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Judgment
Rajesh H. Shukla, J.—The present Appeal from Order has been filed by the appellant-original defendant being aggrieved with the impugned order passed below Exh. 5 in Special Civil Suit No. 32 of 2010 by 2nd Additional Sr. Civil Judge, Gandhidham-Kachchh dated 15.03.2011 on the grounds stated in memo of appeal inter alia that the Court below has failed to appreciate that there was no concluded contract, which can be said to have in existence between the appellant and the respondent. It is also contended that as the parties were at variance with the terms and conditions in the original tender documents and the development agreement, no contract can be said to have been in existence. It is also contended that the Court below has also failed to consider the development contract, which is not enforceable unless the conditions referred to in proviso to Section 14(c) of the Specific Relief Act are fulfilled. It is also contended that the Court below has failed to consider the relevant criteria for the grant of injunction under Order 39, Rule 1 of the Civil Procedure Code. Learned counsel, Shri Dhaval Dave appearing with learned counsel, Jigar Patel for the appellant referred to the paper book and strenuously submitted that the Court below has failed to consider that no concluded contract can be said to have been brought in existence. He submitted that the parties were at variance and there was proposal and counter proposal as it is evidence from the correspondences and, therefore, it was at the stage of offer but no concluded contract can be said to have been entered into by and between the parties. Learned counsel, Shri Dave referred to the background with regard to the tender with terms and conditions for the development of the plot and submitted that the communication dated 28.06.2010, which refers to as an offer for the development for the commercial purpose has specifically stated that offer has qualified for acceptance subject to compliance with further requirements. He emphasized and submitted that therefore it is only a communication that subject to further requirement the offer has qualified for consideration. He submitted that it is categorically stated in the said communication "in case you failed to accept the offer of development of plot within 10 days from the date of issue of this offer letter, offer of development so made by the Corporation shall stand cancelled."
Learned counsel, Shri Dave therefore submitted that it was therefore an offer, which was to be accepted by the respondent-original plaintiff and in respect to that, another communication has been addressed by the respondent-original plaintiff dated 06.07.2010 that offer is subject to providing NOC of Kandala Port Trust and it is in this background whether it could be claimed that there was any concluded contract. Further, learned counsel, Shri Dave submitted that the communication by the respondent-original plaintiff dated 14.07.2010 makes it clear that the terms and conditions were not acceptable to the respondent-plaintiff and it is specifically stated that terms and conditions stipulated in the development agreement differ with the bid documents signed by the respondent-plaintiff and, therefore, is not accepted. Further, a request has been made for arranging joint meeting. Learned counsel, Shri Dave therefore submitted that this itself would suggest that there was no ad diem and the respondent-plaintiff according to their own say had suggested for arranging a meeting to sort out the differences. Learned counsel, Shri Dave therefore submitted that the Court below has failed to consider this aspect and, therefore, the order directing the appellant-original defendant to maintain status quo is not just and proper and, therefore, the present Appeal from Order may be allowed.
Learned counsel, Shri Dave has referred to the judgment and pointedly referred to the written statement filed before the trail court and submitted that in para no. 20, same aspect has been specifically emphasized, which has not been considered. He has also referred to the provisions of the Specific Relief Act in support of his submission. He has referred to and relied upon the judgment of the Calcutta High Court in case of Vipin Bhimani and Another Vs. Sunanda Das and Another, and pointedly referred to the observations stating that the facts were also similar in that case like the development agreement and difference with regard to the terms and conditions. He submitted that as observed in this judgment, when there is no specific prima facie case, the interim injunction could not have been granted. He referred to the observations made therein. He submitted that it has been observed that in view of embargo imposed by Section 14(1) of Specific Relief Act, when there is no prima facie case, injunction cannot be granted considering the balance of convenience. Learned counsel, Shri Dave also referred to and relied upon the judgment in case of Gurudev Developers Vs. Kurla Konkan Niwas Co-op. Hsg. Society, . Learned counsel, Shri Dave also referred to judgment in case of Dresser Rand S.A. Vs. BINDAL Agro Chem Ltd. and K.G. Khosla Compressors Ltd., and pointedly emphasized the observations made "The tender document or the invitation to bid containing the ''instructions to bidders'' and the ''general conditions of purchase'', by itself, is neither an agreement nor a contract. The instructions to bidders informed the intending bidders how the bid should be made and laid down the procedure for consideration and acceptance of the bid. The second part of the invitation to bid consists of the ''general conditions of purchase'', that is, the conditions subject to which the purchase order will be placed or offer will be accepted. The ''general conditions of purchase'' were made available as a part of the invitation to bid, so as to enable the prospective suppliers to ascertain their obligations and formulate their offers suitably."
