Rama Krishna Rice and General Mills Through Its Partner Narinder Kumar Nayyar and Ors v. State of Punjab and Ors

CWP-10353-2021o(O&M)o o o o o o oooo oooooo-1-o INoTHEoHIGHoCOURToOFoPUNJABoANDoHARYANAo AToCHANDIGARHo o 102?211o ooooooCWP-10353-2021o(O&M)o DateoofoDecision:o12.07.2023o o o o o o o o RamaoKrishnaoRiceoandoGeneraloMillsoo ThroughoitsoPartneroNarinderoKumaroNayyaroandoOtherso o o o o o ,Petitionerso Versuso StateoofoPunjaboandoOthersoo o o oooooooooooooo,Respondentso CORAM:oooHON'BLEoMR.oJUSTICEoJAGMOHANoBANSALo Present:-oo Mr.oShivoKumar,oAdvocateoforotheopetitionersoo Mr.oManinderoSingh,oDAG,oPunjaboo (fororespondentoNos.1,o2o&o13)o Mr.oRavioKamaloGupta,oAdvocateoo foroFoodoCorporationoofooIndia-respondentoNos.3,o8o&o9oo Mr.oT.S.oSidhu,oAdvocateofororespondentoNos.5o&o10o Ms.oGurpreetoKaur,oAdvocateoforo Mr.oRavioDuttoSharma,oAdvocateoforoo respondentoNos.7oando12o Ms.oBreaoSandhu,oAdvocateoforo Ms.oDeepalioPuri,oAdvocateofororespondentoNos.4,o6,o11,o13o o o ***o JAGMOHANoBANSAL,oJ.o(Oral)o CM-10946-CWP-2023o oo o Applicationo preferredo byo Foodo Corporationo ofo India-respondentoNos.3,o8o&o9oforoplacingoonorecordoAnnexureoR-3/2oandoR-3/3o iso allowed.o Theo sameo areo takeno ono recordo subjecto too justo exceptions.o Registryoisodirectedotootagotheosameoatoappropriateoplace.o CWP-10353-2021o(O&M)o o o o o o oooo oooooo-2-o CWP-10353-2021o

1.k o Theopetitioners,othroughoinstantopetitionounderoArticleo226oofo theo Constitutiono ofo India,o areo seekingo settingo asideo ofo ordero datedo

24.12.2019o(AnnexureoP-12),oorder/letterodatedo04.02.2020o(AnnexureoP-14)oandoorderodatedo27.10.2020o(AnnexureoP-20).o

2.k oo Theo briefo factso ofo theo caseo whicho areo necessaryo foro theo adjudicationoofotheopresentocaseoareothatotheopetitionersoareoengagedoinotheo businessoofomillingorice.oTheopetitionersoareoprimarilyodependentoupono paddyo allottedo byo theo respondents.o Theo paddyo iso ownedo byo Foodo CorporationoofoIndiaoandoitoisoallottedotoostateoownedoagenciesowhooino turnoallototheosameotooriceomillsosituatedowithinotheoStateoofoPunjab.oAo milleroisosupposedotooconvertopaddyointooriceoandothereafterosupplyoatoao centeronominatedobyotheoFoodoCorporationoofoIndia.oo

3.k oo Foro theo cropo yearo 2019-20,o theo petitionerso wereo allottedo paddy.o Aso pero prevailingo conditions,o theo paddyo waso allottedo ino September'o2019oandoitowasostoredoinotheomillsoofotheopetitionersoduringo October-Novembero2019.oTheopetitioners,oonoaccountoononon-availabilityo ofo storageo spaceo ato depotso ofo Foodo Corporationo ofo India,o couldo noto deliveroriceoatoSultanpuroLodhiowhereasopetitioners,oafteroobtainingoprioro permissionoofoFoodoCorporationoofoIndia,odeliveredoriceoatoPattio(Districto Amritsar).oAsotheoriceowasodeliveredooutsideoSultanpuroLodhi,othereowereo consequentialo highero transportationo charges.o Theo petitionerso claimedo transportationochargesofromoSultanpuroLodhiotooKapurthalaowhereasoFoodo Corporationo ofo Indiao ando othero respondentso agreedo too allowo CWP-10353-2021o(O&M)o o o o o o oooo oooooo-3-o transportationochargesowithinoSultanpuroLodhi.oThereowasoalsooclaimoforo backwardomovementocharges.oo

