Narayani Sons Pvt. Ltd. v. The Orissa Minerals Development Co. Ltd.
2010-09-16
B.P.DAS, S.PANDA
body2010
DigiLaw.ai
JUDGMENT B.P. DAS, J. : Petitioner no.1-M/s. Narayani Sons Pvt. Ltd., which is a Private Limited Company and petitioner no.2, the President of petitioner no.1-company, have filed this writ peti¬tion with a prayer to quash Annexure-29, the order dated 14.8.2010 issued by the Deputy General Manager (I/C) of the Orissa Minerals Development Company Ltd., O.P.2, directing petitioner no.1-company to sign the agreement and start the work within seven days following the terms of the contract and order of this Court, failing which the contract awarded to the peti¬tioner would automatically stand terminated. A prayer is also made to direct O.Ps. 1 & 2 to release the Earnest Money Deposit, as the awarded work has become un-executable for no fault of the petitioner-company by reason of unforeseen circumstances and not to take recourse to any action detrimental and prejudicial to the interest of the petitioner-company. O.P.1-Orissa Minerals Development Company Ltd. (O.M.D.C.) is a Public Limited Company under the administrative control of the Government of India, Ministry of Steel. The brief facts leading to the present writ petition are as follows:- Pursuant to the tender notice bearing no.OMD/71/09-10 dtd.19.3.2010 issued by O.P.1-O.M.D.C. vide Annexure-1 inviting applications from the interested reputed and experienced agencies for undertaking the jobs of raising and transporting of iron ore from North Iron Section (Kolha Roida), Bhadrasahi Mines, Roida. Petitioner no.1-Company submitted its tender documents by depositing earnest money of Rs.15.00 lakhs with O.P.1. On 6.5.2010 the Deputy General Manager, O.P.2, awarded the work and issued the L.O.I./work order vide Annexure-2 in favour of peti¬tioner-company for raising of iron ore of specified quality and quantity from North Iron Section, Bhadrasahi Mines in the dis¬trict of Keonjhar and transporting the ore to crusher plant/railway siding plot at Thakurani. Thereafter, petitioner no.1- company took necessary steps in accordance with the terms and conditions of the tender documents for mobilization and de¬ployment of equipments and machineries in the North Iron Section of Bhadrasahi Mines. After deployment of such equipments and machineries, when the petitioner was going to start the work, the representatives of two Workers’ Unions, i.e., Keonjhar Mining Workers Union, O.P.3, and the Keonjhar Mines Sramik Sangh, O.P.4, demanded for engagement of more than 350 workers of their Unions for executing the work awarded to the petitioner.
After deployment of such equipments and machineries, when the petitioner was going to start the work, the representatives of two Workers’ Unions, i.e., Keonjhar Mining Workers Union, O.P.3, and the Keonjhar Mines Sramik Sangh, O.P.4, demanded for engagement of more than 350 workers of their Unions for executing the work awarded to the petitioner. According to the petitioners, it was not possible on their part to engage such a huge number of workers, as major portion of the work are to be executed through mechanical and scientific mining process and only 50 workers would be required to start the work. In response to the letter dated 21.5.2010 of O.P.2, vide Annexure-3, directing to start the work within 15 days, the petitioner by letter dated 24.5.2010 (Annexure-4) intimated O.P.2 that even though equipments and machineries have already been placed in the mines, the work could not be started due to the rigid and impractical demand of the Unions to engage the entire workforce before starting the work and accordingly, the petition¬er-company requested O.P.2 to take step to convince the Unions to take a practical approach and resolve the stalemate. The peti¬tioner-company further requested O.P.2 to remove the huge over¬burden from the mine faces. On the same day, i.e., 24.5.2010, the petitioner-company wrote a letter to the Secretary, Keonjhar Mining Workers Union, O.P.3, vide Annexure-5, requesting to take a practical approach to resolve the issue and facilitate smooth start of the work and indicating- “....We are supposed to start work in 15 days from the issue of the work order and we were keen for the same. We had several informal and formal meetings with your repre¬sentatives with a request to facilitate smooth start of the work. Even though there is no provision in the Tender or Work order to deploy workers from amongst the workers of previous contract, we assured you that we will be deploying workers only from them depending on the requirement of the work. At present mine faces are full of over-burden and it will not be possible for us to use the entire workforce for gainful employment. We requested you to facilitate start of work with maximum no. of workmen we need for gainful deployment. With the progress of work, more persons may be deployed. But you are in¬sisting on immediate deployment of entire workforce at one go which will not be viable for us.
