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Madhya Pradesh High Court · body

2022 DIGILAW 625 (MP)

UBIK BUILDERS AND ENGINEERS PVT. LTD. , NAGPUR v. MADHYA PRADESH STATE ELECTRICITY BOARD, RAMPUR

2022-04-19

PURUSHAINDRA KUMAR KAURAV, RAVI MALIMATH

body2022
ORDER PURUSHAINDRA KUMAR KAURAV, J. : – The instant writ petition has been filed by the petitioners seeking issuance of a writ of certiorari to quash the impugned order dated 19-5-2005 (Annexure-P-6) (wrongly mentioned in the prayer clause as Annexure-P-5). The petitioners have further prayed for directions to refund the security amount and deductions carried by the respondents from the running bill of the petitioners together with interest @ 24% p.a. till the date of its payment. 2. Short facts of the case are that the petitioner No. 1 is a Private Limited Company duly incorporated under the provisions of the Companies Act, 1956. The petitioner No. 1 is involved in the business of transportation of coal. Petitioner No. 2 is the Director of petitioner No. 1. The respondents invited tender from reputed and experienced transport contractors for the work of transportation of coal from Satpura II Mines of M/s WCL to Satpura Thermal Power Station, Madhya Pradesh Electricity Board, Sarni, by road through the contractors own tippers/dumpers and uploading it at Courtyard of the power station for a period of one year. In pursuance to the Notice Inviting Tender (hereinafter referred to as ‘NIT’ for short), the offer of the petitioners was found to be acceptable and, accordingly, award of contract for transportation of coal was issued in favour of the petitioners on 12-10-1998. The period of contract was for 12 months i.e. upto 24-10-1999. However, the same was extended by further three months i.e. upto 24-1-2000. The petitioners have successfully completed the work. However, the running bills of the petitioners were not paid. The security deposit of Rs. 7,61,327/- and Rs. 5,65,618/- was also not refunded. Therefore, various representations were made. The petitioners were served with the order dated 29-4-2005 and 19-5-2005, whereby, a penalty for less coal transportation was levied against the petitioners stating therein that petitioners were to transport 8,33,059.865 MT of coal against which 7,71,747.240 MT of coal was transported. Therefore, a penalty of Rs. 30,238.49 was imposed. It has also been alleged that at the risk and cost of petitioners, the deficit coal was lifted through other agencies @ 26.95 and @ 32.70 per MT and, accordingly, a sum of Rs. 7,17, 864.83 was claimed from the petitioners on account of loss suffered by the respondents. 3. Therefore, a penalty of Rs. 30,238.49 was imposed. It has also been alleged that at the risk and cost of petitioners, the deficit coal was lifted through other agencies @ 26.95 and @ 32.70 per MT and, accordingly, a sum of Rs. 7,17, 864.83 was claimed from the petitioners on account of loss suffered by the respondents. 3. Learned Senior Counsel Shri Brian Da Silva, assisted by Shri S. S. Oberoi, Advocate appearing for the petitioners submits that the order dated 19-5-2005 (Annexure-P-6) is illegal and improper. The same has been issued beyond the terms of the contract. According to him, the terms of the contract are very specific which provides under Clause (5) of the award of contract dated 12-10-1998 that the total quantity of coal to be transported during the contract period of one year shall be 6.50 (+ -20%) Lakhs MT. He submits that even while extending the period of contract for three months more, the factor of + - 20% has been taken into consideration and it has been specifically mentioned therein that the extra quantity to be transported was 1.30 Lakh MT, which is 20% plus of the original quantity 6.5 Lakh MT on the same rates. It is, thus, his submission that the total quantity which was to be transported was 7.80 MT upto 24-1-2000. He, therefore, criticized the impugned order on the ground that the respondents have erred in holding that the petitioners were required to transport 8,33,059.865 MT of coal. Learned Senior Counsel appearing on behalf of the petitioners placed reliance on the decisions of Hon’ble Apex Court in the case of Century Spinning and Manufacturing Company Ltd. and another vs. Ulhasnagar Municipal Council and another, (1970) 1 SCC 582 , Surya Constructions vs. State of U. P. and others, (2019) 16 SCC 794 and Food Corporation of India and another vs. Seil Ltd. and others, (2008) 3 SCC 440. 