http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12  

CASE NO.: Appeal (civil)  4108 of 2006

PETITIONER: Noble Resources Ltd.                                             

RESPONDENT: State of Orissa & Anr.   

DATE OF JUDGMENT: 13/09/2006

BENCH: S.B. Sinha & Dalveer Bhandari

JUDGMENT: J U D G M E N T [Arising out of SLP (Civil) No.915 of 2005]

S.B. SINHA, J :

       Leave granted.

       Whether a writ petition is maintainable in contractual matter is the  core question involved in this appeal which arises out of a judgment and  order dated 14.09.2004 passed by a Division Bench of the Orissa High Court  in Civil Writ Petition No.1463 of 2004  whereby and whereunder the writ  petition filed by the Appellant herein was dismissed.  

       Admittedly, the parties entered into a contract in terms whereof the  Respondent No.2 herein was to supply 1,20,000 MT + / -10% each of Grade  A, Grade B and Grade C iron ore fines by September 2003.  On or about  28.02.2003, the parties also agreed that the supply of full tender quantity  would be made in the sequence of C, B and A Grades iron ore fines at the  prices offered by the Appellant.  Indisputably, the Appellant disclosed the  names of the parties with which it had entered into agreements to supply iron  ore fines procured from the said Respondent.  There is no dispute that   supply of C-Grade iron ore fines had been made by the Respondent No.2.   Indisputably, again supply of 64,236 MT of Grade-B iron ore fines had also  been made.  It is furthermore not in dispute that the Respondent No.2 offered   25,000 MT of Grade-A  iron ore fines to the Appellant herein which was not  accepted.

It appears that in regard to the supplies made from March, 2003 to  September, 2003  there had been no complaint on the part of the Appellant  about any breach of contract on the part of the Respondent No.2 On  05.09.2003, a fax was sent by the Appellant requesting the laycan  in the  following terms :

"After  the successful completion of mv Susan S,  we now look forward to receiving the laycan for the next  shipment of Grade-B Iron Ore Fines in the month of  September.

We look forward to receiving your confirmation at  the earliest please, to enable us to nominate a suitable  vessel."

Yet again by a fax dated 09.09.2003, its request was reiterated stating  that it had signed the sale contracts with some of its long term buyers and  was looking forward for completing the balance shipments and honouring its  commitment to both  Respondent No. 2 and its buyers.  A request was  made  by the Appellant seeking for personal intervention of the matter by the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12  

Chairman and Managing Director of  Respondent No.2.      

The Board Sub-Committee On Sales Policy of Respondent No.2,  however, by a resolution dated 22.09.2003 resolved  :

"Out of the total quantity of A, B & C grade Iron  Ore fines, two C-grade and one B-grade material has  been shipped by M/s Noble Resources Ltd., Hong Kong  and another B-grade material is due to be loaded during  the current month.  It was informed that there is a stock  of 60,000 MT A-grade material, 1 lakh MT B-grade  material and 2.40 lakh MT C-grade material at Daitari.   After receipt of information from L.C. and confirmed  by Company Secretary, it was decided that 60,000 MT,  A-grade material is to be shipped to M/s Noble  resources, Hong Kong even after 30.08.03 and the party  should be pursued not to insist for the balance quantity  of A-grade as it is physically not available with OMCV  and hence cannot supply the 2nd shipment of A-grade."    

       "Further as NINL has agreed that they will be  lifting Iron Ore Fines from October, 03 onwards, the  requirement is to be reviewed and for the time being  export sale of C-grade fines may be postponed.   Therefore, the tender auction taken by OMC Ltd. should  be cancelled invited in the News Paper and Website of  OMC Ltd. for information of all concerned.  On the basis  of the above decision the tender for export sale of  1,80,000 MT of C-grade Iron Ore fines was cancelled."

