Dewas, ... Madhya Pradesh v. Steel Authority of India Limited, a public sector undertaking, through
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (C) No. 4085 of 2023 M/s U.R. Engineering Company, a proprietorship firm, through its proprietor Mr. Rajan Mishra, about 55 years, S/o M.L. Mishra having his office at 52- B, Industrial Area No.1, A.B. Road, PO & PS Dewas, District-Dewas, ... Madhya Pradesh Petitioner ... ... ... ... ... Versus Steel Authority of India Limited, a public sector undertaking, through 1. its Chairman having his office at Ispat Bhawan, Lodhi Road, PO & PS- Lodhi Road, New Delhi; The Director-in-Charge, Bokaro Steel Plant, a unit of Steel Authority 2. of India Limited, having his office at Bokaro Steel Plant, PO & PS Bokaro Steel City, District - Bokaro Steel City; Executive Director (Materials Management), Bokaro Steel Plant, a 3. unit of Steel Authority of India Limited, having his office at Bokaro Steel Plant, PO & PS Bokaro Steel City, District Bokaro Steel City; Chief General Manager (Purchase), Bokaro Steel Plant, a unit of Steel 4. Authority of India Limited, having his office at Ispat Bhawan, PO & PS - Bokaro Steel City, District - Bokaro Steel City; DGM (Finance & Accounts), Bhilai Steel Plant, a unit of Steel 5. Authority of India Limited, having his office at Expansion Building, Bhilai Steel Plant, PO Bhilai, PS Bhilai, District Bhilai … … ... Respondents --------- CORAM: HON’BLE THE ACTING CHIEF JUSTICE
Legal Reasoning
HON’BLE MR. JUSTICE NAVNEET KUMAR For the Petitioner: --------- Mr. Rahul Lamba, Advocate Mr. Aditya Mohan Khandelwal, Advocate For the Respondents: Mr. Shresth Gautam, Advocate Order No. 08 /Dated: 26th April 2024 Mr. Rajarshi Singh, Advocate --------- I.A. No. 4102 of 2024 This application for amendment has been filed to challenge the circular dated 25th August 2004 issued by the respondents in purported exercise of which recovery of Rs. 1,21,18,752/- is sought to be recovered from the petitioner-Firm. 2. This application is opposed by Mr. Shresth Gautam, the learned counsel assisted by Mr. Rajarshi Singh, the learned counsel appearing for the Steel Authority of India Limited. 1 3. In the amendment application, the writ petitioner has sought following amendments:- “After Paragraph 1 (v) the following may be allowed to be added: (vi) For issuance of an appropriate writ(s), order(s) or direction(s) in the nature of declaration that the Circular, dated 25.8.2004 issued by the Executive Director (MM) of the Respondent Company in relation to the standard risk and purchase procedure in SAIL, is not binding on the Petitioner and/or the said circular is contrary to established principle in law that no damages or risk and purchase amount is payable unless the same is adjudicated by any judicial or quasi-judicial authority." After paragraph 44 of the writ petition, the following paragraphs may be allowed to be added: “45. That the Respondent Nos. 1 to 5 for the first time in the present writ proceedings has relied on the Circular, dated 25.08.2004 of the Respondent Company, for the purpose of imposing and recovering the alleged amount of damages, titled as risk and purchase, from the Petitioner. 46. 47. 48. to of Circular Photocopy dated 25.08.2004 is annexed herewith and marked as Annexure-17 this petition. That it is submitted that the said Circular of the Respondent Company is to regulate the internal operations of the Respondent Company and the same is not binding on any outsider or the Petitioner who is neither an agent nor an employee of the Respondent Company. That it is submitted that the said circular is also in violation of the well established principle of law that no imposition or recovery of contractual damages can be made unless the said damages are adjudicated by any judicial or quasi-judicial authority. That without prejudice to the above, it is humbly submitted that the actions of the Respondents, in imposition and recovery of the alleged risk and purchase amount from the Petitioner, are contrary to the said circular." After paragraph (d) of the prayer portion, the following paragraphs may be allowed to be added: e. Issuance of an appropriate writ(s), order(s) or direction(s) in the nature of declaration that the Circular, dated 25.8.2004 issued by the Executive Director (MM) of the Respondent Company in relation to the standard risk and purchase procedure in SAIL, is not binding on the Petitioner and/or the said circular is contrary to established principle in law that no damages or risk and purchase amount is payable unless the same is adjudicated by any judicial or quasi-judicial authority." 