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2003 DIGILAW 1263 (JHR)

Pramuk Traders v. Bharat Coking Coal Ltd.

2003-11-04

M.Y.EQBAL

body2003
JUDGMENT M.Y. Eqbal, J. 1. The short question that falls for consideration is as to whether petitioner being Hard Coke manufacturer is entitled to the "handling charges" in respect of sale of the hard coke manufactured by it. 2. Petitioner is carrying on business of manufacturing hard coke and for that purpose owns a beehive hard coke over plant at Nichitpur Collery, Bansjora in the district of Dhanbad. In 1974 an agreement was entered into by and between the petitioner and the respondent-BCCL whereby and whereunder it was agreed that the respondents BCCL (in short Company) will supply coal suitable for manufacture of hard coke to the, extent of 1500 tonnes per month on market price to the petitioner at plant site. The petitioner will pay market price in advance to the company in accordance with the usual terms of sale. The petitioner after manufacturing hard coke will hand over to the Company at 12-1/2% less than the companys selling price. Petitioner at his own cost load the hard coke in trucks at the site of Coke Ovens or Nichitpur Colliery siding. The said agreement was subsequently modified and the commission payable to the petitioner was reduced to 6-1/4% with effect from July, 1975. Petitioners further case is that in the process of manufacturing hard coke, petitioner is performing the function of removing the coal from pit head of the company, processing of raw coal and manufacture of hard coke and delivery of the same to the company. Petitioner is therefore entitled to handling charges, which is being recovered by the company from the purchasers. 3. Mr. M.M. Banerjee, learned counsel for the petitioner fully relied upon the decisions of the Supreme Court in the case of Bharat Coking Coal Ltd. v. Steel Abrasers and Allied Products Ltd., 1994 Suppl (3) SCC 361. According to the learned counsel, petitioner since doing the essential function in the process of manufacturing and selling of hard coke it is entitled to the handling charges which has been admittedly recovered by the company from the purchasers of hard coke. 4. Mr. A.K. Mehta, learned counsel for the respondents-BCCL drawn my attention to the counter affidavit and submitted that the petitioners are performing the required function for the purpose of manufacturing hard coke as per the terms and conditions of the agreement in terms whereof any separate handling charges is payable to the petitioner. 4. Mr. A.K. Mehta, learned counsel for the respondents-BCCL drawn my attention to the counter affidavit and submitted that the petitioners are performing the required function for the purpose of manufacturing hard coke as per the terms and conditions of the agreement in terms whereof any separate handling charges is payable to the petitioner. As a matter of fact, it is the respondent-BCCL who is doing the work of processing, marketing, bookings, indenting, allotment, placement etc. and for that it is entitled to handling charges. 5. First of all. I would like to discuss the ratio decided by the Supreme Court in the case of Bharat Coking Coal Ltd. (supra). The fact of the case was that writ petitioner one Steel Abrasers and Allied Products Ltd. carried on business of foundry casting and for that purpose it had to buy hard coke from the respondent-BCCL. The BCCL beside the price of the hard coke fixed by the Statutory notification was realizing handling charges which was, challenged by the writ petitioner. The High Court of Patna allowed the writ petition and issued a mandamus directing the BCCL not to charge from the respondents any amount other than fixed price in terms of the notification i.e., any amount other than handling charges. The matter went up to the Supreme Court. Their Lordships set aside the order passed by the Patna High Court and held that the appellant BCCL is entitled to handling charges. The reasons assigned by their Lordships are reproduced herein below :-- "Mr. Salve, the learned counsel appearing in support: of the appeal submitted that when Note 10(1) clarified that the prices fixed under the notification were applicable to sale at pit-heads they would, as regards coke, necessarily refer to sale at the "coke over plant". Since the coke as prescribed in the plant, was required to be properly handled to attain the specification of foundry coke as laid down by IS1, the appellant could legitimately demand handling charges besides the notified price, in terms of Note 14, argued Mr. Salve. To bring home his contention Mr. Salve relied upon the following averments made in the counter-affidavit filed on behalf of the appellant in the High Court; "It is stated that after indirect heating of coal in Beehive Oven (B.H.) and B.P. Plants coke is produced. After manufacture of coke further handling is required for sale of coke. Salve. To bring home his contention Mr. Salve relied upon the following averments made in the counter-affidavit filed on behalf of the appellant in the High Court; "It is stated that after indirect heating of coal in Beehive Oven (B.H.) and B.P. Plants coke is produced. After manufacture of coke further handling is required for sale of coke. It is stated that pit-head hard coke is an assorted sizes of coke having various size ranges. Coke below 1/2" size of 12 m.m. size constitutes up to 6 to 8 per cent of total hit-head coke. As per Indian Standard Specification (IS) undersize tolerance is 10 per cent. Further Indian Standard Specification for Foundry Coke is 4" (100). This constitutes about 80 per cent of the total product. It is stated that loading is not possible at pit-head. Therefore shifting, sizing either by manual or by fork-lifting and storing in different loading points, is undertaken either manually or by vehicles. The colliery owners are spending substantial money to carry out despatch of coke according to specification as improper handling of coke may result in breaking. The operations required before despatch of suit Indian Standard Specification generates substantial rejection. The expenditures incurred in screening, staking, loading and transportation into despatchable container is termed as handling charges." Their Lordships further observed : "Having carefully considered the respective contentions of the learned counsel in the light of the material on record we are inclined to accept the contentions of Mr. Salve in preference to those of Mr. Sanyal. From a combined reading of the relevant clauses of the order and the notes appended to the notification referred to earlier we may draw the following conclusions : (i) The Central Government may, by Gazette notification, fix the sale price for different grades and sizes of coal and coke and for different collieries, including plants for the production of coke. (ii) The prices so fixed are applicable to sale of coal at pit-heads and of coke at coke oven plants. (iii) Prices given in Table V of the notification for hard coke shall not apply to small sized hard coke and other types of cokes as mentioned: (iv) No colliery owner shall sell and no person shall purchase coal or coke at a price which is in excess of the notified price. (iii) Prices given in Table V of the notification for hard coke shall not apply to small sized hard coke and other types of cokes as mentioned: (iv) No colliery owner shall sell and no person shall purchase coal or coke at a price which is in excess of the notified price. (v) However, besides the price so fixed, the colliery owner is entitled to realize (a) costs for transportation beyond a distance of 3 kms. to the loading point at the specific rates, (b) excise duty. Royalty, cess, sales-tax and other taxes levies if any and (c) additional charges as may be negotiated between the producer and the purchaser for undertaking special sizing or beneficiation." 