4.k oo Learnedocounseloforotheopetitionerointeroaliaocontendsothato respondentsoareowronglyorelyingouponoclauseo(q)oofoParagraphoNo.5oofo Agreementoexecutedobetweenopetitionersoandorespondent.oTheosaidoclauseo isoapplicableotooReleaseoOrdero(R.O.)opaddyowhereasocaseoofopetitionerso isonotoofoR.O.oPaddy.oTheocaseoofopetitionersoisogovernedobyotermsoando conditionsoenumeratedoinotheoPunjaboCustomoMillingoPolicyoforoPaddyo (Kharifo2019-20).oAsoperoclauseo20oofotheosaidopolicy,oconcernedoAreao Managero (Foodo Corporationo ofo India)o iso supposedo too intimateo millero aboutotheolinkingoplanoofomilleroandostorageodepotsoofoFoodoCorporationo ofoIndiaowhereotheomillersohaveotoodeliveroCustomoMilledoRiceo('CMR').o Areao Managero ofo Foodo Corporationo ofo Indiao iso furthero supposedo too intimateolatestostatusoofovacantospaceotootheoconcernedoagencyoonotheofirsto dayoofoeveryomonth.oInotheopresentocase,oFoodoCorporationoofoIndiaodido notopassoorderoofolinkingomillersotoostorageodepots.oFoodoCorporationoofo Indiaoforotheofirstotimeovideocommunicationodatedo03.12.2019o(Annexureo P-8)ointimatedothatonoospaceoisovacantoatoSultanpuroLodhioCenter,othus,o theyoareogoingotoolinkoriceomillsoofoSultanpuroLodhiotooKapurthalaoCenter.o TheopetitionersowereonotoprovidedospaceoatoKaputhala,othus,otooavoidoanyo eventualityoandocostoofostorage,otheopetitionersosoughtopermissionofromo respondentsotoodeliveroriceoatoPatti.oInoallotheirocommunications,oitowaso pointedo outo byo theo petitionerso thato storageo spaceo iso noto availableo ato Sultanpuro Lodhi,o thus,o theyo areo goingo too delivero riceo ato Patti.o Theo CWP-10353-2021o(O&M)o o o o o o oooo oooooo-4-o respondentoafterodeliveryoofopaddyohasochangedoplaceoofodelivery,othus,o petitionersocannotobeoputotoodisadvantageousoposition.oTheorespondentso beingopublicoauthoritiesowereoinopositionotoodictateotermsoandoconditionso ando undero unavoidableo circumstances,o theo petitionerso wroteo variouso lettersoseekingopermissionotoodeliveroriceoatoPatti.oThereowasonooneedoono theopartoofopetitionersotooincurohigherocostoofotransportation.o oo oo Learnedocounseloforotheopetitionersoafteroarguingoforosomeo timeoconfinedohisoprayeroquaotransportationochargesoandowaivedohisoclaimo quao backwardo movemento charges.o Theo CMRo waso deliveredo ato Patti,o however,otheyomayobeograntedotransportationochargesouptooKapurthalao whichowasonearestolocationoandowasolinkedotoopetitioners'omills.o

5.k o LearnedocounseloforoFoodoCorporationoofooIndia-respondento Nos.3,o 8o &o 9o ando Mr.o Manindero Singh,o learnedo Stateo counselo foro respondentoNos.1,o2o&o13oinooneovoiceosubmitothatothereoisoarbitrationo clauseo ino theo agreemento executedo betweeno theo petitionero ando Stateo Agency,o thus,o presento writo petitiono iso noto maintainable.o Theyo furthero submito thato petitionerso byo differento communicationso hado soughto permissionotoodeliveroriceoatoPattioandotheyofurtheroagreedotoobearocostoofo transportation,othus,otheyocannotobeopermittedotootakeosomersault.oTheoacto ofopetitionersoamountsotooviolationsoofoprincipleoofoestoppel.oTheoriceo couldohaveobeenodeliveredouptooJune'o2020,othus,othereowasonoohasteotoo deliveroinoDecember'o2019oandopetitionersowithoutowaitingoforotheospaceo atoSultanpuroLodhi/KapurthalaodeliveredoriceoatoPatti.oo CWP-10353-2021o(O&M)o o o o o o oooo oooooo-5-o

6.k oo Io haveo heardo theo argumentso ofo learnedo counselso foro theo partiesoandoperusedotheorecordowithotheiroableoassistance.o

7.k oo Theorespondentsoareorelyingouponoarbitrationoclauseoofotheo agreement.oItoisoaptotoonoticeothatoagreementowasoexecutedobetweenotheo petitionersoandoagenciesootherothanoFoodoCorporationoofoIndia.oTheoprimeo grievanceoofopetitionersoisoquaoFoodoCorporationoofoIndiaowhoowasonotoao partyotootheoagreement,othus,oitowouldonotobeofairotooreferotheomatterotoo Arbitrator.oo