4. Learned Senior Counsel appearing for the petitioners also submitted a chart demonstrating the details of the quantity of coal and the payment due to him as under : – S.No . Total Quantity of coal to be transported in view of the extension order dated 23.10.1999 Total Quantity of Coal transported Difference Rate (in Rs. Per MT) Transportation Cost for Deficit Coal (in Rs.) Penalty @ of 2% of the Quantity 1. Total Quantity of coal to be transported in view of the extension order dated 23.10.1999 Total Quantity of Coal transported Difference Rate (in Rs. Per MT) Transportation Cost for Deficit Coal (in Rs.) Penalty @ of 2% of the Quantity 1. 7,80,000 MT 7,71,747 MT 8235 MT 19.17 8235 x 19.17 = 1,58,210/ 2% of 1,58,210= 3164 Total amount of penalty = Rs.3164 B. Calculation for Additional Cost that may have been incurred by respondent for transporting deficit coal of 8235 MT. S.No . Total Quantity of coal to be transported in view of the extension order dated 23.10.1999 Total Quantity of Coal transported Difference Difference in Rate of other contractor (in Rs. Per MT) Additional Cost incurred by respondent for transporting coal through other contractor (in Rs.) 1. 7,80,000 MT 7,71,747 MT 8235 MT 7.78 8235 x 7.78 = 64,068/- Total amount of additional cost = Rs. 64,068 5. Learned Senior Counsel Shri M. L. Jaiswal, assisted by Shri K. K. Gautam, Advocate appearing on behalf of respondents submits that the instant petition is not maintainable as the same relates to contractual disputes. He further submits that the terms of the contract have been understood by the respondents to mean that whatever quantity of coal made available to the petitioner would be transported from the WCL, therefore, the petitioners were under an obligation to lift the same. The total quantity of the coal is not limited to 7.80 lakh MT as according to him, the total quantity of coal which was made available to the petitioners for transportation was 8,33,059.865 MT. The penalty has been imposed as per the terms of the contract. The total amount which was due against the petitioners was 7.48 Lakhs. The amount recovered was Rs. 5.82 Lakhs. As such 1.65 Lakhs was still outstanding. The said amount was recovered subsequently out of the security deposit and balance amount of security was returned to the petitioner which was duly accepted by the petitioner without any objection. The total amount which was due against the petitioners was 7.48 Lakhs. The amount recovered was Rs. 5.82 Lakhs. As such 1.65 Lakhs was still outstanding. The said amount was recovered subsequently out of the security deposit and balance amount of security was returned to the petitioner which was duly accepted by the petitioner without any objection. Learned Senior Counsel for respondents has taken us to various clauses of the work order and in particular Clause 4(xii) and he has submitted that the work of transportation of coal from Satpura II Mines shall be carried out by the contractor round the clock matching with production of mines i.e. full quantity of coal that would be made available by WCL through CHUPE Hopper of Mines of M.P.E.B. Learned Senior Counsel for respondents has placed reliance on the decision of the Hon’ble Supreme Court in the matter of Pimpri Chinchwad Municipal Corporation vs. M/s Gayatri Construction Co., (2008) 8 SCC 172 , Municipal Corporation of Greater Bombay vs. Bombay Tyres International Ltd. and others, AIR 1998 SC 1629 , K. K. Saksena vs. International Commission on Irrigation and Drainage and others, (2015) 4 SCC 670 and submits that the instant petition deserves to be dismissed. 6. We have heard learned Senior Counsel appearing for the parties and perused the record. 