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Gauhati High Court · body

2019 DIGILAW 810 (GAU)

Bimalendu Roy, S/o (L) Harendra Ch. Roy v. Food Corporation of India, New Delhi

2019-07-09

NELSON SAILO

body2019
JUDGMENT : Heard Mr. Lalfakawma, the learned counsel for the petitioner and Mr. Vanlalnghaka, the learned counsel appearing for all the respondents. 2. The petitioner is a Carrying Contractor who claims to be in the business since the year 1993. By a contract Agreement dated 23.01.2010 (Annexure-1), the petitioner was appointed by the respondent Corporation to transport food grains and allied material etc. in and around Railway Siding/ Food Supply Depot(FSD), Bairabi for a period of two years w.e.f. the date of issuance of the said communication. Accordingly, an Agreement to this effect was signed by the parties and the petitioner was issued a Work Order on 23.06.2010 (Annexure-2). The appointment of the petitioner was extended by another three months vide communication dated 21.06.2012 (Annexure-3). However, despite the petitioner having carried out his work to the best of his ability and also the extended term of the contract having come to an end, the respondent Corporation failed to refund the security deposit of Rs. 40,13,171/- to him. Not only did the respondent Corporation fail to refund the security deposit but it also failed to refund a sum of Rs. 1,86,600/- from two separate running bills of the petitioner, dated 12.06.2012 and 09.10.2012 (Annexures - 11 and 12 respectively). 3. Mr. Lalfakawma, the learned counsel for the petitioner by referring to the terms and conditions governing the contract annexed to the Agreement dated 23.01.2010, more particularly, Clause XII submits that it deals with the liability of the contractor for losses etc. suffered by the Corporation. However, to invoke the same, the Corporation is required to show that it was due to the negligence of the contractor, un-workman like performance of any services under the contract or breach of any terms thereof or failure to carry out the work with a view to avoid incurrence of demurrage, etc. The petitioner or the contractor concerned will also be required to be given a notice to this effect. However, no such procedure was adopted by the respondents in the present case. 4. Prior to the deduction of the demurrage charge from the petitioner in the running bills dated 12.06.2012 and 09.10.2012, a sum of Rs. 10,00,711/- toward demurrage charge was deducted from the running bills of the petitioner which prompted him to approach this Court by filing WP(C) No. 72/2012. 4. Prior to the deduction of the demurrage charge from the petitioner in the running bills dated 12.06.2012 and 09.10.2012, a sum of Rs. 10,00,711/- toward demurrage charge was deducted from the running bills of the petitioner which prompted him to approach this Court by filing WP(C) No. 72/2012. The writ petition was disposed of vide Order dated 26.11.2012 after taking into consideration the decision rendered in other cases of similar nature i.e. WP(C) No. 500/2011 (M/s Sreema Stone Vs. FCI & Others) and Bulbul Enterprise Vs. Food Corporation of India and Others reported in (2000) 2 GLR 537, where it was held that Clause XII of the Agreement has to be given due regard if the authorities intend to impose demurrage charges upon the contractor concerned. Following the disposal of the writ petition, the sum deducted i.e., Rs. 10,00,711/- was refunded to the petitioner on 18.10.2013 (Annexure-10). It is therefore the case of the petitioner that despite the direction of this Court vide Order dated 26.11.2012, the respondents have failed to comply with the stipulation of Clause XII of the Agreement dated 23.06.2010 while refusing to refund the security deposit to the petitioner alongwith Rs. 1,86,600/- that was deducted from his running bills. Being highly aggrieved thus, the petitioner is again before this Court. 5. Mr. Lalfakawma, the learned counsel by referring to various communications made by the respondent authorities to the NF Railway dated 18.12.2010, 20.12.2010 and 10.01.2011 (Annexures-4, 5 and 6 respectively) amongst others submit that the respondent Corporation themselves are aware that due to infrastructure deficiency faced in the Railway station, there is practical difficulty in unloading the food grains within the allotted time. Therefore, the Corporation have been requesting the NF Railway not to impose any demurrage charge. He therefore submits that it is only clear that it is beyond the power and control of the petitioner to not able to unload the food grains within the allotted time slot. As such, the petitioner cannot be said to have been negligent in any manner. Even if the respondent Corporation by over-looking such practical difficulty contemplates to proceed against the petitioner and impose demurrage charge, the Corporation would still be required to give the petitioner an opportunity by issuing him an appropriate notice and also by conforming to Clause XII of the Agreement. Even if the respondent Corporation by over-looking such practical difficulty contemplates to proceed against the petitioner and impose demurrage charge, the Corporation would still be required to give the petitioner an opportunity by issuing him an appropriate notice and also by conforming to Clause XII of the Agreement. The same having not been done, the petitioner should be refunded the security deposit amounting to Rs. 40,13,171/- alongwith interest and also the amount of Rs. 1,86,600/- which was deducted from his running bills. 