                The said resolution  was evidently taken in view of the increase of the  rates of  iron ore fines in the international market, which has gone  up  manifold. Yet again the Board Committee On Sales Policy of the  Respondent No.2 decided as follows :

"i)     The validity of the tender will not be extended  beyond 30.09.2003 and therefore no further  quantity shall be supplied  to M/s Noble Resources  Ltd.

ii)     Fresh tender may be invited for B-Grade Iron Ore  fines for one shipment and one shipment of C- Grade.  However, while doing so it must be  ensured that the quantity is available for export  after meeting the requirement of NINL."  

However, despite a reminder, no action had been taken and in the  meantime another invitation of tender was published.  It is not in dispute that  the Appellant also participated in the subsequent tender.

A writ petition was filed by the Appellant in the Orissa High Court.   In its first counter affidavit the Respondent No.2,  inter alia, stated :         "That the Board Sub-Committee on Sales Policy  held on 8.5.2993 of OMC Ltd., decided to review the  export of Iron Ore fines on the basis of tender finalized in  January-February, 2003.  Basing on the above direction  the Board of Directors in their 339th meeting held on  26.08.03 took the following decisions :

       "Regarding export of A-grade Iron ore fines,  it was decided to examine if there is a penal  provision in the agreement/tender for non- fulfillment of obligation on the part of OMC Ltd.  

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12  

It should also examine whether any legal  complicacy arises if the A variety ore will be kept  reserved for NINL.  For the C-grade, Board  approved for inviting fresh Tender"

       Accordingly, tender was floated for a quantity of  1,80,000/- MT +/- 10% of C-grade Iron Ore fines in all  editions of ECONOMIC TIMES on 4.9.2003.  The Board  Sub-Committee on sale held on 22.09.2003 observed as  follows :

i)      "Out of the total quantity of A B & C grade Iron Ore  fines, two C-grade and one B-grade material has been  shipped by M/s Noble Resources Ltd., Hong Kong  and another B-grade materials is due to be loaded  during the current month.  It was informed that there  is a stock of 60,000 MT A-grade materials, 1 lakh MT  B-grade material and 2.40 lakh MT C-grade material  at Daitori.  After receipt of information from L.C. and  confirmed by Company Secretary, it was decided that  60,000 MT, A-grade material is to be shipped to M/s  Noble Resources, Hong Kong even after 30.08.2003  and the party should be perused not to insist for the  balance quantity of A-grade as it is physically not  available with OMC and hence cannot supply the 2nd  shipment of A-grade"

ii)     "Further as NINL has agreed that they will be lifting  Iron Ore fines from October 03 onwards, the  requirement is to be reviewed and for the time being  export sale of C-grade fines may be postponed.   Therefore, the tender auction taken by OMC Ltd.,  should be cancelled invited in the News Paper and  Website of OMC Ltd. for information of all  concerned.  On the basis of the above decision the  tender for export sale of 1,80,000 MT of C-grade Iron  Ore fines was cancelled.

       11.     That this matter was further referred to  Board Committee on sales Policy held on 24.10.2003.   The Committee decided as follows :

i)      The validity of the tender will not be extended beyond  30.09.2003 and therefore no further quantity shall be  supplied to M/s Noble Resources Ltd.

ii)     Fresh tender may be invited for B-grade Iron Ore  fines for one shipment and one shipment of C-grade.   However, while doing so it must be ensured that the  quantity is available for export after meeting the  requirement of NINL."

 However, somehow a different stand was taken by the Respondent  No.2 in its additional counter affidavit as it assigned the following reasons  for its ability to supply iron ore fines, stating :

"A)     The primary crusher at Daitari which was an old  plant got break down during the contractual period  and the spares were not available in India for  immediate repair.  As a result production of "A" &  "B" grade iron ore got affected.

B)      The working permission issued by the Government

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12  

of India, Ministry of Environment and Forest  expired on 13.03.2003 and the same was issued  afresh by Government of India only on 9.4.2003,  during which period there could not be any  production.

C)      Production of "A" grade Ore was to be made by  Selective Mining which could not be possible due  to restrictions imposed by the Director General  Mines, Safety, Government of India.

D)      Railway Rakes were not available for  transportation of Iron Ore  Fines from Daitari to  Paradip, despite persuasion of OMC with the  Railway Authorities.

