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TMI Blog2023 (4) TMI 1387X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.2018 and Purchase Order No.CORE/S/1271/4054/20177 dated 13.09.2013 as well as quash the Demand Notice dated 26.09.2018 in respect of purchase order dated 13.09.2013. B. issue a writ, order or direction in the nature of mandamus directing the respondent authorities to make the entire payments of the petitioner forthwith alongwith 18% interest from the actual date of dues of the petitioner. C. issue a writ, order or direction which this Hon'ble Court may deem fit and proper under the circumstances of the case. D. award the cost to the petitioner." 4. The brief facts of the case are that the petitioner is a partnership firm registered under the Partnership Act, 1932 and engaged in business of supply of specialized electrical equipments imported from Europe to the Indian Railways. The petitioner firm is an agent of Arthur Flury, Switzerland, which is an international company engaged in the business of manufacturing several specialized electrical equipments to be used worldwide in the electrification of railways as well as in other fields also. The petitioner firm inter alia procures "Short Neutral Section Assembly" "SNS Assembly" also called "Phase Break", which is approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The copy of the challan-cum-tax invoice showing receipt of articles on 15.3.2018 has also been brought on record as Annexure No.7 to the writ petition. 6. Meanwhile, another global tender was advertised by the CORE on their official website and solicited online global bids, which were opened on 29.11.2017 for supply of 238 sets of SNS Assembly (Phase Breaks). The petitioner firm had again participated in the said global tender. Finally, the Members of the Tender Committee accepted the offer of the petitioner and recommended to procure 176 sets, out of total tender quantity of 238 sets. It is also claimed that the decision of the Tender Committee was accepted by the Higher level Purchase Officer i.e. Principal Chief Material Manager of CORE. Thereafter, the respondent issued the purchase order dated 27.2.2018 with detailed terms and conditions for supply of 170 sets for Rs. 14.64 crores. It is not disputed that in response of the purchase order dated 27.2.2018, the petitioner supplied the entire articles through various Challan-cum-Tax Invoices dated 26.6.2018, which is appended as Annexure No.9 to the writ petition. After supply of the materials instead of clearing the outstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking unreasonable higher profits. Consequently, the second respondent had preferred a complaint dated 12.06.2018 under Section 19(1)(b) of the Competition Act, 2002 Act, 2002 before the Secretary, Competition Commission of India CORE alleging that the petitioner flouted the provisions of Sections 3 and 4 of the Act, 2002. The said complaint was treated as a Reference Case No.05 of 2018 (Central Organisation for Railway Electrification Office of the Principal Chief Materials Manager 1, Nawab Yusuf Road, Civil Lines, Allahabd, U.P vs. M/s PPS International, Greater Noida, UP). Finally, the CCI by its judgment and order dated 27.8.2018 had proceeded to decide the reference holding that no case is made out against the petitioner. 8. The petitioner has preferred the present writ petition in the year 2018 seeking aforementioned reliefs. After filing the writ petition, a time barred Appeal dated 11.10.2019 was filed by the CORE before the National Company Law Appellate Tribunal, New Delhi NCLAT under Section 53(1) & (2) of the Act, 2002 against the judgment and order dated 27.8.2018 and the same was registered as Competition Appeal (AT) No.79/2019 (Central Organization for Railway Elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose not to and unilaterally revised the rates by passing an order dated 12/13.9.2018 and consequently, has issued a demand notice on 26.9.2018 for a sum of Rs. 5,19,47,553.80/-. It is to be further noted that once the Competition Commission already decided the claim of the Railway, prima facie, we are of the view that without filing an appeal, unilaterally rates could not have been revised. The matter requires consideration. Mr. Rajnish Kumar Rai, learned counsel for the respondents prays for and is allowed three weeks' time to file counter affidavit. List this case after expiry of the aforesaid period. Considering the aforesaid, no coercive steps shall be taken against the petitioner pursuant to the order dated 26.9.2018 (Annexure No.4 to the writ petition)." 10. Again on 23.1.2023 the Court had directed the parties to bring on record the reference filed by the CORE before the CCI and consequently, supplementary affidavit was filed on 29.1.2023 bringing on record the certified copy of the Reference Case No.05 of 2018 filed by the CORE and order passed in Review Application No.01/2020 as Annexure Nos.SA-4 & 5 to the supplementary affidavit. 11. In this backdrop, Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g contravention of provisions of Sections 3 and 4 of the Act, 2002. On the said complaint/reference the enquiry was made by the CCI on the basis of material filed by the respondent and passed an order on 27.8.2018 and rejected the complaint/reference. He submitted that while preferring the reference against the petitioner the CORE has alleged before the CCI, on the basis of purchase orders, to the effect that the petitioner's monopolistic position of single approved source has increased the rates in recent 12 years without any significant inflation in Switzerland. In support of his submission, he has placed reliance on the Reference Case No.05/2018, wherein the CORE had alleged the excessive pricing viz. "But later on it was revealed vide "Custom's letter dated C. No.VIII/12/ACC-Import/Gr-VA/Misc./841/2013 dated 22.06.2015 that M/s PPS International has imported the material @ CHF 6400 and jacked up prices taking benefit of its monopoly situation." Further, it has been stated in the last paragraph that "From the above it becomes clear that M/s PPS International has misused its dominant position to jack up prices artificially. In the view of above it is requested that a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to interfere or upset the findings recorded by the CCI in its order dated 27.1.2018. 