The High Court
Case Details
1 IN THE HIGH COURT OF JHARKHAND AT RANCHI W. P. (C) No. 7278 of 2019 IMWPL- RSSG- SPS (IV), a Joint Venture Company, having its office at C/o M/s Indian Mining Works Private Limited, Kolkata through the Director of IMWPL (one of the member of the Joint Venture) Mr. Sushil Kumar Agarwala .... .. ... Petitioner(s) Versus 1.Central Coalfield Limited, a Miniratna Company, Darbhanga House, Ranchi through its General Manager (CMC), Darbhanga House, Ranchi 2. Project Officer, Central Coalfield Limited, KDH Project, North Karanpura .. ... Respondent(s) Coalfield Area, Dakra, Ranchi. ........... CORAM : HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY ......... For the Petitioner(s) : For the CCL : …...
Legal Reasoning
14. After having considered the rival submissions advanced on behalf the side and the materials on record, it is apparent that the petitioner was under the agreement obligated to install two mobile crusher units, whereas he installed only one which became inoperative due to heavy rain and the work had to be suspended because of it. There is merit in the submission made on behalf of the respondent that had their been two machines installed in terms of the agreement, there could have been backup by one machine in the said eventuality. The claim of the petitioner is that it was not given opportunity to make up the loss within three months in terms of clause 6.2, lacks conviction. This is for the reason that the work remained suspended till August 2016, but the penalty was imposed in the month of December 2016. This court is not inclined to enter into the factual aspects of the breach of contract and the liability of the party concerned. It has been held in Noble Resources Ltd. v. State of Orissa, (2006) 10 SCC 236 : 2006 SCC OnLine SC 945 at page 250. Moreover, certain serious disputed questions of fact have arisen for determination. Such disputed questions of fact ordinarily could not have been entertained by the High Court in exercise of its power of judicial review. Writ Petition accordingly stands dismissed. Sandeep/Uploaded. (Gautam Kumar Choudhary, J.)
Arguments
Mr. Ajay Kumar, Advocate Mr. Ashish Verma, Advocate Mr. Amit Kr. Das, Advocate M/s Kanishka Deo & Siddharth Jain, Advocate 09/ 29.08.2023. Heard, learned counsel for the parties. 2. The instant Writ Petition (Civil) has been filed for quashing of the communications dated 21.11.2016 (Annexure-9 & Annexure-10) by which penalty has been levied for the month of July, 2016 and August, 2016 for a sum of Rs.23,42,731.24 and Rs.22,41,649.58 respectively by which the Respondents- CCL has deducted a sum of Rs.45,84,380.82/- as penalty and demurrage, due to shortfall in quantity during the month of July, 2016 and August, 2016 from the 1st R.A. Bill dated 04.11.2016 covering the period 19.06.2016 to 31.10.2016. For a further prayer directing the Respondents to refund Rs.45,84,380.82/- to the Petitioner Joint Venture Company with interest on the basis of Committee Report of Failure/ Collapse of Mobile Crusher Foundation wherein the Committee opined the failure attributed to the petitioner Joint Venture Company be treated as Force Majeure. PETITIONER’S CASE 3. The petitioner, Joint Venture Company which entered into a contract on 17.10.2016 with the Respondents-CCL for work, namely, “Hiring of Mobile Crusher, pay loaders, tipping trucks & allied machinery for loading of coal into tippers from KDH quarry bed stocks (Face 17 & 19 no stock) of KDH OCP, transporting the same to mobile crusher, crushing of coal to (-) 100 mm size (All dimensions) and loading the crushed coal into tipping trucks at mobile crusher and transporting the same to KDH siding platform No.1 for a quantity of 60.00 lakh tone for a period of three years” 4. The Respondents-CCL deducted a sum of Rs. 45,84,380.82/- as penalty and demurrage due to shortfall in quantity during the month of July, 2016 & August, 2016 from 1st R.A. Bill dated 04.11.2016 for the period from 19.06.2016 to 30.10.2016. 2 4. Being aggrieved by the penalty and demurrage charge, the instant Writ Petition has been filed. 5. The main plea of the petitioner is that the penalty and demurrage charges have been levied arbitrarily and against the finding of their Committee constituted by their own Department wherein it has been held that due to unusual rain, the foundation structure became unstable, as such, the mobile crusher stopped working from evening of 06.07.2013. Five membered Committee headed by the Engineers came to a definite finding that the soil movement and heavy rains may be treated as force majeure. Despite this, on the very next date after submission of the report on 23.11.2016, the penalty and demurrage have been imposed by invoking Clause 6.2 of the Agreement. Clause 6.2 of the Agreement reads as under :- 6.2 In the event of the contractor’s failure to comply with the required progress in terms of the agreed time and progress chart or to complete the work and clear the site on or before the contract or extended date of completion, he shall without prejudice to any other right or remedy available under the law to the company on account of such breach, shall become liable to pay or penalty as under : “a) If the average daily progress of work during the calendar months is less than the stipulated rate indicated in the detailed tender notice, penalty as detailed below will be levied. i) If the average daily progress of work executed during the calendar month is more than 80% and less than 100% of stipulated rate of progress, penalty equal to 10% of the contract value of the short fall in work shall be levied. ii) if the average daily progress of work executed during the calendar month is less than 80% of stipulated rate, penalty equal to 20% of contract value of the short fall in work shall be levied. iii) The aggregate of the penalties so levied shall not exceed 10% of the total contract value.” 