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Gujarat High Court · body

2017 DIGILAW 1406 (GUJ)

Kamalben Khumanbhai Sindhav v. Central Warehousing Corporation

2017-08-11

B.N.KARIA, M.R.SHAH

body2017
ORDER : M.R. SHAH, J. By way of this petition under Article 226 of the Constitution of India, the petitioner has inter alia prayed for the following relief:— (B) be pleased to issue a writ of mandamus or any other appropriate writ, order or direction by quashing and setting aside the impugned Order at Annexure-A dated 9/11-05-2016 bearing Reference No. CWC/RO-Ahd/Busi/PEG-Maliya Hatina/2016/1438 by virtue of which the agreement dated 3.6.2014 executed between the petitioner and the respondent no. 1 for construction and hiring of twenty five though MTC godown at village Maliya Hatina, Junagadh for a period of 10 years is terminated.” 2. That, an agreement dated 3rd June 2014 has been executed between the petitioner and the respondent no. 1-Central Warehousing Corporation Limited for construction and hiring of twenty five thousand MTC godown at village Maliya-Hatina, District Junagadh for a period of 10 years. For some minor lapses, which as such can be said to be curable, by the impugned Order, the contract/agreement has been terminated. 3. From the material on the record, it appears that a High Level Committee referred the matter back to the State Level Committee to look into the shortcomings of the godown and to form an opinion as to whether deviations were minor in nature and/or will affect safety of the stock or not. 3.1 It appears that thereafter, the State Level Committee has submitted its report. The Report/Minutes of the Meeting of State Level Committee held on 3rd August 2017 is produced on the record alongwith Affidavit-in-reply filed on behalf of the respondent no. 2 dated 8th August 2017. 3.2 In the Minutes/Report, the State Level Committee has noted item-wise position of the shortcomings in Civil works and version of PEG Entrepreneur as emerged as under: Sr. No. Activity Nature Curable/Non Curabl Tentative Amount [In Rs.] Version of PEG Owner Impact on Quality of Stock/Remarks I Providing of Drainage Minor Curabl 13,85,772 Entrepreneur has agreed to carry out the deficient work Yes. If there is heavy water logging the possibility of spreading of insects and insects and infestation is not ruled out. This may lead to unhygienic condition in the Complex which will adversely affect the quality of food grains. II MS Angle For Platform Minor Curable 6,62,517 Agreed and ready to carry out the deficient work No direct impact on quality of stocks. However, there can be operational hindrances. This may lead to unhygienic condition in the Complex which will adversely affect the quality of food grains. II MS Angle For Platform Minor Curable 6,62,517 Agreed and ready to carry out the deficient work No direct impact on quality of stocks. However, there can be operational hindrances. Moreover, the sane is required as per MTF. III Glass Strips not provided as per MTF Minor Non curable 7,18,635 The Entrepreneur held that sufficient glass strips have been provided. Further, maintenance or floor is responsibility of owner in case of any damage of floor. No immediate impact on quality of stocks. However, it may impact the quality of foodgrains on longer run. IV Road width is less Minor Non curable 1,44,563 Agreed by Entrepreneur Non direct impact on quality of stocks. However, this may cause operational hindrances. Moreover, it is required as per MTF. V Less number of turbo ventilators provided Minor Non curable 5,10,000 Sufficient turbo ventilators with diameter of 3400 CFM are provided Yes. It may have impact on longer storage due to less aeration. VI Veranda Roof with Trusses not provided Major Curable 16,09,049 Sun-shed provided on both sides of godowns as per term and condition. However, the same may be provided/improved as per the instructions of Competent Authority/Office Yes. Stocks lying on Platforms shall get damaged in case of rain, in absence of roof over the platforms. 3.3 In the report/minutes of the meeting, it is further observed that the shortcomings can be cured to the extent of only three items for which, an amount of Rs. 36,58,338/- is expected to be spent by the PEG Entrepreneur. The SLC has also noted that the items at Serial Nos. III, IV & V are not curable, and therefore, referred CSA of Rs. 27,46,396/- [Rs. 13,73,198/- × 2] is required to be deposited by the Entrepreneur upfront for any further thought of re-hiring of the godown. However, SLC has also noted that instead of guarantee contract, it may be considered as performance contract. Ultimately, the SLC opined as under: “[i] That the owner shall carry out the overhauls in Civil works within two [02] months, as per his commitment in the minutes [Annexure-I] of discussions with CWC on 01.08.2017 [ii] That the owner shall furnish consent for deposition of CSA amount @ doubt rate, upfront for the items which are not curable, within two [02] months. [iii] That the owner shall carry out the overhauls in the true spirit of MTF and short the dispute out of the Court. He shall not claim any rent from the date of de-hiring i.e., 22nd April 2016 of the godown till commencement of the godowns. [iv] That the owner shall submit an affidavit stating therein that he will totally be responsible for the quality and quantity of stocks of food grains in his custody as per the tender terms with proper and prescribed norms of management/maintenance/fumigation/daily data feeding/report and returns of stocks, etc., as per MTF. [v] As regards Glass strips, it may not immediately possible to take corrective measures. Moreover, the owner has accepted the responsibility to maintain the floor, in case of any damage. Therefore, at present nothing further is required to be done. However, subject to the condition that if any damages is noticed, the owner will take immediate corrective measures and ensure that damage to the floor does not lead to any damage to the foodgrains. [vi] As regards Turbo Ventilators, the non-availability thereof for the utilization period of six months of AUB, may not have significant impact. However, in longer run, the owner should be asked to install the required number of Turbo Ventilators as per requirement of MTF, it is found that the Turbo Ventilators with capacity of 3400 CFM is not having the desired effect. [vii] As regard the roof of Verandha, the owner has agreed to make necessary provision as per the instructions of Competent Authority/Office. Accordingly, Competent Authority will make necessary instructions, which shall be implemented by the Owner.” “12. After detailed deliberation, the SLC formed an opinion in the interest of PDS and decided to give a last chance on trial [AUB basis for 6 months] to the Entrepreneur subject to the condition that he fulfills all the above stipulations. The performance of owner on all fronts shall be monitored and same may be reviewed after six months by SLC. On the basis of performance of Owner suitable recommendations shall be submitted to HLC. In case of any violation of MTF/irregularities or any action prejudicial to public interest, etc., the tender/hiring shall be liable for termination without any notice period. On receipt of the written confirmation from the Entrepreneur, the matter shall be taken up with HLC for approval.” 