7. It is now no longer res integra that contractual disputes involving public law element are amenable to writ jurisdiction. The Hon’ble Supreme Court in the matter of ABL International Limited vs. Export Credit Guarantee Corporation of India Limited, (2004) 3 SCC 553 has held that once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. A clear error or omission on the part of the State in considering a justifiable claim of the contractor would certainly be subject matter of the judicial review. It is also well settled that where the State behaves arbitrarily, even in the realm of the contract, the High Court could interfere under Article 226 of the Constitution of India. 8. A clear error or omission on the part of the State in considering a justifiable claim of the contractor would certainly be subject matter of the judicial review. It is also well settled that where the State behaves arbitrarily, even in the realm of the contract, the High Court could interfere under Article 226 of the Constitution of India. 8. For proper appreciation of the submissions made by the parties, Clause 4(xii) and 5(i) and (ii) of the work order are reproduced as below : – “4(xii) The work of transportation of coal from Satpura-II mine shall be carried out by contractor round the clock matching with production of mine i.e. full quantity of coal that would be made available by WCL through chute hopper of mine to MPEB on each day during the period of contract shall be transported by this contractor and no quantity of coal be dumped on ground of pithead mouth of mine due to non availability of contractor’s dumper for placement below the mine’s hopper. It will therefore be responsibility of the contractor to ensure that there are sufficient number of dumpers available at the site of mine for receiving the coal therein through mine’s hopper.” If due to non-availability of contractor’s dumpers or due to any other reason. Whatsoever, mine authorities are resorted to dumpcoal on ground, it will be responsibility of contractor to lift such dumped coal in to his tippers manually/mechanically and transport the same to MPEB coal yard within fifteen days without any extra charges. In case contractor fails to lift and transport such dumped coal within fifteen days, Board may at its option either will arrange lifting and transportation of such coal departmentally or will get done by engaging another agency at the cost and risk of the contractor. The cost so incurred will be recovered from contractor’s bills. The report of WCL made to MPEB regarding ground dumping of coal will be treated as final and any dispute raised by contractor in this regard will not be entertained.” “5(i). Total quantity of coal to be transported during the contract period of ONE YEAR SHALL BE 6.50 (+ - 20%) LAKHS M.T. (ii) The above mentioned quantity of 6.50 (+-20%) LAKH M.T. shall be transported at an average rated daily quantity for a period of ONE YEAR from the date of commencement of work.” 9. Total quantity of coal to be transported during the contract period of ONE YEAR SHALL BE 6.50 (+ - 20%) LAKHS M.T. (ii) The above mentioned quantity of 6.50 (+-20%) LAKH M.T. shall be transported at an average rated daily quantity for a period of ONE YEAR from the date of commencement of work.” 9. Clause-6 pertains to penalty and Clause 9 pertains to period of contract, the same are also being reproduced as below :- “6. PENALTY : (i) The transportation of daily quantity of coal, shall be deemed to be the essence of the contract. In the event of less transportation of coal by the contractor from that of the daily rated quantity mentioned in Clause 5(ii) above, the Board may at its option recover a penalty @ 2% value of the contract quantity not lifted and transported in a month or part thereof. (ii) No penalty would be levied in case the guaranteed quantity is reduced due to its non-availability at the mine’s end or coal companies do not give permission for lifting of the available quantity. However, documentary proof from coal company authorities will have to be produced for such reductions or non-availability of coal by the contractor which will be subjected to verification by MPEB authorities. (iii) Further, in case of continuous and considerable decrease in the rated quantity in the next month of the contract period or at subsequent dates thereafter, Board may also, at its motion, terminate the contract at the cost and risk of the contractor as has been provided below in clause No. 11 of this order.” “9. PERIOD OF CONTRACT : The period of contract shall be for one year from the date of commencement of work or till the completion of the quantity specified in the contract, whichever is earlier. The period of contract may be extended upto three months at the discretion of the Board and it shall be binding on the contractor to work at the same rate, terms and conditions of this contract.” 