the President CS No. 9852/16 M/s Technicom Systems (I) Pvt. Ltd. vs. Union of India & Anr. Page No. 16 of 17 of India. In Union of India v. A. L. Ralllia Ram, AIR 1963 SC1685, the Hon'ble Supreme Court held that "the mere fact that the officer fails to express that he is executing the contract on behalf of the President of India can be ignored if the facts give an inference that it has been made on behalf of the President". If the President does not prescribe any mode for execution of a contract, the valid contract may arise between the parties by correspondence also. The contract must be executed by such person as the President or the Governor may direct or authorise. Authorisation or direction may be specific in a particular case or rules, notification, special orders may grant or it can be inferred also in the particular facts and circumstance of case. During the cross examination of DW1 no suggestion was given that the officer who had signed the APO/DPO had no authority to sign. Hence, the contention that APO/DPO was not in accordance with Article 299(1) of the Constitution of India is not tenable and accordingly, rejected.
In view of the above discussion and reasoning, issue No.1 is decided against the plaintiff and in favour of defendants.
RELIEF In view of the findings recorded on issue No.1, suit of the plaintiff is dismissed. Parties to bear their own cost of the suit.
Decree sheet be prepared accordingly.
File be consigned to Record Room after necessary compliance.
(Harish Kumar)
Announced in open Court ADJ-13(Central)/THC
(Judgment contains 17 pages) Delhi/21.01.2017
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