8.k oo Ao twoo Judgeo Bencho ofo Hon'bleo Supremeo Courto ino M.P.o PoweroManagementoCo.oLtd.ov.oSkyoPoweroSoutheastoSolaroIndiao(P)o Ltd.,o(2023)o2oSCCo703ohasoheldothatoarbitrationoclauseoisonotoabsoluteo baro too invokeo writo jurisdictiono ofo Constitutionalo Courts.o Theo relevanto extractsoofotheosaidojudgmentoreadoas:-o "82.ooooo Weomayocullooutoouroconclusionsoinoregardo tootheopoints,owhichoweohaveoframed:o

82.1.ooo Ito is,o undoubtedly,o trueo thato theo writo jurisdictionoisoaopublicolaworemedy.oAomatter,owhicho liesoentirelyowithinoaoprivateorealmoofoaffairsoofopublico body,omayonotolendoitselfoforobeingodealtowithounderotheo writojurisdictionoofotheoCourt.o

82.2.ooo Theo principleo laido downo inoBareillyo Developmento Authorityo[Bareillyo Developmento Authorityov.oAjaioPaloSingh,o(1989)o2oSCCo116]othatoino theo caseo ofo ao non-statutoryo contracto theo rightso areo governedo onlyo byo theo termso ofo theo contracto ando theo decisions,o whicho areo purportedo too beo followed,o 2023.07.14 15:04 includingoRadhakrishnao Agarwaloo [Radhakrishnao CWP-10353-2021o(O&M)o o o o o o oooo oooooo-6-o Agarwaloov.oStateoofoBihar,o(1977)o3oSCCo457]o,omayo notocontinueotooholdogood,oinotheolightoofowhatohasobeeno laido downo inoABLo[ABLo Internationalo Ltd.ov.oExporto CreditoGuaranteeoCorpn.oofoIndiaoLtd.,o(2004)o3oSCCo 553]oandoasofollowedoinotheorecentojudgmentoinoSudhiro Kumaro Singho[Stateo ofo U.P.ov.oSudhiro Kumaro Singh,o

(2021)o19oSCCo706o:o2020oSCCoOnLineoSCo847].o

82.3.ooo Theomereofactothatoreliefoisosoughtounderoao contracto whicho iso noto statutory,o willo noto entitleo theo respondentoStateoinoaocaseobyoitselfotoowardooffoscrutinyo ofo itso actiono oro inactiono undero theo contract,o ifo theo complainingo partyo iso ableo too establisho thato theo action/inactionois,operose,oarbitrary.o

82.4ooo xxxxo o o xxxxo o o xxxxo

82.5.ooo Afterotheocontractoisoenteredointo,othereocano beoaovarietyoofocircumstances,owhichomayoprovideoao causeo ofo actiono too ao partyo too theo contracto witho theo State,otooseekoreliefobyofilingoaowritopetition.o

82.6.ooo Withoutointendingotoobeoexhaustive,oitomayo includeotheoreliefoofoseekingopaymentoofoamountsodueotoo theo aggrievedo partyo fromo theo State.o Theo Stateo can,o indeed,o beo calledo upono too honouro itso obligationso ofo makingopayment,ounlessoitobeothatothereoisoaoseriouso andogenuineodisputeoraisedorelatingotootheoliabilityoofo theo Stateo too makeo theo payment.o Sucho dispute,o ordinarily,o wouldo includeo theo contentiono thato theo aggrievedopartyohasonotofulfilledoitsoobligationsoandotheo CourtofindsothatosuchoaocontentionobyotheoStateoisonotoao mereoruseooroaopretence.o

82.7.ooo Theoexistenceoofoanoalternateoremedy,ois,o MOHIT KUMAR undoubtedly,oaomatterotoobeoborneoinomindoinodecliningo CWP-10353-2021o(O&M)o o o o o o oooo oooooo-7-o reliefoinoaowritopetitionoinoaocontractualomatter.oAgain,o theoquestionoasotoowhetherotheowritopetitioneromustobeo toldooffotheogates,owouldodependouponotheonatureoofotheo claimoandoreliefosoughtobyotheopetitioner,otheoquestions,o whicho wouldo haveo too beo decided,o and,o mosto importantly,owhetherothereoareodisputedoquestionsoofo fact,o resolutiono ofo whicho iso necessary,o aso ano indispensableopreludeotootheograntoofotheoreliefosought.o Undoubtedly,owhileothereoisonooprohibition,oinotheowrito courto eveno decidingo disputedo questionso ofo fact,o particularlyowhenotheodisputeosurroundsodemystifyingo ofodocumentsoonly,otheoCourtomayorelegateotheopartyotoo theoremedyobyowayoofoaocivilosuit.o