Learned counsel, Shri Dave therefore submitted that initial bid would only indicate qualified but it was subject to further compliance with the terms and conditions where the parties were at ad diem and, therefore, no concluded contract could be in existence. Learned counsel, Shri Dave referred to the terms and conditions and submitted that it provides for the Arbitrator in any case and, therefore, suit would not be maintainable as the party had agreed to resolve through arbitration. He therefore submitted that Appeal from Order may be allowed.
Learned Sr. Counsel, Shri Percy Kavina appearing with learned counsel, Shri Aspi Kapadia for the respondent referred to the papers and impugned order and submitted that the Court below has rightly appreciated that the bid documents produced suggest that offer was made, which has been accepted as per the letter dated 16.07.2010 and when the respondent-plaintiff showed their willingness to sign the final development agreement, the terms and conditions are sought to be changed Learned senior counsel, Shri Kavina submitted that once having accepted the bid would amount to acceptance of the offer of the bid like the respondent-plaintiff and it has to be accepted as per the terms and conditions of the original bid and in the name of development agreement, the terms and conditions cannot be modified or something could be added. He submitted that variance in the terms and condition of the bid document and the proposed development agreement itself suggest that the appellant cannot be now permitted to back out from the agreement when the offer of the respondent-original plaintiff has been accepted. He submitted that it could be like an agreement to lease and effectively when the offer of the respondent-plaintiff has been accepted, now it cannot be permitted to backed out. He also referred to the written statement and submitted that by enlarge the contentions have not been disputed and it has been accepted that there was an existence of the offer made by the plaintiff, however, the document/bid document has to be considered as it is and if the offer was made according to the broad terms and conditions of such document, further condition cannot be inserted in the name of development agreement, which would be a subsequent formality only but it could not give a rise to new set of terms and conditions. Learned senior counsel, Shri Kavina submitted that in fact, it would have been lease deed and intention of the parties has to be covered to see irrespective of the nomenclature used by the parties. He therefore submitted that if it was a proposal for lease of land then the appellant cannot be permitted to back out from the terms and conditions, which have been agreed for which there is acceptance of the offer made by the respondent-original plaintiff. Learned senior counsel, Shri Kavina has also referred to judgment in case of Sohan Lal Naraindas Vs. Laxmidas Raghunath Gadit, (Paragraph No. 9). He has also referred to the judgment of the Hon''ble Apex Court in case of Dresser Rand S.A. (supra) and submitted that it would not apply to the facts of the case and the appellant cannot have inconsistent stand that on one hand, it is contended that there is no contract and on the other hand, one should resort to the arbitrator clause, which itself suggests that there was a contract. Learned senior counsel, Shri Kavina also emphasized the observations made in this judgment in para no. 34, which reads as under:-
It is no doubt true that a Letter of Intent may be construed as a letter of acceptance if such intention is evident from its terms. It is not uncommon in contracts involving detailed procedure, in order to save time, to issue a letter of intent communicating the acceptance of the offer and asking the contractor to start the work with a stipulation that the detailed contract would be drawn up later. If such a letter is issued to the contractor, though it may be termed as a Letter of Intent, it may amount to acceptance of the offer resulting in a concluded contract between the parties. But the question whether the letter of intent is merely an expression of an intention to place an order in future or whether is a final acceptance of the offer thereby leading to a contract, is a matter that has to be decided with reference to the terms of the letter."
Learned senior counsel, Shri Kavina has also relied upon the judgment of the Hon''ble Apex Court in case of M/s. Punjab Traders and others Vs. State of Punjab Traders and others, and submitted that the Court below has considered the principles for grant of injunction. He submitted that if the injunction is vacated or refused, it would cause more prejudice and same could be decided at the trial and, therefore, the impugned order just and proper.
In view of these rival submissions, it is required to be considered whether the impugned order passed by the Court below calls for any interference.
As it has been submitted at length by both sides focusing on the documents like bid document as well as development agreement and the correspondences, the real issue is whether there was any concluded contract and there was any acceptance of the offer of the respondent-plaintiff. It is evident from the documents produced with the paper book that the bid of the respondent-plaintiff has been accepted but no agreement has been entered into. Letter dated 28.06.2010 of the appellant clearly states that the respondent-plaintiff has qualified for the acceptance subject to compliance with further requirements. Further a communication from the respondent-plaintiff dated 14.07.2010 to the appellant clearly refers to issue with regard to NOC, wherein the respondent-plaintiff has specifically stated that
For Your Information as Per Terms and Condition and Bid Document 10th Clause States "Developer Have to Obtain Necessary Permission/Noc from All Concerned Competent Authorities for Use of Plot for Which It is Developed Allotted. This Own Cost and Submit Copy of Such Permission to the Corporation for Record.
As the Govt. of India through Chairman Kpt is Main Lease of the Above Said Plot of Land to be Allotted to Us for Development and to Satisfy and Further Clarification on Our Part as Developer We Would Like Permission/Noc of Kpt Before Entering Into Agreement of Development as M/s. Src Limited is a Sub Lease of Above Said Plot and Govt. of India through Chairman Kpt is the Main Owner of the Above Said Plot of Land.
