Hindustan Steelworks ... vs The Board Of Trustees For The Syama
2023 Latest Caselaw 4850 Cal

D/L. 20.
August 8, 2023.
MNS.


                                    WPA No. 15472 of 2023

                        Hindustan Steelworks Construction Limited
                                           Vs.
                           The Board of Trustees For the Syama
                        Prasad Mookerjee Port, Kolkata and others


                         Mr. Saptangshu Basu,
                         Ms. Susmita Adhikary

                                        ... for the petitioner.

                         Mr. Subhankar Nag,
                         Mr. Amit Kumar Nag,
                         Mr. Swarajit Dey

                                ...for the respondent nos. 1 & 4.

Affidavit-of-service filed in Court today be

kept on record.

Learned senior counsel appearing for the

petitioner contends that the Kolkata Port Trust

(KoPT) has insisted upon the petitioner paying

service charges, without the Port Trust having

made any capital investments.

It is contended, by placing reliance on

Clause (ii) of the lease granted to the petitioner

by the KoPT, that, in terms of the same, the

petitioner would be required to pay service

charge for each of the five sites on the capital

employed as well as cost of equipment, cost of

installation and cost of structure, if any, along with

cost of network connectivity etc. every year to the

KoPT.

It is argued that, as is obvious from the

said Clause, the service charge is payable only if

there is any capital investment and cost of

structure incurred by the KoPT and not the

petitioner.

As such, a dispute arose between the

parties regarding such payment. The matter was

referred to the Tariff Authority for Major Ports

(TAMP) within the purview of Sections 48 and 49

of the Major Port Trusts Act, 1963 (1963 Act).

When the said authorities wrote to the KoPT

asking for certain clarifications, the KoPT,

however, refused to give such clarifications on

the ground that the contract was concluded

between the parties and possession had been

handed over to the petitioner on December 10,

2013 in respect of the five sites.

It is argued that the petitioner is not liable

to pay any service charge since there was no

capital investment on the part of the KoPT. That

apart, even if any such amount was payable, the

same was required to be decided by the TAMP

and/or any other appropriate authority or this

Court.

Learned counsel appearing for the KoPT,

at the outset, submits that the dispute sought to

be raised by the petitioner is to be decided by a

competent civil court. In view of the factual nitty-

gritties involved in the matter, the writ court is not

the appropriate forum for deciding the same

without taking evidence.

Learned counsel places reliance on a

judgment of the Supreme Court reported at 2023

SCC OnLine SC 671 (Tata Motors Limited Vs.

Brihan Mumbai Electric Supply & Transport

Undertaking (BEST) and others), wherein the

Apex Court held that the Court, being the

guardian of fundamental rights, is duty-bound to

interfere when there is arbitrariness, irrationality,

mala fides and bias. This court is normally loathe

to interfere in any contractual matter unless a

clear-cut case of arbitrariness or mala fides or

bias or irrationality is made out. One must

remember, it was held, that today many public

sector undertakings compete with the private

industry and the contracts entered into between

private parties are not subject to scrutiny under

the writ jurisdiction.

The court further observed that the courts

must realize their limitations and the havoc which

needless interference in commercial matters can

cause. In contracts involving technical issues, the

courts should be even more reluctant, it was

observed.

Learned counsel for the KoPT further

contends that Clause (ii) of the contract stipulates

that service charge is required to be paid by the

petitioner, even on capital employed or cost of

structure invested by the petitioner.

Learned counsel, by placing reliance on

Sections 48 and 49 of the 1963 Act, argues that it

is beyond the jurisdiction and authority of the

TAMP to decide issues as involved in the present

case, particularly since the parties entered into

contract with their eyes wide open.

Heard learned counsel for the parties.

As rightly contended by learned counsel

appearing for the KoPT, the petitioner, in one of

its communications to the KoPT, dated December

26, 2012, stated inter alia that the petitioner

would revenue share with KoPT @ 16.5% of the

capital cost, which is identical to the Tuticorin

model. In addition, it was stated, the petitioner

would compensate KoPT the land rental as per

TAMP scale of rates based on the actual usage

of land on a monthly basis. This amount, it was

stated, may increase or decrease over the year

as land usage may periodically vary.

It is apparent from the said Clause of the

communication made by the petitioner dated

December 26, 2012, that even the petitioner

proceeded to interpret the contract between the

parties to signify that service charge was payable

by the petitioner even if the capital was employed

by the petitioner. Clause (ii) of the lease clearly

stipulates that the petitioner would be required to

pay service charge @ 16.5% on the capital

employed, including cost of structure, if any. The

expression "service charge", as opposed to the

contention of the petitioner, does not necessarily

imply that the cost of structure would have to be

incurred by the KoPT for the purpose of levying

service charge. Payment of service charge, from

the outset, was a necessary and integral part of

the contract between the parties. The allotment

of land contemplated under the agreement was

for installation of weigh bridges by the petitioner,

which, obviously, involves substantial amount of

capital investment by the petitioner.

Read from the perspective of the above

discussions, there cannot be any doubt that the

petitioner was well aware of the correct

interpretation of the clause-in-question, that is,

the petitioner is required pay service charge on

the capital employed and cost of structure, even if

incurred by the petitioner and not the KoPT.

In such background, the KoPT is justified

in arguing that in view of the parties having acted

on a concluded contract, cannot now reopen the

issue of payability of service charges on capital

investment by the petitioner and/or direct the

KoPT to the TAMP, which is not the appropriate

authority to decide on contractual matters.

Sections 48 of the 1963 Act stipulates,

inter alia, that the TAMP shall, from time to time,

frame a scale of rates at which, and a statement

of conditions under which, any of the services

specified thereunder shall be performed by a

Board.

Section 49 of the 1963 Act stipulates that

the authority, from time to time, shall, by

notification in the Official Gazette, also frame a

scale of rates on payment of which, and a

statement of conditions under which, any property

belonging to or in the possession or occupation of

the Board or any place within the limits of the port

or the port approaches may be used for the

purposes specified thereunder.

The tariff thus fixed under Section 48, in

particular Section 49 of the 1963 Act, can at best

be a yardstick for assessment of the amount

payable by the petitioner in the instant case.

However, as rightly argued by the KoPT,

the TAMP is not the competent authority to

decide on contractually payable amounts

between the parties. In the event the petitioner

has a dispute as to the quantum of payment to be

made by the petitioner, the competent civil court

is the only appropriate authority to decide such

issues. In any event, nothing in this order shall

prevent the petitioner or the respondents from

approaching a competent civil court for decision

on such issues.

However, in so far as the present writ

petition is concerned, there is no scope of

interference on the grounds as discussed above.

Accordingly, WPA No. 15472 of 2023 is

dismissed on contest without any order as to

costs.

It is clarified that none of the observations

advert to the merits of the allegations and counter

allegations between the parties and it will be open

to the competent civil court and/or any other

authority to decide such issue independently and

in accordance with law.

Urgent photostat certified copies of this

order, if applied for, be made available to the

parties upon compliance with the requisite

formalities.

(Sabyasachi Bhattacharyya, J.)