M/s Marbaniang Enterprise v. Meghalaya Power DistributionCorporation Limited & Ors

#4. The Company SecretaryMeghalaya Power Distribution CorporationLimited, Lumjingshai, Shillong, East Khasi Hills, Meghalaya 5.Superintending Engineer (RE)Meghalaya Power DistributionCorporation Limited, Lumjingshai, Shillong, East Khasi Hills, Meghalaya 6.Executive Engineer (RE)Meghalaya Power Distribution Corporation Limited, Lumjingshai, Shillong, East Khasi Hills, Meghalaya :::RespondentsCoram:Hon’ble Mr. Justice H. S. Thangkhiew, JudgeAppearance: For the Petitioner(s):Mr. K. Paul, Sr. Adv. withMr. S. Thapa, Adv.Ms. B. Kharwanlang, Adv. For the Respondent(s):Mr. A. Kumar, AG withMr. A.S. Pandey, Adv. Ms. R. Colney, GAi) Whether approved for reporting in Yes/No Law journals etc.:ii) Whether approved for publication in press:Yes/NoJUDGMENT AND ORDERPage 2 of 16

#1. The petitioner by this application under Article 226 is before thisCourt with a prayer for directions to issue to the RespondentCorporation for release of outstanding bills of the Petitioner Enterpriseamounting to Rs.1,80,24,719/- (Rupees One Crore Eighty LakhsTwenty-Four Thousand Seven Hundred and Nineteen) only andRs.1,02,36,278 (Rupees One Crore Two Lakhs Thirty-Six ThousandTwo Hundred and Seventy-Eight) only with regard to service chargeson successful completion of the contract work with the respondent. 2. The brief facts are that the Petitioner Enterprise in the year2006, was awarded with a contract by the Respondent Corporationunder the APDRP Project for reconductoring, feeder bifurcation andconstruction of new feeders, Package-C in the Eastern Circle (Supplyand Erection contract) in Jaintia Hills District, and that the said projectwas completed in the year 2008. A completion certificate was issuedby the Respondent Corporation after payment of outstanding dues. Apart from this contract, the Respondent Corporation had alsoawarded contracts to the Petitioner Enterprise for supply of variousmaterials required for implementing the Rajiv Gandhi GrameenVidyutikaran Yojna(RGGVY) Scheme at the cost of Rs.27,00,07,294/-Page 3 of 16 (Rupees Twenty-Seven Crores Seven Thousand Two Hundred andNinety-Four) only referred to as the first contract or Supply contract.By another letter dated 16.07.2007, the Petitioner Enterprise wasawarded a contract for all services including inland transportationinsurance, handling, storage at site, erection, testing andcommissioning of all equipment for supply of service connections toBPL consumers at a cost of Rs.2,00,54,100/- (Rupees Two CroresFifty-Four Thousand and One Hundred) only referred to as the secondcontract or Erection contract. A formal contract was then executed on25.10.2007 between the parties.3. Thereafter, in the course of the work and other developments, the Petitioner Enterprise by a letter dated 06.06.2013, whileacknowledging receipt of certain payments, had requested for releaseof Rs.1,02,36,278/- (Rupees One Crores Two Lakhs Thirty-SixThousand Two Hundred Seventy-Eight) only which he alleged hadbeen erroneously withheld against the excess payment of service tax, inasmuch as, while quoting the rate for Supply and Erection, the ratequoted had been quoted inclusive of all taxes and duties, and as suchthere was no question of excess payment. Further claims were alsomade from the Respondent Corporation in relation to return of surplusPage 4 of 16 materials which were not utilized for the project and as per thestatement of the Petitioner Enterprise on this account, the balance duefrom the Respondent Corporation stood at Rs.1,95,15,528/- (RupeesOne Crore Ninety-Five Lakhs Fifteen Thousand Five Hundred andTwenty-Eight) only. Further communications on this aspect withregard to payment of balance amount due and return of surplusmaterials continued between the Petitioner Enterprise and theRespondent Corporation.4.It appears thereafter, the Respondent Corporation by a letterdated 07.08.2014, called the petitioner for a meeting with regard to thepayment of service tax on the RGGVY Scheme and the petitioner wasasked to bring all supporting documents. The said meeting took placeon 26.08.2014, and as per the minutes generated which have beenplaced on record, it was observed by the Chief Engineer of theRespondent Corporation that outstanding bills of the Petitioner’sEnterprise be processed for payment, with due compliance of auditobservation in that aspect. Thereafter, vide letter dated 17.08.2015addressed to the Respondent Corporation, the Petitioner Enterpriseacknowledged receipt the payment of Rs.14,19,809/- (Rupees FourteenPage 5 of 16 Lakhs Nineteen Thousand Eight Hundred and Nine) only to its Bankaccount. 