M/s JSW Ispat Special Products Limited (Formerly known as M/s Monnet Ispat & Energy v. M/s Bharat Coking Coal Limited, through its Chairman cum Managing Director, having his office
Case Details
2025:JHHC:38773 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No.6356 of 2022 M/s JSW Ispat Special Products Limited (Formerly known as M/s Monnet Ispat & Energy Limited) having its Registered Office at JSW Centre, Bandra Kurla Complex, Mumbai, through its Assistant Vice-President cum Authorized Signatory Shri Komanduri Krishnamachari. ----- Petitioner Versus M/s Bharat Coking Coal Limited, through its Chairman cum Managing Director, having his office at Koyalanagar, Koyala Bhavan, Dhanbad. ------ CORAM: HON'BLE MR. JUSTICE RONGON MUKHOPADHYAY ----- Respondents For the Petitioner For the Respondent ------- : Mr. Navniti Prasad Singh, Sr. Adv. Mr. N.K. Pasari, Advocate : Mr. Anupam Lal Das, Sr. Advocate Mr. Amit Sharma, Advocate Mr. Indrajit Sinha, Advocate Ms. Sonal Jaiswal, Advocate ------- CAV on 18.07.2023 Pronounced on: 04.12.2025 1. Heard Mr. Navniti Prasad Singh, learned senior counsel appearing for the petitioner and Mr. Anupam Lal Das, learned senior counsel appearing for the respondents. 2. In this writ application, the petitioner has prayed for the following reliefs:- (A) For issuance of an appropriate writ, order or direction or for quashing the letters dated 17.05.2021 (Annexure-23), 18.05.2021 (Annexure-23), 29.12.2021 (Annexure-25) and 04.03.2022 (Annexure-24) to the extent the Risk & Cost Clause is sought to be invoked as against the petitioner, which is directly in conflict with the letter dated 17.10.2012 (Annexure-23) issued by the coal company / respondent as also, the letter dated 01.07.2020. (B) For issuance of an appropriate writ on the nature of mandamus or any other appropriate writ, order or direction directing the respondent to adhere to its contractual obligation under Contract dated 17.10.2012 (Annexure-2) including that of supplying of the raw coal of contractual quality and quantity. 3. The petitioner, formerly known as Monnet Ispat and Energy Ltd. (MIEL) is a company within the meaning of Companies Act, 2013 and has a business portfolio that encompasses manufacturing and marketing of sponge iron, steel and ferro alloys. The petitioner has a world-class integrated steel plant at Raigarh with a production capacity of 1.5 Mtpa to produce HR plates, rebars and structure profiles to cater to the rapidly growing infrastructure and construction industry. The name of the company has been changed to JSW Ispat Special Products Ltd. with effect from 23.09.2020 after the CIRP process Monnet Ispat and Energy Ltd. 4. The respondent had invited international competitive bids vide Bid Notice No. WCD-244 dated 10.03.2009 for setting up of 5 Mtpa NLW Pathardih Washery at Pathardih on Build-Operate- Maintain (BOM) concept. The successful bidder had to set up the washery and also operate the same for a duration of 10 years extendable up to 20 years. 5. Pursuant to the above invitation, the petitioner (erstwhile Monnet Ispat and Energy Ltd. (MIEL) submitted its bid which was duly accepted by the respondent for design, construction and operation of washery on BOM basis and the letter of award being reference no. BCCL:WCD:27 (IA) MIEL 2012:134 came to be issued in favour of the petitioner / MIEL on 21.02.2012. It has been stated that in terms of the letter of award the petitioner was to furnish a development guarantee in the form of bank guarantee for a sum of Rs.13.1659 crores which was equivalent to 10% of the setup cost of the washery. Consequent to the acceptance of the bid, the agreement being 2 contract no.01/2012 was executed between the respondent and the petitioner on 17.10.2012. In terms of the contract the total cost for setting up was Rs. 131,65,90,000/-. The work of setting up of the washery was to be completed within 18 months from the date of signing of contract i.e. 17.10.2012. It has been stated that from the very beginning there was delay and non-adherence to contractual obligations by the respondent resulting in severe financial stress on the petitioner. The work, which was required to be completed within 18 months, could not be commenced timely due to delay in handing over of the site, unencumbered site, delay in approval of layout drawings and non-supply of power and water, etc. The construction work of the washery plant was completed and the same was commissioned on 16.03.2018. The commercial operation of the washery started on 07.04.2020. The petitioner has stated that it has several claims against the respondent which have already been brought to the notice of the respondent by way of correspondence; however, the major grievances raised are:- (i) Initial delay on account of delayed handover of site and the same not being encumbrance free and other operational delays caused by the respondent; (ii) Non-supply / short supply of raw coal to the washery; (iii) Non-construction of BOBR and other related issues. 