6. Mr. Vanlalnghaka, the learned counsel appearing for the Corporation by referring to the affidavit-in-opposition filed by the respondents Corporation on 18.11.2016 submits that pursuant to the Order passed by this Court on 26.11.2012 in connection with WP(C) No. 72/2012, the respondents have refunded the amount that was deducted toward demurrage charge which was to the tune of Rs. 10,00,711/- vide Cheque No. 90146 dated 18.10.2013. In so far as the subject matter in the present writ petition is concerned, the contract period to be considered is w.e.f. 01.07.2010 to 30.09.2012. The General Manager of the Corporation after considering the matter and in exercise of Clause XII of the Agreement, fixed the demurrage charge on the petitioner to the tune of Rs. 26,39,417/- for the period w.e.f. 01.07.2010 to 31.03.2012 and Rs. 14,91,625/- for the period w.e.f. 01.04.2012 to 30.09.2012. Thus, the total outstanding liability of the petitioner is Rs. 41,31,042/-. He submits that the outstanding liability against the petitioner in fact is more than what was deposited by him as security deposit and therefore, the security deposit cannot be refunded to the petitioner. 7. Mr. Vanlalnghaka, the learned counsel submits that in fact as and when the Railway wagon with food grains arrive in Bairabi Railway station, the officials of the respondent Corporation are available on the spot. After assessing as to how many truck will be required for carrying the food grains, a requisition is accordingly made to the contractor concerned. By referring to annexure 1 of the affidavit-in-opposition, the learned counsel submits that from the chart prepared, it can be seen that the petitioner has not been able to supply the required number of trucks requisitioned from time to time. There was always a shortfall in providing the trucks and which ultimately has resulted in huge loss by way of demurrage charges. There was always a shortfall in providing the trucks and which ultimately has resulted in huge loss by way of demurrage charges. Therefore, due to the deficiency in the service of the petitioner, the respondent authorities have rightly imposed demurrage charge on him as found to be appropriate. He submits that an inquiry to this effect was made by the Area Manger of the respondent Corporation. As per the findings of the inquiry, the entire loss sustained for not being able to unload the food grains within the allotted time slot has not been deducted to the petitioner alone. In fact, the respondent Corporation has also shared a majority portion of the demurrage charges. He thus submits that under the given facts and circumstances, the writ petitioner cannot have any legitimate grievance and as such, the same should be dismissed. 8. I have heard the learned counsels for the rival parties and I have perused the materials available on record including the record produced by Mr. Vanlalnghaka, the learned counsel for the respondents Corporation. 9. From the above projection of the petitioner, it can be seen that his claim is two fold i.e. refund of the security deposit of Rs. 40,13,171/- along with interest and also a refund of Rs. 1,86,600/- along with interest which was deducted as a penalty from his running bills. The stand of the respondents on the other hand is that the demurrage charges was fixed against the petitioner as per Clause XII (a) of the Tender Agreement for his failure to unload the wagons due to inadequate supply of trucks and that the decision of the General Manager in this regard is final and binding upon the contractor. The demurrage charge for the period w.e.f. 01.07.2010 to 31.03.2012 is Rs. 26,39,417/- and for the period w.e.f. 01.04.2012 to 30.09.2012 is Rs. 14,91,625/-. Therefore, the total outstanding liability of the petitioner is Rs. 41,31,042/-, which exceeds the security deposit made by the petitioner by Rs. 1,17,871/-. In so far as the deduction that was made from his running bill amounting to Rs. 1,86,600/-, the same was done due to the shortfall of trucks and as permissible under Clause XII (c) (i) of the condition of the Tender Agreement. 10. 41,31,042/-, which exceeds the security deposit made by the petitioner by Rs. 1,17,871/-. In so far as the deduction that was made from his running bill amounting to Rs. 1,86,600/-, the same was done due to the shortfall of trucks and as permissible under Clause XII (c) (i) of the condition of the Tender Agreement. 10. In respect of levying demurrage charges, this Court in the case of Bulbul Enterprise (Supra) held that the respondent authorities should strictly comply with the provisions of the terms of contract provided under Clause XII of the Contract Agreement before deducting any amount on account of demurrage. The said decision was also followed in WP(C) No. 72/2012 filed by the present petitioner and which was disposed of vide Order dated 26.11.2012. 