Nafr High Court
Case Details
1 2025:CGHC:40764-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 4026 of 2025 SKS Ispat And Power Limited A Company Registered Under The Provisions Of Companies Act 1956, Having Its Registered Office At 501- B, Elegant Business Park Andheri Kurla Road, J.B. Nagar Andheri (E) Mumbai Maharashtra - 400050 Having Plant Office At Village Siltara, (Near Industrial Growth Centre, Phase-I I) 18th Mile Stone Bilaspur- Raipur Road P.S. Dharsiwa, Raipur Chhattisgarh 493111, Through Its Authorised Signatory Shri Gopal Garg versus ... Petitioner 1 - South Eastern Coalfields Limited Through Its Cmd, Sipat Road Chhattisgarh Bilaspur Bilaspur District- 2 - The General Manager (M And S) South Eastern Coalfields Limited, (C.G) Sipat Bilaspur Bilaspur District- Road 3 - The Area Sales Manager Chirmiri Colliery, Chirmiri Area, South Eastern Coalfields Limited Sipat Road Bilaspur District- Bilaspur Chhattisgarh 4 - Chief Manager (M And S) Sout Eastern Coalfilelds Limited Sipat Chhattisgarh Road Bilaspur Bilaspur District- 5 - Coal India Limited Through Its Cmd, Coal Bhavan Premise No.04 Mar Plot, No. Af-Iii, Auction Area 1a, New Town Rajarhat Kolkata- 700156, West Bengal, India ... Respondent(s) For Petitioner : Mr. Vivek Chopda, Advocate For Respondent/s : Mr. Pankaj Singh, Advocate 2 Hon’ble Shri Ramesh Sinha, Chief Justice Hon’ble Shri Bibhu Datta Guru, Judge Judgment on Board Per Ramesh Sinha, Chief Justice 13/08/2025 1. The present writ petition has been filled for following reliefs:- “10.1 That the Hon'ble Court may kindly be pleased to pass any appropriate writ, order or direction to quash the impugned order dated 08.11.2024 (ANNEXURE-P/1) passed by the respondent no.4 being illegal, arbitrary and non-est in the eyes of law. 10.2 That, this Hon'ble Court may kindly be pleased to pass any appropriate writ, order or direction to quash the compensation bills dated 22.08.2023 (ANNEXURE-P/2 COLLY) for FY 2017-18 & FY 2019-20, amounting to the tune of Rs. 50,29,138/- and Rs. 2,04,39,623/-, respectively as well as compensation bill dated 28.09.2023 for FY 2020-21 amounting to the tune of Rs. 25,54,953/-, in the interest of justice; and 10.3 That, this Hon'ble Court may kindly be pleased to pass any appropriate writ, order or direction to direct the Respondent No. 1 & 2 to release the bank guarantee submitted by the Petitioner, in the interest of justice; and 10.4 Any other relief or relief(s) which this Hon'ble Court may deem fit and proper in view of the facts and circumstances of the case, may also kindly be granted.”
