Calcutta High Court
Niranjan Pipalia vs Hindustan Steel Works Construction … on 11 March, 2026
Author: Debangsu Basak
Bench: Debangsu Basak
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IN THE HIGH COURT AT CALCUTTA
COMMERCIAL APPELLATE DIVISION
ORIGINAL SIDE
Present:
The Hon'ble Justice Debangsu Basak
And
The Hon'ble Justice Md. Shabbar Rashidi
AD-COM 9 of 2024
Niranjan Pipalia
Vs.
Hindustan Steel Works Construction Limited
For the Appellant : Mr. Anuj Singh, Adv.
Ms. Amrita Pandey, Adv.
Mr. Ghanshyam Pandey, Adv.
For the Respondent : Mr. Shiv Mangal Singh, Adv.
Hearing Concluded on : February 5, 2026
Judgement on : March 11, 2026
DEBANGSU BASAK, J.:-
1. Appellant has assailed the judgment and decree dated April
10, 2024 dismissing CS No. 603 of 2024.
2. Learned Advocate appearing for the appellant has contended
that, appellant entered into a contract for supply of certain
scientific and processed instruments to the defendant. He has
referred to the contract being Exhibit C. He has contended that,
the respondent wrongfully terminated the same on November 27,
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1992. He has referred to the termination letter which is marked as
Exhibit F, in this regard.
3. Learned Advocate appearing for the appellant has submitted
that, no reason for termination was ascribed by the respondent.
He has referred to the written statement of the defendant in this
regard.
4. Learned Advocate appearing for the appellant has submitted
that, the appellant had taken steps subsequent to the contract. He
has referred to Exhibit D and V in this regard. He has also referred
to Exhibit X with regard to steps being taken. He has contended
that, appellant placed an order on the foreign vendor. The foreign
vendor had confirmed the same. Appellant had been asked to open
a letter of credit which the appellant did. It is thereafter, that the
respondent had purported to terminate the contract on November
27, 1992.
5. Learned Advocate appearing for the appellant has contended
that, since the letter of termination does not contain any reasons,
no further evidence should be considered and looked upon by the
Court, justifying the termination. In support of such contention,
he has relied upon 2008 Volume 13 Supreme Court Cases 597
(Bharat Sanchar Nigam Limited and Anr. Vs. BPL Mobile
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Cellular Limited and Ors.), 2023 SCC Online Ori 7084 (Z. Plus
Surakhya Seva, Bhubaneswar Vs. State of Odisha and
Others), 2011 Volume 1 Supreme Court Cases 167 (Alva
Aluminium Limited, Bangkok Vs. Gabriel India Limited), 1978
Volume 1 Supreme Court Cases 405 (Mohinder Singh Gill and
Anr. Vs. The Chief Election Commissioner, New Delhi and
Others.), 2010 Volume 6 Supreme Court Cases 614 (Chairman,
All India Railway Recruitment Board and Anr. Vs. K. Shyam
Kumar and Ors.), 2014 Volume 13 Supreme Court Cases 692
(PRP Exports and Others. Vs. Chief Secretary, Government of
Tamil Nadu and Others.), 2019 Volume 18 Supreme Court
Cases 401 ( 63 Moons Technologies Limited Vs. Union of India
and Others.), 2025 SCC OnLine SC 1979 (Assistant General
Manager State Bank of India and Another Vs. Tanya Energy
Enterprises through its Managing Partner Shri Alluri
Lakshmi Narasimha Varma).
6. Learned Advocate appearing for the appellant has contended
that, since the termination of the contract was wrongful, the
appellant is entitled to damages. Learned Single Judge has erred
in not awarding damages. In support of the contention that the
appellant is entitled to damages on wrongful termination of the
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contract, he has relied upon (2025) SCC OnLine Cal 3945 (State
of West Bengal and Others. Vs. S.K. Maji).
7. Relying upon 1999 2 Cal LT 599 (Pradip Kumar Roy Vs.
Smt. Bimala Banerjee & Anr.) learned Advocate for the appellant
has contended that, the written statement should not be read in
evidence.
8. Learned Counsel appearing for the respondent has contended
that, the plaintiff did not seek specific performance of the
agreement. He has referred to the prayers in the plaint. He has
contended that, the suit of the appellant was for recovery of
damages.
9. Learned Advocate appearing for the respondent has
contended that, the appellant initially filed a writ petition. In such
writ petition, an order dated November 27, 2000 was passed by the
Division Bench. Relying upon Order dated November 27, 2000
passed by the Division Bench in the writ petition filed by the
appellant, learned advocate appearing for the respondent has
contended that, appellant is not entitled to any damages. He has
referred to the findings returned in such appeal. The findings
returned in such order, are res judicata between the parties. The
suit is a replica of the writ petition.