We requested you to facilitate start of work with maximum no. of workmen we need for gainful deployment. With the progress of work, more persons may be deployed. But you are in¬sisting on immediate deployment of entire workforce at one go which will not be viable for us. This has caused stalemate and we are incurring losses.......we appeal that you take a practical approach to resolve the issue and facilitate smooth start of work at mines by acceding to our proposal which will be in the inter¬est of all concerned.” The petitioner-company also wrote a similar letter dated 24.5.2010 vide Annexure-6 to O.P.4-Secretary, Keonjhar Mines Sramik Sangha. The Deputy General Manger (I/C), O.P.2 by letter dated 24.5.2010, vide Annexure-7, directed the petitioner-company to start the work awarded as per the L.O.I./work order dated 6.5.2010 by signing the contract agreement with seven days, failing which it would be constructed that petitioner-company is not capable to execute the work and further it would attract the breach of contract as per the tender terms and the contract might be terminated at the risk of the petitioner-company with cost and the petitioner-company would henceforth be debarred from partici¬pating in any tender floated by O.P.-1-O.M.D.C. In response to the letter in Annexure-7, the petitioner-company invited the attention of O.P.2 to the unforeseen problems faced by them by virtue of the letter dated 25.5.2010 vide Annexure-8. As O.P.1-O.M.D.C. tried to proceed with the matter of termination of the L.O.I./work order, the petitioners filed a writ petition being W.P.(C) No. 9778/2010 with a prayer to quash Annexure-7. A collateral Bench of this Court by its order dated 27.5.2010 while issuing notice to the O.Ps., as an interim meas¬ure directed that operation of the order in Annexure-7 would be kept in abeyance till next date. Thereafter, the matter was listed on 7.7.2010 and again on 28.7.2010 when a Bench of this Court after hearing the learned counsel for the petitioners and O.Ps. 1 & 2 dispose of the writ petition. The aforesaid order dated 28.7.2010 is extracted hereunder:- “xxx xxx xxx In the present writ application, petitioner no.1 is a Compa¬ny and petitioner no.2 is its President.
1 & 2 dispose of the writ petition. The aforesaid order dated 28.7.2010 is extracted hereunder:- “xxx xxx xxx In the present writ application, petitioner no.1 is a Compa¬ny and petitioner no.2 is its President. The petitioner no.1-Company was awarded the work of “Raising of Iron Ore of specified quality and quantity from North Iron Section, Bhadrasahi Mines in the District of Keonjhar (Orissa) and transporting the ore to crusher plant/Railway siding plot at Thakurani.” Learned counsel for the petitioner submits that after issu¬ance of the letter of Intent/Work Order dated 6.5.2010 (Annexure-2) by Dy. General Manager (I/C.) (O.P.No.2) in favour of peti¬tioner no.1-Company, equipments and machineries were deployed at the site. He further submits that the Company is ready and willing to sign the agreement with opposite party no.1. Since a majority of work is to be done by the machine, it is not feasible to accept the demand of the Union to engage 350 labourers in the work, for which the work could not be executed. He further sub¬mits that though the Company intimated the opposite parties to resolve the issue, the letter dated 24.5.2010 (Annexure-7) was issued by Dy. General Manager(I/C.) (O.P.No.2). The relevant portion of the letter is quoted herein below: “In view of the above, you are once again advised to start the work by signing the contract agreement within 7 (seven) days from the date of issue of this letter, failing which it will be construed that you are not capable to execute the job.Further¬more, it will attract the breach of contract as per tender terms and contract may be terminated on your risk and cost. Company will be free to take action as deemed fit. Besides, you will be debarred from participating in any tender of OMDC henceforth. The petitioners have come up before this Court against the aforesaid order dated 24.5.2010 (Annexure-7). Pursuant to the order of a collateral Bench of this Court, as an interim measure, operation of the order in Annexure-7 which has been kept in abeyance, is still in force. In the counter affidavit filed on behalf of the opposite parties 1 & 2, it is not disputed that the petitioner no.1-Company has been awarded with the work order.