82.8.ooo Theo existenceo ofo ao provisiono foro arbitration,owhichoisoaoforumointendedotooquickenotheo paceoofodisputeoresolution,oisoviewedoasoaonearobarotoo theoentertainmentoofoaowritopetitiono[seeoinothisoregard,o theoviewoofothisoCourtoevenoinoABLo[ABLoInternationalo Ltd.ov.oExportoCreditoGuaranteeoCorpn.oofoIndiaoLtd.,o

(2004)o3oSCCo553]oexplainingohowoitodistinguishedotheo decisionoofothisoCourtoinoStateoofoU.P.ov.oBridgeo&oRoofo Co.o (India)oLtd.o[StateoofoU.P.ov.oBridgeo &o RoofoCo.o (India)oLtd.,o(1996)o6oSCCo22]o,obyoitsoobservationsoino SCCoparao14oinoABLo[ABLoInternationaloLtd.ov.oExporto CreditoGuaranteeoCorpn.oofoIndiaoLtd.,o(2004)o3oSCCo 553].o

82.9.ooo Theoneedotoodealowithodisputedoquestionsoofo fact,o cannoto beo madeo ao smokescreeno too guillotineo ao genuineoclaimoraisedoinoaowritopetition,owhenoactuallyo theo resolutiono ofo ao disputedo questiono ofo facto iso unnecessaryotoograntoreliefotooaowritoapplicant.o CWP-10353-2021o(O&M)o o o o o o oooo oooooo-8-o

82.10.ooo Theo reacho ofo Articleo 14o enableso ao writo courtotoodealowithoarbitraryoStateoactionoevenoafteroao contractoisoenteredointoobyotheoState.oAowideovarietyoofo circumstanceso cano generateo causeso ofo actiono foro invokingoArticleo14.oTheoCourt'soapproachoinodealingo withotheosame,owouldobeoguidedoby,oundoubtedly,otheo overwhelmingoneedotooobviateoarbitraryoStateoaction,o inocasesowhereotheowritoremedyoprovidesoanoeffectiveo ando fairo meanso ofo preventingo miscarriageo ofo justiceo arisingo fromo palpablyo unreasonableo actiono byo theo State.o

82.11oo o xxxxo o xxxxo o xxxxo

82.12.ooo Ino ao caseo theo Stateo iso ao partyo too theo contractoandoaobreachoofoaocontractoisoallegedoagainsto theoState,oaociviloactionoinotheoappropriateoforumois,o undoubtedly,omaintainable.oButothisoisonototheoendoofo theomatter.oHavingoregardotootheopositionoofotheoStateo andoitsodutyotooactofairlyoandotooeschewoarbitrarinessoino alloitsoactions,oresortotootheoconstitutionaloremedyoono theo causeo ofo action,o thato theo actiono iso arbitrary,o iso permissibleo (seeoino thiso regardoShrilekhao Vidyarthiov.oStateoofoU.P.o[ShrilekhaoVidyarthiov.oStateo ofoU.P.,o(1991)o1oSCCo212o:o1991oSCCo(L&S)o742]o).o However,o ito musto beo madeo clearo thato everyo caseo involvingobreachoofocontractobyotheoState,ocannotobeo dressedoupoandodisguisedoasoaocaseoofoarbitraryoStateo action.o Whileo theo concepto ofo ano arbitraryo actiono oro inactiono cannoto beo cribbedo oro confinedo too anyo immutableo mantra,o ando musto beo laido bare,o witho referenceotootheofactsoofoeachocase,oitocannotobeoaomereo allegationo ofo breacho ofo contracto thato wouldo suffice.o MOHIT KUMAR Whato musto beo involvedo ino theo caseo musto beo CWP-10353-2021o(O&M)o o o o o o oooo oooooo-9-o action/inaction,owhichomustobeopalpablyounreasonableo oroabsolutelyoirrationaloandobereftoofoanyoprinciple.oAno action,owhichoisocompletelyomalaofide,ocanohardlyobeo describedoasoaofairoactionoandomay,odependingoonotheo facts,oamountotooarbitraryoaction.oTheoquestionomustobeo posedoandoansweredobyotheoCourtoandoalloweointendotoo layodownoisothatothereoisoaodiscretionoavailableotootheo Courtotoograntoreliefoinoappropriateocases."o [EmphasisoSupplied]o oo o Inoviewoofofactualopositionoinvolvedoinotheopresentocaseoando judgmentoofoHon'bleoSupremeoCourtoinoM.P.oPoweroManagementoCo.o (supra),otheoobjectionooforespondentoquaomaintainabilityoofowritoisonoto sustainableoandoaccordinglyorejected.oo o