Legal Reasoning
2. Learned counsel for the petitioner would submit that a fuel 3 supply agreement dated 04.04.2017 was executed between the parties for supply of 31,600 tons of Grade-7 coal annually from the Chirmiri Siding of the respondents. After the execution of the contract right from the very beginning, there was a delay in supply of coal to the petitioner and therefore, various complaints have been made by the petitioner time and again with the respondent, however, there was no response from the said authorities. Apart from the delays, the other Germaine issues faced by the petitioner was with respect to the quality of the coal in as much as the contracted quantity of the coal was G-7, however, the supplies have been made to the petitioner of much inferior quality that is G-9 to G-11 grades. Learned counsel would submit that regarding the quality issues, the petitioner has also raised his grievances with the respondent authorities ,however, the same was also of no avail. The aforesaid issue of quality of coal has led to cancellation of 11 rakes during the period from 2017-2019 and due to this very issue of low quality of coal being supplied, the petitioner had to subsequently determine the FSA and surrender the same on 01.02.2020 which was later on vide letter dated 06.05.2020 acceded by the respondent Nо.2. The Respondent has downgraded the 4 quality of Coal without following the terms of the FSA, and without giving an opportunity to the petitioner as per clause 2.3 and even after making repeated requests the said clause of the FSA has been totally observed in breach by the respondents. (B) Learned counsel would further submit that post termination of the FSA as per the clause 4.2 of the FSA, the petitioner has requested for release of the bank guarantees, securities deposited and financial coverage, however, the same also remained unanswered. Thereafter, the respondent authorities after lapse of more than 3 to 5 years, have issued the impugned compensation bills for the financial year 2017- 2018, 2019-2020 and 2020-2021 in the year 2023 i.e. after more than 2 years of termination of the FSA. The said compensation bills were challenged before this Hon'ble Court vide WPC No. 1508/2024 and the said Writ Petition came up for hearing before this Hon'ble Court on 13.03.2024 and on the said date the counsel for the respondents have submitted that the petitioner may invoke the dispute resolution clause 16 of the FSA and the respondent would take appropriate decision upon the same expeditiously and thus, the said Writ
Decision
Petition was accordingly disposed off by this Hon'ble Court as per the direction given under the order dated 13.03.2024. 5 Thereafter the petitioner while invoking clause 16 has preferred a representation dated 12.06.2024 raising in detail their concerns for withdrawal of the impugned compensation bills which was duly received by the Respondent on 15.06.2024. After lapse of more than 7 months the respondents have asked the petitioner to appear before them on 14.10.2024 while nominating the concerned person for amicable settlement. On 08.11.2024, the impugned order has been passed by the respondents on the grounds that there is no provision under the agreement for waiver of compensation for short lifting on quality parameters and that the FSA provisions for joint third-party sampling and the final settlements for the invoices has been made based upon the result of the joint or third-party analysis for the actual grade of coal supplied. Under FSA-A/192, a quota of seven rakes for FY 2017 was allocated to the Petitioner by Respondents. During the FY 2017, only one Rake was loaded by the Respondent out of the seven allotted and in the FY 2018 only one rake out of the 8 allotted rakes was loaded by the Respondent that too via Road Mode as against the contracted Rail mode. Thereafter in FY 2019 total two rakes were loaded, which were allotted long back in FY 2017 itself. The loaded rakes were of far inferior quality than the 6 contracted grade, the rakes contained only crushed Shale/stone and only at the top some fresh raised coal was loaded so that Third Party Sampling Agency (QCI) may take manipulated/biased sample for 3rd party analysis. (C) Learned counsel further submitted that right from the inception, the respondents were suffering from operational issues prevailing at the Chirmiri open cast mine including the reduced availability of coal which was duly acknowledged by them vide notice dated 03.04.2019. In October 2019, the respondent unilaterally downgraded the grade of coal allocated to the petitioner to a lower grade, i.e., G9 (GCV 4600-4900 Kcal/kg) as against G7 (GCV 5200-5500) specified in the agreement, without providing any justification or obtaining prior consent from the petitioner, which was mandated in the FSA as per clause 2.3. This action further aggravated the petitioner's financial and operational difficulties. Since the petitioner never gave its consent for downgrading the contracted quality, any penalty for not lifting of coal on and from 19.10.2019 is not applicable on this ground alone. The petitioner repeatedly raised concerns regarding the quality issues with the respondent authorities by submitting applications and informing the inferior quality of Coal results at their end. The results of these analyses 7 consistently confirmed that the GCV value of the coal supplied was significantly below the contractual specifications. As a result of the inferior quality of coal supplied, the petitioner faced numerous operational challenges