14. In support of his submission, learned counsel for the petitioner has placed reliance upon the judgment of Apex Court in Union of India vs. Tantia Construction Pvt. Ltd. 2011 (5) SCC 697 and ABL International Ltd. vs. Export Credit Guarantee Corporation of India Limited 2004 (3) SCC 553. He has also relied upon a Division Bench judgment of Madras High Court in M/s K.J. Hospital vs. M/s Technomed International and others Writ Petition No.7031 of 2018 decided on 20.4.2018. 15. On the other hand, Sri Sudarshan Singh, learned counsel for the respondents has vehemently opposed the writ petition and submitted that the petitioner firm is an agent of Arthur Flury, Switzerland since 1st May, 2008. The Arthur Flury, Switzerland (AF) is an international company, which is engaged in the business of manufacturing several specialized electrical equipment to be used worldwide in the electrification of Railway as well as in another field also. The CORE invited an international competitive bid for procurement of Neutral Phase Assembly Break for 347 sets. After opening of the tender in February, 2013 the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Flury, Switzerland, the petitioner has given proforma invoice in which higher CHF rate was quoted by the petitioner but at the time of supplying the material they have paid only CHF 6400, CHF 7200, CHF 7200 per unit respectively in purchase orders dated 13.9.2013, 12.1.2018 and 27.2.2018. Further the petitioner has declared in their calculation sheet submitted during the negotiation that they were claiming a profit of 2% over and above the offered prices in the tender i.e. CHF 8600, CHF 8590 and CHF 8590 in purchase orders dated 13.9.2013, 12.1.2018 and 27.2.2018 respectively, whereas the actual prices of these material were CHF 6400, CHF 7200 and CHF 7200. The petitioner had misrepresented the actual prices and on the basis of fraud, they have obtained the purchase order on high rate by concealing the material fact. Due to this difference of prices the Book Examination as per IRS-3300 has been conducted and modified advices have been issued for reduction in the rates of all three purchase orders and bills have been passed on reduced rates. Since for these three purchase orders, supply of material has already been completed and all bills have been paid, a recovery notice of Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectly determines purchase or sale prices; b. limits or controls production, supply, markets, technical development, investment or provision of services; c. shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way; d. directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable adverse effect on competition. 4. Abuse of dominant position.- 1. No enterprise shall abuse its dominant position. 2. There shall be an abuse of dominant position under sub-section (1), if an enterprise or a group,- a. directly or indirectly, imposes unfair or discriminatory- i. condition in purchase or sale of goods or service; or ii. price in purchase or sale (including predatory price) of goods or service. Explanation.- For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal within six months from the date of receipt of the appeal. 53T. Appeal to Supreme Court.- The Central Government or any State Government or the Commission or any statutory authority or any local authority or any enterprise or any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to them: Provided that the Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed after the expiry of the said period of sixty days." 20. So far as the "Book Examination Clause-IRS 3300" is concerned, the same is incorporated in the letter of the Railway Board dated 27.01.1983, which includes "Book Examination Clause - Special Conditions of Contract". The Book Examination Clause is reproduced hereinafter:- "BOOK EXAMINATION CLAUSE (i) The Contractor shall whenever called upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have proceeded to examine the record in question and find that the CORE is an organization under the Ministry of Railways and is entrusted with the responsibility to carry out railway electrification over the entire network of the Indian Railways. The CORE inter alia procures SNS Assembly also called 'Phase Break' for various Railways Zones from M/s Arthur Flury AG Switzerland, which sells this product through its authorised Indian distributor (petitioner firm). In terms of Railway Board letter dated 14.11.2017, SNS Assembly is a centralised procurement item of CORE, where demand of all Zonal Railways is consolidated and procured. The petitioner entered into an agreement with M/s Arthur Flury AG. The CORE floated the online global tender on their website for supply of 28 sets of SNS Assembly (Phase Breaks). The petitioner firm also participated in the global tender. The bid was opened on 18.10.2017 and the petitioner's bid was accepted. Consequently, the purchase order was given to the petitioner on 12.1.2018 for supply of 28 sets of SNS Assembly (Phase Breaks) for Rs. 2.31 crores. Admittedly, the said material was supplied by the petitioner firm. Meanwhile, another glo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provisions of both Sections 3 and 4 of the Act, yet looking at the nature of allegations and the relationship of the OP with the OEM, the provisions of Section 3(3)(a) of the Act are not applicable to the present case as the OP (distributor) and OEM (manufacturer) are operating at different levels of the production chain in different markets. Thus, prima facie the provisions of Section 3(3)(a) of the Act are not attracted. 