10. After expiry of the period of 12 months, vide order dated 23-10-1999, period of three months was extended. The order of extension reads as under : – “MADHYA PRADESH ELECTRICITY BOARD No. 07-03/8-OT/TS-82/98/6917 Jabalpur, dt. 23-10-1999 M/s Ubik Builders and Engineers Pvt. Ltd., MO2 Silver Palace, Dhantoli, Nagpur-440 012 (M.S.). After expiry of the period of 12 months, vide order dated 23-10-1999, period of three months was extended. The order of extension reads as under : – “MADHYA PRADESH ELECTRICITY BOARD No. 07-03/8-OT/TS-82/98/6917 Jabalpur, dt. 23-10-1999 M/s Ubik Builders and Engineers Pvt. Ltd., MO2 Silver Palace, Dhantoli, Nagpur-440 012 (M.S.). Sub : Extension of contract for transportation of coal by road from Satpura-II Mines to STPS, Sarni. Ref : This office work order No. 07-03/S-CT/TS-82/98/6219 dt. 12-10-1998. Dear Sirs, In accordance with the clause 26 of the work order, Board is pleased to extend the period of contract by further three months i.e., upto 24-1-2000 and quantity by 1.30 Lakh MT (i.e. 20% of 6.5 Lakh MT) on the same rate, terms and conditions of the above referred existing contract. The revised value of the contract would not be Rs. 1,49,52,600/- (Rupees One Crore forty Nine Lakhs Fifty Two Thousand Six Hundred) only. The contract shall expire after completion of revised total quantity of 7.80 Lakh MT or upto 24-1-2000, whichever is earlier. Thanking you, Yours faithfully EXECUTIVE DIRECTOR (OandM:GEN.) MPEB: Jabalpur MS 23-10-1999 11. The impugned communication (Annexure-P-6) dated 19-5-2005 is extracted as under : – “OFFICE OF THE SUPERINTENDING ENGINEER (SERVICES-II) SATPURA THERMAL POWER STATION MPSEB, SARNI. NO. 905/1800/CHP-III/SAT-II/UBE/2782 3291 SARNI, DTD.29/4/05 To, M/s Ubik Builders and Engg. Pvt. Ltd., B-1 and 2 Yashodeep Apartment, Ranate Colony Wardha Road, Nagpur 440 022. Sub : Month wise penalty for less coal transportation and recovery of rate difference for transportation of dumping coal by other transporter. Ref : Work Order No. 07/03/S-CT/TS-82/98/6119 Dtd. 12-10-1998. Dear Sir, For less coal transportation against referred order penalty is hereby levied as under in view of provisions stipulated therein – A. S.No Month Coal Qty to be transported (in MT) Coal Qty already transported (in MT Less Transportation (in MT) T/C Rate PMT Penalty 1. 24.10.9 8 to 31.10.9 8 13236.220 10821.220 2415.000 19.17 925.91 2. Nov.-98 57701.215 57593.755 107.460 19.17 41.20 3. Dec.-98 66577.275 64308.335 2268.940 19.17 869.91 4. Jan.-99 70468.865 67757.585 2711.280 19.17 1039.50 5. Feb.-99 59924.050 54853.050 5071.000 19.17 1944.22 6. Mar.-99 78537.890 46660.890 31877.000 19.17 12221.64 7. Apr.-99 15517.750 35506.750 10041.000 19.17 3849.72 8. May.-99 36245.060 36039.000 206.060 19.17 79.00 9. Jun.-99 50436.720 50236.140 200.580 19.17 76.90 10. Jul.-99 58288.620 51337.430 6951.190 19.17 2665.09 11 Aug.-99 62345.790 58625.200 3720.590 19.17 1426.47 12. Sep.-99 59776.955 46477.765 13299.190 19.17 5098.91 13. Feb.-99 59924.050 54853.050 5071.000 19.17 1944.22 6. Mar.-99 78537.890 46660.890 31877.000 19.17 12221.64 7. Apr.-99 15517.750 35506.750 10041.000 19.17 3849.72 8. May.-99 36245.060 36039.000 206.060 19.17 79.00 9. Jun.-99 50436.720 50236.140 200.580 19.17 76.90 10. Jul.-99 58288.620 51337.430 6951.190 19.17 2665.09 11 Aug.-99 62345.790 58625.200 3720.590 19.17 1426.47 12. Sep.-99 59776.955 46477.765 13299.190 19.17 5098.91 13. Oct.-99 61484.635 65171.870 0.000 19.17 0.00 14. Nov.-99 54014.470 67686.130 0.000 19.17 0.00 15. Dec.