11. Mr. Vanlalnghaka, the learned counsel has produced a communication made by the General Manager (Region) of the Food Corporation of India, Regional Office, NEF Region, Shillong-03, written to the Area Manager, Food Corporation of India, District Office, Aizawl vide Memorandum No. G.30/NEFR/MOVT/11 dated 03.09.2013. The same is to the effect that as per Clause 1 (iii) of the terms and conditions governing the contract, Area Manager, Aizawl is authorized to act on behalf of the General Manager (Region), Food Corporation of India, R.O. Shillong to make necessary inquiry into the incurrence of demurrage at the Rail head in Bairabi, fixed the same on the concerned defaulters and thereafter, the demurrage charges fixed may be communicated to the concerned defaulters by way of a show cause notice clearly stating the reasons and circumstances as to why the demurrage should not be fixed upon them and as to why necessary recovery should not be made/deducted from their bills. 12. Despite the above communication, it is noticed that the petitioner was not given any show cause notice by the respondents. In the affidavitin- opposition of the respondents filed on 18.11.2016 by one Sh. Vanlalpak Gangte, Area Manager, Food Corporation of India, District Office, Aizawl, the findings of Inquiry Officer for fixation of demurrage for Financial Year 2012-2013 is enclosed as Annexure-1 collectively. Against such inquiry, no show cause notice appears to have been issued to the petitioner. Another thing which may be noticed is that the petitioner was selected and appointed to carry out the contract work of transporting food grains for a period of two years vide Letter dated 23.06.2010 (Annexure-2). Against such inquiry, no show cause notice appears to have been issued to the petitioner. Another thing which may be noticed is that the petitioner was selected and appointed to carry out the contract work of transporting food grains for a period of two years vide Letter dated 23.06.2010 (Annexure-2). The appointment was extended for another three months vide Letter dated 21.06.2012(Annexure-3) after the two year contract period expired. While this being the period of engagement, the finding of the Inquiry Officer annexed to the affidavit-in-opposition relates to the Financial Year 2012- 2013. Be that as it may, since it has already been held by this Court that Clause XII of the Contract Agreement will have to be complied with before any demurrage charge is levied upon the contractor, it will therefore be necessary for the respondents to afford an opportunity to the petitioner by giving him a show cause notice along with all the materials by which such findings have been arrived at. In so far as the deduction of Rs. 1,86,600/- which has been made from the running bill of the petitioner as a penalty purportedly under the provision of Clause XII (c) (i) of the Contract Agreement, it will also be incumbent on the part of the respondents to furnish all the relevant materials by reasons of which the amount came to be deducted from his running bills dated 01.06.2012 and 21.09.2012 (Annexures-11 and 12 of the writ petition). Upon receiving the relevant materials, the petitioner will be at liberty to submit his representation which should be considered and disposed of by the respondent authority concerned within a specific time frame. 13. In the result, having regard to the facts and circumstances of the case and the view taken hereinabove, the writ petition is disposed of with a direction to the respondent authorities, more particularly, respondent Nos. 3 and 4 to issue a show cause notice to the petitioner within a period of three weeks from the date of receipt of a certified copy of this order by incorporating all the relevant materials and documents including the Inquiry Report/Verification Report where it has been found that the petitioner should be levied with demurrage charges. 3 and 4 to issue a show cause notice to the petitioner within a period of three weeks from the date of receipt of a certified copy of this order by incorporating all the relevant materials and documents including the Inquiry Report/Verification Report where it has been found that the petitioner should be levied with demurrage charges. The petitioner on receipt of the same will be at liberty to reply to the show cause notice within a period of three weeks from the date of receipt of the same to the respondent No. 3 through the respondent No. 4. The respondent No. 3 shall thereafter dispose of the representation and pass consequential orders within a period of three weeks from the date of receipt of the representation. 14. In so far as the amount of Rs. 1,86,600/- that was deducted from the running bill of the petitioner as a penalty is concerned, the respondent Nos. 3 and 4 shall furnish all the relevant materials which led to such deduction within a period of three weeks from the date of receipt of a certified copy of this order. On receipt of the same, the petitioner shall be at liberty to file his representation within three weeks of receipt of the same to the respondent No. 3 through the respondent No. 4. The respondent No. 3 shall on receipt of the representation consider and dispose of the same by way of a speaking order within a period of three weeks and shall furnish a copy of the speaking order to the petitioner. 15. With the above observations and directions, the writ petition stands disposed of. Parties are directed to bear their own cost.