Further, during the said contractual period OMC  has not sold iron ore of any grade to any party other than  to M/s. Neelachal Ispat Nigam Ltd., which is wholly  Government owned undertaking with which Government  of Orissa and OMC has a long term understanding for  supply of iron Ore to sustain the steel plant of NINL."

By reason of the impugned judgment, a Division Bench of the Orissa  High Court dismissed the writ petition, inter alia, opining that it involved  enforcement of a contract qua contract and thus not maintainable.

Mr. Ashok Desai, the learned Senior Counsel appearing on behalf of  the Appellant, would submit :  (i) When a State-owned monopoly acts unfairly and unjustly, the  action being violative of the equality clause contained in Article 14 of the  Constitution of India; a writ petition would be maintainable;  (ii) A contract of supply should not be terminated on the premise that  the price of the commodity has gone up in the international market which  cannot be said to be either reasonable or bona fide; (iii) The Respondent No.2 having taken two different stands before  the High Court, arbitrariness and unreasonable on its part was self-evident;  (iv)  The High Court committed a manifest error insofar as it failed to  take into consideration that a monopoly concern should be directed to  honour its contractual obligations in view of the decision of this Court in  ABL International Ltd. and Another  v. Export Credit Guarantee  Corporation of India Ltd. and Others  [(2004) 3 SCC 553];  (v) Remedies available in a suit per se cannot be a ground to  refuse   relief under Article 226 of the Constitution of India.  

Dr. Rajeev Dhawan, the learned Senior Counsel appearing on behalf  of the Respondent, on the other hand, would submit that :  (i)  The Appellant itself having shown its inability to lift iron ore fines  in accordance with the schedule and there being no complaint in respect of  supplies made from March to September, the writ jurisdiction of the High  Court under Article 226 of the Constitution of India could not be invoked;   (ii)  The writ petition having been filed only having regard to the  escalating prices, the High Court rightly refused to exercise  its discretionary  jurisdiction;  (iii) The main plea raised by the Appellant being applicability of the  doctrine of promissory estoppel which having no application in contractual  matters, the writ petition was not maintainable;  (iv)  A writ petition involving  disputed questions of fact would not  ordinarily lie and in that view of the mater the High Court rightly refused to  exercise its extra ordinary jurisdiction;  (v)  When a  decision is taken for business purposes, the courts should  not readily infer arbitrariness on the part of the State; and  (vi) In any event, a writ petition for specific performance of contract  would not lie when damages can be awarded for breach of contract.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12  

       The Respondent No.2 is a ’State’ within the meaning of Article 12 of  the Constitution of India.  Its conduct in all fields including a contract is  expected to be fair and reasonable.  It was not supposed to act arbitrarily,  capriciously or whimsically.  

       It is trite that if an action on the part of the State is violative the  equality clause contained in Article 14 of the Constitution of India, a writ  petition would be maintainable  even in the contractual field.  A distinction  indisputably must be made between a matter which is at the threshold of a  contract and a breach of contract; whereas in the former the court’s scrutiny  would be more intrusive, in the latter the court may not ordinarily exercise  its discretionary jurisdiction of judicial review, unless it is found to be  violative of Article 14 of the Constitution.  While exercising contractual  powers also, the government bodies may be subjected to judicial review in  order to prevent arbitrariness or favouritism on its part.  Indisputably,  inherent limitations exist, but it would not be correct to opine that under no  circumstances a writ will lie only because it involves a contractual matter.

       This dicta of law was laid down by this Court as far back in1977,  wherein this Court in  Radhakrishna Agarwal and Others v. State of Bihar  and Others  [(1977) 3 SCC  457] accepted the division of types of cases  made by the Patna High Court  in which breaches of alleged obligation by  the State or its agents could be set up.  It  read  as under :    "(i) Where a petitioner makes a grievance of breach  of promise on the part of the State in cases where on  assurance or promise made by the State he has acted to  his prejudice and predicament, but the agreement is short  of a contract within the meaning of Article 299 of the  Constitution; (ii) Where the contract entered into between the  person aggrieved and the State is in exercise of a  statutory power under certain Act or Rules framed  thereunder and the petitioner alleges a breach on the part  of the State; and (iii) Where the contract entered into between the State  and the person aggrieved is non-statutory and purely  contractual and the rights and liabilities of the parties are  governed by the terms of the contract, and the petitioner  complains about breach of such contract by the State."