Pursuant to the order of a collateral Bench of this Court, as an interim measure, operation of the order in Annexure-7 which has been kept in abeyance, is still in force. In the counter affidavit filed on behalf of the opposite parties 1 & 2, it is not disputed that the petitioner no.1-Company has been awarded with the work order. It is averred therein that under the terms of the contract, the Company was obliged to start work within fifteen days from the date of issu¬ance of the letter of intent, i.e., by 21.5.2010 and there is also glaring violation of provision contained at Clauses-11, 22.1. and 22.2 of the Tender Call Notice for which the Management was forced to issue the letter dated 24.5.2010 (Annexure-7). In the said counter affidavit, it is also indicated as follows:- “After all sole intention of the management is to start the work under the tender notice and thereby company with the terms under the Tripartite settlement vide Annexure-1/2 and since the petitioner no.1-Company is unable to meet the local requirement following the obligation under the tender notice, it should given way to the management to take a fresh contractor who would be able to start the work under the existing terms and conditions.” According to Mr. Rath, there is no fault on the part of the opposite parties 1 & 2 to issue the letter dated 24.5.2010 (Annexure-7). Rejoinder affidavit on behalf of the Company to the counter affidavit of the opposite parties 1 & 2, is filed in Court today denying the averments made in the counter affidavit.Learned counsel for the petitioners draw our attention to the counter affidavit and submits that the intention of the Management is to implement tripartite settlement between the Labour Union, Govern¬ment and Management through the petitioner-Company. Learned counsel for the opposite parties 1 & 2 submits that the Management is not at all pressurizing for re-deployment of 350 workers. This being the position, in our considered opinion, no further dispute remains to be resolved. Learned counsel for the petitioners submits that the Management shall give a list of fifty numbers of workers to the Company to start the work. Considering the nature of grievance, we dispose of the writ application directing that the Company will start the work without delay after receiving the list of labourers and signing the agreement with O.P.No.1.
Learned counsel for the petitioners submits that the Management shall give a list of fifty numbers of workers to the Company to start the work. Considering the nature of grievance, we dispose of the writ application directing that the Company will start the work without delay after receiving the list of labourers and signing the agreement with O.P.No.1. If there would be any obstruction by the outsiders, the Management will take effective steps to maintain law and order in the site. In case any requisition is made, the police authorities shall also keep watch for smooth execution of the work. It is made clear that the Local Union do not have any right to obstruct the work in the guise of deployment of entire work force. They are free to raise the issue in the appropriate statu¬tory forum. xxx xxx xxx” In the aforesaid W.P.(C) No.9778/2010, O.P.-3-Keonjhar Mining Workers’ Union has filed an application being M.C. 13598/2010 to modify/recall the order passed by this Court on 28.7.2010. The present writ petition (W.P.(C) No. 15752/2010) has been filed by the petitioners for quashing the letter dated 14.8.2010 issued by the Deputy General Manger (I/C), the Orissa Minerals Development Co. Ltd. directing them to sign the agreement within seven days and start the work following the terms of the contract and order of this Court, failing which the contract awarded to them would automatically stand terminated. Learned counsel for O.P.3-Union vehemently submits that the OMDC is bound to engage the workers who were ex-workers of the private company, which was earlier awarded with mines and after change of ownership of mines, the OMDC cannot shirk its responsi¬bility of engaging the idle workers. According to him, 373 nos. of contract labourers working in the mines were disengaged and the Union raised a dispute before the RLC(C), Rourkela and ulti¬mately a tripartite settlement was signed between the representa¬tive of the Union, Officers of OMDC and Labour Authority, i.e., Regional Labour Commissioner (Central), Rourkela, which binds the OMDC, relevant portion of the said settlement is quoted herein below:- “I) It is agreed by and between the parties that consequent upon cancellation of mining lease of 254 Hector Roida north Section of OMDC Co.