5.Mr. K. Paul, learned Senior counsel assisted by Mr. S. Thapa, learned counsel on behalf of the petitioner submits that even thoughthe work had been completed, the Respondent Corporation paid noheed to the request made by the petitioner with regard to the extramaterials utilized for the RGGVY Scheme, and that the petitioner wasnot supplied with a detailed statement, item wise showing the details ofdeduction made on both Supply and Erection contract, at which theamount paid to the petitioner was arrived at. 6.It is to be noted at this juncture that from the part of theRespondent Corporation, Mr. A. Kumar, learned Advocate Generalassisted by Mr. S. Sahay, learned counsel has raised issues with regardto the maintainability and the merit of the writ petition. It has beensubmitted that the petitioner is seeking to recover alleged dues forwork which were awarded on 16.07.2007, and executed under acontract dated 25.10.2007, and that further the petitioner’s own case, isthat the financial claims agitated in these writ proceedings pertain toPage 6 of 16 dues that became payable in the year 2013-2015. It has been alsopointed out that the petitioner has deliberately omitted to mention in itspetition, that the said agreement contains an arbitration clause, whichtherefore ousts the jurisdiction of the writ court, as also any other civilcourt.7.The learned Senior counsel has then submitted that the instantwrit application is an abuse of the process of law, as the petitioner hascome forward with claims that are time barred, and are therefore liableto be rejected in view of Section 3 of the Limitation Act. It is furthersubmitted that in such commercial matters, a writ petition seekingenforcement of contractual obligations against the State or itsinstrumentalities is not maintainable, inasmuch as, the same arematters of private law arising purely out of a contract. In support ofthis contention, the learned Senior counsel has placed the followingdecisions: -i)M/s Radhakrishna Agarwal & Ors. vs. State of Bihar &Ors. reported in (1977) 3 SCC 457 ii)Premji Bhai Parmar & Ors. vs. Delhi DevelopmentAuthority & Ors. reported in (1980) 2 SCC 129Page 7 of 16 iii)Divisional Forest Officer vs. Bishwanath Tea Co. Ltd.reported in (1981) 3 SCC 238iv)Joshi Technologies International Inc. vs. Union of India &Ors. reported in (2015) 7 SCC 728 v)Bareilly Development Authority & Anr. vs. Ajai Pal Singh& Ors. reported in (1989) 2 SCC 116vi)Kerala State Electricity Board & Anr. vs. Kurien E.Kalathil & Ors. reported in (2000) 6 SCC 293vii)Union of India & Ors. vs. Puna Hinda reported in (2021)10 SCC 6908.It has also been contended by the learned Senior counsel that thewrit petition is not maintainable in view of the existence of alternativeremedy, and has drawn the attention of the Court to clause 48 of thecontract, wherein an arbitration clause has been provided, and in thisregard has placed reliance on the following judgments:-i)M/s Titagarh Paper Mills Ltd vs. Orissa State ElectricityBoard & Anr. reported in (1975) 2 SCC 436ii)State of U.P. & Ors. vs. Bridge & Rood Company (India)Ltd. reported in (1996) 6 SCC 22iii)Kerala State Electricity Board & Anr. vs. Kurien E.Kalathil & Ors. reported in (2000) 6 SCC 293Page 8 of 16 iv)State of Gujarat & Ors. vs. Meghji Pethraj Shah CharitableTrust & Ors. reported in (1994) 3 SCC 5529.The dispute raised by the petitioner, it also has been submittedby the learned Senior counsel, makes the writ petition not maintainableas it relates to the adjudication of disputed questions of fact, which inthe instant case, concerns amounts billed towards the contract works inthe years past, which have to be examined from old records. On thispoint, reliance has been placed on the following decisions: -i)Sanjay Kumar Jha vs. Prakash Chandra Chaudhary &Ors. reported in (2019) 2 SCC 499ii)World Tel