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10. Learned Advocate appearing for the respondent has
contended that, the appellant did not put any question in cross-
examination as to the alleged misrepresentation made by the
respondent to the appellant. He has contended that, the contract
was terminated primarily for two reasons namely, high price being
charged by the appellant and the appellant not being an agent of
the foreign principal.
11. Learned Advocate appearing for the respondent has relied
upon AIR 2016 SC 2250 (Muddasani Venkata Narsaiah (D) Th.
Lrs. Vs. Muddasani Sarojana) and AIR 1961 Cal 359 (A.E.G
Carapiet Vs. A. Y. Derderian) in support of the proposition that,
since the appellant did not put any question in cross-examination,
the appellant is precluded from contending that there was no
misrepresentation.
12. By a letter dated November 19, 1992, respondent awarded
the contract to the appellant for supply of different instruments at
erection site of Sinter Plant No. 1 combined package at Durgapur
Steel Plant and supervision during erection, testing and
commission for a total cost of Rs. 4,14, 09,495. 55 including West
Bengal Sales Tax, packing, forwarding, insurance and available
discount. This award of contract by the letter dated November 19,
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1992 has been tendered in evidence which was marked as Exhibit
C.
13. By a letter dated November 26, 1992, the respondent had
cancelled such contract. Appellant had introduced such letter of
termination dated November 27, 1992 as Exhibit F at the trial.
14. Exhibit F being a letter of termination dated November 27,
1992 does not contain any ground for termination of the contract
as has been rightly pointed out on behalf of the appellant.
15. The respondent in its written statement has taken two
grounds for cancellation, namely, exorbitantly high price and the
appellant not having requisite registration as the agent of the
foreign supplier. According to the respondent, the appellant had
misrepresented to the respondent that the appellant was the agent
of the foreign supplier in India when it actually was not so. On
such discovery, the respondent had terminated the contract.
16. Mohinder Singh Gilland another (supra) has held that,
when a statutory functionary makes an order based on certain
grounds, its validity must be judged by the reasons so mentioned
and cannot be supplemented by fresh reasons in the shape of
affidavit or otherwise.
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17. Mohinder Singh Gilland another (supra) has been
considered in subsequent decisions of the Supreme Court namely
K. Shyam Kumar and Ors. (supra), PRP Exports and Others
(supra),63 Moons Technologies Limited (supra), and Tanya
Energy Enterprises (supra).
18. Tanya Energy Enterprises (supra) while reviewing various
authorities of the Supreme Court including Mohinder Singh
Gilland another (supra) and 63 Moons Technologies Limited
(supra) has held as follows:-
“38. The respective Benches in Commissioner of
Police v. GordhandasBhanji [1951 SCC 1088; 1951 SCC
OnLine SC 70; AIR 1952 SC 16.] , Mohindhr Singh Gill v. Chief
Election Commissioner [(1978) 1 SCC 405; 1977 SCC OnLine
SC 323.] , Opto Circuit India Ltd. v. Axis Bank [(2021) 6 SCC
707; (2021) 3 SCC (Cri) 105; 2021 SCC OnLine SC 55.] and 63
Moons Technologies Ltd. v. Union of India [(2019) 217 Comp
Cas 181 (SC); (2019) 18 SCC 401; 2019 SCC OnLine SC 624.]
, in our reading, while mandating what has been noticed
above was not required to and, as such, rightly did not go that
far in establishing the principle that, in all cases coming before
it, the court is necessarily bound to confine itself to the
grounds mentioned in the administrative order under
challenge and cannot look beyond such grounds at all. While
the courts, in course of reviewing administrative orders, may
not permit additional grounds not found within the four
corners of the said order to be raised in an affidavit or in oral
arguments, we are inclined to the view that the factual
8narrative in such order and the documents referred to therein
can certainly be considered together with the case set up in
the writ petition, but in appropriate cases. Such cases could
include a case, as the present, where the mentioned grounds
are found to be untenable and, thus, unsustainable, but an
alternative ground (appearing from the factual narrative in the
order itself and/or from the records relevant thereto) is
traceable which could have validly been mentioned as a
ground to support the impugned rejection had there been a
proper application of mind by the administrative authority. In
all such cases, it would be open to the court to uphold it on
such alternative ground subject, of course, to the affected
party being put on notice and an opportunity to respond. This
approach, which would prioritize fairness and justice over
technicalities, does not run contrary to or inconsistent with the
law laid down in the afore referred precedents.”