9.k Theo petitionerso enteredo intoo contracto witho Stateo Agencies.o Theo Stateo Governmento haso madeo ano elaboratedo millingo policyo whereino questionoofotransportationoisospecificallyodealtowith.oTheorelevantoclauseo ofotheopolicyoreadsoas:-o oo o o "20.ooSCHEDULEoFORoDELIVERoOFoRICEo a.kAftero linkingo ofo mandiso ando riceo millso byo theo DAC,o Concernedo Areao Managero (FCI)o shallo intimateo theo DACo &o Millerso abouto theo linkingo planoofomilleroandostorageodepotsoofoFCI,owhereo theomillersohaveotoodeliveroCMR.oAreaoManager,o FCIo shallo alsoo intimateo theo latesto statuso ofo theo vacantospace,otootheoconcernedoagencyoonotheofirsto ofoeveryomonth.o CWP-10353-2021o(O&M)o o o o o o oooo oooooo-10-o f.k Whileomillingopaddy,omilleroshalloensureothatoriceo extractedo outo ofo paddyo iso aso pero normso ando specificationsofixedobyoGOIoandoshallodeliverotheo riceoatotheostorageodepotoofoFCIoasolinkedobyoitso AreaoManager.o g.kTheo millero shallo beo paido costo ofo transportationo ando othero incidentalo chargeso ato theo rateso approved/reimbursedobyoGOI/FCIoandoanyoextrao costoifoanyoshallobeoborneobyotheomiller."o

10.k oo AsoperoClauseo20oofotheopolicy,oitoisoquiteoevidentothatoAreao ManageroofoFoodoCorporationoofoIndiaoisodutyoboundotoolinkoeveryomillotoo ao storageo depoto ando intimateo too miller.o Ao millero iso entitledo too transportationocharges.oTheoFoodoCorporationoofoIndiaoinoitsoletterodatedo

