The High Court
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (C) No.5591 of 2023 ---- Mandeepa Enterprises (a proprietorship firm), having its office at Unit-G-1, Tulip Garden, Dashodron, Rajarhat, Main Road, Opposite State Band of India, Kolkata-700136, through its Proprietor, namely, Madan Satya Das …. …. Petitioner Versus 1. The State of Jharkhand, through its Secretary, Road Construction Department, Dhurwa, Ranchi, Jharkhand 2. Engineer-in-Chief, Road Construction Department, Dhurwa, Ranchi, Jharkhand 3. Chief Engineer (Communication), Road Construction Department, Dhurwa, Ranchi, Jharkhand 4. Executive Engineer, Road Construction Department, Road Division, Seraikella Kharsawan, Jharkhand …. …. Respondents ---- CORAM: HON’BLE MR. JUSTICE RAJESH KUMAR ---- For the Petitioner For the Resp.-State 07/Dated:8th May, 2024 :Mr. Sumeet Gadodia, Adv. Ms. Shilpi Sandil Gadodia, Adv. Mr. Ritesh Kumar Gupta, Adv. Mr. Prakhar Harit, Adv. Ms. Shruti Shekhar, Adv. :Mr. Sachin Kumar, AAG-II ---- 1. 2.
Legal Reasoning
Heard learned counsel for the parties. The present writ petition has been filed for following reliefs:- “For issuance of an appropriate writ, order or direction, including writ of certiorari for quashing the Letter no.731 dated 18.07.2023 (Annexure-14) issued by the Respondent No.4, wherein the demand towards instalment of toll has been raised upon the petitioner belonging to Kandra Junction Toll Plaza (Adityapur- Kandra Section) for the Period from 11.09.2019 to 10.03.2022 in a most arbitrary and illegal manner without taking into consideration the admitted force majeure events as described under Clause 25 of the Request for Proposal (RFP) document which entitled the petitioner to forego instalment during the period of force majeure; (ii) For issuance of further appropriate writ, order or direction, including writ of mandamus, directing the Respondent No.2 to recompute the demand towards instalment of toll belonging to Kandra Junction Toll Plaza (Adityapur- Kandra Section) after taking into consideration Clause 25 of the RFP document and to compute the foregone remittance of the petitioner by taking into consideration the actual toll collected by the petitioner and deposited in the government treasury during subsistence of the force majeure events; (iii) For issuance of any other appropriate writ(s)/order(s)/ direction(s) as Your Lordships may deem fit and proper in the facts and circumstances of the case.” 3. The period in question is 15.03.2020-28.02.2022 i.e. pandemic period popularly known as COVID-19. 4. It appears that the petitioner company is a proprietorship firm which has been assigned a work after being successful for collection of the toll of Kandra Junction Toll Plaza, Adityapur-Kandra Section. 5. 6. The other factual matrix are not in dispute. The contractual terms which has to be interpreted is quoted hereinbelow:- Force Majeure Clause: In all the agreements entered by and between the Petitioner and Respondent- State of Jharkhand, there is a clause pertaining to Force Majeure Event being Clause 25, which reads as under:- "(a) NON-FORCE MAJEURE EVENT: An event (i) which involves diversion of traffic of any kind, including but not limited to any diversion ordered/implemented by local authority or any State/ Central Government for a period not exceeding 15 days in continuation; or (ii) where the road users opt to access/travel through the existing alternate free User Fee (toll) roads due to deteriorated road conditions/maintenance of road section. This may result into bypassing of User Fee Plaza/User Fee Collection Booths and use of any part of the said Section of the State Highway by the users. "(b) FORCE MAJEURE EVENT: Except as stated in clause (a) above, Force Majeure event means an event or circumstances or a combination of events and circumstances referred to in this clause which are beyond the reasonable control of the Party or Parties to this Contract and which party could not have prevented or reasonably overcome with the exercise of its reasonable skill and care in relation to performance of its obligations pursuant to this Contract and which are of the nature, without limitation of those described below: 2 W.P.