Ltd. and subsequent imposition of prohibition of mine working by DDM, Joda to hand over the mining list to DDM, payment of wages to the contract labourers, who have actually presented for work, due to their non-engagement w.e.f. 17/01/2007 in respect of Roida north section for the above reason shall be made by the respective managements by 16/2/2007. It is also agreed by and between the parties that similarly idle wages there after till resumption of normal working shall be paid by the respective managements. II) It is also agreed by and between the management of OMDC Ltd. to first explore possibility of renewal of the existing mining lease terminated by the Govt. Orissa and subsequent appeal pending before the Central Govt. failing which shall explore and ensure working the adjacent mining lease area within a period of 30 days from 21/1/2007 i.e. the date of disposal of the appeal of the Central Government. III) Union agrees to withdraw their all coercive methods if any to create an atmosphere of industrial peace and harmony for the interest of all concerned. IV) Management also further agree not to take any action on any employee during the period of unrest undertaken in the past due to non-payment of wages and alleged closure that both parties agreed to maintain industrial peace and harmony in the industry.” According to Mr. Mohanty, learned counsel for the petition¬ers, it is the OMDC, which should pay the idle workers and it is also its duty to see that peace prevails in the area so that the petitioners can start the work. Mr. Mohanty further states that it is totally un-remunerative for the petitioner-company to engage a huge number of idle workers. He draws our attention to different documents annexed to the present writ petition. Annex¬ure-27 of such documents is a news item dated 12.8.2010, which shows that in the month of August, this Court directed OMDC to prepare a list of fifty labourers and by utilizing them, the mining operation will start. Thereafter, on last Wednesday when the mining operation was about to start around five hundred workers led by the prominent activist like Padmashree Tulasi Munda protested against the functioning of the mine and demanded for re-engagement of entire idle labour force. According to him, unless the idle workers are employed, there is every chance of law and order problem in and around Roida.
According to him, unless the idle workers are employed, there is every chance of law and order problem in and around Roida. Local people are also demanding absorption of four hundred fifty unemployed labourers by OMDC in its mines. Even in the news item, which was published in “The Samaj” on 22nd August, 2010,it is indicated that the labourers also opposed to the Bhumi Puja, which was to be done by the Company to start the work. In the present writ petition, O.Ps. 1 & 2 have filed a counter affidavit, in paragraph-8 of which it is stated as fol¬lows:- “8. That the averments of the petitioners Company that it is ready and willing to sign the agreement with the O.P.No.1, but he is facing strong opposition from local Unions at Barbil, who are insisting upon the petitioner’s Company to engage all the 400 labourers is all false and concocted. The document to establish its claim is all fabricated with investment of money behind some local leaders so also behind these so called Trade Unions operat¬ing in the area. In view of categoric order of this Hon’ble Court in W.P.(C) No. 9778/2010, no Union can dare to obstruct the petitioner no.1 Company in its executing the work as it would be amounting to clear violation of the direction of this Hon’ble Court. The present writ petition is a well designed attempt to avoid by the petitioners the rigorous arising out of the failure in the execution of work by the petitioners. The petitioners are trying to abuse the process of Court by bringing this writ peti¬tion. The fall out on account of non-execution of work is to be dealt under the terms and conditions of the Tender document and both parties are bound by it. Writ forms are not the appropriate fora.” Mr. B.N. Rath, learned counsel for O.Ps. 1 & 2, submits that in these circumstances, the OMDC should be allowed to go for fresh tender as the petitioners are not able to start the work in accordance with the tender condition.
