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Judgment
Three applications along with the main writ petition are taken up for final consideration.
CAN 2511 of 2019 is an application at the behest of the respondents seeking stay of the writ petition in view of Section 8 of the Arbitration and Conciliation Act, 1996. CAN 2512 of 2019 is an application for production of the original letter of interest dated March 19, 2016. CAN 4722 of 2018 is at the behest of the writ petitioners claiming payment of admitted amount.
In the writ petition, the writ petitioners seek a direction for refund of Rs.65,71,819/- towards earnest money and security deposit.
Learned senior Advocate appearing for the petitioners submits that, the amount of Rs.65,71,819/-as claimed by the petitioners stands admitted by the writing dated March 8, 2017 issued by the first respondent. By such writing, the first respondent required the petitioners to provide the bank details along with a cancelled cheque for payment through electronic mode. Thereafter, the first respondent resiled from such declared position and is not paying such amount. The amount being admitted, the respondent should be directed to pay such amount.
So far as CAN 2511 of 2019 is concerned, learned senior Advocate for the petitioner submits that, an application under Section 8 of the Arbitration and Conciliation Act, 1996 cannot be invoked for the purpose of staying a proceedings under Article 226 of the Constitution of India. A Constitutional Court does not come within the meaning of a judicial authority as described in Section 8 of the Act of 1996. Therefore, such an application is not maintainable.
Learned senior Advocate appearing for the respondents submits that, there subsists an arbitration agreement between the petitioner and the first respondent. He relies upon a photocopy of the letter of interest issued by the first petitioner to the first respondent. He submits that, the terms and conditions governing E-auction contains an arbitration clause. He draws the attention of the Court to the arbitration clause and submits that, there are disputes subsisting between the parties which are referable to arbitration. On a query from the Court, he submits that, neither his client nor the petitioners have taken any step to refer the disputes to arbitration. He draws the attention of the Court to the various correspondence exchanged between the parties and submits that, there are disputes which are referable to arbitration. Since disputes are there, it cannot be said that the first respondent admitted any amount to be receivable by the petitioners. The writing dated March 8, 2017 does not admit any particular figure. The same cannot be construed to be an admission. It has read in the context of the earlier correspondence. Therefore, the application under Section 8 of the Act of 1996 should be allowed. There being disputes between the parties, the parties may be required to take recourse to the resolution of such disputes between them through the mechanism of arbitration as provided in the agreement.
On a query from the Court, learned senior Advocate for the respondents submits that, he is not canvassing the point of lack of jurisdiction of this Court.
The first respondent floated a tender for lifting of coke. The first petitioner participated therein and became the highest tenderer. It was awarded the contract. The first petitioner sought to act in terms of such contract. It is the case of the petitioners that, the first respondent did not permit the lifting of the agreed quantity of coke. Therefore, certain amounts became due and payable by the first respondent to the petitioner. Moreover, the first petitioner put in a security deposit, which the first respondent is yet to refund.
It is the case of the first respondent that, the failure to lift coke on the part of the first petitioner cannot be attributed to the first respondent. In any event, there is no admitted amount of liability warranting the writ Court to intervene.
Section 8 of the Arbitration and Conciliation Act, 1996 applies where, there is a proceeding pending before a judicial authority. In the present case, a Constitutional Court is considering an application under Article 226 of the Constitution of India. It is settled law that, notwithstanding the existence of arbitration agreement, a writ petition is maintainable, where it is shown that, the action complained of is wholly without jurisdiction, or is in breach of principles of natural justice or the impugned order is unreasoned or the conclusion arrived at by the authority concerned shocks the conscience of the Court or the authority has acted mala fide. In the present case, the petitioners claim that, an admitted amount is being unjustly withheld by the first respondent which is an instrumentality of the State within the meaning of Article 12 of the Constitution of India.
Pursuant to the contract between the parties, the first petitioner deposited a security amount of Rs.10,20,000/- with the first respondent. The same is yet to be refunded. The petitioners raised their claims on the first respondent, lastly on March 3, 2017. The response thereto is an electronic mail of the first respondent on March 8, 2017. The response is as follows: -
"Dear Sir,
For refund of balance amount you need to submit e-mandate form along with cancelled cheque of bank in which you want your refund. All payment and transaction is mandatory through online mode and for this it is necessary to submit filled e-mandate form along with cancelled cheque. Then we will able to expedite the refund process. You are requested to submit filled original (no xerox or soft copy) e-mandate form along with cancelled cheque. Please find enclosed e-mandate form with this mail."
The claims of the petitioner as noted above, are for a sum of Rs.65,71,819/-. There are three components of such claims.
One component is the additional security deposit of Rs.10,20,000/-. The other component is Rs.45,73,329/-comprised in eight transactions where, the first petitioner claims that, it is entitled to value of the cargo including security deposit.
There is one more component of claim being C-Forms of the value of Rs.9,78,490/-. The value of the cargo is required to be adjudicated upon by an appropriate forum.
The entitlement of the first petitioner on the component of value of the cargo, to my mind, remains disputed. The writing dated March 8, 2017 does not contain any admitted figure. It should be read in the context of the earlier correspondence exchanged between the parties. Therefore, in my view, the first respondent should be directed to pay a sum of Rs.10,20,000/- being the additional security deposit to the first petitioner within a fortnight from the date of communication of this order. All other claims of the respondent authorities may be adjudicated by an appropriate forum, in accordance with law.
The Court is informed that, by reason of the interim order dated December 21, 2017, a sum of Rs.65,71,819/- lies in a fixed deposit created by the first respondent with a nationalised bank. In view of the directions in this writ petition, the first respondent is at liberty to encash such fixed deposit, if required, prematurely. The first respondent will disburse the sum of Rs.10,20,000/- to the first petitioner, in accordance with law. The first respondent will make a fresh fixed deposit of the balance amount in a suitable interest earning fixed deposit with any nationalised bank of its choice for a period of a fortnight from date. The fixed deposit so created will abide by the result of any proceeding that may be initiated by the parties.
It is clarified that this Court did not enter into the claims interest on account of or any other claim of the petitioners. Neither has this Court entered into the counter-claim of the first respondent.
W.P. No.30742(W) of 2017, CAN 4722 of 2018, CAN 2511 of 2019 and CAN 2512 of 2019 are disposed of accordingly.
No order as to costs.
Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance of the requisite formalities.