(C) No.5591 of 2023 (i) Publicly declared strike by registered and recognized association of Transporters exceeding 7 days. The date of going on strike and withdrawal or start of movement of traffic will be inclusive for the purpose of calculation of 7 days under this clause. (ii) Floods/Earthquake having materially adverse impact i.e. complete blockade of road. (iii) Act of war, invasion, armed conflict or act of foreign enemy, unexpected call up of armed forces, blockade, embargo, revolution, riot, sabotage, terrorism or act of such threat, or any other political or social event having material adverse impact on the performance of obligations of the parties thereof. (iv) Expropriation, acquisition, confiscation or nationalisation of the User Fee collection (v) Any change in law which has a material adverse effect on the obligation of the parties hereto. (vi) Any decision or order of a court or tribunal, which has a material adverse effect on the performance of obligations of the parties to this contract. (vii) Suspension of traffic on the said section of State Highway/said bridge or any part thereof, exceeding 15 (fifteen) days at a stretch. (viii) Any event or circumstances of a nature analogous to the foregoing. Either party to this Contract shall be entitled to suspend or excuse performance of his obligations, including remittance of instalments by the Contractor to the Authority for the period of continuance of the Force Majeure event, under this Contract to the extent that such performance is impeded by an event of Force Majeure prevailing continuously for more than 7 (seven) days at a time. (c) PROCEDURE FOR FORCE MAJEURE: (i) NOTICE: (1) If a party claims relief on account of a Force Majeure event, then the Party claiming to be affected by the Force Majeure event shall, as soon as reasonably practicable and in any event within 7 days of becoming aware of the Force Majeure event, give notice giving details of the effects of such Force Majeure on the Party's obligations under this Contract to the other Party in writing, including the dates of commencement and actual/likely date of cessation of such Force Majeure and its effects, with necessary supporting documents and data. 3 W.P.(C) No.5591 of 2023 (2) The Party receiving the claim for relief under Force Majeure shall, if wishes to dispute the claim, give a written notice of the dispute to the Party making the claim within 30 days of receiving the notice of claim. (ii) CONSULTATION AND DUTY TO MITIGATE: (1) The Party claiming relief under Force Majeure shall, at its own cost, take reasonable steps to remedy and mitigate the effects of the Force Majeure event and restore its ability to perform its obligations under this Contract as soon as reasonably possible. The Parties shall consult with each other to determine the measures to be implemented to minimise the losses of either Party as a result of the Force Majeure event. (2) The party affected by Force Majeure shall keep the other Party informed of such efforts to reedy and make reasonable efforts to mitigate on a continuous basis and shall provide written notice of the resumption of performance hereunder. (3) Notwithstanding anything contrary to the specifically stated in this Contract no party shall be relieved of its obligations under this Contract by reason of impossibility of performance or any other circumstances whatsoever not beyond its control. (4) Any Party claiming cessation of the event of Force Majeure may, if the other party has not served a notice of resumption of performance, give notice to the other party, of cessation of such event, notifying the date of alleged cessation and unless the party to whom such notice is given does not dispute the same within 30 days of the receipt of such notice the Force Majeure event shall be deemed to have ceased to consequences thereof and shall be deemed to have come to an end or the date so notified. (5) The relief under Force Majeure will be calculated on the basis of average collection per day, arrived based on the agreed weekly remittance. The difference in collection per day during force majeure and average amount of collection per day, arrived based on the agreed weekly remittance multiplied by number of days of force majeure will be payable to the contractor. (iii) TERMINATION DUE TO FORCE MAJEURE: If any event of Force Majeure shall continuously impede or prevent a Party's performance for longer than 60 days from the date of commencement of such Force Majeure event, the parties shall decide through mutual consultation, either the terms upon which to continue the performance of this Contract or to terminate this Contract by mutual consent. If the parties are unable to agree on such terms or to terminate the Contract by mutual consent within 90 days 4 W.P.(C) No.5591 of 2023 from the date of commencement of such Force Majeure event, either Party may issue a Notice to terminate this contract. (iv) The Authority is authorised specifically to settle claims for force majeure events." 7. On the strength of above terms and conditions of the contract, learned counsel for the petitioner has raised the following issues:-
Decision