Writ forms are not the appropriate fora.” Mr. B.N. Rath, learned counsel for O.Ps. 1 & 2, submits that in these circumstances, the OMDC should be allowed to go for fresh tender as the petitioners are not able to start the work in accordance with the tender condition. On perusal of the counter affidavit, we are unable to find anything stated therein regarding the steps taken by the OMDC with local administration in order to bring the situation into control, save and except, saying that the CISF has taken charge of the mines.Learned counsel for the petitioner is correct in saying that the CISF cannot take any step to prevent the law and order situation in that site unless there is active cooperation and help of the District Administration, which is lacking in this situation. From the narrations of the facts and submissions made by the parties, the overall situation in that area is far from normalcy as tried to be depicted by the OMDC. There is nothing in the writ petition to show that the District Administration has taken steps to ensure an atmosphere conducive to start mining operation. Learned counsel for the Workers Union-O.P.3 submits that O.P.1-O.M.D.C. is bound by the tripartite agreement to engage employment of those idle workers. They have no quarrel with the petitioners but the labourers will not allow any attempt by the petitioner-company to frustrate the conditions imposed in the tripartite agreement. Considering the facts and circumstances and the nature of allegations and counter-allegations made as well as the stand taken by the Workers Union and without any definite assurance of the local administration or the O.P.-O.M.D.C. for managing the law and order situation, we are satisfied that it is not possible on the part of the petitioner-company to proceed with the work in question as per the tender conditions. We make it very clear that the contract agreement has not been signed yet and all the par¬ties are acting on the basis of work order and tender conditions. Now a question arises whether in these circumstances, the petitioners can be penalized and/or blacklisted and the earnest money can be forfeited. In our considered opinion, the petition¬ers cannot be compelled to do the work, which cannot be possibly performed. The maxim is, lex non cogit and impossibilia-the law does not compel a man to do what he cannot possibly perform.
In our considered opinion, the petition¬ers cannot be compelled to do the work, which cannot be possibly performed. The maxim is, lex non cogit and impossibilia-the law does not compel a man to do what he cannot possibly perform. The law itself and its administration is understood to disclaim as it does in its general aphorisms, all intention of compelling impos¬sibilities, and the administration of law must adopt that general exception in the consideration of particular cases (see-Mohammed Gazi vrs. State of M.P. & others,(2004) 4 SCC 342.The words, “Becomes Impossible” used in Section 56 of the Contract Act (1872) came up for interpretation in another decision of the apex Court in Satyabrata Ghose vrs. Mugneeram Bangur and Co. & anoth¬er, reported in AIR 1954 SC 44 , paragraph-9 of which is extracted hereunder:- “9. The first paragraph of the section lays down the law in the same way as in England. It speaks of something which is impossible inherently or by its very nature, and no one can obviously be directed to perform such an act. The second para¬graph enunciates the law relating to discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done. The wording of this paragraph is quite gener¬al, and though the illustration attached to it are not at all happy, they cannot derogate from the general words used in the enactment. This much is clear that the word “impossible” has not been used here in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very founda¬tion upon which the parties rested their bargain, it can very well be said that the promisor finds it impossible to do the act which he promised to do.” In the aforesaid facts and circumstances, we dispose of this writ petition allowing the O.P.-O.M.D.C. to go for a fresh ten¬der, if it so decides. The petitioners shall not be penalized and their earnest money shall not be forfeited and no other penal action shall be initiated against them.
The petitioners shall not be penalized and their earnest money shall not be forfeited and no other penal action shall be initiated against them. Accordingly, the order dated 14.8.2010 issued by the Deputy General Manger (I/C) of the Orissa Minerals Development Company Ltd., O.P.2, vide Annexure-29 is quashed. No cost. S. PANDA, J. I agree. Petition disposed of.