and financial setbacks. Due to the non-availability of coal, there was a significant accumulation of rakes over extended periods. For instance, the rake allotted in July 2017 was loaded only in January 2019 i.e. after lapse of around one and a half year, and rake allotted on December 2017 was loaded only in July 2019 after lapse of around one and a half year. This delay in providing rakes is in clear violation of Clause 1.2(n) of the Fuel Supply Agreement (FSA), which explicitly states that "time is the essence in the performance of the parties." (D) Learned counsel would further submit that the factual scenario as stated above has already been deliberated upon by the petitioner in the context of the present case. However, the same is reiterated herein for the sake of advancing arguments and substantiating the grounds raised against the inaction of the respondent authorities with respect to the settlement of the dispute and the return of the bank guarantee and challenging the illegal initiation and imposition of compensation bills raised against the petitioner. Even though 8 the aforesaid factual scenario continued for a duration of almost two years yet the respondents out of bolt from the blue have raised the impugned Compensation bills vide Compensation Bill(s) No. C081921718001744, dated 22/08/2023 for an amount of the year 2017-18, C081921920001745, dated 22/08/23 for an amount of Rs. 2019-20, Rs. 50,29,138.00.00 2,04,39,623/-, for and the for year C081922021002171, dated 28/09/2023 for an amount of Rs. 25,54,953/-for the year 2020-21. 3. On the other hand, learned counsel appearing for the respondents opposes the submissions made by learned counsel for the petitioner and submits that the petitioner has an alternative efficacious remedy under the Arbitration and Conciliation Act. As such, the present writ petition as framed and filed is not maintainable. 4. We have learned counsel for the parties, perused the impugned order and other documents appended with writ petition. 5. It is settled law that the High Court should not exercise its jurisdiction under Article 226 of the Constitution of India when it raises disputed question of facts. 6. The Hon'ble Supreme Court in the case of Chairman, Grid Corpornation of Orissa Ltd. (GRIDCO) and others v. 9 Sukamani Das (Smt.) and another, (1999) 7 SCC 298 was dealing with the question of whether the High Court had made an error in entertaining a writ petition filed seeking compensation for the death of a person due to electrocution, which had allegedly been caused due to the negligence of the authorities. The Supreme Court in the said case observed as under: "6. In our opinion, the High Court committed an error in entertaining the writ petitions even though they were not fit cases for exercising power under Article 226 of the Constitution. The High Court went wrong in proceeding on the basis that as the deaths had taken place because of electrocution as a result of the deceased coming into contact with snapped live wires of the electric transmission lines of the appellants, that "admittedly/prima facie amounted to negligence on the part of the appellants". The High Court failed to appreciate that all these cases were actions in tort and negligence was required to be established firstly by the claimants. The mere fact that the wire of the electric transmission line belonging to Appellant 1 had snapped and the deceased had come in contact with it and had died was not by itself sufficient for awarding compensation. It also required to be examined whether the wire had snapped as a result of 10 any negligence of the appellants and under which circumstances the deceased had come in contact with the wire. In view of the specific defences raised by the appellants in each of these cases they deserved an opportunity to prove that proper care and precautions were taken in maintaining the transmission lines and yet the wires had snapped because of circumstances beyond their control or unauthorised intervention of third parties or that the deceased had not died in the manner stated by the petitioners. These questions could not have been decided properly on the basis of affidavits only. It is the settled legal position that where disputed questions of facts are involved a petition under Article 226 of the Constitution is not a proper remedy. The High Court has not and could not have held that the disputes in these cases were raised for the sake of raising them and that there was no substance therein. The High Court should have directed the writ petitioners to approach the civil court as it was done in OJC No. 5229 of 1995." 7. The aforesaid judgment has been relied/ reiterated by the (emphasis supplied) Supreme Court in S.P.S. Rathore v. State of Haryana and others, (2005) 10 SCC 1 wherein it observed as follows: "16. In Chairman, Grid Corpn. of Orissa Ltd. (Gridco) v. Sukamani Das [(1999) 7 SCC 298] 11 the question which arose for consideration was, can the High Court under Article 226 of the Constitution award compensation for death caused due to electrocution on account of negligence, when the liability was emphatically denied on the ground that the death had not occurred as a result of negligence, but because of an act of God or of acts of some other persons. The Court held that it is the settled legal position that where disputed questions of facts are involved, a petition under Article 226 of the Constitution is not a proper remedy. Therefore, questions as to whether death occurred due to negligence or due to act of God or of some third person could not be decided properly on the basis of affidavits only, but should be decided by the civil court after appreciating the evidence adduced by the parties. In T.N. Electricity Board v. Sumathi [(2000) 4 SCC 543] it was held that when a disputed question of fact arises and there is clear denial of any tortious liability, remedy under Article 226 of the Constitution may not be proper. The Court carved out exception to this general rule by observing that, it should not be understood that in every case of tortious liability, recourse must be had to a suit. When there is negligence on the face of it and infringement of Article 21 is there, it cannot be said that there will be any bar to proceed under Article 226 of the Constitution." 