Further it has been stated in this very letter that the terms and condition as submitted in the development agreement differ with the bid documents which is not accepted. A close look at this would suggest that even with regard to the conditions in the bid document itself with regard to NOC to be obtained, the parties were not ad diem. In fact the respondent-plaintiff sought clarification on this aspect before entering into development agreement specifically referring to main lease in favour of KPT and M/s. SRC Ltd., as a special lease. Thus it would clearly suggest that even after the bid was submitted, the respondent-plaintiff also had some doubt or second thought with regard to the terms and conditions of the bid document itself with regard to obtaining necessary permission, which was stipulated in the terms and conditions of the bid document itself. Therefore, it would not be possible to accept the submission by learned senior counsel, Shri Kavina that it is an agreement of lease whatever may be the nomenclature. Further, the submission made by learned senior counsel, Shri Kavina that once the offer is accepted, the documents or the agreement was to be made as a formality is over simplification and it cannot be accepted. It is required to be mentioned that the appellant vide communication dated 02.08.2010 specifically stated that the issues, which have been raised with regard to the variance or the deviation between the terms and conditions narrated in bid document and the development agreement. It was clarified that it was simply elaborating with precision the terms and conditions of the bid document. Further as could be seen, the acceptance itself was a conditional. In fact, the respondent-plaintiff was also not at ad diem with regard to the terms and conditions of the bid document and had sought a clarification as stated above, which led to correspondence. In other words, there was no concluded contract between the parties so far as the development agreement is concerned and acceptance of the bid was not acceptance in as much as the offer was qualified offer, which was brought to the notice of the respondent-plaintiff. It is in these circumstances, the submissions made by learned counsel, Shri Dave that there was no concluded contract also required to be accepted. Reference made to the judgment of the Hon''ble Apex Court reported in case of Dresser Rand S.A. (supra) is required to be mentioned that both have cited and referred to this judgment and it has been stated that the tender document invited bid is only a general terms and conditions, which could be subsequently elaborated at the time of execution of further agreement and it is in this circumstances, it has been observed in this judgment that "A prelude to a contract should not be confused with the contract itself." Further, the bid document would offer only referred to invitation of the offer and as could be seen from the correspondences, the offer was conditional which has already been communicated to the respondent-plaintiff. As per the say of the respondent-plaintiff they themselves have by communication dated 14.07.2010 as stated that further clarification is required, meaning thereby, offer is conditional and was not ready to accept offer as it is as stated in the bid document with regard to the getting necessary permission by the developer. It is in these circumstances when there is no concluded contract whether the injunction could have been granted is required to be considered. The Court below has failed to consider this aspect with regard to the very basis or the foundation for considering the prima facie and balance of convenience. If there was no concluded contract between the parties, no prima facie can be said to have been made out. Apart from that as rightly submitted the provisions of Section 14(1)(c) of the Specific Relief Act would also attract and assuming that said contract was not covered and it was an agreement to lease even then as discussed above, the parties were never at diem and the stage of execution of any final document/development agreement had not reached and it was only at the stage of negotiation and proposal and counter proposal for some clarification. Therefore, the Court below having failed to consider this aspect has committed an error in appreciating and applying well accepted criteria for the grant of injunction as provided under Order 39, Rules 1 & 2 of the Civil Procedure Code.
Therefore, though as an appellate court, normally the discretionary orders are not required to be disturbed easily unless the order can be said to be perverse. One is also required to consider the very basis for grant of injunction if the Court below has failed to consider the relevant criteria for the grant of injunction forming basis for the grant of injunction like prima facie case, balance of convenience etc. For the purpose of deciding the prima facie case, the Court has to consider the existence of a valid contract or concluded contract, which has not been considered. As there is no prima facie case, the error as crept in resulting into impugned order, which cannot be sustained. Therefore, the present Appeal from Order deserves to be allowed. In the circumstances, the present Appeal from Order stands allowed. The impugned order passed below Exh. 5 in Special Civil Suit No. 32 of 2010 by 2nd Additional Sr. Civil Judge, Gandhidham-Kachchh dated 15.03.2011 is hereby quashed and set aside.
FURTHER ORDER
After the order was pronounced, learned senior counsel, Shri Percy Kavina appearing with learned counsel, Shri Arpit Kapadia for the respondent has requested for stay of the operation of the order for six weeks to enable his client to approach the Hon''ble Apex Court. Learned counsel, Shri Jigar Patel has resisted the said request.
In the facts and circumstances, since the stay has been continued from 15th March, 2011, interest of justice would require that such order may continue to enable the respondent to approach higher forum. Accordingly, the request is granted and operation of this order is stayed for six weeks as prayed for.