Calcutta High Court
Sua Explosives & Accessories Ltd vs Coal India Limited on 15 May, 2024
Author: Sugato Majumdar
Bench: Sugato Majumdar
OCD - 1
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
COMMERCIAL DIVISION
IA NO. GA/5/2018 (Old No: GA/34/2018)
[OLD NO CS/55/2008]
In CS-COM/590/2024
SUA EXPLOSIVES & ACCESSORIES LTD.
Vs
COAL INDIA LIMITED
BEFORE:
THE HON'BLE JUSTICE SUGATO MAJUMDAR
Date: 15th May, 2024
Appearance:
Mr. Siddhartha Mitra, Sr. Adv.
Ms. Sananda Mukhopadhyay, Adv.
Ms. Roopa S. Mitra, Adv.
...for the Plaintiff.
Mr. Pradip Dutta, Adv.
Ms. Akansha Mukherjee, Adv.
Mr. Pradipta Basu, Adv.
Mr. Nilankan Banerjee, Adv.
...for the Defendant.
The Court: GA 34 of 2018 is filed by the Plaintiff praying for handing over the
original bank guarantees along with interests and other reliefs.
There was a concluded contract between the Plaintiff and the Defendant,
namely, Coal India Limited for supply of permitted explosives non-permitted, large
dia and small dia explosives, cast, booster, detonators, non-electric detonators and
detonating fuse etc. to the Defendant. It is contended in the petition that the
subsidiaries of the Defendant withheld certain payments and claimed deduction from
the bills of the Plaintiff for the "powder factor". The Plaintiff only supplied
accessories and such accessories have no role to play for the achievement of "powder
factor" as the accessories served the purpose of only igniting the main explosives.
The Defendant contested the suit by filing written statement. The written statement
was amended subsequently wherein withholding of the bank guarantee was justified
since identical issues were pending before the Hon'ble Supreme Court of India. The
Supreme Court India, on 2nd November, 2017 passed order resolving the issues,
directing return of bank guarantee to the parties therein. All of these parties were
suppliers of explosives to the Defendant, like Plaintiff. But the Plaintiff was not a
party therein. On the strength of the judgment of the Supreme Court of India, the
Plaintiff prays for return of the original bank guarantee.
In Affidavit-in-Opposition, a plea was taken by the Defendant that the matter
before the Supreme Court of India was decided a different factual premises. The
Supreme Court of India set aside the order of this High Court on the ground that the
Defendant had exercised its right for commensurate deduction of cost for explosives
and accessories because of the "powder factor" thereof which was introduced by way
of supplementary clause, not being part of the original contract.
Mr. Mitra, Learned Counsel for the Plaintiff argued that the Defendant
admitted in their written statement that issue of the present suit is identical with the
matters pending before the Supreme Court of India. This admission becomes
incorporated after amendment of the written statement. Mr. Mitra also invited
attention to the Affidavit-in-Opposition where the Defendant submitted that the
issue of the present suit and that the pending suits before the Supreme Court of India
are stated to be slightly different. According to Mr. Mitra, admission of the
Defendants verily entitled the Plaintiff to the prayer of the application.
Per contra, Mr. Dutta, the Learned Counsel for the Defendant Coal India
Limited submitted that the Supreme Court of India decided the issue in different
factual premises absent in the present suit. The Supreme Court of India passed the
order observing that subsequent introduction of powder clause in a concluded
contract amounts to novation. In all those cases a new clause was introduced
imposing liability, in a concluded contract. This subsequent introduction of clause
and liability amounts to novation of contract. This newly introduced powder clause
is also issue here. But factual premises is different in as much as, the powder clause,
in this case, is there in the contract from the very inception, as submitted by Mr.
Dutta. This is not the case herein. According to the Mr. Dutta, if the application is
allowed a final relief of the suit would be granted at interlocutory stage.
I have heard rival submissions.
It is manifest from the Order of the Supreme Court of India that the matter
was decided in the premises that introduction of a supplementary clause constitute a
novation of contract which could not have been done unilaterally and such unilateral
action on the part of the Coal Inia Limited violates Article 14 of the Constitution of
India and therefore, liable to correction in exercise of writ jurisdiction. In the cases
before the Supreme Court India an introduction of a supplementary clause and
imposing liability was a matter of issue. In the instance case, the "powder clause" is
very much in the agreement itself from the inception. It is not a case of subsequent
introduction of a new clause imposing liability resulting in novation of contract. The
instant suit is factually different from the matters decided by the Supreme Court of
India. Refund of bank guarantee was ordered in the premises of facts and
circumstances of those cases which are not applicable to the present case. The
Defendant stated in the written statement that issues are identical. It may be taken
as identical issue of powder factor which is raised in the petition involved in the suit
and was also subject matter of the writ petition before the Supreme Court of India.
There is no clear admission by the Defendant that the Plaintiff is entitled to the
return of bank guarantee. Admission must be unambiguous, clear and unequivocal.
There is no implied admission to as apparent on the face of record that the Plaintiff is
entitled to refund of bank guarantee as prayed for. However, that is still a question
of fact to be decided in trial weight of evidence. Furnishing bank guarantee is part
and term of the executed contract in respect of which the parties are ad-idem. If the
prayer is allowed and furnished bank guarantee is ordered to be returned then this
Court might be trapped into undue interference of the terms of an executed contract
which every civil court loaths to do. This is not a fit case where final relief should be
given at interlocutory stage.
For reasons discussed above, this Court is of view that the instant application
is not tenable and stands dismissed.
The suit will appear in the list on 26th June, 2024 under heading "Witness
Action".
(SUGATO MAJUMDAR, J.)