10. Next, for the purpose of examining the allegations of the Informant under the provisions of Section 4 of the Act, it is necessary to determine the relevant market at the first instance. Thereafter it is necessary to assess whether the OP enjoys a position of strength required to operate independently of the market forces in the relevant market. Only when such a position is established, the Commission is required to examine whether the impugned conduct amounts to abuse of dominance or not. 11. The Commission observes that the product involved in the instant case is SNS Assembly, which is used mainly by the Railways to isolate different phases of power supply in adjoining Over Head Equipment (OHE) fed by adjacent substations, which are normally conne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to CORE. The informant has claimed that the OP has increased the prices in last 12 years without any significant inflation in Switzerland. Thus, the informant has essentially raised the issue of excessive pricing. To support the allegations, it has been pointed out that in purchase order dated 13.09.2013, the OP had supplied 282 sets of SNS Assembly on behalf of M/s Arthur Flury AG on the basic rice (excluding all taxes, duties, freight charges, insurance charges & other expanses) i.e. @ 8600 Swiss Franc (CHF) per set. But, later on, it was revealed to the informant that the OP had imported the same goods on the basic price of 6400 Swiss Franc per set. Similarly, the informant provided another evidence where the OP in response to the purchase order dated 12.01.2018 had supplied 28 SNS Assembly on the basic price of 8580 Swiss Franc but, later on, it was found through the invoice of M/s Arthur Flury AG & Bill of Entry that the OP had imported the same at 7200 Swiss Franc per set. 18. In order to appreciate the allegation of excessive pricing, the Commission deems it appropriate to examine the percentage increase in the prices of SNS Assembly over period of time i.e. from 2006 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfactorily and no sufficient cause has been assigned for such delay. The application for condonation of delay is accordingly dismissed. That apart, on merit we find that the Commission has noticed the trend in decrease of price of the relevant product in 2016 and 2018 and in view of the same, no prima facie case for directing investigation by Director General was made out. We find no reason to disagree with the view taken by the Commission. There being no infirmity in the impugned order, we decline to intervene. Appeal is accordingly dismissed." (emphasis supplied) 24. Against the said order, the Review Application No.01/2020 in Competition Appeal (AT) No.79/2019 was preferred by the CORE and the same was also dismissed by the Appellate Tribunal vide its order dated 13.4.2022 with following observations:- "There is no representation on the side of the review applicant at the time of calling the matter. It comes to be known that on 23.01.2020 this Tribunal has dismissed the application for condonation of delay. Likewise, this Tribunal had also not interfered with the impugned order passed by the concerned authorities. There being no infirmity in the impugned order and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the NCLAT on 13.4.2022 as not maintainable, leaving it open to the aggrieved party to prefer Civil Appeal before the Hon'ble Supreme Court of India against the judgment dated 23.01.2020 passed by the Tribunal in Competition Appeal (AT) No.79 of 2019. 26. It is admitted that the observations and findings returned by the CCI in its order dated 27.8.2018 stood upheld by the NCLAT in its orders dated 23.1.2020 and 13.4.2022. The said orders could only be tested or upset by Hon'ble Apex Court under Section 53-T of the Act, 2002. Therefore, we do not find any justification to entertain the writ petition to sit in appeal or to upset the findings recorded by the CCI in its order dated 27.8.2018, which was affirmed by the NCLAT in the order dated 23.1.2020 and in the review order dated 13.4.2022. In response to the earlier order dated 23.1.2023 supplementary affidavit dated 30.1.2023 was filed by the petitioner bringing on record the certified copy of the Reference Case No.05/2018; memo of appeal (AT) No.79/2019 preferred before NCLAT. Even at that stage leave was available to the respondents to take a stand before us that they are inclined to prefer an appeal before the Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was challenged in a Writ Petition before the Calcutta High Court. During the proceedings, the State of West Bengal raised the preliminary objection that by virtue of Section 14 of the West Bengal Taxation Tribunal Act, 1987, which excluded the jurisdiction of the High Court in all matters within the jurisdiction of the Taxation Tribunal, the Calcutta High Court had no jurisdiction to entertain the writ petition. However, the High Court proceeded with the case and, by its judgment dated 25.11.1992, declared the impugned provisions to be unconstitutional. These developments have resulted in an interesting situation, where the same provisions have alternately been held to be constitutional and unconstitutional by two different form, each of which considered itself to be empowered to exercise jurisdiction. 