6. It has been stated that the land where the washery was located was under dispute with native villagers and other stakeholders and the petitioner was not allowed to work on the same. Despite having mobilized its site team including soil investigation agency and other staff and resources, the petitioner had to bear their idling expenses and cost for the said duration / period. The dispute was later resolved by the respondent and the site could be handed over to the petitioner after 22 months i.e. on 18.08.2014 as acknowledged by the 3 respondent in its letter dated 01.06.2015 while granting the extension of time to the petitioner till 18.02.2016 for construction / setting-up phase from 18.08.2014. Though the land was handed over on 18.08.2014, there were still hindrances at site that obstructed the site area and kept the petitioner from taking up the site activities in full swing. The respondent was requested by the petitioner repeatedly to remove the hindrances and furnish hindrance free land to the petitioner in order to enable the petitioner to start with the other activities. Even during the construction phase, the washery got inordinately delayed for the reasons not attributable to the petitioner. In view of the same, there were huge additional costs incurred by the petitioner in terms of the prolonged deployment of resources and other related financial costs during construction stage amounting to Rs. 65,15,20,711/- which was submitted by the petitioner in claim report to the respondent on 23-03-2022. 7. Apart from the above, there were several other delays attributable to the respondent which are beyond the reasonable control of the petitioner. In terms of the contract, if the delay is on account of the respondent, in such event, the petitioner shall be given extension of time for the completion of works and compensation. The delay in the construction of washery was also on account of delayed supply of water and power required for construction activities which were obligatory on the part of the respondent which however was not supplied to the petitioner within a reasonable period. The petitioner vide letter dated 06-01-2016 issued to the respondent had stated that non-erection and commissioning of power supply arrangement at site has been impacting the project progress. It had also been stated that the petitioner was ready to start testing and commissioning so as to commence the washery. Another hindrance which caused a 4 delay was with respect to non-supply of coal even after the inauguration of the washery in February 2018 and a request was also made to the respondents to increase the supply quantity to at least 8000 T for testing / adjustment of equipment accordingly. However, the respondent had almost never been able to supply the said quantity of requisite raw materials and thus the plant has never achieved its full capacity. The petitioner is also aggrieved by the supply of substandard quality of raw material coal which led to the malfunctioning and damage to the machinery and other equipment. 8. Despite the pointing out by the petitioner to the respondent regarding the deficient supply of coal, the position did not improve and repeated representations/communications were made to the respondents about the same, but no corrective measures were taken by the respondents. It has been stated that the washery was designed for a capacity of 5 Mtpa and the coal feeding into the washery by road was envisaged to be done by tipping truck and by railway using BOBR wagons which are built exclusively for movement of coal with a unique feature of unloading from bottom. At the time of the tender it was provided that the bunker for receiving coal was to be arranged in two rows, each row capable of accommodating half of the rake length. The system was to be designed in a manner that the entire rake could be unloaded in 2.5 hours as provided by the railways. The design submitted by the petitioner was discussed over a period of three years after submission of the bid and after several rounds of discussions and clarifications over the design so submitted the letter of award dated 21.02.2012 was issued in favour of the petitioner. The petitioner was of the belief that its design has been accepted and the respondent would not change the rules of the game after playing. On 30.07.2014 the petitioner sent a 5 letter to the respondent informing that the BOBR location, placement and unloading arrangement given by the respondent to the petitioner in the drawing vide letter dated 24.07.2014 was different from the drawing given in the NIT / bid documents. The petitioner drew the attention of the respondent to the clarification dated 17.10.2012 wherein it was clearly stated by the respondent that any modification beyond the contract would be the full responsibility of the respondent. In a subsequent correspondence dated 13.10.2014 the petitioner informed the respondent that it would have to compensate the petitioner if the so-called changed job was to be carried out by the petitioner. On 07.04.2020 the washery was handed over to the petitioner for commercial operation and maintenance after successful completion of the performance test. However, the handing over letter stated that as BOBR unloading system for receiving raw coal had not been constructed by the petitioner, 100% capacity utilisation may not be possible. As such, commitment charges for short supply of coal would not be paid to the petitioner till such unloading system is established. It has been stated that on 17.05.2021 and 18.05.2021 the respondent had sent a letter to the petitioner whereby the petitioner was informed that the respondent had floated an open tender for construction of BOBR track hopper which on the face of it, is arbitrary and malefide. The respondent on 04.03.2022 issued a letter of acceptance for the work of construction of BOBR track hopper of a third party namely M/s ACB (India) Ltd. and M/s Shyam Indus Power Solutions Pvt. Ltd. It is the case of the petitioner that the respondent has sought to artificially create a dispute to get out of its contractual obligations and therefore, a direction has been sought for upon the respondent to adhere to its contractual obligation including supply of raw coal of 6 contractual quantity and quality.