6. Coming back to the instant case, it appears from the writ petition that petitioner is seeking a declaration that petitioners firm is entitled to handling charges in respect of sale of hard coke manufactured by it and further for a direction upon the respondents not to deduct the handling charges from the bills raised by petitioner No. 1 in respect of the hard coke manufactured and sold by the petitioner. 7. As noticed above, the petitioner entered into an agreement with the respondents whereby it agreed to manufacture hard coke from the coal that to be supplied by the company; The relevant clause of the Agreement (Annexure-1) reads as under :-- "The agreement shall come into force with effect from the 1st April, 1974. It is further agreed that following working arrangements will be applicable for running the said beehive coke-ovens. (a) The company will supply coal suitable for the manufacture of hard coke to the extent of 1500/- tones per month at market price to the owner at the plant site. The owner will pay the market prices in advance to the company in accordance with the usual terms of sale. It will be the exclusive responsibility of the company to supply suitable coal at the plant site, the costs of transportation being borne by the owner. The company will keep the transport cost at the minimum by supplying suitable coal from mines within a radius of five miles. The owner will send indents of the required amount of coal. It will be the exclusive responsibility of the company to supply suitable coal at the plant site, the costs of transportation being borne by the owner. The company will keep the transport cost at the minimum by supplying suitable coal from mines within a radius of five miles. The owner will send indents of the required amount of coal. The owner shall, however, be at liberty to purchase coal from other suppliers if the company for any reason whatsoever is unable to supply the required quantity of suitable coal and due notice thereof is given to the company. (b) The entire hard coke manufactured will be handed over to the company at 12-1/2% less than the company selling price. The owner will at its own cost load the hard-coke in trucks at the site of coke ovens or and at the Nichitpur Colliery siding. Necessary Loading orders will be issued by the company to the owners. The owners will send the bills to the company at the current market rates less the usual 12-1/2% discount. The bills will be paid within ten days from the receipt thereof. The entire costs of manufacture will be borne by the owner. (c) If at any time for any reason whatsoever the company is unable to lift the stock of hard-coke manufactured so that the stock exceeds 15 days average output. At any time the owner will be entitled to claim an on account payment of 90% of the value of the hard coke in stock, the value to be calculated at the rate payable if the hard coke had been loaded. If, however, the stock exceeds 1000 tonnes or more than 30 days average output which ever is higher, the owner will be entitled to sell the hard coke to any customer or its own choice and in that case the company will not be entitled to any discount on the sale price beyond 12-1/2% of the companys selling price." 8. Admittedly, there is nothing in the agreement-creating obligation on the part of the company to pay to the petitioner the handling charges for the purpose of manufacture and delivery of hard coke. The question therefore that requires for consideration is as to whether this Court under Article 226 of the Constitution can go into the question with regard to determination of the terms of the agreement which admittedly is not statutory agreement. The question therefore that requires for consideration is as to whether this Court under Article 226 of the Constitution can go into the question with regard to determination of the terms of the agreement which admittedly is not statutory agreement. The scope" of Article 226 in the matter of enforcement of contractual obligation has been set at rest by the Supreme Court in the case of Hindustan Petroleum Corporation Ltd. and Anr. v. Dolly Das, (1999) 4 SCC 450 , their lordships observed :-- "In the absence of constitutional or statutory rights being involved a writ proceeding would not lie to enforce contractual obligations even if it is sought, to be enforced against the State or to avoid contractual liability arising thereto. In the absence of any statutory right Article 226 cannot be availed to claim any money in respect of breach of contract or tort or otherwise. In the present case, the appellants have sought to exercise their powers under Section 7 of the Act and therefore, though the other consequences may be contractual in nature, the exercise of the right being under a statute, it cannot be said that the respondent could not approach the writ Court. 9. From perusal of the agreement which is the basis of the petitioners claim, it transpires that an obligation was created upon the petitioners to bear its own cost in respect of the loading of the hard coke in the truck as per loading order issued by the company. In the counter affidavit, the case of the respondents is that after receiving the hard coke from the petitioner the company processes all sales/marketing deeds including bookings, indenting, programming, allotment, placement etc. 10. Be that it may, admittedly there is no provision in the agreement or in the modified agreement which entitled the petitioners to the amount of handling charges. In may opinion therefore it serious disputed question of fact which needs adjudication on the basis of evidence. This Court therefore cannot determine the question of entitlement of the petitioner in respect of the handling charges. 11. For the aforesaid reasons, no relief can be granted to the petitioner. This writ application is dismissed.