1. Whether the Force Majeure clause is available to the writ petitioner or not? 2. Whether the petitioner is entitled to pay actual collected amount or the license fee, as per the agreement or not? 8. Learned counsel for the petitioner has relied upon the judgment of Hon’ble Court of Delhi in the case of Halliburton Offshore Services Inc. Vrs. Vedanta Limited & Anr. reported in 2020 SCC Online Del 2068. 9. Relevant paragraph No.63 of the above judgment is quoted hereinbelow:- “63. It is under this factual backdrop that the ground of Force Majeure taken in March, 2020 would have to be adjudged. The grounds taken to invoke the Force Majeure clause are that due to outbreak of COVID-19 experts from France who may be required cannot travel to India. Since the Force Majeure clause in the contract covers epidemics and pandemics, the Contractor claims that its non-performance is justified and the invocation of Bank Guarantees is liable to be stayed. There is no doubt that COVID-19 is a Force Majeure event. But was this event the cause of the non-performance?” 10. It has been submitted by learned counsel for the petitioner that the COVID-19 situation is no doubt is a Force Majeure and accordingly the obligation of the parties has to be worked out in accordance with the terms and conditions of the contract. 11. Referring to the various paragraphs of the counter affidavit, learned counsel for the State has disputed the above fact and submitted that there was no total restriction rather flow of the vehicle was there. Once there is no total restriction rather the flow of vehicle was there then the clause of Force Majeure is not available to the petitioner. 12. It has been further submitted that it is a contractual matter and as such the writ petition is not maintainable. 5 W.P.(C) No.5591 of 2023 13. Having heard learned counsel for the parties and from perusal of record, it appears that following fact stands admitted:- During the impugned period i.e. 15.03.2020-28.02.2023 there was various orders restricting the movement of traffic. Relevant memo have been annexed as Annexure-10 series which are as follows:- (i) Memo No.1747 dated 26.06.2020 (ii) Memo No.880 dated 01.10.2020 (iii) Memo No.1 dated 18.04.2021 (iv) Memo No.431 dated 16.09.2021 (v) Memo No.434 dated 30.10.2021 14. It further appears that considering the COVID-19 situation, the department has initiated the process for realisation of only collected amount not the contractual amount but that recommendation although has travelled from one authorities to another authority but that has not been given effect. 15. It further appears that denying the application of Force Majeure the liability has been created by the impugned Letter No.731 dated 18.07.2023 (Annexure-14) 16. It further appears from the documents annexed in the pleading that there was less collection than the contractual amount for which the petitioner was held liable under the contract. 17. So far as issue of maintainability raised by the learned counsel for the State is concerned, the law is settled that once issue has to be decided then the Writ Court is under obligation to decide the same and then only remit the matter. Issue which is required to be determined cannot be delegated to the authorities. 18. Since the issue was required to be decided by this Court, the writ petition has been entertained. 19. It further appears that the petitioner has remitted the contractual amount and only default has been made during the impugned period. 20. From the marshalling of above facts and the legal position, it appears that i. The pandemic situation is no doubt Force Majeure. 6 W.P.(C) No.5591 of 2023 ii. There was a restriction in the movement of traffic and as such there was less collection and the less collection is totally attributable to the Force Majeure. iii. It further appears that in similar situation the central government as well as some other state i.e. State of Rajasthan etc. has accepted the clause of Force Majeure and only the actual collected amount has been realised. 21. In view of factual matrix and legal position, the impugned letter No.731 dated 18.07.2023 issued by the Executive Engineer Road Construction Dept., Road Division, Seraikella-Kharsawan (Respondent No.4) is, hereby, quashed and set aside. 22. The matter is remitted to the authority to raise the fresh claim applying the Force Majeure clause and it is hereby declared that for the impugned period i.e. 11.09.2019 to 10.03.2022, the petitioner will be liable to pay actual collected amount only. 23. Authorities are directed to conclude the proceeding and raise the final demand within five weeks from the date of receipt/production of a copy of this order. 24. With above observation and direction, the present writ petition stands disposed of. 25. In view of the disposal of the main writ petition, pending I.A. also stands disposed of. (Rajesh Kumar, J.) Shahid/- uploaded 7 W.P.(C) No.5591 of 2023