Legal Reasoning
9. It has been submitted by Mr. Navniti Prasad Singh, learned counsel for the petitioner that the failure on the part of the respondent to honour its contractual obligations and pay bonafide dues of the petitioner are illegal, arbitrary and perverse. The respondent had acted in an arbitrary, malefide and high-handed manner by compelling the petitioner to construct the BOBR hopper in a manner which was not envisaged under the contract. The respondent had specifically undertaken vide its written clarification dated 17-10-2012 that any change in design would be the sole responsibility of the respondent. The respondent has also sought to take an artificial plea of non-construction of BOBR as a defence to its failure to supply raw material to the washery. It has been submitted by Mr. Singh, learned senior counsel that the contract does not quantify the quantum of coal to be supplied via road and / or rail to washery and it simply mentions both methods through which the coal can be supplied by the respondent varying from 0-100% under each method. In view of the same, the respondent could have supplied the coal in required quantities through road as well. It has been submitted that the contract was executed on 17-10-2012 mandating the time for completion to be 18 months. While the petitioner in the right earnest undertook the works from the very beginning, the respondent delayed the execution of the project in as much as unencumbered and hindrance free land was handed over only on 18-08-2014. The petitioner has incurred a heavy operational loss considering the unrevised washing charges and this amount is getting enhanced day by day on account of keeping men and equipment in readiness at all times for the purpose of operating the washery in its full capacity. 7 10. It has been submitted that the delay was caused by non- availability of construction site, supply of water and power required for construction activity. The supply of coal was not up to the mark as per the contractual obligation and there was a short supply of raw coal which had resulted in a loss. 11. Mr. Anupam Lal Das, learned counsel for the respondent BCCL has submitted that the dispute between the parties is purely contractual in nature for which efficacious remedy is available under the Specific Relief Act and the writ petition itself in such circumstances is not maintainable. The petitioner has failed to point out any arbitrariness in the decision making process by the respondent BCCL. The prayer of the writ petitioner is completely misconceived as it does not challenge the tender process and subsequent work order issued to a third party. The petitioner has also failed to disclose the nature of writ and such prayer is inconceivable. Mr. Das has submitted that there has been an inordinate delay on the part of the writ petitioner to approach this court with respect to the risk and cost notice as well as the tender being floated and awarded to a third party. Submission has also been advanced that the petitioner despite being aware of the stipulation of the railways to complete the process of unloading of one rake of 59 BOBR wagons, the petitioner refused to abide by the same and therefore had failed to fulfill its contractual obligations and comply with the terms of the bid document/NIT and/or the contract document. Mr. Das, learned counsel for the respondent has drawn the attention of the court to various documents to impress upon the fact that with respect to construction of track hopper system, the petitioner has not been asked to do something which is outside the scope of work as mentioned in the NIT. The respondent BCCL has lost a significant amount of opportunity revenue as the washery was running since inception at an abysmally low capacity owing to default of the petitioner for not constructing the BOBR track hopper. Mr. Anupam Lal Das, learned counsel 8 for the respondent has submitted that despite providing ample opportunity to the petitioner to make good its failure when the petitioner has failed to adhere to the terms and conditions of the contract agreement, the respondent BCCL had invited tenders for the construction of BOBR track hopper of bare minimum length required to unload one rake of coal in free time as per stipulation of railways through transparent bidding mechanism and the information of floating of tender and all stages with regard to the tender were shared with the petitioner. Though the respondent had issued a work order dated 28.02.2022 for the work of construction of BOBR track hopper at 5.0 MTPA Pathardih NLW Washery to the L-1 bidder M/s ACB (India) Limited and M/s Shyam Indus Power Solutions Pvt. Ltd. (JV) and the said joint venture has already completed 25 to 30% of
Decision