It was further observed : "In the cases before us, allegations on which a  violation of Article 14 could be based are neither  properly made nor established. Before any adjudication  on the question whether Article 14 of the Constitution  could possibly be said to have been violated, as between  persons governed by similar contracts, they must be  properly put in issue and established. Even if the  appellants could be said to have raised any aspect of  Article 14 of the Constitution and this Article could at all  be held to operate within the contractual field whenever  the State enters into such contracts, which we gravely  doubt, such questions of fact do not appear to have been  argued before the High Court. And, in any event, they are  of such a nature that they cannot be satisfactorily decided  without a detailed adduction of evidence, which is only  possible in ordinary civil suits, to establish that the State,  acting in its executive capacity through its officers, has  discriminated between parties identically situated. On the  allegations and affidavit evidence before us we cannot  reach such a conclusion. Moreover, as we have already  indicated earlier, the correct view is that it is the contract  and not the executive power, regulated by the  Constitution, which governs the relations of the parties

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12  

on facts apparent in the cases before us."

It may, however, be true that where serious disputed questions of fact  are raised requiring appreciation of evidence, and, thus, for determination  thereof, examination of witnesses would be necessary; it may not be  convenient to decide the dispute in a proceeding under Article 226 of the  Constitution of India.   

On a conspectus of several decisions, a Division Bench of this Court  in ABL International Ltd. (supra) opined that such a writ petition would be  maintainable even if it involves some disputed questions of fact.  It was  stated that no decision lays down an absolute rule that in all cases involving  disputes questions of facts, the party should be relegated to a civil court.

In Mahabir Auto Stores & Others v. Indian Oil Corporation and  Others [(1990) 3 SCC 752], this Court observed :  

"\005It appears to us that rule of reason and rule against  arbitrariness and discrimination, rules of fair play and  natural justice are part of the rule of law applicable in  situation or action by State instrumentality in dealing  with citizens in a situation like the present one. Even  though the rights of the citizens are in the nature of  contractual rights, the manner, the method and motive of  a decision of entering or not entering into a contract, are  subject to judicial review on the touchstone of relevance  and reasonableness, fair play, natural justice, equality and  non-discrimination in the type of the transactions and  nature of the dealing as in the present case."

In State of Uttar Pradesh and Others v. Vijay Bahadur Singh and  Others [(1982) 2 SCC 365], a Division Bench of this Court held that the  Government cannot be denied to exercise its discretionary power provided  the same is not arbitrary.  

Interplay between writ jurisdiction and contractual disputes has given  rise to a plethora of decisions by this Court.  See for example M/s  Dwarkadas Marfatia & Sons  v. Board of Trustees of the Port of Bombay  [(1989) 3 SCC 293] and Mahabir Auto Stores (supra).

In Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai  and Another  [(2004) 3 SCC 214], this Court stated :

"The position of law is settled that the State and its  authorities including instrumentalities of States have to  be just, fair and reasonable in all their activities including  those in the field of contracts. Even while playing the  role of a landlord or a tenant, the State and its authorities  remain so and cannot be heard or seen causing  displeasure or discomfort to Article 14 of the  Constitution of India. It is common knowledge that several rent control  legislations exist spread around the country, the  emergence whereof was witnessed by the post-World  War scarcity of accommodation. Often these legislations  exempt from their applicability the properties owned by  the Government, semi-government or public bodies,  Government-owned corporations, trusts and other  instrumentalities of State\005"

Non statutory contracts have, however, been treated differently.  [See  Bareilly Development Authority and Another v. Ajai Pal Singh and Others

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12  

[(1989) 2 SCC 116].