6. It is submitted that in order to invoke the said Clause, it is necessary that the failure of supply should be on the part of the contractor, and further the Contractor should be given an opportunity to make up the shortfall in succeeding three months within the stipulated time of completion. Once the shortfall is fully made up, the so withheld penalty will be released. 7. There is further provision under Clause 6.4 for extension of date of completion. As a matter of fact, there was a shortfall in the supply of coal from the quarrying bed which has been specifically averred in Para-19 of the pleading and the same has not been denied in the counter-affidavit. Letter dated 28.12.2016 addressed to the petitioner’s company whereby it has been admitted that due to insufficient quantity of coal in the stock, work awarded vide above referred letter for loading and transporting of crushed coal was discontinued till further order. RESPONDENT’S CASE 8. Learned counsel for the Respondents- CCL has opposed the prayer. It is submitted that the proximate cause for breach of contract was not force majeure, but the 3 inadequate number of mobile crusher(s) that was deployed by the petitioner, in contravention of the, Clause in Tender, Award as well as the agreement under which two mobile crushers with minimum 400 TPH was to be deployed. In the report dated 23.11.2016 submitted by the five members Committee which was constituted to report on the failure/ collapse of mobile crusher combination wherein the Project Officer has noted that two mobile crushers had to be installed and its place only one was installed. 9. It is further argued that the coal measure machines were not of the requisite capacity which will be apparent from Annexure-9 to the Writ Petition where the contract of collection for the July, 2016 has been furnished. As per the contract, per day 5556 tonnes of coal was to be produced for a total of 172236.00 tonnes for the month of July, whereas the total output was only 18704.80 tonnes. The rain started, as per the case of the petitioner in the evening of 6th July, 2016 and even if it is assumed that the work was interrupted by the rain, even then there was shortfall in the out for the five days. As per the representation dated 08th November, 2016 (Annexure-7), the work was interrupted from 4:00 p.m. on 06.07.2016 to 4 p.m. on 23.08.2016. 10. There is specific pleading with respect to Para-6 of the counter-affidavit which has not been disputed, rather it has been admitted in Para-9 of the rejoinder that only one mobile crusher unit was installed. With regard to discontinuation of the coal supply of the contractor/ petitioner, it is submitted that in Clause 9.3 of the agreement, there was provision to suspend the progress of the work on account of any default on the part of the contractor for proper execution of the work. In view of the suspension of the work by the Contractor, the said letter was issued in the Month of December when the stock of the coal had to be transferred to the Punjab State Electricity Board (in short PSEB), as the petitioner was to crush the same, and the respondents had requested the petitioner to discontinue the crushing activities. 11. It is further argued that discontinuation in December, 2016 or thereafter will not have any impact on the breach committed by the petitioner in the month of July/ August, 2016. 12. Lastly, it is submitted that it is not a statutory contract wherein the jurisdiction of this Court can be invoked for the breach thereof. Reliance is placed on the ratio laid down in the following authorities :- 1. Rajasthan State Industrial Development & Investment Corpn. v. Diamond & Gem Development Corpn. Ltd., (2013) 5 SCC 470 III. Contractual disputes and Writ Jurisdiction 19. There can be no dispute to the settled legal proposition that matters/disputes relating to contract cannot be agitated nor terms of the contract can be enforced through writ jurisdiction under Article 226 of the Constitution. Thus, the writ court cannot be a forum to seek any relief based on terms and conditions incorporated in the agreement by the parties. [Vide Bareilly 4 Development Authority v. Ajai Pal Singh [(1989) 2 SCC 116 : AIR 1989 SC 1076] and State of U.P. v. Bridge & Roof Co. (India) Ltd. [(1996) 6 SCC 22 : AIR 1996 SC 3515] ] 2. Union of India v. Puna Hinda, (2021) 10 SCC 690 in which it has been held that in pure contractual matters the extraordinary remedy of writ under Article 226 or Article 32 of the Constitution cannot be invoked. However, in a limited sphere such remedies are available only when the non-Government contracting party is able to demonstrate that it is a public law remedy which such party seeks to invoke, in contradistinction to the private law remedy simpliciter under the contract. 3. National High Speed Rail Corpn. Ltd. v. Montecarlo Ltd., (2022) 6 SCC 401 29. Thus, from the aforesaid decisions, it can be seen that a court before interfering in a contract matter in exercise of powers of judicial review should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say:“the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”? And (ii) Whether the public interest is affected? If the answers to the above questions are in the negative, then there should be no interference under Article 226. 4. Noble Resources Ltd. v. State of Orissa, (2006) 10 SCC 236 : 42. Moreover, certain serious disputed questions of fact have arisen for determination. Such disputed questions of fact ordinarily could not have been entertained by the High Court in exercise of its power of judicial review. 13. In-reply with regard to capacity of the mobile crusher, it is submitted by learned counsel for the petitioner that as per the certificate issued by the Installer which is Annexure R-2 of the Rejoinder, it was of a capacity of 400 TPH and below the capacity of supply/ output was due to deficit in supply of the coal.