4. The reasons for seeking amendments are pleaded in the present Interlocutory Application as under: “2. That the present writ petition was filed inter-alia challenging the actions of the Respondents, in not releasing the dues of the Petitioner with respect to the work done or supplies made by the Petitioner on the pretext of recovery of alleged contractual damages in the nature of risk purchase amounting to Rs. 1,21,18,752/-, since the said actions are unfair, arbitrary and illegal as the said alleged contractual damages amount has not become 2 payable by the Petitioner for the reason that the same has not been adjudicated or determined by any judicial or quasi-judicial authority. That the Respondents No. 1 to 5 in their Counter Affidavit filed in 3. the present case has for first time stated that the said Respondents have imposed and are recovering the alleged damages amount, titled as risk and purchase, from the Petitioner based on the Circular, dated 25.08.2004, issued by the Respondent Company. 4. That further the said circular for the first time has been provided by the Respondents, vide their said Counter Affidavit filed in the present case, to the Petitioner. 5. That the said circular issued by the Respondent Company may be binding on the Respondent Company internally but the said circular is not binding on the Petitioner who is neither an agent nor an employee of the Respondent Company. 6. That therefore such circular cannot be imposed on the Petitioner and hence it is in the interest of justice that this Hon'ble Court may be pleased to allow the Petitioner to challenge, by way of amendment of the present writ petition, the circular dated 25.08.2004 of the Respondent. 7. That in view of the aforesaid, the petitioner seeks amendment of the writ petition to challenge the said circular dated 25.08.2004 of the Respondent.” 5. An amendment in the writ petition shall be guided by the provisions under Order VI Rule 17 of the Code of Civil Procedure. It is by and large an admitted position in law that the application for amendment should be dealt liberally. Proviso to Order VI Rule 17 of the Code of Civil Procedure provides that amendment can be permitted at any stage of the trial. However, there is one fundamental rule of the pleadings that the parties cannot be permitted to change the foundation of the case by incorporating an amendment. 6. To challenge the aforementioned circular the writ petitioner is required to make pleadings in respect of the powers of Steel Authority of India Limited to enforce any circular like the internal circular dated 25th August 2004. Quite different from such grounds, to challenge the recovery of Rs. 1,21,18,752/-, the writ petitioner has pleaded that the amount of damages cannot be recovered unless quantified. In support of its stand, the petitioner-firm referred to “Gangotri Enterprises Limited Vs. Union of India and others” (2016) 11 SCC 720. 7. Mr. Rahul Lamba, the learned counsel for the petitioner submits that for the first time in its counter affidavit the Steel Authority of India Limited disclosed that the recovery of Rs. 1,21,18,752/- shall be made on the 3 basis of the internal circular dated 25th August 2004. However, on such a plea this amendment application cannot be permitted. 8. While so, I.A. No. 4102 of 2024 is dismissed with liberty to challenge the internal circular dated 25th August 2004 by filing a writ petition if so advised. W.P. (C) No. 4085 of 2023 9. In view of the order passed in I.A. No. 4102 of 2024, the learned counsel for the petitioner-firm is seeking permission to withdraw this writ petition with a liberty to it to file a consolidated writ petition challenging the internal circular dated 25th August 2004 with a consequential prayer not to recover Rs. 1,21,18,752/- from the petitioner-Firm. 10. 11. The prayer is granted. W.P.(C) No. 4085 of 2023 is dismissed as withdrawn with liberty as aforesaid. (Shree Chandrashekhar, A.C.J.) (Navneet Kumar, J.) VK 4