12 (emphasis supplied) 8. Similarly, the Hon'ble Supreme Court in Shubhas Jain v. Rajeshwari Shivam, 2021 SCC OnLine SC 562 has held as under: "26. It is well settled that the High Court exercising its extraordinary writ jurisdiction under Article 226 of the Constitution of India, does not adjudicate hotly disputed questions of facts. It is not for the High Court to make a comparative assessment of conflicting technical reports and decide which one is acceptable." 9. Subsequently, in Union of India Vs. Puna Hinda, (2021) 10 SCC 690, the Hon'ble Supreme Court has observed: "24. Therefore, the dispute could not be raised by way of a writ petition on the disputed questions of fact. Though, the jurisdiction of the High Court is wide but in respect of pure contractual matters in the field of private law, having no statutory flavour, are better adjudicated upon by the forum agreed to by the parties. The dispute as to whether the amount is payable or not and/or how much amount is payable are disputed questions of facts. There is no admission on the part of the appellants to infer that the amount stands crystallised. Therefore, in the absence of any acceptance of joint survey report by the competent authority, no right would accrue to the writ petitioner only because measurements cannot be undertaken 13 after passage of time. Maybe, the resurvey cannot take place but the measurement books of the work executed from time to time would form a reasonable basis for assessing the amount due and payable to the writ petitioner, but such process could be undertaken only by the agreed forum i.e. arbitration and not by the writ court as it does not have the expertise in respect of measurements or construction of roads." 10. Recently, the Hon'ble Supreme Court in the case of M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd., (2023) 2 SCC 703, while dealing with the issue of exercise of writ jurisdiction by a Court in matters arising out of a contract, has stated: "82.7. The existence of an alternate remedy, is, undoubtedly, a matter to be borne in mind in declining relief in a writ petition in a contractual matter. Again, the question as to whether the writ petitioner must be told off the gates, would depend upon the nature of the claim and relief sought by the petitioner, the questions, which would have to be decided, and, most importantly, whether there are disputed questions of fact, resolution of which is necessary, as an indispensable prelude to the grant of the relief sought. Undoubtedly, while there is no prohibition, in the writ court even deciding disputed questions of fact, particularly 14 when the dispute surrounds demystifying of documents only, the Court may relegate the party to the remedy by way of a civil suit." (emphasis supplied) 11. A reading of the aforesaid judgments makes it clear that it is well settled proposition of law that when there are disputed question of facts involved in a case, the High Court should not exercise its jurisdiction under Article 226 of the Constitution of India. It has been held that the remedy under Article 226 of the Constitution of India may not be proper. 12. From perusal of the pleadings, it appears that the petitioner has prayed for issuance of direction to quash the compensation bills dated 22.08.2023 (ANNEXURE-P/2 COLLY) for FY 2017-18 & FY 2019-20, amounting to the tune of Rs. 50,29,138/- and Rs. 2,04,39,623/-, respectively as well as compensation bill dated 28.09.2023 for FY 2020- 21 amounting to the tune of Rs. 25,54,953/- and also seeking direction to the respondent Nos.1 and 2 to release the bank guarantee submitted by the petitioner. 13. In the instant case, the relief of issuance of direction to quash the compensation bills and to release the bank guarantee submitted by the petitioner, the petitioner is contingent upon the resolution of the disputed question of 15 facts raised, and these questions cannot be adjudicated under Article 226 of the Constitution of India. In view of the aforesaid, it would not be appropriate for this Court to entertain the instant writ petition as there are disputed questions of fact involved. 14. Considering the submissions advanced by learned counsel for the parties, further considering the disputed questions of law involved in this writ petition, the relief sought by the petitioner and in view of law laid down by the Supreme Court in the above-stated judgments (supra), we do not find any good ground to entertain this writ petition. 15. Accordingly, the writ petition being devoid of merit is liable to be and is hereby dismissed. However, liberty is reserved in favour of the petitioner to take recourse to other alternate remedies available to him under the law. No cost(s). Sd/- Sd/- SD/- SD/- (Bibhu Datta Guru) Judge (Ramesh Sinha) Chief Justice Gowri/Amardeep