79. We also hold that the power vested in the High Courts to exercise judicial superintendence over the decisions of all Courts and Tribunals within their respective jurisdictions is also part of the basic structure of the Constitution. This is because a situation where the High Courts are divested of all other judicial functions apart from that of constitutional interpretation, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposition as that may result in splitting up proceedings and may cause avoidable delay. If such a view were to be adopted, it would be open for litigants to raise constitutional issues, many of which may be quite frivolous, to directly approach the High Courts and thus subvert the jurisdiction of the Tribunals. Moreover, even in these special branches of law, some areas do involve the consideration of constitutional questions on a regular basis; for instance, in service law matters, a large majority of cases involve an interpretation of Articles 14, 15 and 16 of the Constitution. To hold that the Tribunals have no power to handle matters involving constitutional issues would not serve the purpose for which they were constituted. On the other hand, to hold that all such decisions will be subject to the jurisdiction of the High Courts under Articles 226/227 of the Constitution before a Division Bench of the High Court within whose territorial jurisdiction the Tribunal concerned falls will serve two purposes. While saving the power of judicial review of legislative action vested in the High Courts under Article 226/227 of the Constitution, it will ensure that frivolous claims are f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aggrieved party could move this Court under Article 136 of the Constitution." (emphasis supplied) 28. In L. Chandra Kumar's case (supra) once a Constitution Bench of the Apex Court declared the law that "all decisions of Tribunals created under Article 323A and Article 323B of the Constitution will be subject to the scrutiny before a Division Bench of the High Court within whose jurisdiction the concerned Tribunal falls", then it is impermissible to make any further construction on the said issue. The expression "all decisions of these Tribunals" used by the Constitution Bench will cover and take within its sweep orders passed on applications or otherwise in the matter of transfer of Original Applications from one Bench of the Tribunal to another Bench of the Tribunal in exercise of the power under Section 25 of the Administrative Tribunals Act, 1985 The Act. In other words, any decision of such a Tribunal, including the one passed under Section 25 of the Act could be subjected to scrutiny only before a Division Bench of a High Court within whose jurisdiction the Tribunal concerned falls. This unambiguous exposition of law has to be followed scrupulously while deciding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court or the Supreme Court and that without exhausting such alternative remedy, a writ petition would not be maintainable. Relevant portion of the judgment is reproduced herein below:- "27. Apart from the above, even on the question of maintainability of the writ petition on account of the Arbitration Clause included in the agreement between the parties, it is now well-established that an alternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court or the Supreme Court and that without exhausting such alternative remedy, a writ petition would not be maintainable. The various decisions cited by Mr. Chakraborty would clearly indicate that the constitutional powers vested in the High Court or the Supreme Court cannot be fettered by any alternative remedy available to the authorities. Injustice, whenever and wherever it takes place, has to be struck down as an anathema to the rule of law and the provisions of the Constitution. We endorse the view of the High Court that notwithstanding the provisions relating to the Arbitration Clause contained in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r opinion, lies squarely in the decision of this Court in the case of ShriLekha Vidyarthi (supra) wherein this court held : "The requirement of Article 14 should extend even in the sphere of contractual matters for regulating the conduct of the State activity. Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, the State cannot thereafter cast off its personality and exercise unbridled power unfettered by the requirements of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more. The personality of the State, requiring regulation of its conduct in all spheres by requirement of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirement of Article 14 and contractual obligations are alien concepts, which cannot co-exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitrariness at the hands of the State in any of its actions. x x x " 54. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution. Thus if we apply the above principle of applicability of Article 14 to the facts of this case, then we notice that the first respondent being an instrumentality of State and a monopoly body had to be approached by the appellants by compulsion to cover its export risk. The policy of insurance covering the risk of the appellants was issued by the first respondent after seeking all required information and after receiving huge sums of money as premium exceeding Rs. 16 lacs. On facts we have found that the terms of the policy does not give room to any ambiguity as to the risk covered by the first respondent. We are also of the considered opinion that the liability of the first respondent under the policy arose when the default of the exporter occurred and thereafter when Kazakhstan Government failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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