ABHAYRAJ S SHAH Vs. GUJARAT STATE TEXTILE CORPORATION LIMITED
LAWS(GJH)-1979-11-3
HIGH COURT OF GUJARAT
Decided on November 14,1979

ABHAYRAJ S.SHAH Appellant
VERSUS
GUJARAT STATE TEXTILE CORPORATION LIMITED Respondents

JUDGEMENT

M.P.THAKKAR - (1.) Some interesting questions raised by this petition are: Should the Court in exercise of its jurisdiction accede to the request of Ahmedabad merchants who refused to submit tenders for the purchase of goods worth about Rs. 7 0 0 on one occasion and Rs. 15 0 0 on another to restrain the Gujarat State Textile Corporation Limited (respondent No. 1) to from disposing of the accumulated goods worth about Rs. 20 0 0 through a Calcutta agent (respondent No. 3) by inviting tenders from Calcutta merchants ? Merely because there is a minor difference in terms and conditions of sale arising mainly because the goods are sold in far away Calcutta market ? Because the operations have to be carried out through an agent (as the Corporation has no office at Calcutta) and commission has to be paid for services rendered ? Can the Corporation be obliged to carry stocks worth about Rs. 20 0 0 for months because the Ahmedabad merchants initially refuse to submit tenders and then invoke the constitutional jurisdiction of the Court ? What about loss of interest on Rs 20 0 0 ? What about financial stringency the Corporation has to suffer ? From where will the Corporation pay to its creditors and labourers ? Will a public sector undertaking be able to function if in day to day business matters its hands are shackled even when it is acting in good faith on business principles and policy considerations ? ... ... ... ... ...
(2.) It will be seen that 1 1/2% commission is payable to respondent No. 3 for the services rendered by him namely for securing offers for the pur chases of the goods from the Corporation and for taking responsibility for payment. 12% commission specified in Annexure C is not to be paid to the merchants of Calcutta who submit the tenders and whose tenders are accepted by the Corporation. In other words this commission is paid not to the merchants who effect the purchase but it is paid to respondent No. 3 an Agent of the petitioner who secures the orders. In essence it is something like a brokerage or a commission paid for securing orders. The petitioners are not similarly situated as respondent No 3. They are not the agents of the Corporation for the purpose of effecting sales They are the local merchants who themselves submit tenders for the purchase of the goods offered for sale by the Corporation. IF is therefore futile to contend that making a provision for payment of 11% commission to respondent Nos. 3 results in hostile discrimination vis a vis the petitioners It may be stated that as disclosed by the record the compulsion to explore new avenues for sale of Rents and Rags arose because the Corporation was not able to secure any offers for purchase from the local merchants. The Corporation could not have remained at the mercy of the merchants of Ahmedabad for disposing of its goods worth about Rs. 20 0 0 which resulted in a loss of interest and in financial stringency. The Corporation was therefore acting in good with in exploring a new avenue for effecting sales. If in this connection it had to pay 11% commission to the Agent or broker who secured the orders it cannot be said that the Corporation was indulging in hostile discrimination vis a vis the petitioners. It is not for this Court to examine whether or not on business principles or in view of the exigencies of circumstances the Corporation was justified in offering 12% commission. That is beyond the scope of the present dispute. So far as the petitioners are concerned they used to submit tenders for the purchase of the goods offered for sale at Ahmedabad and if they have not submitted their tenders the) cannot thwart the proposal to sell the goods through respondent No. 3 at Calcutta. In fact the terms and conditions of sale to the Calcutta merchants do not provide for payment of and discount to them at all whereas the petitioners get 7050 discount. As the petitioners are not simil any situated vis a vis respondent No. 3 it cannot be said that any hostile discrimination has been practised vis a vis them on this score.
(3.) The second ground on which the complaint about hostile discrimination is made is that when the goods were sold to the Ahmedabad merchants on the basis of cash payment at the time of the acceptance of the tenders by the new sales policy sought to be adopted by the Corporation more liberal terms were being offered to the Calcutta merchants. This grievance is made in the context of the fact that the terms and conditions of sale to Calcutta merchants provide for despatch of goods by transport receipts through Banks. The merchants at Calcutta would be able to take delivery of the transport receipts on payment of the bills drawn against the transport receipts. Thus they would have to pay only at the time of delivery of goods whereas according to the petitioners they were required to make payment at the time of the acceptance of their tenders at Ahmedabad and that there was usually a timelag of about a week or 10 days between the date of the acceptance of the tender and the date of the actual delivery of the goods. This argues counsel for the petitioners constitutes hostile discrimination. The argument does not deserve any serious consideration as it is obvious that the petitioners are not similarly situated as the Calcutta merchants. In the first place the petitioners being residents of Ahmedabad where the Head Office of the Corporation is situated on the spot transactions on cash basis are possible unlike in the case of Calcutta merchants. Again transportation to Calcutta a far away place would naturally take a very long time whereas transportation from Baroda to Ahmedabad would take only a few hours. By the very nature of the operations at Calcutta a different policy of sending transport receipts against bills through Bank has to be adopted. It would have been a different matter if the petitioners were merchants of Calcutta who had submitted tenders and they were required to make cash payment on a basis different from the basis offered to the others. Under the circumstances since the petitioners are not similarly situated it is not possible to uphold the contention that the proposed sale would constitute hostile discrimination vis a vis the petitioners.;


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