the work awarded, but the writ petitioner, however, has failed to array the joint venture as a party respondent despite the said joint venture being a proper and necessary party. 12. We have heard learned counsel for the respective parties. 13. Consequent to the bid of the petitioner being accepted, a letter of award was issued in favour of the petitioner on 21.02.2012 and a contract was executed between the petitioner and the respondent being Contract No. 01 of 2012 dated 17.10.2012. The scope of work as per the contract consisted of two different parts, which are as follows: “(i) Part-I: Setting up of Washery plant (which will include an indivisible supply and erection) with two years’ critical spares : Planning, Design & Engineering, Selection of necessary equipment & machinery, Procurement, Delivery, Erection / Installation, Testing, Successful Commissioning of 5.0 Mtpa Coal Washing Plant at including Performance Guarantee Test Patherdih (PGT) with two years’ critical spares and all allied activities necessary to put the plant for commercial operation required as per Bid Document and the Contract with the following salient features: Raw Coal throughput : 5.0 Mtpa (Five million tonnes per 9 annum) of Raw Coal with likely monthly average ash content of 42% (arb) and average Raw Coal moisture of 2.0% as per Bid Document / Offer. 18.0% monthly average basis) (apb)/19.89% (Dry) [on Washed Coal Ash : Washed Coal (Power) Ash : ≤ 40.0% (apb)/ 43.96% (Dry) [on Yield (Clean Coal) : Yield [Wash Coal Power Consumption : Water consumption : (dry) (guaranteed monthly average basis] 22.46% parameter) (Power)]: 51.59% parameter) 5.0 Kwh per tonne of Raw Coal feed (guaranteed parameter) 0.12 Cum / tonne of Raw Coal feed (guaranteed parameter) (guaranteed (dry) (ii) Part-II: Operation & maintenance of washery plant: Operation & Maintenance of the Washery for supply of washed coal and Wash coal (Power) of requisite quality and quantity through belt conveyors into BCCL’s Loading Hoppers at the existing railway siding and disposal of washery rejects as per contract.” 14. Clause-5 enumerates the time schedule for completion of work i.e. setting up of the washery which reads as follows:- “5) Time schedule for completion towards set up of time schedule Washery: The for Design, Engineering, Procurement, Site preparation, construction, erection, installation, testing, commissioning including PGT of the washery under the Contract (including various clearances from concerned agencies) shall be within 18 (eighteen) months of time from the date of signing of the contract. Bar Chart (Annexure-VI) and Pert Network (Annexure-VII) in this respect are attached.” 15. It is the case of the petitioner that from the very inception of the contract, non-adherence to the contractual obligations delayed the construction of the washery plant, which was finally commissioned on 16.03.2018. The delay, according to the petitioner, had occasioned on the failure on the part of the 10 respondent BCCL to fulfill its contractual obligations and the same has been copiously demarcated by the learned senior counsel for the petitioner. According to the petitioner, it was compelled by the respondent to construct the BOBR hopper in a manner, which was not envisaged in the contract. Mr. Singh, learned senior counsel for the petitioner has, in support of such contention, has put reliance in the case of Union of India versus Tantia Construction (P) Ltd. reported in (2011) 5 SCC 697, wherein it has been held as follows: “30. We are of the view that the letter dated 12.04.2008, did not cover the extended work on account of the alteration of the design and was confined to the work originally contracted for. We cannot lose sight of the fact that while the initial cost of the tender was accepted for Rs. 19,11,02,221.84, the costs for the extended work only was assessed at Rs. 24.50 crores and that two offers were received, which were for Rs. 34,11,16,279.39 and Rs. 35,89,93,215.66 respectively. This was only with regard to the extended portion of the work on account of the change in design. The respondent Company was expected to complete the entire work which comprised both the work covered under the initial tender and the extended work covered by the second tender. The respondent had all along expressed its unwillingness to take up the extended work and for whatever reason, it agreed to complete the balance work of the initial contract at the same rates as quoted earlier, despite the fact that a long time had elapsed between the awarding of the contract and the actual execution thereof. In our view, the respondent Company has 31. satisfactorily explained their position regarding their offer being confined only to the balance work of the original tender and not to the extended work. The delay occasioned in starting the work was not on account of any fault or lapses on the part of the respondent Company, but on account of the fact that the project design of the work to be undertaken could not be completed and ultimately involved the change in the design itself. The respondent Company appears to have agreed to complete the varied work of Tender No. 76 of 2006-2007 which variation had been occasioned on 11 in that The submissions made on behalf of terms of Clause 23(2) of account of the change in the design as against the entire work covering both the first and second tenders. To proceed on the basis that the respondent Company was willing to undertake the entire work at the old rates was an error of judgment and the termination of the contract in relation to Tender No. 76 of 2006-2007 on the basis of the said supposition was unjustified and was rightly set aside by the learned Single Judge of the High Court, which order was affirmed by the Division Bench. the 32. the petitioners agreement, the petitioners were entitled to alter and increase/decrease the scope of the work is not attracted to the facts of this case where the entire design of the rail overbridge was altered, converting the same into a completely new project. It was not merely a case of increase or decrease in the scope of the work of the original work schedule covered under Tender No. 76 of 2006-2007, but a case of substantial alteration of the plan itself. 