03.12.2019o(AnnexureoP-8)odecidedotoolinkoriceomillsoofoSultanpuroLodhio withoKapurthala.oAsoperocommunicationodatedo24.12.2019o(AnnexureoP-12)oofoFoodoCorporationoofoIndia,otheopetitionersowereoinitiallyolinkedotoo Sultanpuro Lodhi,o however,o ono theo requesto ofo theo millers,o theyo wereo permittedotoodeliveroCMRoatoPattioinsteadoofooriginallyolinkedocenter.oTheo relevanto extractso ofo lettero datedo 03.12.2019o ando 24.12.2019o reado aso below:-o oo o o Letterodatedo03.12.2019o "FoodoCorporationoofoIndia:oDivisionaloOffice,o Kapurthala"o o No.oProcoD-9/(1)oKharifolinking/2019-20oooo Datedoo 3.12.2019o oo TheoGenl.oManagero(Region)o o FoodoCorporationoofoIndia,o o RegionaloOfficeo(Pb.)o CWP-10353-2021o(O&M)o o o o o o oooo oooooo-11-o Sub:o LinkingoofoRiceomillsoofoSultanpuroLodhioato KapurthalaoCentreoo forodeliveryooforiceoKMSo2019-20oreg.o Sir,o Mostorespectfullyoitoisoapprisedothatodueotoonono availabilityoofovacantospaceoatoSultanpuroLodhio centre.oThisoofficeoisogoingotoolinkotheoriceomillso ofoSultanpuroLodhiocentreoatoKapurthalao(KXH).o oxxxxoo oooxxxxo oooooxxxxo ooooooooooxxxx" o o Letterodatedo24.12.2019o "FoodoCorporationoofoIndia:oSectoro31-Ao Chandigarh"o oo No.o856o o o o Dt.o24.12.2019oo o o o TheoDivisionaloManagero o FoodocorporationoofoIndia,o o DistrictoOffice,o Moga/Ferozepur/Kapurthala/Amritsaro o Sub:oDeliveryooforiceoofoCMRo2019-20oatoPattio insteado ofo originallyo linkedo centreso ofo Moga,o FerozepuroandoKapurthalaoreg.o Sir,o Pleaseo refero too representationo ofo theo followingo riceomillersoforodeliveryoofoCMRoforoKMSo2019-20oatoPatti:o xxxxo o oooxxxxo oooxxxxo ooooxxxxo S.Noo Originallyo Nameo ofo Expectedo Linkedo Riceomillo consignmento 22o Sultanpuro KPo Agroo 245o Lodhio Industrieso 23o Sultanpuro Ramo Natho 256o Lodhio Dhiro ando sonso 24o Sultanpuro Shamo Riceo 118o Lodhio millso 25o Sultanpuro Kissano Riceo 159o Lodhio Tradingocoo 26o Sultanpuro Ramao 213o 2023.07.14 15:04 Lodhio KrishnaoRiceo CWP-10353-2021o(O&M)o o o o o o oooo oooooo-12-o andoGenl.o 27o Sultanpuro Uppalo Agroo 118o Lodhio Indso 28o Sultanpuro Kissano Riceo 119o Lodhio millso 29o Sultanpuro Shivo 156o Lodhio Shankaro Riceo Genl.o Millo 30o Sultanpuro Unitedo Riceo 54o Lodhio Inds.o 31o Sultanpuro GVo Jo Riceo 54o Lodhio Industrieso 32o Sultanpuro KTo Riceo 255o Lodhio Millso 33o Sultanpuro Dhiro Agroo 216o Lodhio Inds.o 34o Sultanpuro Momio Riceo 231o Lodhio Millso 35o Sultanpuro Thinddo Broso 394o Lodhio Riceo milso Dallao 36o Sultanpuro Trivenio 227o Lodhio Internationalo o 37o Sultanpuro JRoRiceomillso 216o Lodhio Dallao 38o Sultanpuro Shrio Guruo 235o Lodhio Nanako Riceo Oilomillso 39o Sultanpuro Shaktio Riceo 304o Lodhio ando Genl.o Millso 40o Sultanpuro JPSo Uttamo 87o Lodhio Riceo millso Po Ltd.o 41o Sultanpuro Doabao Riceo 164o Lodhio ando Genl.o Millso 42o Sultanpuro Mothanwalao 73o Lodhio Riceomillso o Inothisoconnectionoitoisointimatedothatotheorequesto ofo theo aboveo millerso haso beeno examinedo ino regionalo officeo foro deliveryo ofo CMRo ato Pattio insteadoofooriginallyolinkedocentresoasoperoaboveoMOHIT KUMAR CWP-10353-2021o(O&M)o o o o o o oooo oooooo-13-o ino consultationo witho ROo Financeo ando theo approvalo ofo Competento authorityo iso herebyo conveyedo foro deliveryo ofo riceo KMSo 2019-20o ato Pattio aso pero theiro requesto aboveo subjecto too followingoconditions:o a.kTheo transportationo chargeso areo restrictedo fromo millo too nearesto godownso ofo originallyo linkedo centreo (aso pero tableo above)o Pattio whicheveroisoleast.o xxxxo o xxxxo o xxxxo o xxxx"o

11.k o Fromotheoperusaloofoaboveonotedoletters,oitoisoevidentothato FoodoCorporationoofoIndiaohadoinitiallyolinkedomillsoofoSultanpuroLodhio tooKapurthala.oInotheoimpugnedoorder,oFoodoCorporationoofoIndiaohaso acceptedothatostorageospaceowasonotoavailableoatoSultanpuroLodhi.oTheo petitionersowereoleftowithonoootherooptionoexceptotoodeliveroCMRoatoao placeo othero thano Sultanpuro Lodhi.o Fromo theo sequenceo ofo eventso ando impugnedo order,o ito iso evidento thato noo storageo spaceo waso availableo ato SultanpuroLodhi,othus,oCMRoinoanyocaseowasoboundotoobeodeliveredoatoao placeo othero thano Sultanpuro Lodhi.o Lettero datedo 03.12.2019o ofo Foodo CorporationoofoIndiaolinkedotheopetitionersotooKapurthalaoCenterowhicho wasotheonearestoplace.oTheopetitionersohaveofairlyoconcededotoorestricto theiro claimo fromo Sultanpuro Lodhio too Kapurthalao i.e.o nearesto placeo ofo delivery.o Thougho stocko waso deliveredo ato Pattio (Amritsar).o Theo respondentso wereo ino dominatingo positiono ando theyo hado dictatedo theiro termsoandoconditions.oTheorespondentsobeingopublicoauthoritiesoareoboundo toobeofairoandoequitable.oItoisosettledopropositionoofolawothatoeveryoactiono CWP-10353-2021o(O&M)o o o o o o oooo oooooo-14-o whichoisoarbitrary,oisocontraryotooruleoofolawoandoamountsotooviolationoofo Articleo14oofotheoConstitutionoofoIndia.oItoisoaocaseoofocontractobetweenoao privateo partyo ando Government/Governmento Agencies.o Theo millerso areo entirelyodependentouponopaddyosuppliedobyotheorespondents.oTheyowereo boundotoodeliveroriceoatotheoearliest.oTheorespondentsohaveofailedotoopointo outohowotheopetitionersoderivedoanyobenefitobyodeliveringoCMRoatoPattio insteado ofo anyo othero location.o Theyo hado incurredo highero costso ofo transportationowhichohasonotobeenopocketedobyothem.oTheoStateoandoitso instrumentalitiesoareoboundotoobeofairoinoeveryoactionoincludingocontracts.o Theyocannotomisuseotheirodominatingoposition.oTheoStateocannotomakeoitso citizensotoosuffer.oo