A distinction is also made between performance of a statutory duty  and/or  dealing of a public matter by a State and its commercial activities.  [See Indian Oil Corporation Ltd. v. Amritsar Gas Service and Others    (1991) 1 SCC 533]  and  L.I.C. of India v.  Escort Ltd. [(1986) 1 SCC 264].

In ABL International Ltd. (supra), this Court opined that on a given  set of facts, if a State acts in an arbitrary manner even in a matter of contract,  a writ petition would be maintainable.  It was opined :    "It is clear from the above observations of this Court,  once the State or an instrumentality of the State is a party  of the contract, it has an obligation in law to act fairly,  justly and reasonably which is the requirement of Article  14 of the Constitution of India. Therefore, if by the  impugned repudiation of the claim of the appellants the  first respondent as an instrumentality of the State has  acted in contravention of the abovesaid requirement of  Article 14, then we have no hesitation in holding that a  writ court can issue suitable directions to set right the  arbitrary actions of the first respondent\005"  

Contractual matters are, thus, not beyond the realm of judicial review.   Its application may, however, be limited.  

Although terms of the invitation to tender may not be open to judicial  scrutiny, but the courts can scrutinize the award of contract by the  Government or its agencies in exercise of their power of judicial review to  prevent arbitrariness or favouritism.  [See Directorate of Education and  Others v. Educomp Datamatics  Ltd. and Others  (2004) 4 SCC 19].     However,  the court may refuse to exercise its jurisdiction, if it does not  involve any public interest.   

Although the scope of judicial review or the development of law in  this field has been noticed hereinbefore particularly in the light of the  decision of this Court in ABL International Ltd. (supra), each case, however,  must be decided on its own facts.  Public interest as noticed hereinbefore,  may be one of the factors to exercise power of judicial review.  In a case  where a public law element is involved, judicial review may be permissible.   [See Binny Ltd. and Another v. V. Sadasivan and Others [(2005) 6 SCC  657] and G.B. Mahajan and Others v. Jalgaon Municipal Council and Others  [(1991) 3 SCC 91].

In State of U.P and Another. v. Johri  Mal  [(2004) 4  SCC 714], it  was held :

"It is well settled that while exercising the power of  judicial review the court is more concerned with the  decision-making process than the merit of the decision  itself. In doing so, it is often argued by the defender of an  impugned decision that the court is not competent to  exercise its power when there are serious disputed  questions of facts; when the decision of the Tribunal or  the decision of the fact-finding body or the arbitrator is  given finality by the statute which governs a given  situation or which, by nature of the activity the decision- maker’s opinion on facts is final. But while examining  and scrutinising the decision-making process it becomes  inevitable to also appreciate the facts of a given case as  otherwise the decision cannot be tested under the grounds  of illegality, irrationality or procedural impropriety. How  far the court of judicial review can reappreciate the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12  

findings of facts depends on the ground of judicial  review. For example, if a decision is challenged as  irrational, it would be well-nigh impossible to record a  finding whether a decision is rational or irrational  without first evaluating the facts of the case and coming  to a plausible conclusion and then testing the decision of  the authority on the touchstone of the tests laid down by  the court with special reference to a given case. This  position is well settled in the Indian administrative law.  Therefore, to a limited extent of scrutinising the decision- making process, it is always open to the court to review  the evaluation of facts by the decision-maker."          

Another field where  judicial review is permissible would be when  mala fide or ulterior motives is attributed. In Asia Foundation and  Construction Ltd. v. Trafalgar House Construction India Ltd. and Others   [(1997) 1 SCC 738], this Court held :   "\005We are of the considered opinion that it was not within  the permissible limits of interference for a court of law,  particularly when there has been no allegation of malice or  ulterior motive and particularly when the court has not  found any mala fides or favouritism in the grant of  contract in favour of the appellant\005"  

It was further held :  