33. Apart from the above, even on the question of maintainability of the writ petition on account of the arbitration clause included in the agreement between the parties, it is now well established that an alternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court or the Supreme Court and that without exhausting such alternative remedy, a writ petition would not be maintainable. The various decisions cited by Mr. Chakraborty would clearly indicate that the constitutional powers vested in the High Court or the Supreme Court cannot be fettered by any alternative remedy available to the authorities. Injustice, whenever and wherever it takes place, has to be struck down as an anathema to the rule of law and the provisions of the Constitution.” 16. Reference has also been made to the case of Kumari Srilekha Vidyarthi & Ors. versus State of Uttar Pradesh & Ors. reported in (1991) 1 SCC 212 and the relevant reads thus:- The State cannot be attributed “24. the split personality of Dr. Jekyll and Mr. Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfill the obligation of Article 14 of the Constitution 12 and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the contract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it. It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. There is a basic difference between the acts of the State which must invariably be in pubic interest and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not promote public interest. Viewed in this manner, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regulating the conduct of the State activity.” 17. The respondent BCCL has sought to refute the claim of the petitioner by highlighting the fact that the petitioner has not been asked to do something, which is beyond the scope of work as mentioned in the NIT. Mr. Anupam Lal Das, learned counsel for the BCCL has stressed on the fact that as per the contractual agreement, the petitioner was bound to construct the complete washery including the BOBR track hopper system for unloading of the coal and having failed to do so, the same has caused a significant loss of revenue to the respondent BCCL. 18. The impugned letter dated 17.05.2021 reveals about an information to the petitioner about the publication of tender for the construction of track hopper system at 5.0 Mtpa, Patherdih NLW Washery at the risk and cost of MIEL. The letter dated 04.03.2022 is the information to the petitioner about issuance of the work order in relation to the works mentioned in the letter dated 17.05.2021. 19. What would transpire from the gamut of claims and 13 counterclaims is a dispute with respect to construction of BOBR track hopper system and the invocation of the risk and cost clause. All these fall from the purported change in design and the deviations made by the respondent from the clauses of the contract. There are technical issues as well which attains centre stage with respect to such construction apart from the purported deviations as claimed by the petitioner and which according to the petitioner was beyond the domain of the respondent BCCL as it was bound by its contractual obligations. 20. In the case of NG Projects Ltd. versus Vimal Kumar Jain & Ors. reported in (2022) 6 SCC-127 it has been held as follows: in “23. In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work.” is after complying with 21. As it has been noticed above, there are several technical issues which encompass the dispute and it would be beyond the scope of this Court to go into such technical aspects. In NG Projects Ltd. (supra), the Hon’ble Supreme Court has highlighted the fact that the court is to examine as to whether the decision 14 making process is within the conditions of the contract and/or there is arbitrariness on the part of the respondent in the entire decision making process. The various communications which have been brought on record by both the parties with respect to the contractual work regarding construction of BOBR track hopper system and the consequent invocation of the risk and cost clause as envisaged in one of the impugned letters dated 04.03.2022 cannot be concluded to be an arbitrary action on the part of the respondent and the said decision making process is also concentrated on the technical aspects as well, which does not indicate about any arbitrariness on the part of the respondent BCCL in the entire decision making process. The writ petition and the counter affidavit are replete with claims and counter claims and such factual aspects which are in the realm of disputed question of fact cannot be adjudicated upon by this Court in its writ jurisdiction. Moreover, it seems that the construction of the BOBR track hopper for which the work order was issued to the L-1 bidder, which was a joint venture, has led to completion of a substantial part of the work awarded. 22. Based on the findings recorded above, I do not find any reason to entertain this writ application which accordingly stands dismissed. Pending interlocutory application(s), if any, stand(s) closed. Dated: 4th December 2025 Shamim/- Uploaded on: 10/02/2026 (Rongon Mukhopadhyay, J.) 15