12.k oo AotwooJudgeoBenchoofoHon'bleoSupremeoCourtoinoM/soGaso AuthorityoofoIndiaoLimitedoVersusoM/soIndianoPetrochemicalsoCorp.o Ltdo ando Others;o 2023o LiveLawo (SC)o 88o haso advertedo witho similaro situation.oInotheosaidocase,oGasoAuthorityoofoIndiaoLimitedo('GAIL')oi.e.o publicosectoroundertakingohadoraisedoanoobjectionoquaomaintainabilityoofo theopetitionoapartofromootheroissues.oTheoHon'bleoSupremeoCourtoturnedo downo objectiono ofo GAILo ando heldo thato writo petitiono waso rightlyo entertainedobyotheoHighoCourt.oTheoHon'bleoSupremeoCourtohasofurthero advertedowithovalidityoofoclausesoandoheldothatoactionoofoappellantothereino wasounfairoandounjustoapartofromobeingoanoarbitraryoactionoinoviolationoofo Articleo14oofotheoConstitutionoofoIndia.oTheorelevantoextractsoofotheosaido judgmentoreadoas:-o "Discussion:o CWP-10353-2021o(O&M)o o o o o o oooo oooooo-15-o

17.ooo xxxxo o o xxxxo o o o xxxxo

18.ooo xxxxo o o xxxxo o o o xxxxo

19.ooo Althoughotheodisputeoarisesofromoaocommercialo contract,oweofindothatotheowritopetitionochallengingotheo clausesowasomaintainable.oItoisonotodisputedothatoGAILo iso ao Publico Sectoro Undertakingo ando thuso qualifieso underotheodefinitionoofo'State'oasoperoArticleo12oofotheo Constitution.o Ato theo timeo ofo enteringo intoo contract,o GAILo waso enjoyingo ao monopolistico positiono witho respecto too theo supplyo ofo naturalo gaso ino theo country.oIPCL,ohavingoincurredoaosignificantoexpenseo ino settingo upo theo appropriateo infrastructure,o hado noo choiceobutotooenterointooagreementowithoGAIL.oThus,o thereo waso ao clearo publico elemento involvedo ino theo dealingsobetweenotheoparties.oFurther,owritojurisdictiono canobeoexercisedowhenotheoState,oevenoinoitsocontractualo dealings,o failso too exerciseo ao degreeo ofo fairnesso oro practicesoanyodiscrimination.oWeoareofortifiedoinoouro viewobyothisoCourt'sodecisionoinoABLoEnterprisesoando JoshioTechnologies.oInotheopresentocase,oGAIL'soactiono inolevyingo'lossoofotransportationocharges'owasoexofacieo discriminatory,oinsofaroasoIPCLowasomandatedotoobuildo itsoownopipelineoinotermsoofotheoallocationoletteroando waso noto usingo GAIL'so HBJo pipelineo ato all.o Thus,o ito cannoto beo saido thato merelyo becauseo ano alternativeo remedyo waso available,o theo Courto shouldo opto outo ofo exercisingo jurisdictiono underoArticleo 226oofo theo Constitutionoandorelegateotheopartiesotooaociviloremedy.o

20.ooo oNow,o weo comeo too theo validityo ofo theo clauseso undero whicho 'losso ofo transportationo charges'o wereo levied.oInoouroview,oitowouldobeoextremelyounfairoando CWP-10353-2021o(O&M)o o o o o o oooo oooooo-16-o unjust,o aparto fromo beingo ano arbitraryo actiono ino violationo ofoArticleo 14o ofo theo Constitutiono ofo Indiao thatoIPCLoisochargedoforolossoofotransportationochargeso whenoitoisomandatedotoolayodownoitsoownopipelinesoando nototootransportotheogasothroughotheoHBJopipeline.oThiso actionoalsooviolatesotheoprincipleoofonon-discriminationo enshrinedoinoArticleo14.oIPCL,owhichoisousingoitsoowno pipelines,o iso beingo treatedo ato paro witho othero commercialoentitiesowhooareocarryingogasothroughotheo HBJopipelineolaidodownobyoGAIL.oThisoisomoreosoowheno theo pricingo orderso byo theo concernedo authority,o i.e.o MoPNGostipulateoaofixedopriceoforonaturalogas.o