Inc. & Anr. vs. Union of India & Ors. reported in(2001) 10 SCC 51310.It is lastly submitted that for the dues of 2015, the writ petitionhad been preferred only in the year 2022, which renders the claim ofthe petitioner a stale claim, especially after final payment for thecontract had been acknowledged vide letter dated 17.08.2015. Further, the learned Senior counsel submits that in the meeting dated26.08.2014, there was no computation of the liability, nor anyadmission of debt, and as such the same cannot vest any right or anyactionable claim upon the petitioner. As such, therefore it is submittedPage 9 of 16 that the writ petition being hopelessly delayed, the same is liable to bedismissed on this ground alone, apart from the other grounds ofmaintainability as set forth. 11.Mr. K. Paul, learned Senior counsel in reply to the challenge tomaintainability and other grounds submits that there is no denial of theexisting claims of the writ petitioner as the meeting dated 26.08.2014has recognised this fact. He further submits that there is no question ofinvoking arbitration, inasmuch as, the dispute that is present, does notarise from the contract nor there is dispute as to the entitlement, but itis only with regard to non-settlement of dues by the RespondentCorporation. Accordingly, he submits as there is no dispute, the instantcase cannot be classified as commercial matter that will bar this Courtfrom exercising jurisdiction under Article 226 of the Constitution. It isfurther submitted that the writ petition is not hit by delay and laches, inasmuch as, the dues of the writ petitioner till the settlement thereof, is a continuing wrong. In support of the submissions, the learnedSenior counsel has placed reliance on the following cases:-i)Smt. Maya Rani Punj vs. Commissioner of Income Tax, Delhi reported in (1986) 1 SCC 445Page 10 of 16 ii)M. Siddiq (Dead) Through Legal Representatives (RamJanmabhumi Temple Case) vs. Mahant Suresh Das & Ors.reported in (2020) 1 SCC 1iii)ABL International Ltd & Anr. vs. Export Credit GuaranteeCorporation of India Ltd. & Ors. reported in (2004) 3 SCC55312.He therefore prays that appropriate directions be issued forclearance of outstanding dues within a timeframe and that interest beallowed at 24% to be calculated from the date of completion of thework till the date the said payments are made by the respondents. 13.Heard learned counsel for the parties. This Court notes at theoutset that the writ petitioner is before this Court, after a lapse of manyyears for recovery of dues that were allegedly payable in the years2014-2015. Further, no recourse was taken for invocation of arbitrationin spite of the presence of arbitration clause, and though argumentshave been advanced that the dispute does not arise from the contractagreement, the same in the view of this Court is incorrect as it isrelated to payments and adjustments that have arisen from theexecution of the contract. Even if the argument is accepted that there isno arbitrable dispute, for the recovery of the dues as alleged, no suitPage 11 of 16 for recovery for the same was ever instituted by the petitioner. Further, the case as presented before this Court contains questions of disputedfacts, as it relates to alleged unpaid amounts, which if is to beadjudicated, will involve the examination of old records that have to beauthenticated and the veracity thereof ascertained. 14.In this scenario, the question before this Court is therefore, whether the petitioner will be entitled to claim any relief by way of theinstant writ petition. This Court apart from the other materials placed, while perusing the minutes of the meeting held on 26.08.2014,(Annexure-16) on which heavy reliance has been placed by thepetitioner to make out the case, notes that outstanding dues have beenacknowledged by the respondents which was directed to be processed. However, in a subsequent letter dated 17.08.2015, from the PetitionerEnterprise addressed to the respondent No. 6 under the caption ‘FinalPayment of Supply and Erection bills under RGGVY’acknowledgement is given of the receipt of payment by the petitionerof Rs.14,19,809/- (Rupees Fourteen Lakhs Nineteen Thousand EightHundred and Nine) only. This letter on a plain reading, apart fromrequesting the respondents to furnish the details statement-wise, isPage 12 of 16 silent on any other or further claim of outstanding dues. As such, thisletter which comes after the acknowledgement given in the meetingdated 26.08.2014, makes it a difficult task to discern or to come anyclear finding, as to whether the petitioner’s dues had been finallysettled by the respondents after adjustments to the service charges asclaimed, or whether other amounts remain unpaid. The pleadings in thewrit petition on this aspect, also are vague and are of no assistance inassisting this Court to come to any conclusion. 