19. An administrative decision, although, being untenable on the
face of it, as not being informed with reasons, nonetheless, can be
sustained if, such decision, is supported by materials appearing
from the decision itself and/or from the records relevant thereto. A
Court can consider the materials appearing from the decision
impugned and/or the records relevant thereto in order to decide on
the legality, validity and sufficiency of the decision impugned.
However, a Court considering the records relevant to the impugned
decision should ensure that the parties to the lis has access to
such relevant materials.
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20. In the facts and circumstances of the present case, the letter
of termination being Exhibit F by itself does not contain any
reasons for such termination. However, the respondent has taken
a stand in the written statement that, the appellant was guilty of
overpricing, and making its misrepresentation as to a status with
the foreign seller.
21. The requirement in Tanya Energy Enterprises (supra) is
that, when the Court is considering materials other than the
administrative decision of the authority then, the Court has to
ensure that, the parties to the lis are not prejudiced thereby. In
other words, Courts have to ensure that, parties to the lis have
access to the same materials as that which the Court is
considering along with the impugned administrative decision.
22. In the facts and circumstances of the present case, the
impugned judgment and decree of the dismissal of the suit was
passed after trial where both the parties had ample opportunity to
adduce evidence. Finding of the learned Single Judge that, the
decision of termination of contract was not bad is based on cogent
evidence placed on record. Learned Trial Judge has noted that, the
appellant as the plaintiff was not the agent of foreign companies.
Learned Single Judge has also noted that, in the course of cross-
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examination, PW 1 had stated that, the appellant is a dealer of
instrument and importers of various scientific instruments. In fact,
PW 1 has stated that, the appellant never claimed that it was an
agent of a foreign company or that the appellant was registered
with any Government body.
23. Few documents which have been marked as Exhibits at the
trial requires consideration on the issue as to whether or not, the
respondent was justified in terminating the contract. One of such
document is Exhibit-C which is the award of the contract. In
Exhibit-C, clauses 4 and 7 are relevant. Clause 4 of Exhibit C
requires the appellant as the supplier to open a letter of credit with
the foreign supplier. Clause 7 of Exhibit C requires the appellant
as the supplier to provide test calibration certificate manual,
guarantee and performance certificate as received from the
manufacturer. It also stipulates that the respondent as the
purchaser can have inspection of the materials at the principal’s
premises abroad at the cost of the respondent.
24. By a letter dated January 27, 1992, which has been marked
as Exhibit- R, the appellant stated that, it would provide the
respondent with guarantee papers received from the principal of
the appellant in Germany. It has also stated that the respondent
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can take pre-shipment inspection at principal’s premises at
Germany. It has gone on to say that the appellant is a distributor
of the principal at the time of offer to the respondent.
25. In cross-examination of the witnesses of the defendant, on
February 10, 2011, the appellant had put question with regard to
the appellant being agent of foreign principal. In answer to
question No. 41 put in cross-examination, the witness of the
respondent had stated, after looking into the letter dated January
27, 1992, being Exhibit R, as to the guarantee and the inspection.
In response to the question no. 43, the witness of the respondent
in cross-examination had stated that, the respondent was not
entering into the contract of on principal to principal basis.
26. These materials on record have established that, the
appellant held out that it was the authorized agent of the foreign
principal, while it was not so. The respondent had placed the
contract upon the appellant on the basis that the appellant was
the agent of the foreign principal. The respondent had been misled
by the appellant as to its relationship with the manufacturer. The
appellant has misrepresented to the respondent that the appellant
was the agent of the manufacturer while the appellant was not so.
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27. It has been admitted that, the appellant was not the agent of
the foreign principal. Therefore, it cannot be said that the
respondent had no justification in cancelling the contract.
28. The respondent had at the trial established that, there were
sufficient grounds to cancel the contract. The appellant was not
prejudiced at the trial since the appellant had sufficient
opportunity to lead its evidence as also cross-examine the witness
of the respondent. In terms of Tanya Energy Enterprises (supra)
therefore, the learned Trial Judge has rightly considered the
materials relevant leading to the decision of termination of the
contract being Exhibit ‘F’.
29. The cancellation had happened within 7 days from the date of
contract. The respondent had awarded the contract on November
19, 1992 and cancelled the same on November 26, 1992. The
appellant at the trial did not establish any material to establish
damages allegedly suffered within such short period of time to
claim compensation.
30. In view of the above discussion, we have found no ground to
interfere with the judgment and decree of the dismissal passed by
the learned Single Judge.
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31. AD-COM 9 of 2024 is dismissed without any order as to
costs.
[DEBANGSU BASAK, J.]
32. I agree.
[MD. SHABBAR RASHIDI, J.]