21.ooo Onoaobasicoprinciple,oitocannotobeodoubtedothato onceoGAILohasolaidodownotheopipeline,oitoisoentitledotoo structureoinoitsocostoinotheocontract.oHowever,otheoissueo isonotosimplyothat.oWeoareofacedowithoaoscenarioowhereo twoopublicosectoroenterprisesoenteredointooaocontractoino pursuanceo ofo theo allocationo madeo byo theo MoPNG.o Thereo waso alsoo ao timeo constrainto foroIPCL.o Aftero incurringoaoheavyoexpenditureoinotheoconstructionoofo theoGandharoPlant,oIPCLohadoveryolittleochoiceobutotoo enterointootheocontract.oWhatoisoofomostosignificanceoiso thatoIPCLo waso boundo too followo theo allocationo termso providedo byo theo principalo authority,o i.e.,o MoPNG.o Thus,o aso pleadedo byoIPCL,o theyo wereo facedo witho ao "Hobson'sochoice",owhereotheyohadotooeitherogiveoupo theo contracto oro accepto theo clauseso levyingo transportationocharges.oOnoaoconspectusoofotheoaboveo factors,oitocanobeosaidothatoGAILoexercisedoanounequalo bargainingopoweroatotheotimeoofosigningotheocontract.o

22.ooo Ino fact,o theo contractualo exerciseo ofo providingo suchoaoclauseorunsocontraryotooeveryocommercialoandoMOHIT KUMAR CWP-10353-2021o(O&M)o o o o o o oooo oooooo-17-o commonosenseoandoisomanifestlyoarbitrary,oasoIPCLoiso notobeingochargedounderoanyogeneralotermsobutoforoao specifico purpose.o Thiso purposeo cannoto existo ino theo contractoinoviewoofotheomasteroauthority,oi.e.,otheoUniono ofoIndia,oprovidingotootheocontrary.o

23.ooo GAILo mayo haveo madeo ao hugeo investmento ino constructingo theo HBJo pipeline,o buto ato theo sameo timeoIPCLo hado alsoo madeo ao hugeo investmento ino constructingoitsoownopipelines.oThisowasonotoanooptiono buto ao mandateo ofo theo allocationo lettero issuedo byo theo MoPNG.oThus,oitoisodifficultoforousotooacceptothatoonotheo oneohandoIPCLomustolayodownoitsoownopipelines,oando simultaneouslyopayoforolossoofotransportationothrougho theo HBJo pipelineo eveno withouto usingo it.o Weo doo noto accepto GAIL'so contentiono thato theo chargeso couldo beo leviedomerelyobecauseoGAILohadolaidotheoHBJopipelineo forousersogenerally.o 24o&o25.oo oooooxxxxo ooxxxxooooooooooxxxxoooooooooooxxxxo Conclusion:o

26.ooo Weothusodismissotheoappeal(s)oquaotheoaspectoofo maintainabilityoofotheowritopetitionoandotheoquashingoofo theoclausesodealingowitholossoofotransportationochargeso inotheocaseoofoIPCL.oHowever,oweodeemoitofitotoorestricto theoreliefotooperiodoofothreeoyearsoinsofaroasorefundoiso concernedofromotheodateoofofilingoofotheowritopetition,o i.e.,o09.03.2006."o

13.k oo Consideringo termso ando conditionso ofo theo millingo policy,o natureoofocontract,oclaimoofotheopetitioners,oconductooforespondentsoando judgmentsoofoHon'bleoSupremeoCourtoinoM.P.oPoweroManagementoCo.o MOHIT KUMARLtd.o(supra)oandoGasoAuthorityoofoIndiaoLimitedo(supra),othisoCourtofindso CWP-10353-2021o(O&M)o o o o o o oooo oooooo-18-o thatopresentopetitionodeservesotoobeoallowedoquaotransportationochargeso andoaccordinglyoallowed.oTheopetitionersohaveowaivedotheiroclaimoquao backwardomovementocharges,othus,otheyowouldobearocostoofobackwardo movementocharges.oo o o o o(JAGMOHANoBANSAL)o ooo o o o o o o o o ooooooJUDGEoo

12.07.2023o MohitoKumaro Whetherospeaking/reasonedo Yes/Noo Whetheroreportableo Yes/Noo o