-99 38444.350 58632.120 0.000 19.17 0.00 Total 833059.865 1771747.240 30238.49 B. Further the dumped quantity not transported by you have been got transported by other transporter as detailed below : – S.No . Firm Order No. & Date Rate awarded (PMT Your Rate (PMT) Rate diff. (PMT) 1. M/s Jay Ambey Transport Co 005/1600/202/148 3 Dtd.10.05.99 26.95 19.17 7.78 2. M/s PCR. Lines Nagpur 005/1600/219/303 9 Dt.02.09.99 32.70 19.17 13.61 Therefore difference of rate recoverable from you are hereby calculated as under : – S.No. Firm Order No. & Date Qty Transporte d (PMT) Rate diff. (PMT Amount (Rs.) 1. M/s Jay Ambey Transport Co 005/1600/202/148 3 Dtd.10.05.99 20000.000 7.78 155600.00 2. M/s PCR. Lines Nagpur 005/1600/219/303 9 Dt.02.09.99 32.70 13.61 562264.83 Total 717864,83 (C) Total Amount Recoverable (A+B) Say Rs.748103/- 748103.31 (D) Amount already recovered from various bills on adhoc basis for above Rs.582270/- (E) Balance recovery (C-D) = Rs. 165833.00 The aboe amount will be recovered from your balance payment which may be please noted. Thanking you, Yours faithfully SUPERINTENDING ENGINEER SERVICES – II MPSEB, SARNI. 12. Under the aforesaid facts and circumstances of the case, we are required to adjudicate as to whether the petitioners were under an obligation to transport coal quantity to the extent of 833059.865 MT or the same is limited to 7.80 Lakhs MT. 13. Sub-clause (xii) of Clause 4 of the work order relates to ‘Scope of Work’ and Clause-5 relates to ‘Quantity of Transit Loss’. Since the ‘Quantity’ is specifically prescribed under a specific Clause, therefore, for the purposes of quantity the Clause relating to Scope of the work becomes secondary. Clause-5, specifically states that the total quantity of coal to be transported during the contract period of one year shall be 6.5 (+-) Lakh MT. Since the ‘Quantity’ is specifically prescribed under a specific Clause, therefore, for the purposes of quantity the Clause relating to Scope of the work becomes secondary. Clause-5, specifically states that the total quantity of coal to be transported during the contract period of one year shall be 6.5 (+-) Lakh MT. Sub-clause (ii) of Clause-5, says that the above mentioned quantity of 6.50 (+- 20%) Lakh MT shall be transported at the average rated daily quantity for a period of one year from the date of commencement of the work. The quantity of the coal is very much specified. The same is also made specific as to what extent it can be reduced or extended which is upto +- 20%. The order of extension dated 23-10-1999 specifically provides that three months’ extension is granted upto 24-1-2020 and quantity by 1.30 Lakhs MT has been increased which is 20% of 6.5 MT on the same rate. Not only in the main Clause 5, but even in the order of extension also, the respondents have specified the quantity in unambiguous term that the quantity is extended by “1.3 MT i.e. 20% of 6.5 MT. (1.30 MT)” has been specified by the respondents themselves to mean “i.e. 20% of 6.5 MT” which can be seen from the order dated 23-10-1999. 14. Under the aforesaid circumstances, the petitioner cannot be held liable for any extra quantity of the coal which is made available by WCL to the respondents. When the terms of the contract are very specific, the same have to be respected and complied with. When in no uncertain terms, the parties have understood the terms of the contract in a particular way then at a later point of time, they cannot dispute the same. If the argument of respondents is accepted that the petitioners were under an obligation to transport the quantity of coal to the extent the same is made available to them by WCL, the entire contract would suffer from uncertainty. Such is not the intention of the parties at any point of time. The petitioners have to deploy dumper and other means for transportation and, therefore, the total quantity with +- 20% has been agreed upon. 15. So far as the judgments relied upon by the learned counsel for respondents are concerned, we do not dispute the legal position expounded therein. The petitioners have to deploy dumper and other means for transportation and, therefore, the total quantity with +- 20% has been agreed upon. 15. So far as the judgments relied upon by the learned counsel for respondents are concerned, we do not dispute the legal position expounded therein. In the matter of Pimpri Chinchwad Municipal Corporation the Hon’ble Supreme Court was