"Therefore, though the principle of judicial review  cannot be denied so far as exercise of contractual powers  of government bodies are concerned, but it is intended to  prevent arbitrariness or favouritism and it is exercised in  the larger public interest or if it is brought to the notice of  the court that in the matter of award of a contract power  has been exercised for any collateral purpose. But on  examining the facts and circumstances of the present case  and on going through the records we are of the  considered opinion that none of the criteria has been  satisfied justifying Court’s interference in the grant of  contract in favour of the appellant\005"  

We, however,  having regard to ABL International Ltd  (supra), do not  accept Dr. Dhawan’s contention that only because there exists a disputed  question of fact or an alternative remedy is available, the same by itself  would be sufficient for the High Court to decline its jurisdiction.

The case at hand may be considered having regard to the  aforementioned legal principles in mind.  The parties indisputably were  bound by the terms of the contract.   

For determining the dispute; conduct of the Appellant was also  relevant.  Indisputably, the Respondent No.2 in its letter dated 28.02.2003  offered consignment of 25,000 MT of iron ore fines.  It  did not lift the same  on the ground that a small load would be unacceptable.  On  13.05.2003, it  lifted the quantity of 46,280 MT of iron ore fines, although the said quantity  would also be small load.  Although the consignment was to be on monthly  basis, it had been rescheduled.   

In the writ petition it was averred :

"Referring to the present stock of 25,000 MT of A Grade  iron ore referred to in the letter of acceptance of Opposite  Party No.2, the Petitioner stated it was not viable to ship  a parcel of 25,000/- MT of iron ore on its own and that it

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12  

would need a minimum parcel of 60,000 MT.  Given the  tight vessel situation on the east coast and especially in  the Halia/Paradip area, the Petitioner stated that it would  be advisable for both the Opposite Party No.2 and the  Petitioner to plan the first ship in early April\005"                                  The monthly schedule of shipment  evidently was altered.  We have  also noticed hereinbefore that there had been no complaint on the part of the  Appellant in regard to the supply of iron ore fines till August, 2003, by  which time 1,08,181 MT of iron ore fines was supplied in two installments.   In the month of September 60,000 MT of Grade-B iron ore and 1,20,000 MT  of Grade-A iron was to be supplied.  According to the Respondent No. 2,  however, such quantity was not possible in adherence of the schedule.  We  have noticed hereinbefore that in its additional affidavit before the High  Court, the Respondent No.2 has not assigned any reason which can be said  to be contrary to its earlier stand.  Some more reasons have been assigned in  regard to its inability to supply iron ore fines.  It its Counter Affidavit, the  Respondent No.2 stated :

"That to sum up as per tender norms of the tender floated  during February, 2003, the price and quantity was valid  till end of September 2003 as there was constraint in  convergence of ore by rake from Daitari to Pradip, the  buyer was intimated by OMC Ltd., to conclude the  contract on shipment to shipment basis.  OMC would  have concluded the contract for the entire tender quantity  in one lot with M/s Noble Resources Ltd. Hong Kong  had there been no constraint for convergence of cargo to  Paradip\005if the balance quantity against the tender norms  would have been supplied to the petitioner company at  the tendered prices  of February, 2003 the Corporation  would have incurred huge loss as the price of iron ore in  the International Market has increased manifold."  

We may herein notice a statement on tenders floated and accepted in  respect of the iron ore fines after 30.09.2003, which is  as under : " DATE OF  TENDER  OPENING QUALITY OF  IRON ORE  FINES  QUANTITY      HIGHEST                             PRICE

Quoted                  Price in     by                    USD/DMT PRICE QUOTED  BY NOBLE USD/D MT

SEE PRICE  IN  TENDER AT P.50 12.11.03

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12  

B-Grade-60,000  MT +- 10%

C, Grade- 60,000 MT+- 10% M/s Burwill Hong Kong

M/s  Burwill Hong Kong 47.10

45.10 31.75

29.25 14.96

13.86 03.02.04 C-Grade- 1.20,000 MT +-  10%

Sudamin  Metal,  London  63.30 59.80 13.86 20.03.04 C-Grade- 1,20,000 MT +-  10%  VISA  Comtrade,  AG,  Switzerland 75.06 62.68 13.86 22.06.04 C-Grade- 1,20,,000 MT +-  10%

