Niranjan Pipalia vs Hindustan Steel Works Construction … on 11 March, 2026

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    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.

    SPONSORED

    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
    3

    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
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    narrative 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-
    10

    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.
    12

    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.]



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