4. On the basis of performance of Owner suitable recommendations shall be submitted to HLC. In case of any violation of MTF/irregularities or any action prejudicial to public interest, etc., the tender/hiring shall be liable for termination without any notice period. On receipt of the written confirmation from the Entrepreneur, the matter shall be taken up with HLC for approval.” 4. Today, when the present petition is taken up for further hearing, the petitioner has filed Additional Affidavit-in-Rejoinder by which the petitioner has agreed and undertaken to carry out curable defects nos. [I], [II] & [VI] within two months of supply of design by the respondent, as per Table at page nos. 360 & 361 respectively. The petitioner has also agreed and has given consent to deposit CSA amount; as may be directed by this Court, for the items which are not curable, within two months, with a request that the credit of an amount of Rs. 19,00,500/- already deducted towards CSA may be adjusted. The petitioner has also agreed and given consent to her not claiming the rent from the date of de-hiring i.e., 22nd April 2016 till commencement of the Godown; provided operation is commenced within a week. 5. Learned advocate for the petitioner has requested that instead of double the amount of CSA, in the peculiar facts and circumstances of the case, when the petitioner had already suffered a lot, as because of de-hiring of godowns from 22nd April 2016, the petitioner suffered huge loss; including loss of interest as the petitioner had taken Bank loan of Rs. 6.5 Crores and is required to pay approximately a sum of Rs. 9.5 lakhs per month towards interest. Shri Raval, learned advocate appearing on behalf of the petitioner has also requested that the petitioner may be permitted to make appropriate representation to the concerned authority to extend period of contract beyond the term of 10 years, for the period from April 2016 till the date i.e., for a further period of approximately 16 months which may be directed to be considered sympathetically. 6. Shri RS Sanjanwala, learned Senior Advocate appearing on behalf of the respondent no. 1 has submitted that an Additional Affidavit-in-Sur Rejoinder to the Affidavit of the petitioner dated 9th August 2017 has been filed by which, it is stated that the respondent no. 6. Shri RS Sanjanwala, learned Senior Advocate appearing on behalf of the respondent no. 1 has submitted that an Additional Affidavit-in-Sur Rejoinder to the Affidavit of the petitioner dated 9th August 2017 has been filed by which, it is stated that the respondent no. 1 has no objection if suitable directions are issued in line with the report of State Level Committee. Shri Sanjanwala, learned counsel has submitted that as per the practice, for non curable defects which might have a long effect, double the amount of CSA is required to be deposited. Therefore, it is requested to dispose of the petition in line with the report of SLC; including the suggestions made by SLC that the re-hiring of the godowns shall be initially for a period of 6 months on “performance basis”. 7. Having heard learned advocates appearing on behalf of respective sides at length, as such, there is a broad consensus between the respective parties to dispose of this petition by issuing suitable directions, taking into consideration the minutes of the meeting of SLC held on 3rd August 2017. The report/minutes of the meeting of State Level Committee held on 3rd August 2017 are produced hereinabove and as such it is a part of Affidavit-in-reply filed on behalf of the respondent no. 2 dated 8th August 2017. As per the same, the shortcomings at serial no. [I], [II] & [VI] are curable and which shall be cured by the petitioner at the earliest and preferably within two months from today. The concerned Officer of the respondents no. 1 & 2 to cooperate in supplying design; if any, within a period of one week from today. On removing such defects and on deposit of Rs. 13,73,198/- towards CSA, the impugned Order stands quashed and set-aside. There shall be rehiring of the godowns, as per the original terms and conditions; more particularly for a guaranteed period of 10 years and not on performance basis; as suggested by SLC. 8. In the peculiar facts and circumstances of the case, the petitioner has to deposit CSA of Rs. 13,73,198/- and not double the amount of CSA, as the rental amount from April 2016 is stopped and the petitioner has taken huge bank loan of Rs. 6.5 Crores, and for which the petitioner is required to repay the amount with interest in installments. 13,73,198/- and not double the amount of CSA, as the rental amount from April 2016 is stopped and the petitioner has taken huge bank loan of Rs. 6.5 Crores, and for which the petitioner is required to repay the amount with interest in installments. The re-hiring of the godowns on completion of the above shall be as early as possible, subject to curing the shortcomings with respect to Item nos. [I], [II] & [VI] at the earliest and either from the date of curing such defects and/or 11th September 2017; whichever is earlier. 9. It will be open for the petitioner to make a representation for extension of the period of contract of hiring of the godowns, as the petitioner has agreed and consented that the petitioner shall not claim rental from 22nd April 2016 till the date. The petitioner may request for extension of the hiring of such period which may be considered by the appropriate authority in accordance with law and sympathetically. 10. With the above, the present petition stands disposed of. Notice discharged. Interim relief stands vacated. Liberty to approach, in case of any difficulty.