considering a dispute related to work of improvement and widening of a road. The original contractor did not complete the work in time. Hence, fresh NIT was issued. New Contractor was appointed for completion of the work which was left incomplete by the original contractor with other fresh work. The original contractor filed writ petition before the Hon’ble High Court. The writ petition was entertained. The Hon’ble High Court found that subsequent agency was selected on much higher rates. The Hon’ble Supreme Court while considering the aforesaid facts has held that when in house remedy was available under Clause 58 of the earlier contract, the High Court should not have entertained the writ petition. 16. The present writ petition is pending after admission for last 17 years for final disposal. Learned Senior Counsel appearing for the respondents has not pointed out any similar mechanism as applicable in the present case also. However, in any case, after 17 years, to relegate the petitioners to go for adjudication by any alternate mode would not be proper under the facts of the present case, when no disputed question of facts are involved. Similarly, another decision cited by the learned Senior Counsel appearing for the respondents in the matter of K. K. Saksena is concerned, in that case the writ petition was filed against the International Commission on Irrigation and Drainage which was not found to be “State”, under Article 226 of the Constitution and hence, the Hon’ble Supreme Court has held that ‘private law remedies’ are not enforceable through extraordinary writ jurisdiction. So far as the decision relied upon by the learned Senior Counsel appearing for the respondents in the matter of Municipal Corporation of Greater Bombay is concerned, the same relates to limitation for filing of suits for recovery. In the instant case, we are not concerned with such an issue. 17. In the instant case, we find that the terms of the contract are very specific. No reasonable person would stretch the scope of contract beyond its terms. In the instant case, we are not concerned with such an issue. 17. In the instant case, we find that the terms of the contract are very specific. No reasonable person would stretch the scope of contract beyond its terms. The decision of the respondents requiring the petitioners to transport 833059.865 MT is not based on any material and the same is contrary to the terms of the contract. The same is found to be without application of mind. 18. In view of the aforesaid, we find that the total quantity of coal transported by the petitioner during the term of the contract was 7,71,747.240 MT which is deficit to 8235 MT from the agreed quantity of coal which was 7.80 Lakh MT. The cost of the deficit coal comes to Rs. 1,58,210/- as per the chart produced by the petitioners. Penalty @ 2% of the said quantity not lifted, comes to Rs. 3,164/-. To the extent of deficit quantity of 8235 MT which has been directed to be lifted through alternate agency, the respondents are entitled to recover the said money as the same is not disputed by the petitioners and the same is also in terms of the contract. We, therefore, direct the respondents to work out the entire calculation on the basis of following directions : – (i) The petitioners were under an obligation to transport 7.80 Lakh MT coal during the period of contract including the extended period; (ii) The respondents are entitled to recover the difference amount for 8235 MT deficit coal with penalty @ 2%; (iii) The respondents are also entitled to deduct the amount to the extent of incurring expenses in lifting 8235 MT from alternate agency @ Rs. 7.78 per MT. 19. In view of the aforesaid calculation, the remaining amount withheld by the respondents be refunded to the petitioner within a period of eight weeks from the date of receipt of the certified copy of the order along with the interest @ 6% p.a. from the date of passing of the impugned order Annexure-P-6. If the amount payable to the petitioner comes higher to the amount withheld by the respondents, the payable amount be paid to the petitioner within the aforesaid period. 20. The petition stands allowed to the extent indicated above.