Noble  Resources,  Hong Kong 25.70 25.70 13.86 07.09.04 C-Grade-60,000  MT +- 10%

IMR  Resources,  Hong Kong 46.35 44.68 13.86 22.11.04

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12  

C-Grade- 1,20,000 MT +-  10%

Noble  Resources,  Hong Kong 40.18 40.18 13.86 24.01.05 C-Grade-60,000  MT +- 10%

Noble  Resources,  Hong Kong 53.08 53.08 13.86 15.03.05 C-Grade-60,000  MT +- 10%

IMR  Metallurgical  Resources  AG,  Switzerland 58.10 54.00 13.86                                                                                                 "         The Appellant evidently participated in subsequent tenders.  It became  successful in some of them.  It did not raise any protest.  It took part in the  said process without any demur.  

We have noticed hereinbefore that the price of iron ore fines in the  international market varied  from time to time.  After September, 2003, a tender  was issued.  The Appellant took part in the said tender.  Its tender was accepted in  relation to Grade-C iron ore fines.  Its offers on 22.06.2004, 22.11.2004 and  24.01.2005 had also been accepted.            The table quoted hereinbefore also points out that the Appellant had  also understood the implication of phenomenal rise in price in the  international market.

       We may at this juncture furthermore notice that the contractual terms  came to an end in September, 2003.  It participated in the bids of prices  much higher than the contractual prices during the period 12.11.2003 and  03.02.2004.  The stand of the Respondents that only having regard to the  fact that there had been increase in the prices, the Appellant filed a writ  petition only in February, 2004, cannot be said to be wholly misconceived.

       The submission of Mr. Desai that rise in international price would not  by itself be a relevant consideration to rescind the contract may be correct,  but then the same was not the sole ground for the Respondent No.2 to refuse  to supply iron ore fines to the Appellants.

       Moreover, certain serious disputed questions of fact have arisen for  determination.  Such disputed questions of facts ordinarily could not have  been entertained by the High Court in exercise of its power of judicial  review.  

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12  

       Ordinarily, a specific performance of contract would not be enforced  by issuing  a writ of or in the nature of mandamus, particularly when  keeping in view the provisions of the Specific Relief Act, 1963 damages  may be an adequate remedy for breach of contract.

       The questions as to whether OMC had the available stock of iron ore  fines or the only ground to refuse supply thereof was the rise in international  prices, are matters which could not have been fully and effectively  adjudicated in the writ proceedings.  It was difficult for the High to go into  the other questions which have been raised before us by the Appellant,  namely, the effect of the purported decision of OMC to offer to the  Appellant 60,000 MT of ’A’ Grade iron ore fines provided the Appellant  gave up all other contractual rights which stating the bad faith on the part of  OMC.  We may, however, notice that  although a decision had allegedly  been taken by OMC not to supply iron ore fines prior to the expiry of the  contractual  period, but the same had not been communicated. Its effect has  to be determined keeping in view the fact as to whether the Appellant  suffered any loss thereby.  The reasons for non-supply, we may reiterate,  may constitute a breach of contract but having regard to the conduct of the  parties, it cannot be said that the same was so arbitrary so as to attract the  wrath of Article 14 of the Constitution of India.  Before us also what has  been emphasized is the purported breaches of contract by the Respondent.  A  contention has also been raised by Mr. Desai that keeping in view the facts  and circumstances of this case, this Court should  mould the relief.  We do  not intend to do so and leave the parties to raise all contentions before an  appropriate forum.           For the reasons aforementioned, we are of the opinion that although  the approach of the High Court was not entirely correct, its ultimate decision  to refuse to exercise its discretionary jurisdiction cannot be faulted with.

       The appeal is, therefore, dismissed.  We, however, leave it open to the  Appellant to take recourse to the other remedy which is available in law.  In  the facts and circumstances of the case, there shall be no order as to costs.