15.This Court therefore in order to fully understand and appreciatethe claim of the writ petitioner, and whether inspite of the delay andthe question of disputed facts, the matter could be effectivelyadjudicated under writ jurisdiction, had called for the records to beproduced by the respondents. From the records, it is noted thatapproval for closure of the RGGVY Project, Jaintia Hills, was given on27.03.2014, by the Chief Project Manager, Rural ElectrificationCooperation Limited to the respondent Corporation. It is noteworthy tomention that by a letter dated 04.11.2014, from the respondent No. 5addressed to the respondent No. 6, request was made that necessaryaction may immediately be taken to process all pending bills of thePage 13 of 16 Petitioner’s Enterprise in line with the closure approval. The recordsalso contain a statement dated 06.08.2015, showing final paymentmade to the petitioner, under various heads, which however is not clearon the component of service tax, although payment made to theDepartment of Income Tax, and the Tax Department on account ofroyalty have been indicated. However, as aforementioned the finalpayment under the RGGVY scheme, had been acknowledged by thepetitioner vide its letter dated 17.08.2015. The records as producedhowever, do not reveal whether the petitioner had raised any claimthereafter, after acknowledging the receipt of the payment vide the saidletter dated 17.08.2015. 16.Though a case of continuing wrong has been sought to be madeout by the petitioner and judgments placed in support thereof, in thefacts of the present case where even the petitioner has not been ableeven to clearly establish the existence of any outstanding dues, thesame are of no assistance to the petitioner and accordingly are notdiscussed. The judgments placed by the respondents being on aspectsof settled law, are also not elaborated upon. Page 14 of 16

#17. It is also interesting to note that the petitioner has also sought tolink the alleged outstanding dues to a disconnection notice dated13.10.2014, served on the petitioner’s concern, a commercialestablishment, for unpaid bills, making the payment of the samethereof to the respondents, contingent upon the release of the allegedoutstanding dues. This in the considered view of this Court is of norelevance and the pleadings made in this regard are rejected. 18.As such, looking into the totality of the facts and circumstancesof the case, this Court notes that the petitioner failed to avail ofarbitration, which had been provided in the contract agreement itself, which at this belated stage, by operation of law, cannot be takenrecourse to. Further, no civil proceedings for recovery of any allegeddues had been instituted within three years of the acknowledgedreceipt of final payment, which also effectively bars recourse to amoney suit, except under exceptional circumstances which thepetitioner would have to demonstrate. The other factors of delay, disputed facts and absence of any clear outstanding dues, also come inthe way of this Court, exercising its jurisdiction or discretionarypowers under Article 226 of the Constitution of India. Page 15 of 16 Signature Not Verified THABAH Powered by TCPDF (www.tcpdf.org)

#19. As such, in view of the reasons and discussions herein above, the instant writ petition cannot be entertained by this Court, and isaccordingly dismissed, leaving the petitioner to seek other alternativeremedy, if available. 20.Writ Petition accordingly stands closed and disposed of. 21.Records to be returned to the learned counsel for the RespondentCorporation. JudgeMeghalaya23.07.2024“D.Thabah-PS” Page 16 of 16